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Principais insights da Aula #03
com Tiago Reis sobre Viralização

Principais insights da Aula #03
com Tiago Reis sobre Viralização.

Tiago Reis aula no MI5 startups

Viralização. Primeiro, falar o que não é viralização (ou não deve ser). Luva de Pedreiro viralizou; Bora Bill viralizou. Tem muita coisa aleatória e não dá pra padronizar – só se descobre se vai viralizar depois que já viralizou, não dá pra prever tudo na vida. Mas viralização não é só “o próximo Luva de Pedreiro” ou o próximo “Bora Bill”. Às vezes, é melhor ter várias coisas pequenas dentro de um público em específico, que é o caso da Suno.

Viralização pode ser coisa pequena também. É sobre ter os outros falando de você (e, com isso, ter um custo de aquisição menor). A melhor forma de viralizar é ter uma boa experiência de usuário – nada supera isso. Se tiver uma experiência foda na Link, você vai recomendar com certeza. 

Conteúdos que viralizam:

Newsjacking (se infiltrar nas notícias dos outros no início de quando e colocar seu ponto de vista em cima) e nem toda viralização é boa, porque o apoio vem de um lado e as críticas vêm do outro. Algumas marcas estão se posicionando desse jeito e colhendo bons frutos e aumentando custo de aquisição. Havan com Luciano Hang: gastos de publicidade com relação à receita estavam caindo e a receita estava aumentando bastante. Existem também os truques de headline (exemplo: Petrobras acaba de cometer a maior fraude da história; entenda). O desafio é ter processos pra fazer isso acontecer quando precisa acontecer, no timing certo;

Public Relations é usar veículos de imprensa (que envolvem desde jornais até influenciadores) ao seu favor. Amizade e networking importam nesse momento e ser a “fonte do conteúdo” também ajuda. A Suno começou em uma parceria com o InfoMoney – os veículos de comunicação precisam de conteúdo e os jornalistas precisam de dinheiro: se você facilitar a vida do cara, pode dar jogo;

User Generated Content é fazer com que os usuários falem sobre seu produto e sobre você. O que funciona para UGC é pedir explicitamente para o cliente e também oferecer incentivos. 

Make your customer successful. Exemplos do Spotify, Headspace, Peloton, Nike Run, Apple Watch etc., nos quais a entrega do produto faz o cliente se sentir melhor com números e, consequentemente, postar sobre isso.

Create a community. Link tem isso naturalmente e é algo muito difícil de ser feito, mas quando pega, pega forte.

A ideia aqui é encarar isso como uma série de ingredientes e daqui pra frente se inicia a arte de misturar as coisas. 

A oferta de conteúdo é cada vez maior para a mesma atenção. Para aumentar o share de atenção, então, provavelmente vamos precisar fazer os outros falarem de nós.

Como a Suno usa: redes sociais, 100%. Tem que acompanhar – quem não mede, não gerencia. Tem que planilhar tudo: Instagram, postou tal conteúdo, tal horário, tal link, tal objetivo e depois KPIs de engajamento. O processo deles é: 100 conteúdos por dia (em todas as redes do Tiago) e qualidade está no olho de quem vê (precisa conhecer muito bem sua persona) e qualidade não é só o conteúdo e a mensagem, mas também a forma como você se expressa, a imagem, takes diferentes, de um jeito inovador e engraçado etc. (transformar sua empresa em uma empresa de cinema) – as pessoas gravam muito mais a forma do que o conteúdo. Exemplo do Gary Vee de como traduzir um conteúdo grande para infinitos conteúdos menores distribuídos ao longo do tempo.

Estratégia do “5º P do Marketing além dos outros 4” como propósito/posicionamento e usando o exemplo da Havan e do posicionamento do Luciano Hang.

4 passos para uma viralização inevitável: 100 por dia, todos os dias, qualidade e sempre com CTA. Estudar um pouco mais sobre Conversion Rate Optimization e entender dá pra aproveitar para, por exemplo, o Tik Tok.

Nada supera a experiência do usuário. Magicamente, se você foca nisso, o resultado vem (mas costuma tomar tempo). 

Tiago Reis sobre Viralização.

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Business Tuesday sobre SEO com
Gian Kojikovsky, CMO da Suno

Business Tuesday sobre SEO
com Gian Kojikovsky, CMO da Suno

Aula na Link School sobre SEO

O Gian começou o trabalho nessa área há 5 anos. O Grupo Suno hoje teve em agosto 14 milhões de acessos aos sites do Grupo Suno; 10 milhões foram orgânicos. 20% total da receita vem desses acessos orgânicos. Curiosidade: 70% dos cliques do Google são dos primeiros 3 links – e SEO é uma busca pelo primeiro lugar do Google.

SEO: técnicas empregadas pra fazer um conteúdo rankear bem em buscadores (pode ser Google, mas podem ser outros). YouTube é o segundo lugar do mundo e a Amazon é o terceiro maior buscador do mundo.

Por que SEO é importante? Alcance: mais gente será impactada pelo conteúdo criado (seja no Google, no YouTube ou Amazon). Autoridade: bons conteúdos com alcance gera crescimento da autoridade, seja da marca ou do especialista. Tráfego: essa distribuição gera crescimento orgânico, que é a forma mais barata de ganhar um possível cliente.

35% de qualquer pesquisa começam no Google. 8,5 bilhões são feitas por dia no Google (98k por segundo). Metade do mundo usa o Google ativamente.

No funil de conversão (awareness, discovery, evaluation, intent, purchase, loyalty), o SEO tem como ponto forte a atuação nos momentos de awareness e discovery.

Gian também falou da importância de entender vantagens e desvantagens de diferentes canais de aquisição por alcance, custo, atrito/dificuldade etc.

Mídia paga não tem quase nenhuma vantagem competitiva – todo mundo pode começar por ali e isso gera competitividade absurda. É um bom lugar pra começar, fácil, mas depois começa a complicar e acaba criando-se uma dependência. Está cada vez mais caro trabalhar com tráfego pago. A cada ano desde 2011 isso cresce.

SEO é uma das poucas vantagens competitivas que você pode ter em um cliente nas fases iniciais de awareness e discovery – uma vez que você construiu isso, é muito difícil de reproduzir para concorrentes e isso se torna uma vantagem competitiva muito forte. SEO é estável e perene, tem alto ROI (e baixo CPL), concorrência menor que em outros canais e educa a audiência e gera autoridade. Por outro lado, é um investimento de longo prazo, gera muito trabalho, é difícil de medir, cria dependência do buscador e precisa de mão de obra qualificada.

A melhor forma de atrair clientes é, obviamente, a que tiver maior ROI – e isso está comumente associado a usar todos os meios possíveis; ou seja, a ter uma amplitude de atuação de canais em conjunto. É óbvio que isso não é fácil e depende de faturamento e escolhas precisam ser feitas de formas inteligentes.

Como usar SEO em um negócio? Blogs e textos, ecommerces, notícias, vídeos, SEO automatizado. Sobre SEO automatizado, muitos ignoram isso, mas qualquer área de conteúdo que tenha conteúdo estruturado você consegue automatizar (exemplo: uso de dados públicos como as informações da B3 para as ações). A maior parte dos setores tem algum tipo de automatização possível.

Pra SEO funcionar, precisa ter “SEO conteúdo” + precisa ter linkbuilding (referenciamento) + precisa ter “SEO técnico”. SEO Conteúdo é conteúdo bem escrito precisa de variações da palavra chave (exemplo: moletom e frio), precisa ser bem dividido e estruturado, ter parágrafos curtos, intertítulos, bullets pra listar informações etc. Linkbuilding é referenciamento. SEO Técnico é site amigável, otimizado pra celulares, poucos anúncios, meta tags otimizados e estrutura de subtítulos otimizada.

Cópia de conteúdo não rankeia e ainda prejudica a história do site.

Começar agora com SEO, mesmo que seja devagar. Escolha uma única palavra e comece a escrever pelo menos em cima de 10 derivadas dessa principal. Sobre newsletter, eu não criaria fora do meu próprio site (Substack pode ser um desperdício).

Gian Kojikovsky sobre SEO

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Aula #01 Tiago Reis:
Growth e Canais de Aquisição

Aula #01 Tiago Reis:
Growth e Canais de Aquisição

A Business Tuesday é uma iniciativa do MI5 Startups para recebermos em uma frequência semanal empreendedores que podem compartilhar uma série de conhecimentos e experiência prática de suas jornadas. Para inaugurar a Business Tuesday do segundo semestre de 2022, convidamos o Tiago Reis, fundador da Suno Research, e o fundador da Link, Alvaro Schocair. 

Realizamos a aula inaugural de uma série de 6 aulas sobre Growth com o Tiago Reis – e abordamos assuntos como canais de aquisição de clientes, canais de distribuição de conteúdo e indicadores importantes para serem acompanhados, sempre trazendo exemplos práticos e reais, tanto da Suno quanto de outras empresas referências do mercado.

 

Antes de entrar, em si, nos conceitos e exemplos dos canais de aquisição, o Tiago iniciou a aula com um gráfico que, de acordo com suas palavras, “valeria a aula sozinha”:

Esse slide traz os conceitos de CAC, que é o custo de aquisição de um cliente, e LTV, que é o valor que um cliente traz para sua empresa ao longo de toda a sua vida. Quem já estudou um pouquinho sobre growth com certeza já cruzou com esses conceitos.

 

Já no início, vale citar um ponto que o Tiago comentou: são conceitos difíceis de calcular e que empresas em início podem ter uma dificuldade ainda maior – mas isso não é justificativa para não dar atenção a eles. Nessa imagem acima, podemos entender pontos que jogam o CAC pra baixo (mais barato), o que é super positivo, e pontos que jogam o CAC pra cima (mais caro) – o que não necessariamente é negativo, até porque, por exemplo, pode ser necessário investir em uma equipe de vendas, o que sobe o CAC, mas aumenta o resultado.

 

Inclusive, conectando com esse assunto, o Tiago também fez um comentário que trouxe uma boa provocação: não deveria existir budget de marketing – no sentido de ter um limite para o orçamento. Marketing precisa estar se pagando – se o marketing se paga, precisa investir tudo que puder e ainda mais. A questão é se o marketing realmente está se pagando. Em resumo, quanto você gasta de marketing importa muito menos que o spread que você tem entre o que investe e o que gasta.

 

Outro ponto importante sobre LTV e CAC: o Tiago se mostrou preocupado em não colocar uma pressão enorme nas costas de todo mundo dando a entender que precisaria fazer tudo – não precisa e não tem como. Inclusive, existem pouquíssimas empresas que são boas em LTV ou boas em CAC, é normal.

 

Após introduzir esses dois conceitos super importantes, o Tiago explicou um pouco mais das 5 possíveis formas de adquirir um cliente: SEO, viralização, publicidade (ads), força de vendas, parceria. É importante olhar tudo isso como um canivete – são opções e os alunos precisam desenvolver ideias em cima disso. Ele também mostrou o PESO Model sobre como adquirir clientes (paid, earned, shared and owned channels). Como essa foi uma aula inaugural, ele abordou cada um desses assuntos de maneira introdutória para depois aprofundar nas próximas aulas.

 

A seguir, algumas anotações e observações úteis sobre o restante da aula:

 

– SEO não é só Google, pode ter da sua própria categoria, pode considerar dentro do Mercado Livre, pode considerar na Amazon etc. Empresas que cresceram muito por causa disso: RD Station; Booking; site de melhores DJs do mundo pode ser um SEO; ranking de melhores faculdades do Brasil. É importante dar atenção a isso na sua categoria.

 

– Conteúdo: em todos os dias nos últimos 5 anos, o Tiago fez 100 peças de conteúdo por dia, conteúdo com qualidade (está nos olhos de quem vê) e call to action no final. 

 

– O Tiago também comentou enxergar o User Generated Content como o futuro do marketing digital. “Os marketeiros arruinam tudo: se algo dá certo, todo mundo vai copiar e, consequentemente, aquilo vai deixar de dar certo”. Quem é rápido, consegue se aproveitar dessas oportunidades e, ao exauri-las, já pula pra próxima. Estratégias de UGC: pedir aos usuários, oferecer incentivos, criar experiências memoráveis, criar comunidade (o que é muito difícil, mas traz um retorno incrível – indicação sobre isso é o livro Community Buzz).

 

– Antes, tinham poucos canais e poucos players. Atenção do consumidor foi pro online e hoje é um ambiente com muitos canais e muitos players – a atenção das pessoas foi completamente pulverizada. Como competir nisso? A estratégia da Suno é guerra total em todos os flancos. Como podemos estar em todos os canais que nos interessam? Pode ser nicho. Pode ser relevância de conteúdo. Pode ser tanta coisa. Não tenha paixão por um canal de aquisição – quando a Suno começou, o principal canal era uma live que era feita todas as terças-feiras. Tem que ter paixão pela atenção do consumidor: onde ela está hoje?

 

– Assim como canais e formatos degradam, existem canais e formatos que nascem também. Tik Tok talvez seja o canal do momento. Suno nasceu por causa disso, porque foram uma das primeiras a dar as caras por lá – e dentro desse jogo a rapidez é fundamental. Tiago foi o primeiro a fazer live no YouTube, primeiro a responder pergunta no Instagram (contou que foi por volta de 17/julho/2018 quando lançaram a funcionalidade de perguntas do Instagram). Essa oportunidade se abriu pra todo mundo simultaneamente: não é uma guerra de quem tem mais recurso, mas sim de quem age mais rápido. 

 

– Integração do marketing também é importante: não criar silos. Não pode ter uma área que faz artigos pro Google e o outro é de social media e eles não se falam – tem que incentivar as conversas entre essas áreas. Na Suno, como eles sabem qual é o ticker do FII mais procurado, ele consegue fazer conteúdo direcionado para esses – e se ele não tivesse acesso a esses dados, ele correria atrás via Twitter, Bloomberg etc. Procurar case de Harvard do Booking.com sobre integração de SEO com ads. Integração é o futuro. 

 

– O que funciona pra um não necessariamente funciona pra você. Pesquisar o que referências do mercado fazem pode ser uma boa. É um canivete, escolher um ou dois bem feitos podem mudar o jogo.

 

– Maximizar LTV é o jogo e deve ser o principal. NADA supera criar a melhor experiência do usuário. Apple tem churn parecido com empresas de utilities e saneamento, por exemplo. 

 

– Pricing sometimes matters more than price: preço é o preço, pricing é como você cobra aquele preço. Vai em um restaurante e vai ao banheiro: é de graça? Não, está incluso talvez no café – o markup dele é mais caro do que deveria custar. Imagine ele cobrar 5 reais por usar o banheiro. Às vezes, a transparência joga contra. No exemplo dele, ver a assinatura do cartão de crédito dói na cara dele e ele está pensando em diferentes modelos de cobrança para melhorar essa percepção.

 

– Quando perguntaram como fazer micro viralizações de conteúdo acontecerem, a resposta dele foi direta: ter uma rotina de construção de conteúdo, postar bastante conteúdo todo santo dia e criar sua “metralhadora de postagem”.

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Andrew Chen da Andreesen-Horowitz sobre como desenhar um programa de indicação

How to design a referral program

Above: Dropbox’s innovative growth initiative — A referral program to give/get storage

Why a referral program?

Referral programs — the “give $5, get $5” offers you see in many apps — have become popular in recent years. They have big advantages over paid marketing channels, in that you give your CAC to your users, who then spend it within your product, as opposed to handing it over to Google or Facebook. Because they are a form of viral marketing — utilizing your network of users to bring in more users — they tap in to your product’s network effects, as I describe in The Cold Start Problem. This is particularly useful for products that target high acquisition cost niches, whether that’s crypto users or on-demand drivers, whose CAC are often >$200, since the users often know each other.

A successful referral program can be 20-30% of your acquisition mix, as one of several acquisition loops. It’s not a silver bullet, but it’s worth adding to complement other marketing efforts.

The history of the referral program

How did a structured form of customer referrals come into being? It’s said that the first documented referral program was created by Julius Caesar, who in 55 BC would paid his soldiers 300 sestertii (something like a third of their annual pay) to refer a friend to join the army. And thousands of years later, we still use, plus or minus, the same idea. It seems as though every consumer app has implemented some form of a referral program, though I argue it really kicked off in ~2008, which is when Dropbox’s innovative referral program was rolled out.

Yes, the most famous early implementation of referral programs came from Dropbox, which inspired a generation of startups — particularly YCombinator-backed startups — to experiment with similar ideas. Why did this make sense for them? CEO/cofounder Drew Houston’s made a very helpful presentation describing his journey towards referral programs, and the general trajectory was the following:

  • First, do all the things you’re “supposed” to do
    • Big bang launch at a tech conference. Try some AdWords, hire a PR firm / VP of Marketing
    • Paid marketing programs created a CAC of $233-388 for a $99 product
    • Then trying affiliate programs, display ads, and many other things — which all failed
  • … but then failing! And realizing none of it works that well
  • Then realizing the key was to accelerate word-of-mouth and viral growth by offering a “give and get storage space” program
  • Boom. 100,000 users to 4 million in just 15 months, with 35% of daily signups

The entire deck is wonderful — created roughly a decade ago, but still very relevant — and I highly encourage you to check it out here.

Referral programs work very well for certain kinds of products, particularly ones that are already spreading via word of mouth. In Dropbox’s case, there is a natural use case between friends and colleagues — shared folders — which naturally complement the referral channel. Referrals drive that forward, providing an economic incentive to tell friends. As another example, at Uber where I ran the referral programs for drivers and riders at various points (and spent >$300M/year on them), the program for driver referrals was naturally successful. Drivers were often from certain sub-communities, whether newly arrived immigrants or limo drivers, and people were naturally already talking about the earning opportunity. Referrals, sometimes as high as $500/signup, accelerated that in a big way.

And yet referral programs have their limits. Of course they don’t really work that well for products that have low LTV — that’s why we don’t see free social photo sharing apps reward their users for referrals. There’s no LTV to arbitrage against, and the referral amounts create a form of customer acquisition cost. They also tend to decline in importance over time. Years after the rollout of Dropbox’s referral program, I had the opportunity to join Dropbox as an advisor, where I got a first-hand look at the data. By then, the natural virality of their core product — just the process of people sharing their folders and files with others — had come to completely dominate user acquisition. This had become the primary method of spread, and the referral program became much less important. I’ll discuss why, later on, but this seems to be the natural pattern of things — referral programs are very helpful at the beginning of a market. Eventually it becomes less important, and that’s OK.

But we get ahead of ourselves. Let’s start first by looking at how a referral program is usually defined.

The structure of a referral program

We see the same rough patterns in referral programs that are implemented across the industry. Airbnb, Uber, Instacart have them, and so do Coinbase and Wealthfront. There are variations of course, as some focus on giving and getting dollars. Some ask you to share a code, or a link, or connect your addressbook to invite friends.

One way to organize all these variations is to divide them into the following — and you need to answer a series of questions for how you structure the program:

  • Ask
    • When do you ask the user to refer?
    • Why do you refer? Is it tied to a holiday, or a particular promotion?
    • What’s the message?
  • Target
    • Which users do you target? All of them?
    • How do you set referral amounts?
  • Incentive
    • What’s the incentive, is it extrinsic ($) or intrinsic (points, storage, etc)?
    • Do you give the inviter or recipient the same reward?
  • Payback
    • What is the success criteria for the program?
    • How do you think about cannibalization?

Let’s use an example to describe this.

For example, take Airbnb’s host referral program:

You could break this down into the following categories:

  • Ask: Invite someone who can host their entire place or private room
  • Target: All Airbnb users
  • Incentive: Earn $200
  • Payback: CAC is better/comparable to other marketing channels (just speculating!)

This is the basic structure, and now that we have this in place, it’s time to talk about a number of design considerations needed when creating a referral program.

The Ask

Product folks often start by agonizing over the ask. They wonder if it’s too trivial to create a “Get $5, Give $5” referral program, or if that’s too basic. But I think that’s the wrong place to focus — after all, you can always word smith and test many variations later once you have the program up and running.

The real question is, WHERE do you make the ask? And my answer is simple: Ask many times, in many places, with different messages, and in-context with whatever action you’re asking the user to take. What you find, after instrumenting all your referral UI, is that there’s just a certain conversion rate on this screen. And that most users, if you put the referral functionality on a banner somewhere random in the product, simply don’t interact with the referral features. Rather than trying to raise conversions, instead, show the screen more often — get more impressions!

Thus, make the referral ask part of the main flows. After the user is buying something within your app, ask them if they want $X cash back now, by inviting someone. Or if they interact with a friend within the app — assuming the product allows invitations of some sort — follow up by asking if they want to invite others. And add it to the onboarding flow, and at the end of key transactions when the user is otherwise done, and you might as well capture engagement. And for god’s sake, don’t make it look like “an ad” with big splash text and graphics — make it plan, like something that’s part of the normal UI where the user can interact.

One of my favorite ideas from Uber is the concept of “holidizing” a referral campaign. For drivers, as the holidays approached, you might tell them to earn extra money towards gifts and festivities, by participating in a referral program. Or for the run up to a major concert in town, you might run a special tiered campaign where referring 1 friend gets you X, but 5 gets you 5*X and a huge bonus on top. There’s something great about freshening up the messaging each month to align to major holidays, with new amounts, new imagery, and otherwise.

The Target

The headline best practice is that your referral program should target new users to refer their friends — this means prompting users during their initial onboarding flows, and adding emails as part of the onboarding, among other surface areas. This is in direct contradiction to folks who often argue to let users experience the product first, have a good experience, before they’re hit up to invite. Why focus on new users? First, mathematically, it’s easiest to make a big impact when you are hitting a cohort of 1000 new users when it’s as close to 1000 as possible, not in day 30 when the cohort will have churned and gotten down to 150. And in the math of the viral factor, you have a better chance to hit >1 when you have 1000 users invite 1000 users than to ask 150 to invite 1000. Second, new users generally have more friends who haven’t yet used the product, because they are new themselves. Once they have gone through the referral program a few times, then they will have naturally tapped out their networks.

And of course, the simplest thing to do is a “give $5, get $5” and give that offer to everyone, in an untargeted fashion. But a product leader soon realizes that this is inefficient — perhaps it’s best to give some users $15 and others $5, depending on their value. This is exactly what many marketplace companies have done, when it’s easy to segment their network into high-value cities like New York and SF versus, say, Memphis — you can set custom referral amounts in each place. But why stop at cities? Perhaps you do an analysis and figure out certain leading characteristics of high-value users as their account balance, or the types of other apps they use, or otherwise — once you think of this as personalizing an ephemeral offer to users, then you can run whatever promotions you want.

The Incentive

You’ll note in the original Dropbox offer, the incentive itself was storage space not dollars — this is the dilemma of intrinsic versus extrinsic rewards for users that participate in your program. Many referral programs for mobile games tend towards intrinsic rewards as well, earning you points if you invite friends. The advantage of intrinsic rewards is that it’s particularly cost effective when the incentive is something you can control, like points. The problem with intrinsic rewards, of course, is that external users — people who have never heard of your product — are the least responsive to points or otherwise. Dropbox’s storage offer is maybe somewhere in the middle, since it’s at least a concrete form of value. As a result, most referral programs have tended towards dollars over time, though I think the important idea is to prioritize new, outside users, and think about how to make the incentive as concrete as possible.

There’s the basic question of how to set the incentive amount. Typically this is based on a basic calculation of CAC/LTV, which has major weaknesses as it doesn’t take into account cannibalization (which we’ll discuss later). Instead, the focus is often to pick a simple number — if you know that the average user who signs up spends $20, then you can create a referral program that rewards a $5 give/get with some margin of safety. But the big lever on the incentive, of course, is to increase the amount — and the largest amount generally comes from tiered offers that have some form of breakage. An example of this is to say, “$100 when you sign up and buy 5 things” rather than “$5 when you sign up.” Given that the difference between a signup and a repeat conversion rate might be 100x, you might be able to safely raise the amount 20x. At Uber, this went so far as to combine two distinct numbers: A headline number that combined both the initial signup conversion as well as the first month’s earnings (again, as long as you drove X trips in the first few weeks). This resulted in a $3000+ number, a huge upgrade from the initial $200 numbers we started with. These larger headline numbers always tested much better on A/B tests, whether in email marketing or banner form, and while it might feel like the reward becomes unattainable, it’s possible to create a second or third or fourth tier to go along with the big headline number. You could say, earn $X when you fulfill all the requirements, but then a smaller number, $Y, when you only fulfill a few. That way you get the marketing impact of the big number but still have a fallback for users who don’t hit all the milestones.

The last aspect of the incentive structure I’ll discuss is a symmetric versus asymmetric offer — that is, should it be a “give $20, get $5” or “give $5, get $20.” Which one sounds better to you? This is anecdotal, but in testing I’ve seen, the inviter-centric amount generally works better — that is, catering to their self interest. However, I’ve also seen B2B contexts where in a professional setting, people tend towards inviting more if they are perceived as altruistic, giving out a large $ discount to others. In the end, probably just worth A/B testing to see what works best.

The Payback

You’ll need some kind of ROI metric to drive the strategy of the referral program. Are you spending the right amounts, or should you increase the numbers? How much product effort should be put into implementing new surface areas? Etc. Is it working? These fundamental questions are often answered with a classic CAC/LTV analysis, and there’s a reason to doing that.

After all, if the lifetime value of these users exceeds the cost of acquiring them, shouldn’t you just go full steam ahead? Well, maybe. What if you can get much cheaper acquisition via another channel, like TikTok ads. Then any dollars that go to this might be better spent on ads. Or what if improving a referral program takes engineering team away from critical features? So yes, of course look at the CAC/LTV of your referral initiative, but think about how you might compare the tradeoffs against everything else.

The trickier ROI question is cannibalization: How many of the users that you bring in via referrals would have come in through word of mouth anyway? If you spike the referral amounts, going from $5 to $20, are you just creating a “pull forward” effect where users that would have arrived for free a few months from now are coming in suddenly, but at a cost, and to the detriment of a later month?

Cannibalization is a hard effect to tease out, but generally the goal is to measure something like “Cost Per Incremental Customer” by A/B testing offers to a control group that gets the standard number, and a test group that gets the elevated number. Because you’re trying to capture organic users, you often have to do this as a “twin cities” experiment, where we run one set of offers in Phoenix and another in Dallas — this is the Uber approach, and in B2B you might do it via one set of companies versus another. And then you measure what the uptick actually looks like. If there is a lot of cannibalization, then the CPIC number will be large — this is the true CAC, cannibalization aside.

The other, simpler form, is simply to do an “On/Off test.” If you turn off all your referrals for a few days, do you notice a big drop in new users? If yes, then your referral program is working. If not, then you are potentially paying a lot of customer acquisition cost for something that would be happening anyway.

The weaknesses of a referral program

As I mentioned at the intro of this essay, Dropbox’s eventually became less dependent on their referral program. There’s a natural trajectory here, because as the market matures and more users have already adopted the product, the fewer friends there are to invite. You only need a few “I already have that” responses to stop participating in referrals altogether. For products that have a true network effect, as Dropbox does, the acquisition will eventually be taken over by intrinsic use cases like folder sharing rather than something as extrinsic as a referral reward.

And in a way, I find myself mostly skeptical when teams approach me to build a referral program. The first thing I ask is, are you sure you wouldn’t rather build a viral growth engine? Building viral features and a referral program are similar problems — trying to get users to invite friends — but truly viral features around sharing and communicating are evergreen and create lasting value. They help users engage and retain, and as a secondary effect, generate new users as well. And it’s a huge benefit to get these new users onto your platform for free. For Dropbox, that means investing in product features like inviting teammates into projects, or file sharing, or otherwise, rather than creating ever more complex referral structures. At Uber, this might mean building virality into features like “Share ETA” or bill splitting or group food ordering.

In that way, I find myself a reluctant fan of referral programs — they can work, and can become a 10%+ acquisition channel for products — but they will always take a back seat for me, compared to building great viral functionality.

texto por Andrew Chen

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Não pergunte ao seu cliente
“como ele te conheceu”

Não pergunte ao seu cliente "como ele te conheceu"

What if I told you that “how did you hear about us?” is a dangerous question that leads companies to the wrong strategy? And what if I gave you a much better approach?

 

First off, what’s wrong with asking “How did you hear about us?”

Most customers will give you one of three answers — Google, word of mouth, or content (YouTube, blog, social, etc.)  But what can you really do with this information?

 

Buy more search terms? Start a referral programme? Create more content? You’re already doing those things and so are your better-funded competitors. Plus, AdWords and referral bonuses are expensive. (And cash is drying up right now.)

 

What should you ask instead?

When you ask “how did you hear about us” you’re relying on the customer’s dubious memory. They’re using recency bias and telling you the last step in a very long journey. Big companies understand this, so they spend thousands on software to unpack “attribution” in its various forms — stepwise, first click, last click, etc. But I’ve always had doubts about that approach.

 

In reality, you mainly just need to know where the journey started. That way, you can intercept prospects before they even consider your competitors.

 

So, instead of that awful survey, call your recent signups and ask them this:

  1. What does our product help you do?* (e.g., learn Spanish, meditate, attribute marketing spend, etc.)
  2. Do you remember when you first realised you needed to _________ (insert answer to #1)? 
  3. What was happening at the time that made you realise it?
  4. Where’s the first place you looked? Who did you ask? What did you ask for?
  5. What’s the first thing you tried?

 

*Ask question #1 even if you already know the answer. It’s a good way to get “now you can” language for your headlines and it primes the respondent to think about their goals rather than your product.

 

Repeat the conversation 5-10 times until you start to see a pattern. That should give you enough information to find your “locksmith moment” and formulate a more cost-effective marketing strategy.

 

Remember, it’s much cheaper (and less competitive) to acquire prospects at the beginning of their journey. Still, they might not be ready to buy this early, so you’ll want to develop a kickass lead nurture stream. (If you’d like help with lead nurture and inbound lead-gen,  join our Inbound Lead Gen workshop on June 6th & 8th.)

 

(texto extraído da newsletter Startup Core Strenghts)

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Como usar o conceito
de Language Market Fit

Como usar o conceito de Language Market Fit

If I had to explain Finding Language/Market Fit in one sentence it would be: “Figure out the words in your customer’s head and use them in your marketing.” 

 

And I’d crystallize it with  the “now you can” test.

 

The “now you can” test for headlines

If your headline completes the sentence “Our product is…” You’re not using customers’ words, and your headline will not resonate. 

 

On the other hand, your headline might resonate with your audience if it completes the sentence “Now you can ______.”  

 

A good marketer can complete that “now you can…” with exactly the right words. (Especially the verbs, they’re critical!)

 

“Now you can” is a simple way to call out the customer’s goal, but often we’re not thinking about goals, instead we fixate on our struggles and challenges. That’s why I like to test messaging around the struggle.

 

About 1% of startups use this approach, but it’s incredibly effective

In some product categories, customers seldom consider solutions, they just live with the pain (I guess it’s learned helplessness). I’ve noticed this in self-improvement, FinTech, and many types of B2B SAAS. If most of your customers are thinking about the struggle rather than the desired outcome, then test a headline that focuses on the struggle

 

The world’s greatest copy coach, Joanna Wiebe @ CopyHackers, says to always phrase “struggle” headlines in the first person, because it puts you on the same team as the reader. For example, you’ll notice that “I’m not ready for an audit” sounds empathetic, whereas “Are you ready for an audit?” sounds confrontational.

 

A simple next step

Make a list of first-person customer language around the struggle, and try it out in your ads or on a landing page. Use the exact words that are in your customer’s head, and try to capture their emotion. Then highlight your desired outcome (“now you can”) in the sub-headline, here’s an example:

  • Headline: “I’m not ready for an audit.” 
  • Subhead: (Now you can….) Pull all of your sensitive documents in a secure data room in 5 minutes.

How to read your prospects’ minds

Drafting headlines is the easy part. Success really depends on knowing the exact language in your customers’ heads (especially the verbs)! We recommend using “Jobs To Be Done” interviews.

 

(texto extraído da newsletter Startup Core Strengths)

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Como testar com sucesso a
comunicação do diferencial da sua empresa

Como testar com sucesso a comunicação do diferencial da sua empresa

A few weeks ago, I warned against positioning your product as “fast” or “easy” since vague platitudes can leave prospects guessing (and hitting the back button!). Here’s a great example of what to do instead.

 

How Popsa grew 100X by finding language/market fit

Popsa, a photobook app, just raised $12M in a round led by Gresham House Ventures, but things weren’t always rich and rosy.

 

When I first met the founders, they had a very common problem: Customers loved their product (great retention and repeat rates), but getting new customers was expensive. Conversion was low and CPAs were breakeven at best.

 

Popsa was a “better mousetrap” product – yet another entry into a crowded category. But their product was really fast and easy. So, naturally, their headline was “fast easy photo books.” And nobody cared.

 

But when our team started working with them, we changed their headline to “Photobooks in 5 minutes.” The result? Their conversion rate quadrupled, lowering CPAs by 75%. Game changer! But why? How did we know to make that specific change? 

 

We didn’t. We had no idea, but we knew how to run the language/market fit playbook:

  1. Customer interviews: “Jobs to be done” queries to find out what’s in their customer’s heads. We learned that people love getting photo books, but hate making them. So “fast/easy” makes perfect sense, right?
  2. Paper testing: Next, we ran “paper tests” on the headline to check if people understood what it meant. People read “fast/easy” and  thought that meant it would “only” take 3 hours. They didn’t really understand what “fast/easy” meant. So we tried some new headlines, and “Photobooks in 5 minutes” got the message across.
  3. Quant testing: They changed the title of their app store listing to “Photobooks in 5 minutes.” I’m not gonna lie, we’re all pretty stunned when installs quadrupled overnight.

Key takeways

 

How to position against an established category: If you have a “better mousetrap” type of product, a new entrant into an established category (e.g. Netflix, Warby Parker, Casper, Lemonade), it’s not enough to say “fast” or “easy” or “convenient.”  Customers already harbor so much cynicism about the category so your claims will sound hollow. Instead, you need to be very clear and definitive. Try calling out the struggle, or being ultra-specific in describing your key advantage, like Popsa did.

 

Measure twice, cut once: No matter what you suspect, follow the process, do the interviews, check comprehension, and run the tests.

(texto extraído da newsletter Startup Core Strenghts)

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Growth Validação

Existe “business as usual” em startups?

Existe "business as usual" em startups?

Trecho retirado da newsletter “Startup Core Strenghts”:

This is a hard one: “What about “BAU?”

 

We’re constantly reminding entrepreneurs that, with any successful startup, 90% of their growth ends up coming from 10% of the stuff they try. So we push companies to prioritize uncomfortably.

 

Companies write a short list of “must win battles” that’ll ultimately dictate their success or failure. And that’s when it gets uncomfortable.

 

Suddenly, everyone’s inundated with new work, but these crucial “must win” projects tend to creep along painfully. Teams get stressed, and founders usually ask me how they can carve out time to focus on growth initiatives plus the “BAU.”

 

Now, BAU stands for “business as usual,” so I ask: “What exactly is this ‘BAU’ and why is it more important than growing your startup?” And they reply with really important projects like fixing technical debt, ongoing social media marketing, sending newsletters, the product roadmap, QA testing, fixing typos, setting up internal tools and processes, compliance, getting feedback from lawyers…you get the point.

 

I’d hate to tell them to stop any of these pressing matters. It’s not my company, and those sound really important! So instead, I tell them this:

  • In the early days, PayPal wasn’t licensed to transmit money in any of the 50 US States
  • Their early fraud losses exceeded $2,000 per hour
  • And the entire “tech stack” was a single monolithic CGI script that eventually collapsed and brought down PayPal and eBay for 8 days before Christmas 2004.

I tell them that great startups are messy places where people take huge risks and do work they’re not always proud of. They prioritise growth ruthlessly, and make painful choices in the process.

 

Look, I’m not saying you should break the law, avoid compliance, send emails with typos, or accumulate technical debt. But I am saying that every successful startup has taken huge risks to gain tactical advantage.

 

It’s a hard thing to tell perfectionists, but there is no such thing as “business as usual” in a startup.

Av. Brigadeiro Luís Antônio, 4980, Jardim Paulista, São Paulo – SP, Cep 01402-002
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+55 11 93098-6541