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Great slides! Completely agree that retention and referral are key metrics for driving growth.
These slides are perfect.
I think most people know this to be true, but it's extremely difficult to act upon.
If your retention and referral rates suck, what do you do? Do you change your product, add features, pivot? It can be scary, and it's always difficult.
So much advice out there saying don't add features, or only add the most important features, and in theory it's great but hard to execute on. Plus, no one wants to admit their product isn't perfect or sucks. They typically think they targeted the wrong people or people just think their customers are stupid.
So, I think Kyle is spot on. And, it really does come down to building things people need, which is very difficult of course.
Thinking about it logically, when we have problems, we ask others. When we have solutions, we want to share with others to be helpful, earn their trust, build authority, etc.
What I just described is why Quora is growing. Sure, they have a great SEO strategy, community, etc. but those are just accelerants. It all starts with the need they fill.
But, just to add to this...
If your job is marketing, growth, customer acquisition, etc., try explaining to your boss that the product sucks and therefore you cannot attract a ton of people, and if you do, they won't stick around...
An entrepreneur's biggest enemy is their own denial about their product / company. NEVER fall in love with the current state of your product. Your best bet is if you are OBSESSED with solving a problem for a particular audience that you are apart of. The product and details will change. The core problem will stay the same, assuming it's a real problem. The way it is solved will of course change due to a lot of variables, but we have the same problems today that people had hundreds of years ago, just framed and solved differently.
Agree these slides were STELLAR.
Early, early on in my career, I was in that position of explaining that my job as a marketer was "useless" because the product didn't have product/market fit. Oh, those days before lean startups and growth hacking!
And, I think the point to underline is that yes, what Kyle is proposing isn't "catchy", it isn't an "easy solution"... but that is indeed the nature of enterpreneurship. If it were easy... everybody'd be succeeeding!
What a great set of slides :-) Thanks for sharing.
This reminds me of research I recently found that busted the idea that it costs 5-7x more to acquire a customer than it does to retain one.
Nope. The truth is, to be sustainable you need to be investing in the talent & tools necessary to retain customers & keep them happy. I love this - shared!
So shortly after reading this slide deck, I came across this article in PandoDaily. http://pando.com/2014/03/22/thats-a-nice-little-40m-ecommerce-company-you-have-there-call-me-when-it-scales/
A key paragraph caught my attention, which I think is germane to this deck and the concept of growth.
Having a product that delights the user and drives high levels of customer satisfaction (which leads to high levels of referral) is crucial for building a killer business. It separates the great businesses from the good ones at scale, and in the early years, it is often sufficient to drive growth with no need for paid media. It is an important topic, but one for another day. What demands further inspection is the fact that many companies stall out when it comes time to transition off organic growth and add paid media as the primary growth vector as they scale.
Focusing on referral and retention makes a ton of sense to start out, but for most companies (and the article talks about ecommerce specifically) you are going to have to 'add a layer' of growth to support a trajectory that won't be supported by organic alone. (There are few exceptions of course, but those prove the general rule.)
Many companies fail at this step, or rather, fail to do it well. Would love to hear some thoughts about this transition or adding a layer to organic growth engines, particularly as it relates to paid acquisition.
Question: how do we find the motivation for existing customers to refer friends?
short and helpful
Totally agree that referral and retention are the best drivers for long-term, sustainable growth.
It's crucial to nail your product market fit before scaling growth. Once you have PMF, then you can reliably scale your growth efforts knowing that your retention and referral metrics are going to create the engine of growth as new users come into your funnel, stay as happy customers and invite their friends.
By nailing referral and retention up front, you put yourself in the best position for making the most of your growth efforts.
Great slides Kyle, thanks for the share!
Glad you liked it!
As somebody mentioned above, not just great slides but also short and sweet. Nice combo.
Thanks for sharing Kyle. The books on slide 27 are going on the to-read list.
Wow I actually guessed it right! Obviously you need all five to be successful but the retention and referrals are key to reach critical mass. Without those its a money pitt like you said.
I like to think of it like building a fire. The first two (acquisition and activation) are like the kindling. You need them but they don't burn for long, and ideally you just need enough of them for the branches to catch (retention and more importantly referral). I guess revenue would be the log in this analogy :)
spot on! thanks Kyle
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