Product market fit is often talked about like it is a specific destination. A place you arrive at once and know that you’ve arrived. But the reality of growing a SaaS company is that you may not know if you have product-market fit or if you have it, you may not know how good the fit really is.

In this episode of In Demand, Asia Orangio of DemandMaven shares the seven best indicators for when you’ve found product-market fit and how to take action if you haven’t reached them yet. 

TLDL: 

It feels like you are guiding a boulder down a mountain, not pushing it up the mountain. 

When customers are signing up despite some product issues and every new lead or customer doesn’t feel like a lot of work, that is an indicator that you’ve found product-market fit. 

Prospects are willing to pay right now and they don’t bat an eye about the price

When you have customers finding you and signing up right away, that is a great sign of product-market fit.

Retention and active users improve with every new cohort of paying customers 

If you look back 12 months (or 6 in case of being a new venture) and you have retained at least 50% of your customers and that rate is growing over time, that is a great sign of product-market fit. 

Running a product-market fit survey and getting 40% of your customers saying they would be very disappointed if your product disappeared

Using the SuperHuman fit survey (https://firstround.com/review/how-superhuman-built-an-engine-to-find-product-market-fit/) and finding that at least 40% of your customers are every invested in your product shows that you have found product-market fit. 

To quickly recap the survey, ask “How would feel if you could no longer use the product?” With three options: 

Very Disappointed 

Somewhat disappointed 

Not disappointed at all

When one new customer generates two or more customers

When a customer generates two new customer without you having to do anything, you have a great indicator of product-market fit. 

Having this viral growth from word of mouth dramatically decreases your cost of acquisition and is a sign that you have a great segment and fit. 

Cost to acquire a customer is under a third of the lifetime value of a customer

If the lifetime value of a customer

Some lessons in marketing are easy to learn. You pick them up from a book, take a class, or hear a talk and get it immediately. Other lessons are harder to come by. They are the ones learned over time and through experience. The ones that we look back on and think about the head start we could have got from applying them earlier. 

In this episode of In Demand, Asia Orangio of DemandMaven shares the four biggest lessons that she learned the hard way. From customer journey’s to funnels and go to market strategy, you’ll learn growth lessons you can implement today to avoid learning them the hard way yourself in the future.

Understanding your acquisition channels is key to growing your business, but convoluted terminology, different strategies, and numerous channels it can be hard to know where to focus your efforts.

In this episode of In Demand, Asia Orangio of DemandMaven breaks down the basics of acquisition channels, from overviewing different types of channels to general and specific strategy for maximizing your use of acquisition channels to grow your business!

Customer research can be an absolute game changer. It gives you insight into not only what your current customers think of your product, but also who they are, what they want, and how you can better serve them and others in the future. But not every type of customer research is right.

In this episode of In Demand, Asia Orangio of DemandMaven breaks down 8 ways that you might be doing your customer research wrong and how you can update your research to upgrade your results. 

TLDR; 

[1:20] - #1  You’re not doing customer research at all 

If you’re not doing research, you can be sure what you’re customers think about your product and business. You’re not only missing out on improving your product now, but you’re liking missing the big picture on where you should go in the future.  

[4:42] - #2 - You’re asking the wrong questions 

There are lots of resources outlining customer research questions to ask, but asking general questions won’t get you the information you need to solve your specific challenges.

[7:26] - #3 You’re not digging deep enough 

In a research interview, you will often get vague answers like “It made my life easier”, as a founder you need to know the specifics of what you’re customers are thinking, so don’t be afraid to follow up and don’t just accept the first response you get if you don’t fully understand.

[10:18] - #4 You’re answering questions for your customers 

When you’re doing a customer interview, it’s natural that some awkward moments come up. And it’s human nature to fill awkward moments with words. But when we do that in a customer interview we influence the responses we get back. 

[14:21] - #5 You’re not taking the feedback objectively

If you built the product yourself, it’s easy to critical feedback personally. Instead, once you have the feedback you need to take a step back and put it into context. What are the patterns? Who are the outliers? Don’t let your prior viewpoint influence the answers you get back from customers.

[ 21:14] - #6 - You’re the only one doing the interviewing

At the end of the day a customer interview is a conversation, and the interviewer is one half of the conversation. So if you have one person doing all of the interviewers they will likely be missing information because they have the same blinds spots. A strong customer research process allows for this by having more than one person interviewing.

[24:31] - #7 - You’re not recording or sharing your interviews 

When we recount an interview we filter out information. And when you do that you miss crucial details. If you have a tea

Funnels are a great thinking tool for founders. They help us clarify the journey our customers take and help us plan the steps needed to scale. But thinking in funnels can narrow our vision if we don’t truly understand the reality behind the tool. 

In this episode of In Demand, Asia Orangio of DemandMaven breaks down the basics of funnels. From the different types of funnels to common misconceptions and how marketers and founders can use them to maximize them to grow their business. 

TLDR; 

[1min] What actually is a funnel?

It’s a simple way to visualize how a prospect becomes a customer. From the top were prospects/leads learn about a product, down to where they consider it, and finally become a customer. 

[2:50] The two funnels

Sometimes talking about funnels can get confusing because there is an overall business funnel and then there is the marketing funnel. 

[6:00] The marketing funnel

At the top of the marketing funnel are activities that help build awareness of your brand and product. As you move down the funnel, marketing focuses in on consideration -- teaching about the problem and your potential solution. Finally, at the bottom of the funnel, you get very specific about your product as the solution to the problem to help prospects make the decision to buy. 

[16:20] How to think about funnels in your business (and common misconceptions)

The funnel isn’t a linear experience for your prospects and it isn’t the only experience. While you think of a customer moving from step to step and stage to stage they are often hopping around or doing things you can’t measure (like exploring competitors or chatting with friends). It is important to remember that a real customer journey is much more detailed and harder to track.

[29:50] When you change the customer, you change the journey, and you change the funnel

As your business grows and you start to focus on new segments, you always have to come back to your campaigns and think about if your funnel still matches your customer journey. Sometimes it will, but often it won’t and you will need to adjust, adapt, and expand your marketing.

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Times and Unedited draft notes for reference 

What actually is a funnel 

A simple way to visualize how a prospect becomes a customer

A the top of the funnel we have people who are just aware of your product 

Lower down people who are considering it 

Lower yet is people who are considering it, maybe

In our personal lives we’ve learned that assumptions will often lead us astray. When it comes to an early stage SAAS startup, they can be the difference between success and failure. 

In this episode of In Demand, Asia Orangio of DemandMaven shares the six worst assumptions that you can make as a SAAS founder and how to reframe them for success.

Extra Resources:

Check out the Baremetrics blog post on SAAS milestones: https://baremetrics.com/blog/how-fast-saas-companies-hit-arr-milestones

TLDR; The Worst Assumptions You Can Makes as a SAAS Founder

1. [1:29] “If you build it they will pay”

It’s not “If you build it they will pay” it is much more like “If you build it, test it out, validate it, then they are much more likely to pay.”

Most founders don’t believe the old idea “if you build it they will come.” They know they need to market their product, but today more than ever, many assume that when the time comes the paying customers will be there. 

If you expect to charge for the product in the future, it is crucial that you don’t just assume that customers will be willing to pay when you ask. “The best way to know if someone will pay for your product is to actually try and charge them for it.” 

If you’re early on and don’t have paying customers yet there are two directions you can go:

You can create a group of beta users who get free access 

You can focus on finding your first ten paying customers 

2. [16:00] “If it worked for them, it’s gonna work for me”

It’s not really “if it worked for them, it will work for me”. It’s much more like “if it worked for them, in this market, in this industry, for these kinds of people, for this kind of software category, then it will probably work for me."

It is great to listen to the stories of other founders, to learn from what they did, but the context for your business will always be different. If you find yourself doing research on others companies journeys, always remember that there is a specific context in which this strategy worked and compare it to the context you are operating in.

3. [24:00] “The first 100 customers is fast”

It’s not “the first 100 customers is fast” or that it should be fast, if anything it is exactly correlated to you, your market, and your product. 

No matter the milestone, never assume that it will be fast or easy. As the saying goes, your first $100k will be much harder than the second $100K

Growth suddenly going stagnant? Here's the top 3 strategic questions you need to answer in order to unpack and troubleshoot your stagnant growth.

When it comes to early-stage SaaS founders trying to grow their businesses, there's a perfect time for marketing and there's less ideal times for marketing. Your mission, should you choose to accept it, is to time your marketing efforts for maximum impact and efficient investment. Asia Orangio of DemandMaven digs deep into what scenarios make sense for founders to invest in marketing, and what scenarios would warrant more customer discovery instead.

We haven't even hit peak COVID-19 yet, but many SaaS companies are wondering: what in the heck do I do with go-to-market and marketing functions now that we're in an economic downturn? Here's how Asia Orangio of DemandMaven thinks we'll shift. 

Extra Reading

Marketing and Growth for Uncertain Times on CXL.com