Defining the customer journey with better data-based decision making
This year has shown us just how important it is to adapt to emerging behaviors. And understanding new journeys means analyzing and understanding the data behind decision making. Data analysis is now both cost-effective and scalable for startups to tap into user decisions and adapt their strategies accordingly.
In the latest Startup Central MeetUp, we sat down with Anand Deshpande, Head of the Startup Program at Segment, and Niels Fogt, Senior Director of Growth at Tray.io. They shared insights for startups looking to understand what drives customers and what practices they should be implementing early in order to track the customer journey when they launch. Here’s a recap of what they covered.
Telling stories with data
Understanding what your customers are doing is a matter of connecting the dots. Each customer journey has a story to tell and creating a tracking plan can help startups unveil individual chapters.
“At the base of it, it’s all storytelling,” says Anand. “ If you’re looking at what your metrics are supposed to be showing you, and what your tracking plan is supposed to be used for, it’s to help you understand the story of your customers.”
Understanding the parts of the story is key to understanding the full picture. “It can be from a business standpoint, from understanding your customer to understanding who’s gonna be your best user and what’s happening right before someone pays you or upgrades a subscription, “ explains Anand. “Those are all just the parts of this customer journey. If you take it and boil it down to its base common denominator, that’s really what a tracking plan is.”
“While this all may sound complex to someone without a technical background, it helps to think about it from a storytelling perspective, it’s not just data and analytical things, but it’s also this more squishy qualitative journey that we’re understanding” says Anand.“ And putting that all together is the end result.
Niels emphasizes the importance of getting into the discipline of tracking early on — and keeping it simple. “You don’t have to overcomplicate things to start,” he says. And by making it important early on, it becomes a “skillset that permeates the culture.”
“We shouldn’t be afraid of learning skills just because we aren’t engineers or analysts.”
“Having certain skill sets helps you have positive accidental discoveries and certain disciplines should be learned broadley across organizations, says Niels. “Blurring the lines of technical disciplines and the business side becomes more important as data becomes cheaper and tools are adopted more broadly.”
Setting up your funnel
There’s no one size fits all when it comes to customer journeys. Understanding data will help your teams define customized funnels.
“Now that we have a stronger product experience, we have a stronger onboarding experience.”
Niels explains that Tray.io had a lot of inbound marketing but it realized that there was a step missing between inbound traffic and sales. It took heavy lead qualification and teams understanding pain points of individual leads. It had to pivot from a self-service funnel to an enterprise model.
“Once we did that was when our growth really started to happen and that’s really fed the business up to this point,” says Niels.
At Segment, “when a visitor is on our site we look at that lead and enhance it with Clearbit data and do a MadKudu lead score, and based on that we react with that lead differently. We might open up a live chat window, we might offer them direct contact with a salesperson, or we might send them other information that’s self-serve content,” says Anand. The leads will then be adjusted based on how they fare through the funnel.
The importance of key metrics
Understanding growth Key Performance Indicators will allow you to save time, iterate often, and find Product-Market Fit (PMF) faster. And this, says Anand, is arguably the most important metric in early-stage startups.
“The difficulty is understanding if growth is actually coming from the source it’s correlated with.”
Anand emphasizes “understanding not just general metrics, but your growth KPI and what it is you’re aiming for. For example, Airbnb is focused on yearly bookings while Facebook is focused on monthly active users.”
But when a startup figures out its core growth KPI it can then use it as a basis for all tests and experiments.
Niels is an advocate for what’s called pirate metrics. “They call them pirate metrics because of AARRR”, saysNiels, mimicking a pirate and explaining that the acronym stands for Acquisition, Activation, Revenue, Retention, and Referral.
Open platforms make for better tools
One of the most interesting things about modern tech platforms is that the majority of them are open which means teams can integrate a range of tools and customize workflows depending on their products and customers.
“We are very much in the day and age where the best of breed products can be chosen because of tools like Segment, Tray.io, and Zendesk,” says Niels.
“And part of your decision in choosing these tools is because they have strong APIs, and strong webhooks that allow them to be integrated with other best of beed tools,” explains Niels.
- Bureaucracy kills innovation. The great thing about being a startup or a small company is that process is flexible.
- Quantify organization. Choose the right metrics to guide and align your strategy.
- Data is accessible and cheaper. Instill a measurement culture at your company and make it available to everybody.
- Bigger is not better. There’s a lot of tools for free out there. You can resource like a small company but act like a big one.
- Put technical skills and knowledge in the hands of people on the frontlines of your business.
Tray.io and Segment provide discounted rates for startups. Get started with a free trial with Tray.io here and sign up for Segment’s Startup Program by clicking here. You can also watch the full talk here.