CategoryGrowth

Identify users with the most valuable feedback

In my time as a product manager, I was constantly reminding myself to talk to customers more. It might have been to talk about existing features, something under development, or customer pain and processes for product research. It was easy in the beginning, because we knew most of the people using the tool as we worked on the initial version. Even as we got bigger, my feelings usually boiled down to these four words: talk to customers more. I think a critical skill, however, is learning how to talk to the right customers.

As I worked on the HubSpot sales products and we grew it to hundreds of thousands of active users, I quickly realized I couldn’t speak to everyone. I needed to be strategic about who I reached out to, and the type of feedback I was looking for. It’s a dangerous path to go down, because you can end up wasting time by over-analyzing your data and getting into analysis paralysis. Even worse, in my opinion, is taking the existing feedback as representative of your user base, and only solving for the loudest segment of the customers or the customers that are most convenient to interact with.

I want to share the process that Brian Balfour showed me. It’s fairly easy (and inexpensive!) to identify who you should reach out to, and collect their feedback.

Step 1: Identify who you want to speak with

Are you working on activation? If so, you want to target people who sign up but don’t really get started or see value. If you’re working on retention, you need to dig into why someone would start to use it but end up quitting your product. Not sure which one you should be solving for? It depends.

Step 2: Find those people

Any good behavioral analytics system will allow you to look at the number of events that someone has done over time. Let’s say we want to find users who start to use the product, but then stop. Most analytics systems will tell you the raw number of times an event happened, or the unique users that did it. Here’s a sample from the Amplitude demo for when someone plays a song:

The graph above is great for evaluating trends, but the goal is to speak with individual users about their experience. You need to go a level deeper and visualize this data on an individual user level. You should be able to get it by the user’s email. Once you have that, export it to Excel so you can play with it more closely.

For the next images, imagine I exported data that has the number of events someone performed on a daily basis for my app’s most important events. I then would create a pivot table:

This pivot table has a list of email addresses in the first column, alongside the number of times an event happened per day. You could do the same on an hourly / daily / weekly / monthly basis, depending on what makes sense for your app.

Next, I typically do some more filtering to evaluate who I could speak with. I set up this filter to find the people that weren’t active on 6/18, but were active on 6/16 or 6/17. I expect people to use my app every day, and I am shocked when they don’t. I’m curious to know why they didn’t use it.

You could spend a lot of time doing this type of analysis. I’d try to limit yourself to less than thirty minutes of playing with a spreadsheet like the above. I’d bucket your search into a couple of categories:

Super active users:

  • They use the crap out of your product, consistently. I’d be curious to speak with them to understand what they like about your product and why it’s so valuable to them.

Drive by users:

  • People who check out your application quickly and then leave, never to return. What was their impression? Why didn’t they stick around? If you’re using a product like Fullstory, are you able to see what they did in your product?

Engaged people who quit

  • I’d look for people who used it for a minimum of some period (a month? Multiple weeks?) and then stopped using it. These people presumably understand at least a portion of your product, but then took action to stop using it.
  • As you can see in the screenshot, I added a column where I computed the number of days someone had performed an action. If done over weeks / months, this is helpful to quickly find the users who were long term users.

Step 3: Reach out to users

This should produce some users that you want to speak with. Now comes the fun part! I took the list of emails, and I send them an email soliciting feedback. This is where I hear a ton of complaints from product managers like “I don’t have enough people to email” or “people never click through to the survey.”

I typically get 10–20% response rates on the emails that I send out. My secret is that I send out the emails from my Gmail account. I BCC lists of users and when I contacted them so I have a record and don’t email people multiple times. This works for multiple reasons:

  1. It ends up in their inbox, not the promo inbox
  2. It feels more personal, there’s no professional email template
  3. One final key: they only have to respond to give you feedback. Nobody wants to click on a link to fill out a survey.

Here’s the email that I send out:

Nobody wants to click on a link to fill out a survey, even if it’s a one question survey. I often get back soliloquies from users with incredibly valuable feedback. I’m grateful, and I also reply back to the emails multiple times doing a typical five whys analysis. This is another reason why it’s superior to embedding a google form into an email.

Step 4: Collect / Analyze the feedback

If you choose to send out this survey to a large group of people, it’ll quickly become difficult to report off the trends and high level information. This is where I use Zapier.

I connect the Gmail and Google Docs zaps like this:

I filter the responses to the survey into a custom label so it doesn’t overload my inbox. I use Zapier to pull the responses into a Google Spreadsheet, so I can easily read them and bucket the responses:

You can see that I have manually gone through and added a feedback bucket for each of the responses. I try to bucket reasons in a handful of categories, and look for common language patterns for how people describe problems. That allows me to create reports for development teams that look like the following:

The value isn’t in doing this with free or low friction tools — the value is in the insight you get into your users and what they love or hated about your product. I’m sure that there are fancy tools that help with this type of analysis, but the bottom line is that you don’t have an excuse for not doing this type of process. It works incredibly fast, produces results, and is free (other than your existing analytics system). I like this because it gets you really close to your users and their behavior, and allows you to quickly get your hands dirty and get some actionable feedback.

How could this process be better? How do you find and the solicit feedback from the users that will have the biggest impact on your company? Let me know through a comment, or drop me an email (it’s on my personal blog).

Thanks to Magdalena Georgieva, Lars Osterberg, and Brian Balfour for reading drafts of this post.

Good vs. Bad Retention — The User and Revenue Impact

I just published this piece on Medium, but am also cross posting to my blog. If you want to make sure you receive all of the content I put out, make sure to subscribe to my email list.


There are many things that set Facebook apart from your (or my) products. That said, there’s really one thing that it all boils down to: retention. Facebook has developed a product that people use indefinitely. The rest of us? We have a long way to go. What should you be doing to close the gap? Keep track of your retention numbers.

Most of the people I speak with have no idea how many people they expect to be using their product in a year, even though they are the ones ultimately responsible for the progress. If you do have some sort of goal, did you just pick a big hairy number? Did someone throw out a goal for you? If I could give you one piece of advice, it would be to build a simple model so you know what to expect.

After watching Phil Libin’s talk on retention and cohorts, I thought it would be interesting to model out what different types of retention look like for a SaaS product. What would it look like if you acquire the same number of users over time, but don’t hang onto them? What would it look like if you had really good retention? What are the tipping points for user growth? I built a couple of simple Excel models, and the graphs were quite shocking to me.

Let’s say you launch a new product, and as a good leader you track the people getting value from your product over time. Imagine it looks like this:

Congrats! You launched a new product to 1,000 users in January of 2016, and have grown it to over 8,000 monthly active users by the end of 2016. Your growth is slowing slightly, but you’re not too worried about it. Why should you be? You grew by 700% in 2016! That’s a cause for celebration.

Lets look at this graph in a slightly different way, by the cohorts of people who start using your product each month. In the example above, I assumed that 1,000 new people sign up for your service each month, and that some of them stop using it over time. Those people might find a different tool, unplug from the internet, or get a virus and blame your tool for the havoc it caused. Either way, of the 1,000 people who start each month, some of them quit using your product in the months after they sign up. This is what the active users chart looks like breaking down the cohorts over time:

In the chart above, the blue shape on the bottom represents the 1,000 people who signed up in January, and then how many of them are using it throughout the year. By December 2016, only 450 of them are still around. The cohorts “stack” on top of one another to produce your total active users in a given month.

If you develop a great product like Facebook or Uber, there’s some percentage of cohorts that use your product forever. They’re addicted to it. Even if they stop using it at some point, they come back. Facebook would have a hard time growing to 1.6 billion monthly active users if a lot of people used it once or twice and then never used it again.

Let’s see what happens to your growth if you weren’t like Facebook, and you didn’t hang onto your cohorts for a long time like Facebook. Let’s say you continue to have 1,000 people sign up every month, but over time those people end up quitting your product. This is what the chart looks like past 2016:

By the end of 2018, you’ll only have 13,000 users of your product. You had 11,700 people at the end of 2017! Even though you grew 700% in 2016, you only grew 11% in 2018. The rate at which you’re growing is slowing significantly, even though you continue to add 1,000 users a month. You can see this visually in the bottom right of the chart, where all of the cohorts seem to stack on top of one another, but don’t add up to anything. You can’t even tell the cohorts apart, they just look like a colorful set of stripes. By the end of 2018, the new people you’re adding every month are barely replacing the people who abandon your product from all of your previous cohorts.

What does it look like if you are able to build a product where 50% of your cohorts end up loving you product and sticking around for a long time. What would that look like? Let’s update our graphs:

Wow! Instead of 13,000 users, you will have 20,000 users by the end of 2018. You can see the big difference between the graphs. In the bottom right you have rectangles that build on top of one another. You overall growth rate is still decreasing (as a percentage of your install base), but your total number of active users continues to increase. In the previous example your growth had basically stalled, in this graph you are growing at a constant rate. The best products in the world retain a large percentage of cohorts over time, and the bars are a large percentage of the initial cohort size.

Up until this point, I’ve only been talking about retention of users. If you’re running a business you ultimately need to charge for your service (for example, a monthly subscription). Assume that a percentage of people will end up paying for your service, and that they slowly upgrade over time. If you can forecast how many people will be using your product, you should also be able to project how much money you’ll be making. Lets look at what your revenue looks like (again, broken down by cohort) when you have poor retention:

As your cohort sizes go to nothing, those people won’t keep paying for your product. This graph doesn’t look too bad, but what about if you look further into the future?

That doesn’t look good, you’re barely making any more money two years later. What about in the case where you have good retention? Assume that 10% of the long term users end up paying for your product, and they pay $50 / month. They don’t immediately upgrade — it happens slowly over time. What would that graph look like?

Holy crap! I like the slope of that line. In the bad retention example, you are making $15,000 / month in recurring revenue. What about in the good retention example? Over $80,000 / month.

Interested in playing with the different scenarios yourself? I uploaded my hypothetical data in an Excel file here, or in a Google Spreadsheet here. Google Spreadsheets is crappy for this kind of stuff, I’d recommend using Excel.

Predicting the future, one week at a time

I used to be the PM for one of HubSpot’s freemium email tools. It was a great experience launching something brand new in front of thousands of people at our annual conference, and then growing it to hundreds of thousands of active users. We watched our metrics extremely closely, and we knew how fast we had to grow to hit our goal for the next year. I would frequently get questions like “are we having a good week?” and I felt the pressure to give a reliable and accurate projection. If things were going poorly, I needed to be able to understand why and sound the alarm so the team could take action. That said, you can’t have many false alarms. You don’t want to come across as the boy who cried wolf.

I ended up building a simple model in Excel (Google Docs link) that helped me visualize the current week against previous weeks, so I’d be able to make a reasonable guess as to whether we would grow, hold steady, or lose ground.

For example, lets say that 100,000 people used an app on a weekly basis (WAUs). Not every person used it every day, so our DAUs (daily active users) was less than 100,000. Lets say it was 65,000 DAUs. I recorded the cumulative number of people that had used our app so far that week. It looked like this:

WAU_Projection

I then added columns going back in time, and kept track of it going forward. This gave me a nice set of data to play around with:

wau_projection

The pattern of usage each week was incredibly consistent. I graphed each daily total against the final count of users active for that week:

cumulative_percentage

This chart shows that our pattern of usage each week is incredibly consistent. Between 60 and 70 percent of our weekly total uses in Monday, and between 75 and 80 percent of our users have used in by the end of the day Tuesday.

The way I read this chart is that we are better able to predict what our total user count will be by the end of the week. As our user base grows larger, it’s harder for our user acquisition to have as much of an impact. New users can definitely increase, but that’s a good problem to have.

Using these numbers, I updated the model to project what the high and low bounds of what I’d expect for our total usage for the week:

growth_model

Interested in doing this kind of analysis or learning how to build world class products through quantitative analysis? We’re hiring for data analysts at HubSpot, read about the position here.

Disclaimer: all of the data in this sample and the screenshots are fake. They were made up and not reflective of any HubSpot product.

Facebook and Twitter Onboarding Emails November 2015

As part of my work on Sidekick and HubSpot’s sales platform, I focus a lot on the new user experience of our products. As Brian Balfour likes to say “user onboarding is the one element of your application that all users will use”. Can you think of better metrics to invest than getting your users activated and set up for success?

As part of thinking through what will help explain the value of our products to users, I like to evaluate what other successful companies are doing on a regular basis. Recently, I took a look at the emails they send to users as part of the signup process as they move them towards an activation event. I thought it was interesting to see how the emails for Facebook and Twitter stacked up against one another. They have a ton of signups and a lot of opportunity to tune these emails to get the best results. What are they doing that might be applicable for your personas / use case?

First Email:

  • Facebook subject: “Just one more step to get started on Facebook”
  • Twitter subject: “Confirm your account, FirstName LastName”
  • Facebook goes with an aggressive headline with “Action Required”. Grabs people’s attention!  Twitter uses your name in the subject, I’m surprised that Facebook doesn’t do the same.
  • Both Twitter and Facebook want you to “complete” your account in the paragraph above, but both say “confirm” in the CTA. The two sentences in the Facebook feel so robotic.
  • Facebook looks to reinforce its value by describing why it’s useful: “helps you communicate and stay in touch with all of your friends. Once you join Facebook, you’ll be able to share photos, plan events, and more”. Twitter doesn’t do anything like this. I guess it’s hard to describe what twitter is to everyone in one sentence.

Second Email:

  • Facebook subject: “Welcome to Facebook”
  • Twitter subject: “Follow Vogue Magazine, Jimmy Kimmel and Rihanna on Twitter!”
  • Twitter is focused on getting you to follow users, rather than build out your profile. I’d guess that twitter is less about making it so your friends can find you, and more about finding content you’re interested in.
  • Facebook is obsessed about getting you to enter your profile information. They try to hook you with content first, but I assume that profile information is the key to showing you friend suggestions and other information you might like.

Third Email:

  • Facebook subject: “You have more friends on Facebook than you think”
  • Twitter subject: “Eric Shawn tweeted: “Should we accept more #Syrianrefugees? A look at one man’s journey @Foxnews, @CWS_global, @John_Kass, Watch:
  • Twitter is all about information and news (granted, I picked some accounts to follow in their onboarding process), while Facebook is pushing you to connect your inbox so they can prompt you to add your friends. This is one long email with a lot of tweets embedded in it.
  • It’s weird that Facebook shows so many different email clients, when I signed up with a gmail.com test address. Feels like they haven’t optimized this email, but what do I know?

Fourth Email:

  • Facebook subject: “Robinson Cano and Tom Brady are Trending on Facebook”
  • No twitter email (other than more content to view / follow). Interesting that they don’t prompt you to connect your address book, everybody else does this.
  • I’m surprised that the content of the email isn’t more engaging. I’m surprised they aren’t using images more prominently as twitter is, or showing information as it would appear in your news feed.

Here’s the side by side comparison for Twitter and Facebook’s emails. Did I miss something? Are you impressed with their emails, or underwhelmed?

 

FBvsTwitter

 

 

The Metric Watched By Top Startup Growth Teams

It is easier to create technology products today than it has been in the past (and only getting easier). With more entrepreneurs building new products, the competition for people’s attention is accelerating. I used to think that building a great product would result in press and demand for your project; but I now know that is naive. Even if you build a wonderful product, it doesn’t mean that people will flock to use it. You need to be maniacal about understanding how many people are using your features, and improving your metrics over time.

Dave McClure’s pirate metrics are an invaluable model for analyzing SasS metrics, but little has been written about them. Each of the metrics are not all immediately valuable and actionable as you first start building a product, but one of the ones I think that is valuable (and critical to start measuring) from the very beginning is an activation event.

What is an activation event?

I like the KissMetrics definition of activation:

Activation is: The first point where you deliver the value that you promised.

Source: https://blog.kissmetrics.com/saas-activation/

Activation Examples

Some examples of activation (I don’t know if these are their real activation events):

  • DropBox: Your first file is backed up from your computer into the cloud
  • Facebook: You connect with 7 friends within your first 10 days
  • Stack Overflow: Your question is answered
  • Instacart: When your groceries are delivered for the first time
  • Instagram: Someone likes one of your photos

Key Elements of An Activation Event

There are key elements of an activation event that make it so valuable:

  • It happens once.  Once someone has activated, they cannot activate again.
    • This defines cohorts (daily, weekly, monthly) analyzed over time.
  • It represents real value for users. It’s shouldn’t be a “bullshit metric”.
  • It gives you a sense of how efficient your acquisition funnel is / how well you do at getting people to see value in your product. This is the activation rate.

Not everyone who signs up for your service is going to be able to use it / get value from it. Over time, you should be optimizing for the percentage of people who can use your product, and then how many of these people come back and use your product in the long term. I have been using MixPanel to do this in my time on the Sidekick team, but any good analytics tool will be able to give you this type of insight.

Measuring impact based on activation

Some of the things that we track based off our activation rate:

  • What is our overall activation rate?
  • What is our overall activation rate by channel?
    • For example: Paid Acquisition (platform, campaign, audiences), Content Marketing, Social Channels, SEO, Virality. You might choose to stop pursuing channels because the activation rate is too low or adjust your strategy to improve activation rate for a single channel.
  • What is the time it takes someone to activate? Can we decrease this time?
  • What is our retention of activated users over time?
    • If a user doesn’t activate, I highly doubt they’ll keep using your product over time. By focusing on cohorts of activated users, you can optimize towards a ceiling that reflects an attainable goal
  • How does our activation rate improve over time?

When to start tracking activation

When you’re first building your product, you should be speaking with all of the people that are using it. Once you get past those first 100 users, it’s hard to speak with everyone. That’s when having an activation event will give you an indication of whether people saw value in your app, and whether they’re likely to want to continue using your product. Even in your earliest days, it’s important to have an idea of what you expect people to do in your app and how many of them accomplish that task. Since it is a percentage, it is valuable when you’re the size of Facebook or for your first 1,000 users. As you grow, you will learn more about your users, your business, and how to optimize for success and activation over time. As you learn more, you can refine your activation event as you learn and collect more data.

This post was originally posted here on the HubSpot product team blog

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