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How do you determine if your slow growth is a product market fit or marketing channel problem?

When growth is slower than expected/needed, it can become a heated debate between whether the problem is on the product vs. the marketing side. What methods/tools do you use to root out whether the marketing channels/onboarding funnel/etc needs revamping, vs. re-evaluating your product's features?

Updating the question to be more clear: Assume that you have already done best-practices on bringing the product to market - user and beta testing with target personas, etc, and the results look good. Assume even that you have acquired some customers in your target vertical(s). A broader product market fit may still exist, or your growth engine may be the culprit - how to tell?

14 Replies

Rob Rusher
2
0
Rob Rusher Advisor
Director, Denver Area
I recommend that you look into Service Design. The principle behind service design is that you must first understand the people that would use your product and their journey through why they would need your product.
You can easily do this yourself with guidance for the Internet. Start with: thisisservicedesignthinking.com
The concept of user personas and journey maps will help you understand your market. User interviews are also a huge eye opener.
Patrece Bryan
2
0
Patrece Bryan Advisor
Product, Content and Communications Strategist, Communications Advisor at Apartment
I'd start with speaking to your intended customers about your PRODUCT. See what needs it solves. What benefits your audience is taking away. Then look at your marketing to see if these customer pain points are being hit hard enough for conversion. Sometimes you'll find that the problem is not product or marketing. It may be that you're targeting the wrong audience. Patrece Bryan mobile: [removed to protect privacy] https://www.linkedin.com/in/patrecebryan
Thomas J. Kaled
1
0
Thomas J. Kaled Advisor
Business Development Consultant @ thomas.kaled@gmail.com
The tools I use to distinguish between a Sales and/or (generally and) Engineering are CRM's and Focus Groups. Groups are cost effectively convened during Symposia or any "naturally" occurring conference and are generally conducted near (not in) those meeting areas. CRM's should have fields wherein terms are operationally defined that will allow you to dynamically collect this information and summarize using dashboards.
Sam McAfee
3
0
Sam McAfee Advisor
Building Popup Incubators for Corporate Innovation Programs
Steve,

It would probably help if you thought about this in terms of metrics, as applied to your business model canvas, which is where you keep all of your assumptions, right? :-)

Typically, I use Dave McClure's pirate metrics, AARRR. On the canvas, there are boxes for channel and value proposition. You test those assumptions with marketing. The conversion rate from your marketing to your landing pages will tell you what's working. Your marketing is going to be focused on acquisition, which does not validate product market fit.

Your retention metrics, on the other hand, are what will tell you whether or not your product is actually solving the problem the customer has. Patrece is right that you can also just talk to them. That will give you more fine-grained information.


Steve Paddon
1
0
Steve Paddon Advisor
Sr. Product Manager at Gbox by Oncircle
Thanks all for the comments. I raise this because for founders, there is often a lot of consternation around contemplating when to bring expensive sales and marketing leads for scaling the business. If they do this before they really have a good product market fit, it's a big waste of money and can bury the startup. On the other hand, really getting sufficient data to know if you have product market fit before these skills are in-house is often not trivial.
Megann Willson
1
0
Megann Willson Advisor
Partner & Owner, Facilitator, Strategist, Panoptika. Co-Founder, ProductCamp Atlantic. Founder & Designer, UpSatchel
We validated, but it's not selling. Who to blame!?!

I'm hoping you objectivelyevaluated product-market fit at the outset, prior to launching, as you described. (And by this I don't mean asking friends and family who love you...but some really harsh critics). Any failure to perform can result in finger-pointing, but when it does, the problem may be neither, but rather a culture of scarcity and a search for a scapegoat to CYA.

It's worth getting an outsider involved at the validation stage, someone who doesn't have a stake in the product and is willing to say so when the baby is ugly. If that didn't happen, then regardless of the cost, if you're already selling product (or not) and it isn't going well, it's time to take a step back. It's not going to get any better on its own. Start doing some win/loss analysis with customers and channel partners, and find out what's going on before proceeding.
Charles Leahy
0
1
Charles Leahy Entrepreneur
Digital Marketing Assistant at Holborn Assets LLC
Dunno. DailyTop10s
Rill Hodari
0
0
Rill Hodari Entrepreneur
Strategic Consumer Insights Leader
I agree that better strategic research earlier on could have helped but since you're already executing and if you have evidence that relevant people are being exposed to the product and have had the opportunity to buy, conduct follow-up quail with that sample and see why they didn't. If those results prove the channel to be an insurmountable issue then go back to the drawing board and look at bigger strategic research to work on pivoting from.
Dave McCarty
0
0
Dave McCarty Entrepreneur
Sales & Marketing Consultant w/ Startup Success
I'd focus on conversion / retention metrics and process weak points in all existing customers. The points of increased trouble / loss in each process along with appropriate CRM data should help focus on if you have a sales / service issue versus product.
Anila Arthanari
1
0
Anila Arthanari Advisor
Cofounder & CTO at Iris PR Software
Sales and marketing efforts help acquire customers while product retains. To understand where the issue lies, I'd start with assuming there are product concerns and prove otherwise.

I'd start with the retention metrics for your product, namely churn. Do you have churn? Is churn related to issues in the product vs issues such as credit card expiration or misfit customers? Certain churn is acceptable for the type of industry and model you play in. We are a Saas based company and churn up to 2.1% is acceptable. Since you have customers, this is a number you should have data on.

If you have a product that's been in the market for a while, you can also look at CLV (customer lifetime value) and determine average CLV for your product. Product features and experience can have a direct impact on increasing CLV. Having a high level view of your average CLV and analysing them month over month can help you determine if customer are churning because of product blocks.

But the best way to get direct insight into your product is to talk to your customers. For a small startup like ours, I sent out monthly surveys and talk to our customers to understand how they experience our product. You can also get insights into product features that are the most valuable to them and features that have little value. Use this data to ensure marketing campaigns and messaging highlight the highest value customer benefit.

If these numbers look good and above average for your industry and business model, then the chances are good that your product is not the problem. Hope this helps!


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