Lenny's Podcast: The video discusses how to measure and improve customer satisfaction by focusing on the 'very disappointed' metric and targeting 'somewhat disappointed' users.
Guy Raz: Three women in San Francisco created a successful tequila brand, 21 Seeds, targeting women, and sold it for $160 million in three years.
Lenny's Podcast - Ignore some users to find product-market fit
The video explains a method to gauge customer satisfaction by asking users how they would feel if they could no longer use a product, with responses ranging from 'very disappointed' to 'not disappointed.' Sean Ellis found that companies with over 40% of users saying they would be 'very disappointed' tend to grow faster. To increase this percentage, companies should focus on users who are 'somewhat disappointed.' By identifying whether the main benefit of the product resonates with them, companies can refine their offerings. For example, in the case of Superhuman, the focus was on speed and time-saving features. Feedback from 'somewhat disappointed' users should be filtered to align with the core benefits appreciated by the most loyal users, disregarding suggestions that deviate from these core strengths.
Key Points:
- Ask users how they'd feel if they couldn't use the product anymore to gauge satisfaction.
- Focus on increasing the 'very disappointed' user percentage to over 40% for growth.
- Target 'somewhat disappointed' users to understand if the main product benefits resonate.
- Disregard feedback from 'not disappointed' users as they are unlikely to become loyal.
- Align product improvements with core benefits appreciated by the most loyal users.
Details:
1. 🔍 Exploring Customer Disappointment Metrics
1.1. Understanding the 'Very Disappointed' Metric
1.2. Prioritizing Product Features and Improvements
1.3. Strategic Use of Customer Feedback
2. 📊 Benchmarking for Business Growth
- The fastest-growing companies had more than 40% of customers who would be 'very disappointed' if the product was no longer available, indicating high customer satisfaction as a key growth driver.
- In contrast, companies struggling to grow had less than 40% of such customers, underscoring the importance of strong customer loyalty and satisfaction.
- Case studies suggest that implementing strategies to enhance customer engagement and satisfaction can significantly impact business growth.
- Benchmarking involves assessing customer feedback and satisfaction levels to identify growth opportunities and areas for improvement.
3. 🔎 Strategic Engagement with Feedback
- Target individuals who are somewhat disappointed with your product as they represent the biggest opportunity for improvement and conversion into advocates.
- Divide the somewhat disappointed group into two categories: those for whom the main benefit of your product resonates, and those for whom it does not. This allows for tailored communication strategies that address their specific concerns and needs.
- Avoid focusing on feedback from those who are very disappointed or not disappointed at all, as they are less likely to become advocates for your product, allowing for more efficient use of resources.
- Implement specific engagement strategies for each subgroup, such as personalized follow-ups or targeted offers, to effectively turn neutral or slightly negative experiences into positive ones.
4. 🎯 Refining Product Focus for Success
- Identify and focus on the core value that loyal users appreciate most about the product. For Superhuman, this was speed and time-saving.
- Disregard feedback from less enthusiastic users if it deviates from the core value that attracts the majority of loyal users.
- Avoid being pulled in multiple directions by implementing features that do not align with the primary value proposition.
- Ensure that product development is guided by what the most enthusiastic users love the most, rather than the varied requests of less satisfied users.
Guy Raz - Why Product Placement and Demographic is EVERYTHING
Three women in San Francisco identified a gap in the tequila market, which was predominantly male-focused, and decided to create a tequila brand specifically for women. Cat Huntus, one of the co-founders, had been making fruit-infused tequila at home and was encouraged by friends to start a business. They partnered with a distillery in Mexico and launched 21 Seeds in 2019. Instead of selling in traditional liquor stores, they targeted retail locations frequented by women, such as Bevmo and Target. This strategic positioning paid off, and by 2022, the brand was acquired by Diageo for $160 million.
Key Points:
- Identify market gaps and target underserved demographics.
- Create products that cater to specific consumer needs, like women-friendly tequila.
- Strategically choose retail locations that align with your target audience.
- Leverage personal experience and passion to create unique products.
- Successful exits can occur quickly with the right market positioning.
Details:
1. 🌟 The Birth of a $160 Million Idea
- A group of three women in San Francisco founded a business that achieved $160 million in revenue within three years, demonstrating exceptional growth.
- The rapid success was attributed to innovative business strategies and a keen understanding of market needs.
- The founders faced initial challenges, including funding and market competition, which they overcame with strategic planning and execution.
- Their approach involved leveraging technology and data-driven decision-making to enhance customer engagement and retention.
- Key to their success was a focus on building a strong brand identity and delivering quality customer service, which significantly boosted customer loyalty and repeat purchases.
2. 🎯 Targeting an Untapped Market
- The company identified a strategic opportunity in the tequila market by recognizing a predominance of male-focused branding, with hundreds of tequila brands primarily targeting male consumers.
- This market analysis revealed a significant gap, suggesting the potential to engage untapped demographics, particularly female consumers, who were being overlooked.
- As a result, the company developed a comprehensive strategy to target these untapped segments within the tequila consumer base, aiming to differentiate their branding and marketing efforts to appeal to a broader audience.
3. 🍹 A New Kind of Tequila
- Cat Huntus and her co-founders identified a gap in the tequila market by focusing on women who prefer wine at social gatherings.
- They created and marketed a tequila designed to appeal specifically to women, targeting social settings like book clubs.
- This strategy contrasts with traditional tequila marketing, which often targets a younger, male demographic focused on party culture.
- The approach represents a strategic pivot in the industry, aiming to capture a new segment of the market.
- By shifting the focus to women, they aim to redefine the social context in which tequila is consumed, differentiating their brand from competitors.
4. 🏭 From Homemade to Professional
- Cat transitioned from making fruit-infused tequila at home to starting a business.
- Cat leveraged encouragement from friends to commercialize her product.
- In 2019, Cat partnered with a distillery in Mexico to professionalize her tequila production.
5. 🎉 A Successful Launch and Acquisition
- 21 Seeds was launched with a strategic focus on selling in non-traditional liquor outlets where target demographic shops, such as Bevmo and Target, rather than liquor stores.
- This strategic placement was instrumental in the brand's success, leading to its acquisition by beverage giant Diagio within just 3 years of its launch in 2022.
6. 🎧 Discover the Full Story
- A significant financial transaction valued at $160 million was discussed, highlighting its importance in the business landscape.
- Listeners are encouraged to explore the comprehensive story behind this deal by tuning into the 'How I Built This' podcast, underscoring the depth of information available through audio content.
- The podcast not only provides insights into the transaction but also delivers strategic learnings from business leaders, enhancing listener engagement and understanding.
- A direct link to the podcast is provided in the bio, strategically increasing accessibility and encouraging audience interaction with the content.
