The Company That Understands The Customer Best, Wins
Many companies believe that buyer persona (or voice of the customer) research is only useful for marketing. But really, your entire organization needs to have a deep understanding of your customers. These insights can have an enormous impact on a firm’s overall success.
Buyer research contributes market insights that help identify your ideal target niche. It helps you differentiate from the competition. It improves product roadmaps and makes your customer support more effective. Still, many firms prefer to “wing it,” making assumptions about customers that conceal the full picture and adversely affect messaging. Companies that invest in buyer research can leap ahead in growth. Here’s an example.
No Stranger to Challenge
Serial entrepreneur Donna Salvatore is no stranger to challenge. An avid outdoors woman, she has climbed Mt. Everest, chartered sailboats in the South Pacific and is planning to climb Mt. Kilimanjaro in the future. She’s also an intrepid businesswoman who’s served as the CEO of 7 technology companies over the past 23 years. Salvatore launched her latest business adventure in 2014 when she founded Megalytics, a commercial real estate (CRE) analytics company.
There’s a lot of risk involved in commercial real estate transactions. Most of the due diligence for deals is done manually by 3rd party consultants or in-house. Megalytics empowers property owners and lenders to make better decisions by quantifying the risks inherent in their credit underwriting, tenant risk assessment, and portfolio management. The firm aggregates real-time data from hundreds of sources and uses proprietary scoring algorithms to provide real-time credit, due diligence and risk assessments. It’s used by acquisitions and asset managers when evaluating properties, locations and prospective tenants.
Taking a First Stab at Marketing
Like most startups, Megalytics didn’t launch with a clear marketing strategy. Their marketing was reactive as they pitched to prospective clients. But this approach was resulting in inconsistency. Salvatore explained, “We weren’t unified. We had a lot of different brochures for each product that really didn’t match. We had PowerPoint decks that were created at different times by different people who had different ways of communicating what we do. We didn’t have a common look and feel or common messaging.”
Salvatore recognized that they needed brand messaging and a marketing strategy. But the Megalytics messaging was not based on any real customer research. As a result, they weren’t attracting much in the way of inbound leads, and the website wasn’t answering questions for prospects engaged in the sales process. “You really couldn’t even tell we worked in commercial real estate by our website,” Salvatore explained.
Buyer Research Immediately Shifts Sales Messaging
PropelGrowth was engaged to help with marketing strategy. I conducted in-depth interviews with the Megalytics team, including people from Sales, Marketing, Product Development, Delivery and Customer Service. Together, we analyzed their sales process, discussed recent deals, and reviewed proposals and the assessments generated for clients. This helped me to get a sense of their pitch. We then decided on where to focus the persona research.
While I was conducting the buyer interviews, Megalytics was working on new sales decks and asked me to participate in those meetings. After just two buyer interviews, I realized that the value proposition Megalytics was incorporating into the new sales decks was inconsistent with what I was hearing in the interviews. In fact, it was so out of alignment with their buyers’ mindset, that I worried it might alienate prospects. I immediately introduced a different tone and value proposition based on what I was hearing from customers.
Immediate ROI from the Buyer Persona Research
Once the buyer personas were completed, Salvatore circulated the presentations to everyone in the company and to the board of directors. She started using them when meeting with her sales team. At each weekly meeting, they would review a persona and notes from one of the interviews. Then they’d decide how to apply the insights in the field.
The personas had an immediate effect on sales. Within 2 months of completing the persona research, sales were up dramatically.
Two weeks after I briefed the team on the research results, a Megalytics client’s contract came up for renewal. Salvatore read through one of the relevant persona interview transcripts just before meeting with this client. That particular interviewee said he thought Megalytics reports should be a standard due diligence checkbox for every real estate transaction above a specific threshold.
So Salvatore brought up the research in the client meeting. She pitched an unlimited subscription to get more of the client’s acquisitions staff to consistently use the product. “I gave them a proposal for 2½ times the amount of last year’s contract.” Salvatore said, “I would not have been that aggressive if I hadn’t read the persona interviews. I would have been tip-toeing to avoid upsetting the client. But I realized that they need this service.”
Before we conducted the research, Megalytics had dismissed smaller firms as being too small to approach. The research helped Salvatore realize that they could sell subscriptions to these smaller firms. Salvatore met with an existing client that manages only a few thousand square feet of retail space. This client had ordered a few one-off reports, but wasn’t consistent. Salvatore pitched a subscription, and they agreed. “I don’t know if we would have tried that without the persona interviews,” Salvatore said. “We would not have understood how valuable our service is to them. The persona research gave us to confidence to just go for it.”
“Because of the persona interviews, we realized how important our product is and how much clients need it. So instead of selling one-off reports, we converted everything to subscription pricing this year. This creates an annuity stream of recurring revenues, which we really didn’t have before.”
Megalytics is often asked by clients to do “lunch and learns” for their teams. They spend substantial time and money preparing for these and flying out to the client location. But Salvatore wondered if these meetings were a waste of time. In our buyer persona research, we learned that this was the way some of their highest volume users discovered Megalytics and began ordering reports. “It was great to learn that this is not a waste of time,” Salvatore said. Now they can invest in doing more of these educational events to build awareness and grow sales volume with existing clients. Salvatore expects the lunch-and-learns to contribute to ongoing revenue growth over time.
Surprising Feedback on Pricing
The buyer persona research also uncovered surprising pricing feedback. When we started the project, Megalytics was concerned that their prices might be too high. But interviewees told me that Megalytics is actually lower than its competitors. Clients thought the prices could be a bit higher. “That enabled us to raise prices across the board,” Salvatore said. More importantly, they realized that their most popular service was also where clients have the least price sensitivity. “This allowed us to adjust the pricing so it’s not fixed anymore, it’s variable depending on the amount of money they have at risk. We wouldn’t have gotten there without the persona research.”
Right after we completed the buyer research, Salvatore’s team updated the website, incorporating the new messaging and keywords PropelGrowth recommended. “We’ve gotten a lot more hits on the website than ever before now that we’ve updated the content.” That new traffic is converting to qualified leads. “A lot of it is just having the right messaging on our website. That increase in traffic is also a nice return on investment.”
Salvatore plans to use the buyer research for fundraising. She thinks the insights can help convince investors that their market opportunity is huge. In addition, Salvatore is using the research to train her sales team. They meet weekly and review personas and role play approaches. They also review the data from buyer interviews during pre-call planning. So the ROI on the buyer research will continue to pay dividends going forward.