What's up everyone? Good to have you here. We're letting people in, so we'll give everyone a minute or two to join. Tracy, great to see you again.
Love having you here. We'll get started in just a minute or two as people roll through. I can see quite a few people in the waiting room. We got a great outline of what we're going to cover today.
I'm sure you guys got the promotion. You're here for a specific reason. I'm going to be pulling all the expertise I can out of Pep, who is an incredible entrepreneur, a friend of mine, also lives in Austin, Texas. We have dinner every once in a while, talked strategy.
I always learned something from him. And now on his third venture, if I'm counting correctly, which is really cool and got a great agenda here, we will have time. I'll make sure as I guide the questions and the topics we have enough time for Q&A. So if you have a question, feel free to drop it in the chat in real time.
Maybe some other people will help address or answer or give you some ideas about that. And then if you want to, when we're done the first part of the exercise, you'd be happy to come on live, talk through a specific thing that you're working on. Your company, your specific question that you had can get insights from both Pep and myself on whatever you're working on. All right, everyone.
Welcome back to the Demand and Expert Series sponsored and hosted by Refine Labs. My name's Chris Walker. For those of you that don't know me. I'm an executive chairman at Refine Labs.
I started a new company called Passetto recently. I'm also an investor in a content production agency called Hatch. The Expert Series is built around having a core expert within a specific field that we think is incredibly important and impactful for demand and go to market professionals. And we bring them on to share all of the expertise that they have in a specific area in hopes that it helps you challenge the way that you think or give you some ideas to bring back into your company.
We try to make it as actionable as possible. So maybe perhaps just a note, maybe there's some things people can take away that they can put in place today or next week, some actionable things. And then just want to introduce my guest, Pep Lajau. I'll give you a little floor.
But Pep is a great friend of mine. I've known him for many years. And even before, I knew him personally, I watched what he did with his previous agency, Spearow and some of the other things he's been doing. And I really love the new project he's been working on for several years, winter because I see so much incredible value.
And honestly, just a little bit of a miss when it comes to how B2B tech companies at all stages think about being able to bring in insights directly from their target customers and then deploy those not only in product marketing or how to message your product, but also in how we think about our go-to market strategy and how we think about where we advertise and many other things that we can learn directly from customers as an alternative or as a compliment to CRM data and attribution data. And so with that, Pep, pump to have you on the show, man, congrats. I've known you. This is your first podcast doing it in the new house.
I want to congratulate you on that as well. Great to have you here. Yeah, thanks for inviting me. It's my pleasure to be here.
So the topic today is target customer insights and messaging testing and messaging validation. And how that has an impact and how that can augment your demand-gen strategy and even your sales velocity and every other part of the business. So just want to talk at a high level, just set the stage, like talk us through the importance and the rationale as to why you should have this type of process. And then how is the process actually work?
What is the frequency, how you do it? Let's talk through how that works and how people can learn there. So if you think about messaging, what is messaging? Messaging is key ideas, key thoughts we want to send out to the market, the target customer about us.
What do we want them to know about us? And those messages, of course, should be compelling enough so they would consider buying us over alternatives. That's what messaging is. And so if you think about your website, this is where you're messaging mostly, but it also lives on social media.
So it's kind of domain agnostic. If you would remove every single word from your website today, maybe just keep a signup button or request a demo button. How many people would take any action? Like nobody.
So words are the most important part of your website. Now, if you realize the words are the most important part, then how are we measuring how effective the words are? And how can we make the words better? Because better words will convert better.
You'll get more demos, more signups, etc. And so we need to have a methodology to measure the effectiveness of our words, because it's not just any old word will be the same. Now, there's a huge difference on how you call things. As an example, at Winter, we launched the product.
We called demos on demand, and this had massive market interest and so on. And then we renamed it to sales demo feedback. Same exact product, which is the different value prop, different name for the product. And nobody cared.
Nobody cared. The words you use to how you communicate the value prop massively impactful, very important. So that's kind of like the baseline. And to take two steps back, how do we even come up with messaging that might resonate without target customer?
It starts from target market, target customer insights. So we need to know what the problems are, what the pain points are, what triggers them to go look for solutions for their problem, what's happening in their day to day, either workplace, so we need to know all that. So then when they do find us, let them know website or however they find us, that messaging is now joining the conversation in their mind. Love that.
And so high level overview on the process of how you would actually do that. I think initially, right, you have to come up with some type of hypothesis, you have to have an idea, you talk to customers and you come up with something. And then what happens from there, how are you actually able to get feedback on that message, and you could talk through how it works at Winter, or what like a status quo, what would be a status quo, is basically testing in sales messages, feeling how it's resonating or looking at how the deals are closing and perhaps doing focus groups. So there's like some things that people used to do and then you can also talk through how it works at Winter.
Absolutely. Yeah. So a lot of companies don't do any message testing, which a message testing basically means you test your messaging with your target customers, the people you're trying to influence to see how it resonates. And a lot of companies keep that for the reason that they think, you know, that maybe it's too costly or they don't know how to do it, and they just spend endlessly arguing, like sales wants to say this and marketing wants to say that and see it was a different opinion.
And you know, like everybody thinks that they're, you know, they can write words and so they have, they should have a say in it. So the solution to all of that, the solution to getting to a confident consensus is to test how any messaging lands with the customers and essentially, how do you measure words? And it's quality to research, essentially. It's not a testing, it's a measurement methodology.
A testing will tell you if A is better than B and by how much, right? You will learn nothing about what needs improvement or what's resonating and what's turning them off. You know, so that's a message testing is form of quality to research. And really, you're trying to understand four main things when you're putting your homepage in front of your target customers, you want to learn four things.
Clarity, like how clear is it to do they get it after they read the whole thing? Like what questions do they have? So clarity number one, and we know how jargon B to B websites can be, right? Like, so that's like, take it to the playground, like it needs to be in human language.
Number two is relevancy. So people come into a website with specific problems, priorities, pain points, and there might be some other things about them like, oh, I'm a CMO at a company with 50 employees or whatever. When they're on their website, your ideal customers on your website, they need to understand, ah, this is for me. Maybe it spells out this is for CMOs with, you know, 50 people, you know, companies, maybe it's it talks about the problem you solve.
Maybe, you know, things like that. So they need to understand that it's relevant for them. And this within seconds, not after, you know, browsing tens of pages. And the most important part is then the value.
So your website, of course, is communicating some sort of a value, teasing the promised land. And they need to want that. They need to go like, Oh, that's kind of cool. Oh, yeah, this seems interesting.
I want to learn more. Like nobody buys unless your product is very cheap to buy right away, but it should pique their curiosity. They want to learn more. So that's value communicating the value.
And then finally, differentiation, most of us exist in a category with tons of competition, you know, especially if you're like large categories, like email marketing, customer support, CRM, you know, like hundreds of direct competitors. So you need to answer the question, why you over the category leaders. So that's kind of like how we assess what message just thing is. And you gauge their feedback by asking open-ended questions.
What about this is unclear? Would you think this is for or you do like a scale of questions, like on a scale of one to five, how interested are you in learning more about this? Or how interested are you in a demo? And then what might be the word that might because nobody wants to be in a sales meeting.
So that kind of like turn them off. So so changing the how interested are you learning more is a better gauge of the interest in the value than the differentiation. Like, why do you think you should choose this company, tool, whatever, over the name your top competitor that everybody knows, you know, if your CRM is hop spot for Salesforce. If you're not in a category with known big players, then you might phrase that question differentiation question.
Do you understand why you should use this tool over alternatives, something like this? And you want open-ended feedback, like they write, because that's how you know what is the problem, where is the problem, which parts of your website are interesting, because you ask what about the sales percentage with you, or what about this turned you off, and you will learn very in very specific terms. So you can do this completely free, well, time and hassle, creating a server, like, I for more any old survey tool, and then you need to find people who look like your target customers, your ICPs, they might be hanging out the LinkedIn, you might, you know, call, email them and offer them an incentive, you know, here's a gift card, if you're just if you're willing to, you know, invest five minutes in answering a few questions. I mean, quality research, it's not statistical significance does not apply in terms of like sample size.
In quality research, the concept is saturation, meaning that we need to achieve saturation is when you stop receiving new new insights. You can so typically it's around 15 people. So 15 people sample size is perfectly enough. And you can get more, when you get more people, the benefit is that you will start to understand the distribution of each, let's say we identify seven problems, well, which one of them is most important problem, which is like only about as one person, you know, so with a bigger sample size, you get to understand that, but just to identify problems, 15 people is enough.
So you can do this, recruit people that look like your target customers, ideally people who have never heard of you. So they're not familiar with your product, not definitely not your customers. That's one way to do it, it will take you a very long time to get the panel full. So to get 15 people, you need to probably call email about 150 to 150 people, even if you offer them money.
Winter does, you know, my company, we do it for you, you log in, you choose, we just like, ICP, there's a message, I think template, there's a homepage or whatever other page, boom, and then 24 hours, we'll give you the data. But yeah, so you can do this without winter as well. Chris, how do you want to go from here? So there's a point that I think is like, it's a little bit of a tangent, but I think it's critically important.
I love your perspective on it. This like the concept that I think that B2B companies, executives, individual contributors all really struggle with this concept of qualitative research, because they don't get a mathematical answer that can be put in a spreadsheet that tells them exactly what to do. So maybe quickly, just distinguishing quantitative and qualitative research at a high level, but then also talking through the benefits of each different method and why you need to be able to use both. Yeah, so quality, so quantity research is more like, if you want to get a numerical score of, let's say, how good is our support, ready from one to five, and then you learn that it's 3.8?
And now we can all be very happy that our support quality is 3.8. So how can we get it to 4.2? No, fucking idea. So that's quantitative research.
So qualitative research will tell you now what to do, what specifically are the things that people are unhappy about with your support, you know, or whatever it may be. And quant research needs much higher sample sizes. So the research, the thing is that we want it to be representative of the whole market. So that means, and given your the margin of error that you're happy with, it might be like 500 to 1500 people that you need to respond to your thing.
So then it checks out its value, its representative of the market. Now, with qualitative research, you're studying a specific population. So it's not the whole market, it's like very specific people. These are product marketers at e-commerce companies with 500 excuse, you know, like a very specific population that we're studying.
And hence, then again, as I said, 15 people is in us. So qualitative research is about why, what, and quant research is, how much essentially that's like the broad base, the differentiation there. Now, a lot of people think, I believe, and I think Chris also the vast majority of your target customer research should be qualitative. That's where the insights come from.
So because the point is to gather insights that lead to you driving more demand. And the point is not to gather big numbers, survey respondents to impress people. Because people want big survey, filling numbers, they really don't know the science. They just assume that, oh, we need more numbers.
And there's another mindset shift that is needed. It's just to go from capital R research to lowercase R research. And the idea here is that, you know, I think there's this pervasive idea that research needs to be like a big, scary thing, and it's usually very expensive. It's something you do once a year, maybe like you do this market research project.
But the world moves very fast. You know, average CMO thinks two quarters ahead, and a lot can change in the time. And in the reality, where target customers can change on the ground, you know, as increased interest rates that might, you know, a lot can change in quarters. And so you should be able to seek out answers about your target customers whenever a question arises.
I wonder if they what will they think about the new product we're about to launch? Or I wonder if this is a pain point or is it the top 10 pain point? You should not wait until the next annual survey you're going to do. You should be on demand right away.
Okay, we have this question and maybe it's just two questions. Boom, you should go out and find those answers. So it's fast, it's low cost, it's easy. It's no big deal, essentially.
Like research should not be no big deal. It's how we operate. Because target our target customers, our market insights should inform our good market strategy. The actions would take.
Yeah. And we're going to get to that point in just a second. But before we do, I want to ask you about where some of the symptoms that companies feel when they don't have this feedback and validation from target customers in the process? Yeah.
So symptoms are you're endlessly arguing inside a company and not confident in which direction you should go and what you should do and what you should say on your website and any other communication. So if there's like lack of confident consensus, that's a symptom that you don't know. And then another symptom is you might be enthusiastically running in the wrong direction. And you will only learn much, much later.
That is too late. So let me tell you a story. You know, paddle is like a striped competitor. And so they hired the new CMO.
This is a few years ago. So the hired the new CMO, we decided that we need to completely rebrand our website, which they did. And it was catastrophic results for paddle, settle down and all that stuff. And people didn't know what the fuck is this company.
Like they couldn't understand this. They brought in the current CMO who knew of the problem. He knew they needed to rebrand paddle again. But like, do we invest again higher up branding agency, invest a million dollars in like a lunch or website and so on and so forth.
And then they so Andrew, the currency, a mobile basically created a vision for what it might be tested using using winter, like with certain CFOs and other people in the target markets, startup founders, etc. Then tested the new direction. And they got feedback, they iterated and then then the launch. And this was right before Saster, the big SaaS conference and they went out with the new messaging at Saster.
And people came up to their booth and said, Hey, so how are you different from Stripe? And that's when Andrew knew people now get their positioning, like before they couldn't understand even what the hell this is. And this was without investing huge amount of money up front just to see what happens. And you can erect and test any concept before you go, invest too much money in time in it.
Yeah, I think just double clicking on like if you don't do the testing upfront and you don't feel confident in the message or maybe you do feel confident in the message and you're enthusiastically running in the wrong direction, then it'll take you a really long time until it shows up in the business metrics. And then by then it's too late when you start missing pipeline targets, you start missing the number of demo requests, your clothes rates start going down because customers don't understand what you do or don't see how you're different. And so spending this time up front to figure out, do we have the right message? Are we targeted at the right people?
Have we segmented the market appropriately to know exactly who we're going for and why it resonates? I think it's just so critical, which leads us into the next part. And then people will just take a pause here. If you have questions, you have topics you want to talk through, make sure you get them in the chat, we're going to queue up and get into questions in five to 10 minutes here.
Let's take this even further into the action part of it. So we collected the insights, we have an idea of what's going on. So now what do we do with that in terms of how it can change or augment or improve our demand-gen strategy, how that shows up on our website, sales messaging, how does that all work? Yeah.
So somebody signing up for a thing or requesting a demo is the effect. But what is the cause? Cause is mostly, at least 80% is the messaging. And so if we make the cause, improve the cause, message, make it better, you will get more conversions.
Right? And so you want to understand what about it, our messaging is unclear. Now make it more clear. Message testing will tell you what about it, people don't understand.
So enhance clarity, as best as you can, if you understand what the problem is. Second, you know, make it more relevant, introduce more language that so your ideal customer will recognize that this is with them, make the pitch more compelling based on whatever was missing in the existing pitch. Like maybe they didn't get it or maybe they were wondering about the integration. So you know, whatever, maybe and find out the differentiation piece.
So if you, every category, you improve every category and then ship the new iteration or test it again, your conversion rate will go up. And then if a conversion rate go up, your cat goes down, you know, like, because your landing pages, your PPC landing pages will convert better, because the messaging resonates better. You know, and so if you can acquire customers cheaper than your competition, I mean, that's how you dominate. Yeah, I think it's interesting as well, because if you think about like full fledged demand, gen strategy, I think it all starts with the words you put on your homepage.
And then from those decisions that you make around that, then you have the message around what customer stories that you put out and what the framing of it is and how those go on the website and the feature pages. And then from the website, basically, and the way I look at demand gen now is you're taking the message on the website and then you're distributing it to people in other places where they actually pay attention. So with LinkedIn ads, Facebook ads, YouTube, you're basically just taking that message and then moving it downstream into other places and then eventually attracting people back to the website to consume that very focused message. And so it becomes really critically important that the homepage message and the key points that you make there are very in line and value with your customer, because then when you bring it into 100k a month and LinkedIn ads for your large total addressable market to finance leaders, if the message on the homepage isn't right, and the message on the ad isn't right, the ad isn't going to work as well.
And then when people do come back to your website, the website is going to work as well. It creates very large efficiency, improvement opportunities by getting this right. Exactly right. So I did all of our marketing is about trying to appeal to somebody.
We're trying to the target customer will find our message in compelling and they like us and they want to buy our stuff. Right? That's the whole point. How do we know that they like our stuff?
We have to ask them, you know, we cannot assume or if you just wait and see like, let's change it and see what happens. It takes way long. Like the feedback loop is now super long. You might waste hundreds of thousands of ad budget by the time you realize that, oh shit, people don't even get what that is or they don't find our value proposition differentiated or whatever it is.
It's very cheap. We do like 24 hour feedback loops. You can make your messaging really hit home. I wasn't going to go here, but I'm kind of interested myself.
So I am like, A.B. testing versus stuff like this. I know like Spiro does probably what A.B. testing, which historically has like, how do you think about that?
Because a lot of people, I think if they're like, Hey, we're going to change our homepage, they're going to go on higher branding agency. They're going to come up with some different message and they're going to run 50% of traffic each side, wait a month to collect the data and say, Oh, I guess like this one is a little bit better knowing that you're having a ton of experience and expertise in both. How would you guide people as you think about these two different methods? Right.
Well, they're not a replacement for each other. They're complementary to each other. So message testing, as I said, exercise and quality to research is a diagnostics exercise. You will understand what about my messaging is not resonating.
What about it is bad. What about it is unclear. What about it is irrelevant. You will learn what's wrong with it so you can make it better.
But once you understand what's wrong with it, you need to use your brain to make it better. Like your copywriter or your product, marketer, whoever works on the copy needs to take down the data that we have and rewrite it. Is the rewrite better? Is it more clear?
Is it more relevant? So this is hard to know. And again, you can do another round of message testing and see if the problems we identified are now have gone away and maybe, maybe you introduce some new problems. So you iterate with quality to research with message testing until you find a messaging that seems to be clear relevant, is compelling and differentiated.
But now we have the old messaging and the new messaging. How much is the new messaging contributing to revenue? Like I'll be getting 20% more demos, whatever. So AB testing measures that now.
So now we have A and B. But thanks to message testing, we came to a new messaging that we think is better. But how much better? So AB testing is measuring does it convert better?
And if so, by how much? And the thing with AB testing is that most B2B websites do not have enough transaction volume to run even a single AB test per month. It's not about to run for one month. So to calculate the sample size you need, I mean, it depends also on the relative difference.
Or like how much is B converting 5% better or 55% better and nothing converts 55% better. So usually if you have less than 500 transactions per month and transaction is a sign up as a demo request, whatever you're optimizing for, if you have less than 500 per month, you can't run even a single statistically valid AB test per month zero. And then message testing is all you have. If your sales force, if your hop spot, of course, you have 500 is like in the first 30 minutes of the day, you know.
And so they can run a lot of AB tests and measure everything to the T and so on and so forth. But if you're a B2B sales company with under 10 million in revenue, you probably can't even run a single AB test. I mean, it depends. But yeah, but if you can, AB testing comes after message testing.
Love that sentiment. Pep, thanks for sharing all that info. I personally find that the Q&A is like the most fun and the most interesting part. So feel free if you basically got Pep and I for free consulting right now.
So if you have a specific problem that you're working on or something that you're working through, you want to try or learn more about message testing or something that's totally unrelated to this, but you think that we can help work down to help with anything. So I think Stephanie has questions queued up. If you all feel comfortable coming on video, it can be a good back and forth conversation doesn't have to just be a question. So if you feel comfortable doing that, we'd appreciate it.
And looking forward to getting into it. Yeah. All right. So we are going to start with Yasbrit, who has a question about ideal personas.
So just brief, I hope I'm pronouncing that close. If you want to come off mute and ask your question. Sure. Thanks, Stephanie.
Hi, Chris. Hi, my question is basically for products, which are kind of catering for enterprise companies and where the buying cycles are very complex and the multiple buyers involved in the decision meeting cycle. So when we're taking about messaging for the homepage, who is that target persona that we need to keep in mind? I would say the champion, but yeah, I would like to understand the experts view on that.
Yeah. I mean, I agree with you. It is the champion because if we're talking about enterprise sales, the deal is closed in sales meetings. Now, this is very far from words on your website now.
The words on your website is essentially Legion, right? Like we're getting a foot in the door. They will invite us to pitch. And now what your salespeople say in a sales meeting will be a thousand times more important than what's on the website is only to get a foot in the door.
And so is whoever schedules a demo, and which is not the CMO or the C level enterprise decision maker or the buying committee, right? They come in usually much later. I'll offer a slight like alternative perspective here where I think that in many cases, not just in your specific situation, that creating a message that resonates with the business, not a persona ends up becoming the thing that you want to go after. When I write or when I talk about myself on LinkedIn or I pitch stuff, my messaging can resonate with the CEO, the CFO, the CRO, the CMO, the VPA, the man, Jen, even down to a marketing manager, and being able to have a message that fix, help solve a business problem that many smart people in the organization can see that and then bring that to whoever in that company ends up being the champion.
I think is an alternative way to look at it. And then inside of it, you have really good opportunities to say, here's our value prop for the CFO, here's our value prop for the startup founder, here's our value prop for the CMO. I think GONG does that pretty well on their website, breaking out the different stakeholders, but having a larger top level business message. Sure, thank you.
I think Chris, to your point, it could become a bit tricky when you're kind of catering for different verticals, right? Different industries, having a homepage message, then the company's focusing on six different industries. It could be, but you're going to prioritize. Prioritize is good.
That is what can't happen in a company. That is very difficult. I think they've been done. Right, the thing is the best way, and you need to push for it and advocate for it.
The second best way is to try to summarize. Okay, so how can we say it in a way that is appealing to everybody? And that's where companies get mission-wishing vague buzzword-filled bullshit. It speaks to nobody.
It's possible to do summarization well, but often that's how companies end up with fuzzy positioning. So we do have a question and chat following up there from Tony on, how do you suggest they prioritize? You prioritize based on who is the biggest, what's your best-selling product? What are they buying them?
What's your flagship? Usually, it's never that it's everything is equal. You have a flagship product, or at least the foot in the door product that brings everybody in, and then you'll upsell them data stuff later. I think if you go to Miro.com, they might have changed their website, but Miro, which has multiple products, yeah, they do say it's the visual workspace.
I mean, they're trying to summarize now. Visual workspace, the clarity there is questionable, I think, because they have the fake gem and not the big gem, but the other thing besides the whiteboarding. So yeah, maybe Miro is not a good example, but prioritization based on best-selling products. Yeah, I think you have the historical quant of who of the people that have bought the most, what are similar around them, what's our best-selling product or the feature that everybody buys versus there's a quant element, but for early-stage companies or for people that are rapidly iterating on their positioning product, I almost think that there's a qualitative insight from customers that helps you select if you went out to three different segments and you brought your best value props to the table, which segment is that resonating with the most?
Is that segment also the biggest opportunity, the largest ham where you have the best market share in that geography already? I think that prioritization is an exercise of strategy, and therefore, I think that bringing in a lot of different data points and making sure that it's not just a data quant exercise, but bringing in qualitative, being able to really develop a strategy, it's not a perfect answer or a perfect science, but that's like kind of the fun part about business. All the best parts about business are not things that AI can run analysis for and tell us what to do. That's what makes us valuable as employees.
That's what keeps us not being replaced by AI as being able to really understand and use multiple data points to come up with the best answer. Awesome. All right, so we are going to bring Sam on next. Sam, if you want to go ahead and unmute and ask your question.
Hello, folks. Thanks for that. Thank you so much. This has been really helpful.
I'm actually going through a research phase at the moment. I was thinking today how many calls is enough before you start getting validation over certain calls. I think we're up to like 20 now, and it's starting to feel like an echo chamber of the same trend. You're kind of validating your own situation.
It was phenomenal because I was kind of going a bit crazy. Keep this short. It's a slightly convoluted question to you both, but you're both very smart people, so hopefully we'll get through it. As a smaller company, and Chris, you mentioned this on how people are copying you.
So you moved the video, I think you mentioned that recently on LinkedIn. As a smaller company, how do you deal with the copycats of your messaging and your unique point of view? If you don't have your ad budget to distribute that message or quick enough to kind of like, grab the market share, if it's a small enough niche, you know it's debatable. What are your options there?
Is it a case of just constantly? Do you live and die on that point of view? Or do you constantly iterate that messaging to kind of stand out? Well, first of all, you shouldn't worry about small competitors.
If you're a small business and other small businesses are ripping you off, nobody knows they exist either. So that's fine. You should worry if your messaging is identical to the category leader, if you're a CRM and HAPs HAPs is repaid on the same, you're going to be your debt, essentially. You want to be different from the category leader.
Everybody else was maybe even a near identical business to your same positioning, same niche, but a small business, you should not care about it. But what to do about it might take is like everything can and will be copied. Unless so, your only chance to not be copied is to say things that they don't want to copy. So two examples, there are this billboard ads, Rickey Gervais, the comedian, the new vodka, the billboard ads, hey, by these vodka, it will make me rich says that.
Now, a lot of people wouldn't want to copy that because they think it's, how can I say like, like, Dharmesh Shah says, hey, by HAPs, so I'll be even richer. HAPs will not want to copy that message. Or if you go to linkscars.com, it's a British car leasing website is the most terrible awful website in the world, but it works because it's crazy how bad that website is on purpose bad. Nobody will want to copy them ever.
So it's basically put out a lot of personality. That's my advice. Yeah, I think the other alternative is Niching down where another thing that HAPs, if you're a small CRM and you want to niche down to construction companies, less than 50 employees that the category leader or things like that aren't going to copy that because they need much larger market share at this point. You can use down by segment, you can use down by feature and build a much better feature than HAPs bot would build within their much larger platform that's more getting into business strategy than just like marketing or messaging strategy.
But those become other alternatives as well. And then you can always expand the product and expand the message as you grow. So wedge in, go get some market share, start expanding, expanding. That's like HAPs bot started as like an email marketing tool if I remember correctly.
And all of a sudden they have a fully capable product that would compete with Salesforce and Marketo together to the largest SaaS companies out there. But you got to start somewhere, I think having to discipline around telling a small story first and then telling a bigger story as your company gets bigger, I think is the right play. Thank you very much. That was awesome.
We have kind of a similar question from Jesse that I'm going to read y'all. Looking at the SaaS space, there's a remarkable amount of companies using some version of the same copy. There's so much sameness, especially with Eurocopy buzzwords. So more of a why is there so much convergence and are you seeing fatigue in BABI buyers?
Absolutely. I think there's a lot of sameness because marketing in the last five years has been very numbers driven and then creativity and original thought have been playing the second fiddle, if you will. And everybody copies everybody else because they think like, oh, their successful company, if we copy their copy, we will also convert, you know, whatever, like Amazon has a 74% conversion rate, Amazon.com. Now, if you're an e-commerce company, you think that you will copy Amazon's design and the product page layout and that your conversion rate will also be 74%.
I mean, it's naive thinking. No, that's where it's no. But that is the thinking. Everybody, you know, and also copying is very human, right?
Like we, when we're born, we're babies, like how do we learn shit? Like we copy the parents and so mimicking and copying is just how people we can gripe about it, but it's never going to go away. It's, it's here to stay. Everybody will copy each other.
Now, the important thing to know is like, do we care and how much do we care about it? You need to be different, but mainly from the category leaders, you know, there's, if you've read like how brands grow and all that stuff, there's the duplication of purchase law, which you might want to read about, which essentially says that your competitor is always the category leader, not the, not the small players. And at winter, we conducted this buying behavior research study, basically how B2B says executives buy software. And what we learned was that they start with a short list of say, five to 10 companies, and then they narrow it down to only three to get a demo with only three.
And who is, who is in that first short list of like, say, five to 10, is mainly companies with the most brand fame, meaning the biggest, the best known companies. And then it might also be like a company who's marketing their following thanks to LinkedIn, organic, or you know, however, they might find you. So you want to be different against the category leaders predominantly. You don't want to be the same messaging as the top two, three best known companies.
The small potatoes don't worry about it. I think there's another key point that I want to make, especially over the past, like if you look at like 30 or 40 year time window where pre software, when we built hardware products, the product development cycles to build a new hardware product where 12 months to seven years to plan the product at the insights, do the tooling, set up manufacturing and China, do test runs, actually get the product validate that it works in the market. Okay, now let's go run in production. And so at that point, the ability to differentiate and the time that it took for a competitor to react was so long, then we move into the early stage of software where even back 10 years ago, the software development cycles were much slower.
And the ability of your competitor to find out what you were doing was much slower. And so you had this advantage. Now over the past 10 years, what's happened is there's massive commoditization in the software market that the ability to spin up a competitor or a feature of a competitive feature to a platform, you can do that in three to six months, and you can do that like using AI and a couple of devs and lower cost and be able to really make it be a potential competitor to somebody very quickly. And I think that ability to see people's messaging really quickly and be able to develop products is something that's going to be lasting in the software market today that I don't think we're ever going backwards from.
It's creating lots of commoditization. I think that gross margins on software products that have historically been 80% plus are going to face a lot of pressure as it becomes easier and cheaper to build competitive software products. I think the glorified margins of SaaS of like, build it one, sell it forever at 80% margin. I think those are going to reach terminal velocity where we might see margins compress lower.
And that just changes the entire financial dynamics of a software company and how we need to think about as marketers, as product marketers, as product developers, as strategists, understanding how that has changed and what that means for the competitive landscape. Copy it's not going away. I talk about things and three days later, people are copying my shit. But I think the real thing is about what PEPF said, do we care?
And if so, how much do we care? And I think really relating it to are the big players that have 50, 60% plus market share. Are those the people that are copying me? Or is it this $1 million ARR start at the three million bucks?
And really focusing on those things that are important. If you're tempted to copy somebody else, because, oh, look at Kong, oh, then understand that there are different rules for small businesses versus the category leader types. Everybody knows what's Kong and Salesforce and HubSpot and so on. They don't need to explain themselves.
Like, if you go to salesforce.com, I haven't been a long time, but I bet they don't say salesforce. So you just say, you're like, they probably, they don't even need to. They have some brand bullshit there. And you think, oh, we also have brand bullshit.
It's going to convert now. If you're a brand that most people, the market has not aware that you exist, which is the biggest problem for most companies. You need to focus on clarity, relevance, value, and so on. What's the old proverb?
What's permitted to? Jupyter is not permitted to the ox or something like that. If you want to copy somebody, copy a company under 10 million who's killing it. Not the big giants.
All right. So we've talked a lot about the benefits of getting your messaging right, but Andrew has a question about the risks. So speaking of Sataness, can you help articulate the risk to the business of positioning and messaging becomes too controlled by SEO? What's a healthy approach of using search engine keyword data and qualitative messaging research?
Yeah. If you have to choose between SEO and being a differentiated company, I mean, if somebody advocates for SEO, they do not deserve their job. You can get SEO traffic in 100 different other ways. You don't need to insert SEO keywords into every other cent.
Oh, you know, nobody does that in SEO. I get it. I was like, oh, all this. But SEO, we find your positioning and your messaging is just a bad idea.
Can you explain a little bit more about why? Because it's not going to the odds are very high. It's not an absolute odds are very high. It's going to be a generic boring message because it's not going to be differentiated.
It does not send out in the market because people will search for mainstream keywords. If you're an email marketing tool and you optimize for SEO keywords, your value prop will be, oh, yeah, send newsletters, track open rates, click through rates, convert more customers. Everybody says that they're never going to choose you. They're going to just go with Quim chimp, right?
Because it's the big guy. Because if you're saying the same things as the category leader, they're going to go with the category leader because that's the safe choice. And the niche weird language that your customers might use is not high keyword volume keywords. So voice of the customer, very good idea, but it's not necessarily high search volume.
So I will just your blog post or stop pages, all that stuff is do that for SEO. And nowadays, of course, blog post for SEO is just losing tactic because nobody links to blog post and I mean link building, how hard is that these days compared to how it was 15 years ago? And I know because I was a huge, huge into blog. I built and CXL, my other company on top of SEO and link building.
Today, I mean, it's much better to if you study all this fast growing SaaS companies that are killing with with with SEO, how are they doing it? Not by running fucking blog posts. They're doing it by creating tools. Shopify gained how many millions of backlinks by the likes.
The name generator, like people started shopping for, what should I call my e-commerce store, then I'm an easy, simple tool, name generator for a store, right? Massive people link to it or programmatic SEO, like what G2 is doing with all this categories and stuff and like G2 traffic, like put it on a timeline. It's like six million a month or something, right? So other things like then writing blog posts, I think it's even better for backlink building today.
Super interesting. All right. Do we have any more questions popping up in the chat? We've kind of gone through our, oh, here we go.
Chris, Justin time. Chris, do you want to come on and ask your question live? I see you on my screen. Hey, but just a question around, remember the fact that the message testing is as we're in kind of a current state in time, we're kind of snapping a line for right now.
How do you make sure that you're not just early on the innovation adoption curve and you're actually missing relevance because those could look like the same thing with a single point in time? Yes, for sure. Then you would hear the same type of feedback in your sales pitches in the meetings and you're like, I win lost interviews. Other signals as well would tell you that the thing you're trying to push is lukewarm interest, right?
It's not just messaging is one part of it and it's very easy to get right on it and relatively low cost and fast because you don't even, you know, you don't need to write a single line of code or whatever. But yeah, I mean, if it's just overall product is not selling well, maybe we're ahead or maybe nobody wants whatever we're selling. You will hear it from other places too. I'm not sure I have much to add on that one.
When you start to get it from different angles, not just on your website, but on your sales pitches, when you push to investors or things like that, it starts to lead you to do we have a business strategy problem instead of a messaging problem that becomes a much higher order, their indicators are much higher order issue. I'm launching small little products inside winter all the time and my first test is always a LinkedIn post. You know, like add some context, mark a call, why this matters and then it's like, this is the product. And I usually say, hey, DM me for like private beta, whatever that offer is.
And so for instance, when I launched this demo on demand product, I think I got like 120 DMs in one day, like people tell me more. And then maybe two weeks ago, I said, hey, we're gonna now do if you want to do in the state of the industry reports for your industry. Oh, and you need to survey 100 people in industry, like we can do that with winter, DM me. And maybe like five people reached out.
So it's like clearly shows me like one product one offer is so much more compelling than the other offer. And so if I now have to choose where to invest in my developer hours and all that stuff, good stuff. Thanks, everyone for being here. Thanks for the questions, love the discussion here.
Thanks for sharing your expertise. We got to have a dinner again sometime soon. Really appreciate being here. Anything you want to leave the audience with before we check out?
Follow me on LinkedIn. Cool. Post great content. I love I don't know when we're going to bring back the tear downs, the website tear downs, but can't wait for another one of those.
I was going to get a lot of entertainment. And I learned a lot from it too. So appreciate you doing those things and the research that I recently, I recently recently recently, I recently recently recently, I recently recently recently, I recently recently recently, I recently launched a new company called the Data Base Deal. It's a great showcase of your product and it drives home with data.
I think some of the key points that executives and marketers really need to be able to grasp to understand how to continue to win in this new environment. So thanks for all you do for the industry and for all of us. So thank you. And thank you everyone for being here.
We'll be back again next month. I think with Kyle Coleman talking about AI and marketing. So feel free to register for that session as well if you enjoyed this one. I hope you have a great rest of your weekend.
Good weekend. See everyone. Thank you, Chris. Bye everyone.