1. Focus On The Consumer
If done well, a strong customer affinity for your product, as measured by high NPS (Net Promoter Score) or high CSAT (Customer Satisfaction Score) can mean your product grows organically. Your k factor, or rate at which your product grows without paid acquisition can really increase the growth rate of your company At companies like TransferWise or Robinhood where NPS is very high, Word of Mouth can be the largest driver of growth. At Earnin, we focused on ways to increase NPS knowing that it would lead to increase in the k factor, increasing growth.
2. Build Systems For Testing
Earnin has been downloaded millions of times. This means there is enough data on which funnel steps lead to drop-off, which copy entices users to take action and if a push notification can help re-engage a user to help them complete the funnel.
But, the catch is, if it takes a long time to run a test, you may not be able to take advantage of the data that your app or product is giving you. The time it takes to run a test, or velocity, should be a key measure your growth team looks at.
When and where possible, invest in systems that reduce the time it takes to run a test.
3. Match The High Customer Expectations Your Users Have
Users today expect rapid fast shipping times, since Amazon set that expectation. No lag on streaming video, since Netflix has maintained that bar. And supreme customer success with their hardware products, since Apple has cultivated a brand around thinking about the long term.
What is your customer set’s expectation? Maybe returns, or refunds is where the bottleneck is. Maybe it’s in customer service response times. Or, personalization of the experience. Don’t think about these as cost centers but opportunities to go above and beyond and create adoring users for life.
4. Think Long And Hard About Incentives
Charlie Munger said “Never, ever think about something else when you should be thinking about the power of incentives”. He also famously said “Show me the incentives, I’ll show you the outcome”. Munger is spot on. Most of the time, if there is a defect or a flaw in your customer experience, the root cause is usually related to the incentives your business has put in place.
Are customer service representatives paid by how short their calls are? Well, no wonder calls are cut short leaving customers upset.
Do your marketer’s goals include hitting a lead count but not a quality of lead count? Well, it won’t be that surprising that leads are high, but quality is low.
This extends to product and engineering also. Your Objectives and Key Results should be well thought-through. Think about the second order effects. Are we launching a new product that will drive a new type of user but alienate or complicate the product for our existing users?
Accountability on metrics is important, but so too is a deep set process of analyzing incentive structures and their impact.
That’s it - building for growth means:
1) focus on the k-factor, track it and think about ways to improve it, mainly through increasing NPS
2) build systems to allow for rapid testing and increasing the velocity/pace of your learning and
3) go above your customer expectations, this is different for each business, but nearly all have a spot in their business where a customer reaches back out. Either to service their product, fix a bug or get a refund - don’t brush these off. These are opportunities to create loyal fans.
4) Think thoroughly about the incentives in your business. They matter a lot! Chances are, if your not hitting your metrics or feel you are but something doesn’t feel right, dig into your incentive systems.
