Startup growth strategist, Ex PayPal, 500 Startups VC, Founder @ SYSTM
At PayPal, I once wasted $1M on a marketing segmentation to build personas. Here’s what we actually learned, plus what I now do instead. First of all, the research was exquisite. Ipsos started with dozens of interviews, then fielded thousands of surveys and clustered their findings into a segmentation. It teased out nuances among our merchant segments: eBay sellers, DtC, multi-channel, etc. Each persona had psychometric scores for risk tolerance, price sensitivity, ambition, tech savvy, etc. Eventually I asked myself “how will this help our marketing?” And I realized it never would. These differences were fascinating but inconsequential. In payments, merchants basically all want the same 6 things: 1. Buyers trust it 2. Makes checkout easy 3. Works with merchants' existing systems 4. Isn't too expensive 5. Helps manage fraud 6. Good customer service You don’t need to be a PayPal expert to know that, and I definitely didn’t need to spend $1M to figure it out! But here’s my real lesson… Personas, even well-researched ones, are worthless for marketing. Try this thought experiment... Imagine you own a beachside restaurant and you’re trying to get more customers. Which one of these facts is more useful to you? 1) Tammy is a 39 y/o divorced mother of 2, from Atlanta, she works in compliance, earns $58K/yr, throws right, votes left. 2) Tammy is on the sweltering hot beach with two kids, they’re getting hungry, and one of them has to pee. Option 2 wins, it tells us that ice-cold air con and a no-fuss kids menu will draw Tammy in, where #1 leaves us guessing. As a marketer, I need to understand 5 things: 1) What do prospects stress about? So I can play up that pain in ads & headlines. (It usually converts better than talking about the product.) 2) Where do they look for solutions? So I can turn up there (e.g. good search terms, complementary services that can send referrals). 3) Which alternatives did they try and how did those come up short? So I can position against them. 4) How do they describe success? So I can write a great landing page! 5) What are they nervous about? So I can call out and address each objection on my landing page and in my nurture emails. How do I get those 5 answers? (For a lot less than $1M?) Eventually, I discovered Jobs To Be Done. And here’s how I use it specifically for marketing. First, I interview people who recently signed up for my service or a competitor and ask questions like: 1. What were you hoping to do? 2. Why is that important to you? 3. Where did you look? 4. What else did you try? Instead of personas, I fill out a “Job Card” for each use case. Here's a link to my full list of interview questions + “Job Card” template: https://lnkd.in/gDHWV4-A BTW, I post stuff like this each week, but if you don’t follow me, you probably won’t see them. Matt Lerner Thanks Ellen Fishbein April Dunford Adam Waxman for providing feedback on my drafts!
In math, we need two equations to solve a problem with two unknowns. What you did in Paypal was to look at the first equation and ignore the other one. Now you found the second equation and don't want to see the first one. Going back to your example, the second equation is perfect, but good luck to sell to Tammy if her family is vegan and you try to sell her the Burger King by the beach. Keep both equations. Two cents from someone whose job is to find these equations and solve on a daily basis.
Matt, this is NO surprise as big companies always waste money and overspend on everything because they can given their deep pockets. I know because I worked in big tech for decades. Maybe you should have questioned the project price tag first as it is ridiculously unnecessary. Buyer persona research is valuable for effective marketing as it directly informs how to best connect with your target audience. How much you spend on it and how you do it is debatable, but it absolutely creates better sale conversion.
What would be really great is the ability bookmark this post. Just excellent and accurate reminder of guerilla marketing mindset.
RIP Clay Christensen
Hey! Could you send the template and interview questions? Looks like your link isn’t pinned
Lerner by name, learner by nature. Really interesting post, thanks Matt Lerner.
Dryden Geary Kathryn Coe job cards ! Thank you Matt Lerner - everyday is a school day
Yeah, I think it boils down to making customer personas correctly and know their emotions Matt Lerner. Looks like people really had a lot to say for this. I've included this in my weekend wrap-up.
#lernerbynamelearnerbynature
Startup growth strategist, Ex PayPal, 500 Startups VC, Founder @ SYSTM
1yYou can download the Jobs canvas here: https://www.startupcorestrengths.com/jtbd-insights-canvas