Rapid change requires rapid learning

Jon Jones
5 minute read
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You don't know your customers anymore

Your customers have changed. Actually, they constantly change. All the time. And right now, they’re changing so fast that it’s nearly impossible to keep up. Your products and services give customers something they need, but without knowing what has changed, our businesses will suffer through longer sales cycles, lower win rates, and higher churn. Just looking at the 90 or so publicly traded SaaS companies, over $1T has been wiped out since November 20211.

This is a big problem; the opportunity landscape is changing faster than the learning cycles are telling companies why (that is, if they even have a process to attain deep insights from customers or other data sources).

What customers need from you, how they want to interact with you, your products… even what they expect from your brand… all of it is rapidly changing and if you don't understand why, then you are losing ground. RevOps, sales, and marketing are more important than ever because they utilize various data sources to inform strategy. This means, in many cases, that internal teams are struggling with massive amounts of data because it falls short of actionable intel. It also means everyone (i.e. your competition) is seeking out answers from largely the same dataset. So how do you get a competitive advantage?

Job titles with "revenue" or "compete" are increasing in number.  Companies are looking for an edge; competitive intelligence that constantly updates you with your own dataset that nobody else has access to. It's true, with proprietary data you can see patterns, patterns lead to insights, and over time those insights lead to strategic wisdom.

Competitive advantage doesn't come with the quantity of data you have. Just removing silos doesn't do it either. Effectiveness boils down to three things:

  1. Your learning cycles have to be as fast or faster than the speed at which your opportunity landscape is changing
  2. Your organization has to be willing to be changed by your findings
  3. Your findings are deteriorating as soon as you write them down.

How fast is it changing?

Since early 2020, change in our world has been accelerated. Our politics, identity, social injustice awareness... it has all been challenged, torn down, and rebuilt in a very fast change cycle. Sure, customers always change. But right now we are seeing exaggerated effects of the changing markets because it's all happening so darn fast. Just consider our workforce. Employers are clawing back their policies on remote work that aren't even a year old. We're seeing massive layoffs2, whereas 6 months ago there was an absolute gold rush for talent. Talk about whiplash.

Here in the US we've seen the largest stimulus package in history (around $5 trillion to date3) and the economy is on edge as interest rates rise and we head into a bear market (S&P is currently down almost 20% over the last 6 months) market. Will R&D projects go away as they usually do, in recession? What does B2B and B2C spending look like right now? It's true we may be facing a tough recession, but with all the stimulus dollars it will be interesting to see how those funds are deployed as companies vie for a competitive edge.

Generally speaking, it's very hard to keep a pulse on what your customers care about. What will they buy, when, and why will they buy it? You're competing not just with other companies for their business, you're competing with other deal killers like loss of R&D budget, or reprioritization of internal projects (or doing nothing, in some cases).  

I believe these uncertainties are the reason why RevOps and Competitive Intelligence programs are more important than ever to product marketers, designers, and executives.  The fact is, your customers often change faster than your products and brand change. That phenomenon is accelerated right now, and businesses are struggling to find deep connection with their consumers which can lead to low percentage sales efforts, lower lifetime value, and clients churning unexpectedly. What people say they will do or buy vs. what they actually do or buy are usually different.  Thus, organizations need to embrace a faster learning cycle and be willing to be led by their findings.

Learn, synthesize, adapt

Experimentation has always been integral to the success of projects at Anthroware -- distilling insights from data to make good product decisions is the steel thread that touches everything we do. Data doesn't have feelings, it just shows you information about your landscape. An objective, even critical, analysis of data that is focused around finding patterns and applying them to your best thinking allows you to move forward with confidence. This applies to product market fit, it applies to sales, and it applies to strategic decisions. Being an insight driven organization doesn't happen overnight.

Being willing to "kill your darlings" (let go of prior best thinking or understanding, even your pet ideas) is actually pretty hard to get right in any organization. Being able to objectively develop strategy based on evidence takes guts. Perhaps you've seen this in your own organization? Evidence is there, but it's hard to quantify a strategic direction, so you stay the course and suffer from being behind the curve... happens all the time.

Mathematical models are good at predicting smooth curves and trends, but their accuracy decreases the faster the markets are changing. Organizations that are willing to embrace this will win. It isn't trivial to put your ideas, designs, pitches, or sales talking points into the crucible of the real world. However, the more learning cycles you run, the more pieces of evidence you have, and the more confidence you can have in the insights you derive from the data. This is a very design-thinking focused approach to your competitive landscape, and it's very effective.

The faster things are changing, the faster the learning cycles need to be. If you take anything away from reading this post, let it be the focus on increasing the speed of your learning cycles!

One more thing while we're on this topic... organizations are inundated with data. They have data coming out their ears. Some of it is great, some is biased (i.e. self-reported win-loss data is a good example), some of it is available to your competitors, a lot of it is held in silos throughout the organization. Having 'data' is NOT the full picture. But clean data is the first step towards looking for patterns and garnering deeper insights that explain buyer behavior.

Data leads to insights, insights leads to wisdom.

Fast learning cycles are empowering. It doesn't mean your product strategy should change as rapidly as your learning. It gives strategists good enough fidelity in sample rate to make informed decisions. Competitive intel work is much more than hiring a director of compete, it's a constant investment in learning. As soon as you write down a key insight, it's aging.

So what happens now?

Organizations that remove data silos, interpret actionable insights, and speed up learning cycles will have a competitive edge. Looking at history, there are always winners and losers in recessionary periods. Here are some historical challenges that exclaim these points based on the impact they will have on businesses.

  • Sales cycles will increase which increases acquisition cost
  • Budgets will tighten on non-revenue generating activities (i.e. IT departments being asked to consolidate tech stacks)
  • You will find yourself competing with 'the cost of doing nothing' more often
  • Marketing qualified leads (MQL's) costs will increase due to fewer buyers and smaller buying windows
  • Layoffs and hiring freezes will cause a power shift away from employees back to employers.
  • Churning your installed base is unacceptable

These predictions make intuitive sense to me. How do faster learning cycles and competitive intelligence make a difference with respect to this list?

Well, first off, understanding changing priorities of your customers is paramount. The usual playbook is more likely to become less effective than the opposite. Tighter budgets mean even more pressure on buyers, and certain spending will stall completely. With fewer buyers in the market for products and services there will be more competition for each opportunity. Relationships, unbiased product relevance, and human psychology are more important than ever. Investments in competitive intelligence arm your organization with insights that are relevant to you, and relevant to your customers. This benefit can't be understated.

Speaking of relationships, caring for the customers you already have (installed base) is more important than ever. A deep insight into the marketplace and what's on buyer's minds will also give you superpowers when customer success folks are interacting with your existing accounts. SaaS companies aren't just investing in win-loss studies these days, they are also deploying similar studies to understand deep insights on their own customers. PE and VC firms often run studies to understand the strength of both competitive landscape AND customer relationships before making investments. Unbiased third party assessments uncover the bold truth, challenges, and opportunities. Better selling, longer lifetime value for accounts and better strategy are a direct result of having the hard facts.

It's pretty hard for organizations to implement this type of feedback loop. It takes time, but it's worth the effort!

TL;DR:

Most sophisticated organizations have plenty of data. The "so what" comes from focusing on humans, and interpreting nuanced patterns. Data, insights, strategy -- these age and deteriorate as soon as you write them down. The faster your opportunity landscape is changing, the tighter a grip you need to have on these information sources.


Resources

  1. 2022 SaaS Crash by Alex Clayton https://www.meritechcapital.com/blog/2022-saas-crash
  2. A wave of layoffs is sweeping the US. Here are firms that have announced cuts so far, from Compass to Coinbase by Avery Hartmans https://www.businessinsider.com/layoffs-sweeping-the-us-these-are-the-companies-making-cuts-2022-5
  3. Where $5 Trillion in Pandemic Stimulus Money Went by Alicia Parlapiano, Deborah B. Solomon, Madeleine Ngo & Stacy Cowley https://www.nytimes.com/interactive/2022/03/11/us/how-covid-stimulus-money-was-spent.html
Jon Jones
Co-Founder/ CEO
Asheville, NC

Jon Jones co-founded Anthroware in 2013 to build brands and products the right way— always starting from a creative, design and user-first posture. Every project is a product!

Further Reading

The Bull is Dead. Can You Outrun the Bear?

Far too many digital products fail. There is a better way.

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