Every successful business has a synchrony of all the important elements. The basics are the foundation of everything and they influence how the whole business will run.
Buyer personas are the foundation of any business as they represent the ideal customers of a business.
What is a buyer persona?
A buyer persona is a semi-fictional representation of the ideal customer of a business. It is created using data and insights and depicts the concerns, triggers, pain points, and motivations of different buyers.
An organisation has different numbers and types of personas based on what it deals with. Most companies have 3-20 personas.
A buyer persona is created through a collaboration of client facing teams as they have interacted with a customer in a certain way; hence they know the attributes of the customer.
Since a buyer persona is created through data and insights of a customer, you may be forced to interview an ideal customer to know their attributes. You can then combine different characteristics to form a certain trend. Interviewing different customers will help you to have more data, which will help you to be more accurate in making your persona.
Buyer personas are important as they help you to understand your customers and thus personalise your offer according to their demands and expectations. It is used by sales and marketing and product development teams in personalization.
Since the goal of every business is to make products that customers love, crafting a buyer persona is mandatory to meet buyers needs.
What is product-market fit?
According to Marc Andreessen, product market fit is when people sell for you. As much as there are many definitions of product-market fit, they all narrow down to having a product that resonates well with the needs of the buyer. It is having a product that customers cannot live without. If the product meets the needs of the buyer persona well, then they will be obliged to tell others about it and that will lead to traction and scaling up fast.
To achieve a product market fit, the product should be well aligned with the target buyer persona.
Product market fit can determine the success of your business as it will mean you can use less effort and reap big rewards. It has an effect on your advertising, marketing, growth rates and churn rates.
PC Dan Olsen
Product market fit is a journey and most businesses take a long time to find theirs. With the changing markets, adjustments have to always be made to ensure the product meets the needs of the market.
The first step in your journey towards achieving a product market fit is understanding your customers. That means that you need to have the right buyer personas.
How do you get the right personas?
You can do both internal and external research. Internal is involving all the customer facing teams to discuss attributes of the different personas. External is by interviewing your customers to understand them and the different triggers that affect their decision making. Once you understand your customers it will be easy to build what they want and communicate with them in the right way. By understanding your customers, you can adjust your key benefits based on their needs and build a value proposition around that.
Sulma and Sulma have a data driven platform that can help you understand your customers. It will help you have real-time buyer personas according to your needs. This will help you understand your buyers pain points, triggers, motivations, expectations, etc. This is key in decision making.
Can Buyer personas and PMF help in PLG?
Product-led growth is such a hype in the startup world right now. Successful SaaS companies such as Calendly, Slack have used it as a growth strategy. Product-led growth is whereby the company relies on product to drive its growth. Users have the chance to test the product and if they like it, they become a customer, and can also refer the product to others. Most PLG models, customers can onboard themselves, or have a simple onboarding process.
Since in PLG strategy it is the product that drives growth, it means that you need the basics in place. That translates to having a product that resonates with the needs of the buyer. The foundation of all this is customer understanding.
To understand buyers, it starts with having a buyer persona. A well defined buyer persona will help all departments in the company to align with the needs of the buyer. For the marketing team it helps them to use the right channel and message according to the preference of the buyer persona. For sales, it helps them to do the right targeting and easily get hot leads, which helps to avoid wasting time. With that knowledge, the sales team can know the likely objections they can face and how to deal with them. This helps to reduce the time it takes to close a deal. As for the product development team, they know the adjustments they can make so that the product is best suitable for the client.
When you deliver the best product for the customer, then you would have achieved a product market fit. This will make happy customers, who are going to refer you to their networks. This will help you save the money you spend on marketing, reducing the customer acquisition cost. This is what the PLG journey is all about. Reaching a point that customers love the product such that they can onboard their friends to use the product.
Can buyer personas and PMF lower CAC?
One of the main things that make customer acquisition cost to be higher is not understanding buyers and thus delivering a product that does not meet the need of the buyer. Not understanding your customers will mean that you will look for customers in the wrong channel, you may do the wrong targeting, and may deliver the wrong message to the wrong audience.
Not understanding customers leads to a situation where you are trying to adapt customers to the product and not vice versa.
With buyer personas and product-market fit, it means you have understood your buyers and therefore you are delivering a product that resonates with their needs. This will help you to lower your acquisition costs as you will know exactly who they are, what they need, why they are hiring your product and where to find them. Sales, marketing and product development teams will know exactly how to align with the needs of the buyers.
How do you know you have a product market fit?
There are several aspects that you can monitor to determine whether you have a market fit. They include:
Referrals: Once your business has referrals, it is a sign you have a market fit. It is only happy customers that can refer your business to others.
Churn rate: When the churn rates are high, it is a sign that there is something wrong with your business leading to a high turnover. When it is low then it means that customers are satisfied with your product and thus are willing to pay for the product.
Low sales: The main reason you have low sales is you have a product that customers do not understand, or do not feel they need. If you have a product that resonates with the needs of the buyer, then they are bound to buy from you.
As mentioned earlier, product-market fit is a situation in which users are happy with the product and advocate for it. That means that when you have a fit the product is at or above reasonable expectations.Customers advocating for the product means you will have more referrals. It will be easy to build a community or do any other developments. When a company aligns to a customer’s needs drives better understanding of the product. This opens up new possibilities for product development, marketing and sales. Marketing can use an innovative and effortless approach to market, making them ahead of competitors. The sales can share its domain knowledge from power users with new users.
How can you achieve the perfect buyer personas and PMF?
The first step towards achieving the perfect buyer personas and market fit is to understand your customers. This can be through user research.
Research should be both internal and external. Internal can be from the customer database and all client-facing teams. Asking them certain questions will reveal certain attributes about the buyer. Alternatively you can use a data-driven platform such as Sulma & Sulma that can help you create the perfect personas based on data and insights.
External can be through customer interviews to understand their motivation, pain points, triggers, and expectations. Interviews will help reveal what the customers feel about your product and this will help you know if you have a PMF or not. If they cannot do without the product or imagine life without it, then it means you have a product-market fit.
It is important to note that buyer personas should be updated from time to time as the needs of the buyers are always evolving. With a platform such as Sulma & Sulma, it always updates the buyer personas based on the changing data and insights, ensuring you have an accurate persona.
The advantage of using an external data drive platform such as Sulma and Sulma is that you can create a product-market fit feedback loop. This can help you know how to iterate the product to best suit the needs of buyers in the market for a perfect product-market fit. Sulma & Sulma uses the following process to establish a feedback loop
1) Defining buyer personas
2) Outreach to the personas to find the real interested ones or inbound marketing
3) Testing of the product,
4) Measuring PmF: Observing customers interactions with the products and surveying them
5) Enriching Buyer Personas: Feedback to marketing, sales and product development.
The feedback loop is important as it ensures you have a product that resonates with the needs of the buyers in the market.
In the current digital world, data is everything. Data will help you understand your customers and optimise your decision making. This will streamline the flow of your company and help you achieve your goals while lowering customer acquisition costs. Sulma and Sulma platform can help you understand customers using data and insights. This will help you have an up to date buyer personas, and buyer’s journey. The information will help you adapt the product to the buyer’s need helping you have the perfect product that resonates with buyers needs.