Driving Engagement - ProductFTW #26
Identifying Specific Problems Leads to Targeted and Successful Solutions
Last week, in ProductFTW #25, I discussed the importance of clearly defining your user’s problem before developing a solution. It sounds obvious, but so many product managers and developers first focus on a cool solution before they can clearly define a user’s problem. This week, I want to discuss articulating a user's problem in a way that drives your user to purchase or adopt your product.
To illustrate this concept, we’re going to talk about sales. Many product managers shy away from talking about sales, feeling like that is someone else’s job. For many years, I didn’t think of myself as being a sales-y person or being able to sell things, even though I had sold many products and services over the years. Influencing others is a key capability for a successful product manager, so don’t skip this post!
In 2019, I started Vertical Finance to build credit cards with rewards programs that connect groups of passionate users with small merchants. We planned to build a merchant network of hundreds of great merchants that would be a compelling counterpoint to traditional co-brand cards focused on large corporations (e.g., the United Airlines credit card).
Our first (and only) product was the Grand Reserve World Mastercard, which focused on wine enthusiasts. Our cardholders would earn 5x points per dollar at interesting, high-quality wineries, which meant we needed wineries.
I embarked on a nine-month cold outreach sales campaign to build this network. While the logistics of cold outreach are the subject of some other blog post, the sales message that I developed illustrates how a problem and solution and its framing change folks' interest in it.
At its most basic level, the problem we thought we were solving for wineries was pretty basic: to sell more wine. We would build a loyalty program that would allow us privileged access to market wineries to our users, combined with a built-in rewards incentive for buying from our partners.
My first outreach was basically: “Do you want to sell more wine? We can help.”
The message didn’t work. I had some conversations with winery owners and learned through trial and error that the wineries don’t view every customer as equivalent, and not all revenue is equal. Selling a single bottle of wine to a customer is good in the sense of new revenue but not great in that it’s just one bottle of wine. Attracting someone to a tasting who doesn’t buy lots of wine is not good and maybe money-losing.
The priority business goal for the winery owners was to acquire new winery club subscribers. Wine club subscribers enter into a relationship with the winery and commit to buying a minimum amount of wine, enabling the winery to plan better and have dependable income. These users also engage more deeply with the winery, visiting it, introducing their friends to the wine, and more.
The problem wasn’t “I need more revenue.” It was “I need more wine club subscribers.”
We surveyed our loyalty users and discovered that 83% of them belonged to a winery-direct wine club.
I changed my message to something like: “You want more wine club members. We can help. 83% of our members belong to at least one wine club. Do you want access to them?”
The results were a dramatic improvement in engagement and sales. Over the course of the company, we built a merchant network of more than 450 wineries. The product wasn’t really different: it was still a marketing and loyalty platform to connect wine enthusiasts to wineries. However, the solution's positioning differed, and the wineries desired to engage with us.
(As a side note, these tactics didn’t work with wine stores, probably for the same reason of having the wrong problem statement.)
When you are thinking about what to build and how to make your product successful (you have to sell it or create engagement), you must consider the core and specific problem. Generic offers like “make more money” aren’t enough. You must go deeper to find the underlying problem statement, enabling you to make your solution a must-have.
About ProductFTW
ProductFTW is a weekly newsletter about product management with a focus on real-life experiences in startups. We want to help product leaders be successful by giving realistic approaches that aren’t for giant tech companies. We know you don’t have a full-time product designer on each team. We know your software probably hasn’t been used by millions of people worldwide–yet. We’re here to bridge the content gap from building your product and team to scaling it.