[00:00:00] Emilia Korczynska: Is that a significant differentiator? Honestly, not really. Right? Not everyone cares about being able to respond to their users' behavior in real time. But this is kind of a side effect of the streamlining of the whole product that allowed us to offer the same functionality at a lower price point. So is it the best position to be on the market? Not really again, but we're just trying to be the best, most comprehensive solution that is still affordable and that is still product-led for the mid-market, I would say.

[00:00:00] Andrew Michael: This is Churn.FM, the podcast for subscription economy pros. Each week we hear how the world's fastest growing companies are tackling churn and using retention to fuel their growth.

[00:01:00] VO: How do you build a habit-forming product? We crossed over that magic threshold to negative churn. You need to invest in customer success. It always comes down to retention and engagement. Completely bootstrapped, profitable and growing.

‍[00:01:13] Andrew Michael: Strategies, tactics, and ideas brought together to help your business thrive in the subscription economy. I'm your host Andrew Michael and here's today's episode.

[00:01:25] Andrew Michael: Hey Emilia, welcome to the show.

[00:01:26] Emilia Korczynska: Hey, Andrew, nice to see you again. Thanks for–

[00:01:29] Andrew Michael: Yeah, it's great to see you. For the listeners, Emilia is the head of marketing in Userpilot, the all-in-one platform for product teams to activate more users, increase feature adoption and drive expansion revenue. Prior to Userpilot, Emilia was the owner of Wisemont Language Services. And my first question for you today, Emilia is what was it like living in China and how long were you there for?

[00:01:51] Emilia Korczynska: I was there for two years. It was super fun. Probably the adventure of my lifetime so far. Very chaotic, extremely different. It was actually where, you know, I started working my first SaaS startup with a Chinese business partner. It was supposed to be kind of like a marketplace connecting local service providers and local venues, events, holders with the expert community. So the first app I worked on at that point. I kind of, brought into SaaS through my agency, which was providing translation and content services to more and more SaaS companies at that time.

[00:02:33] Andrew Michael: Very cool. And in two years, there's quite a decent amount of time. What were you out there for work specifically? Did you decide you just want to go spend some time there and immerse yourself in the culture? What was the idea behind it?

[00:02:43] Emilia Korczynska: No, no. So at that point I was still, like doing part-time gigs at academia. So basically I got an offer to teach a course to, British university there. Kind of out of the blue, I don't honestly even remember applying, but I thought, heck, you know, wouldn't now than when, and it sounded like a really cool opportunity to experience completely different culture and it was.

[00:03:09] Andrew Michael: Amazing. And the language services business then, was that inspired from your time in China? Like, do you speak Mandarin at all?‍

[00:03:17] Emilia Korczynska: No, no, no, no. I started the language services business, you know, very much. Soon after I graduated, because some… I have a degree in linguistics and, you know, I did some translation studies, modules at university. So I had a lot of connections and then, you know, one thing led to another. So it was first a translation agency and then it morphed into something between translation and content because around 2016, more and more companies were realizing basically the power of content marketing, also internationally. So we're looking to lower collider content into other languages, mostly English, but also some other languages as well.

‍[00:03:59] Andrew Michael: Very nice. And obviously then through that, you've seen a lot of SaaS businesses. Today, you're at Userpilot where you do get to see a lot of SaaS businesses. Obviously your customers, being probably SaaS or if not all SaaS businesses, you can correct me if I'm wrong. And today we're actually going to be chatting a little bit about the SaaS product metrics benchmark reports that Userpilot has put out and excited to chat to you a little bit about it today. Maybe just if you can give us a little bit of context about the report, what was the premise behind it? Why did you decide to put it together?

‍[00:04:29] Emilia Korczynska: Yeah, so we analyze basically six core SaaS product benchmarks that essentially are tied to ultimately revenue. They're a leading metrics for revenue growth. This is something that obviously is the most important for our customers, for any SaaS business. So we launched our analytics product in December 2023. And it consists of basically a lot of dashboards that users can just plug and play. They can just define what is their core feature. They can define what is their activation event. And then the dashboards track metrics like core feature adoption, activation, time to activation.

‍[00:05:16] Emilia Korczynska: So after a few months of collecting data from the reports, we were like, wow, we're sitting on all these first-party data with over a thousand customers. Why don't we actually analyze the data and then basically slice and dice the companies that are using the reports by company size, by industry, and I think most interestingly by product-led versus sales-led companies to see what's going on in SaaS. So we've been running this report on the state of SaaS onboarding for a few years, but then, you know, since we already have these analytics features before, this would be a lot more interesting to dive deep into these leading metrics that correlate with revenue.

‍[00:05:58] Andrew Michael: Very nice. And you said, interestingly, the difference between PLG and sales assisted with the smile on your face. Why would you say specifically that was interesting from this report?

‍[00:06:09] Emilia Korczynska: Yeah, because PLG has been all the hype in SaaS for the last few years. There has been this kind of battle going on on social media between people that like product-led growth and are promoting product-led growth as the growth model that all SaaS companies should adopt and people that are adamant that with some complex products you can't do without sales and there's, whole conversation around it. So we thought it would be interesting to see and we kind of anticipated that since a lot of these PLG gurus maintain that this is the best way to grow for SaaS companies. We would see better results from product-led companies than sales-led companies.

[00:06:54] Emilia Korczynska: And we saw the exact opposite. So across all the six metrics that we analyzed, so, you know, activation, time to activation, onboarding completion rate, month one retention rate, which correlates with onboarding completion rate, actually and activation rate unsurprisingly. NPS scores across all these metrics. We saw lower results from PLG companies. And at first we were like, oh wow, this is sort of very, very counter intuitive. And in a sense, are we just undercutting ourselves because we've been promoting Userpilot as the tool that facilitates product lead growth because hey, you can automate a lot of things that you would normally, needs to do with the help of sales or customer success using Userpilot.

[00:07:47] Emilia Korczynska: But then after digging into the data a bit more, we realized it's not actually about whether the company is product-led or sales-led. I mean, in a sense it is, but it's not a choice. It's not a result of being product-led versus sales-led. It's rather the nature of product-led versus sales-led businesses that affects these results. So the nature being most product-led companies are either B2C or transactional SMB, B2B companies with cheaper transactional products that can be just bought off the shelf, while most sales led companies offer complex products with a lot of technical setup, a lot of modules.

[00:08:34] Emilia Korczynska: So they are bought by larger enterprise companies. They're essentially buying into this product upfront and since they've already invested so much, they can just walk away from it. There are often no free trials, there is a lengthy POC process before this company signs up for a specific product. So essentially, there is a much, much higher initial commitment. And that's probably why the differences in activation rates and month one retention rates. Because with transactional B2C or SMB B2B products, you can just like test five different products in the free trial and then walk away from the four that you didn't like because there is absolutely no upfront commitment.

[00:09:18] Emilia Korczynska: But yeah, it was interesting to see because a lot of people could misinterpret the data and then just use it to flog product-led companies with it while it's not really a choice for them because if your product costs $20 per month, then you're not going to hire a sales team to sell it because you never break even with it. Yeah.

[00:09:36] Andrew Michael: When did you say these people are fighting about PLG versus sales assisted? I haven't noticed.

[00:09:41] Emilia Korczynska: Okay. Well, maybe we follow different people.

[00:09:44] Andrew Michael: I'm joking. It's everywhere. Yeah, no, I think definitely like everything you said makes a lot of sense intuitively as well in terms of like the level of complexity, the level of commitment, there's certain sort of inherent biases that we have within ourselves and you have the social capital as well of like choosing a tool that's 89 versus choosing a tool that's 89,000. And there's a lot more pressure on the one versus the other to make them work. So there's definitely, that's… that I'd say drives a lot.

[00:10:11] Andrew Michael: But I think in the case of PLG as well, there's a case where it's even more important that the experience is right. And thing is because you just, as you said, you cannot afford to hire salespeople. So your PLG motion really needs to facilitate all these interactions that are happening and these things. And what's really hard, I would say, is to find a way to motivate users to the same level of degree that users are motivated when there's that large capital being deployed into a specific software or service. What was the most interesting aspect that you found from this PLG versus SLG viewpoint was any specific metric that stood out to you and you said, wow, this is like, big difference from what we anticipated?

[00:10:51] Emilia Korczynska: So I guess the biggest surprise was that all metrics across the board were lower with the PLG companies. I'm just having a sneak peek at the report summary here to see if any of them particularly, was particularly much, much lower. It seems that month one retention rate, there is the biggest difference. So for PLG companies, that was 39%. For SLG companies, that was 48%. So actually, 10 percentage points difference, which is quite a lot.

[00:11:26] Emilia Korczynska: Yeah, yeah, that alone was surprising. But as you said, this basically means that product-led companies should actually try a lot harder than sales-led companies, to activate users and to onboard them at scale. But I'm seeing the reverse trend in the community that, you know, since PLG is not working, we shouldn't do much to basically facilitate it, which is essentially undercutting yourself.

[00:11:55] Emilia Korczynska: You know, you basically can't afford to hire someone to onboard your customers at a price point below. I think I've read one of Jason Lemkin's, from one of Jason Lemkin's posts that's around $3,000 in the US. Basically, it will never be profitable for you to sell using a sales team below that price point. So what choice do you have with these cheap transactional products? You simply need to deploy some in-app onboarding experiences that would be automated to help people reach a higher activation rate.

[00:12:30] Andrew Michael: Yeah. And it's just feasibly not possible as well. I think in the smaller case where you literally have thousands of customers versus hundreds of customers, and just finding people to actually support those customers is even like another big challenge, despite, like the negative impact it has on the revenue at the end of the day, because of the costs associated with them.

[00:12:50] Andrew Michael: And so this was sort of like a little bit of a revelation for yourself internally at Userpilot. Obviously, you've had this mindset around PLG for the longest period of time, it's how you've anchored your positioning. How are you thinking about the positioning of Userpilot as a whole then as a result of these results?

[00:13:07] Emilia Korczynska: Well, we've been thinking a lot about our positioning, but not just in the context of these results, but, you know, also analyzing, basically doing a win loss analysis of our customers, especially after we've launched the analytics product, see who's there. And we were out for some surprises as well, that unlike what you said at the beginning, it wasn't all SaaS companies, and it wasn't all digital native companies. It was also, more traditional industries.

[00:13:37] Emilia Korczynska: So, you know, think CRM for firefighters, for instance, or companies like DHL that have the need to communicate with their users inside their product at scale, rather than, you know,  use it to generate product-led growth. So, as you said with PLG companies, you simply can't hire enough people to help everyone personally. And you know, with any product that has a high volume of signups and frequent daily active usage, you can't provide this level of self, essentially not self-serve, but actually human assisted support that would be sufficient.

[00:14:18] Emilia Korczynska: If you have thousands and thousands of users, especially using your product at different times of the day, it would be super expensive, and is typically, actually something that people don't like. So we're thinking of essentially departing from the positioning of being a tool for product led growth, to being a tool for in-app user communication and engagement.

[00:14:41] Emilia Korczynska: And we also noticed that we are actually not used by only products teams, which was interesting, but we're used by a whole range of zonas, including marketers, not just product marketers, but other marketers that are using Userpilot to promote various assets to their users and customers, and do that life cycle, customer life cycle marketing. UX teams, UX researchers that are using the tool to analyze user behavior, and recruit users for interviews.

[00:15:16] Emilia Korczynska: We have engineers that are using the tool to basically not have to code for things that are not important and can be basically deployed using an off-the-shelf solution, and then basically use the time they freed up to focus on the core product. We have revenue operations teams, operations teams doing, honestly, across the board, really, really across the board, that makes it a bit challenging for me to define the positioning because, you know, if you're everything for everyone, what are you really?

[00:15:50] Andrew Michael: You're nothing for everyone. Yeah. Nice. So you're busy, like reevaluating this now, and this has been an ongoing exercise. In the context of this study though, as well, like I want to jump a little bit back to some of the findings around the company size specifically, because I think this also speaks a little bit to the nature of like the PLG versus sales assisted, because typically if you're selling these, like low ticket items, thousands of companies, you're normally going off to like very small businesses or small business.

[00:16:22] Andrew Michael: And then on the upper end, like if you have these large ticket items, you're typically selling into the mid-market enterprise. So did you see any sort of overlap in your findings between company sizes versus the PLG and a sales assisted or sales lead growth tracks?

[00:16:38] Emilia Korczynska: Yeah. So, there was no correlation actually, no clear correlation between company size and how well the company performed on the metrics. There was a weak correlation between the smallest company segments. So between zero and 1 million, under 1 million in ARR, and the largest company segments. So over 50 million in ARR that we analyzed, and performance on these six metrics.

[00:17:10] Emilia Korczynska: So what we've kind of concluded from that, was that maybe both the smallest, and the largest companies actually pay more attention and deploy more resources to onboarding their users and facilitating activation. The smallest companies, you can think about it in terms of whale survival.

[00:17:32] Emilia Korczynska: So if you're a really small company, you need to provide this white-glove experience to all of your customers, because you're just trying to break into the market, then probably things get hectic in the messy middle, right? And then after you've actually broken through this 10, 50 million mark, you have more resources to actually provide a higher quality onboarding. So that's kind of what I would attribute it to.

[00:18:02] Andrew Michael: Yeah.

[00:18:02] Emilia Korczynska: But yeah, again, we haven't really done a qualitative analysis of the company.

[00:18:07] Andrew Michael: It's interesting that you see that in data, sort of like the small face where your smaller customers are having better activation rates and the one I'm specifically now is onboarding checklists. So, but I think it's across most of the metrics, similar pattern. And the messy middle, I like the way you described that as well. It's like, sort of figuring things out. You break a lot of things, but then along the way, improvements can get made as well.

[00:18:30] Andrew Michael: It differs though for activation rates, I think, and that's something that sort of starts to slow off lower and increases, but then decreases in the findings that you have for large enterprises as well.

[00:18:45] Emilia Korczynska: It actually does not. So for their largest enterprises that we had in the study, it's actually the highest, so surprisingly our activation rate was 41%.

‍[00:18:57] Andrew Michael: Sorry, I'm looking at time to value activation.

[00:19:00] Emilia Korczynska: Okay.

[00:19:02] Andrew Michael: That makes sense then as well. The larger the company, it takes time.

[00:19:05] Emilia Korczynska: It takes longer to activate. So one of our colleagues actually worked at a really large enterprise before joining us in UX, and he mentioned that in his previous companies, it would take the whole year before the solution was even set up, before they could prove any value to their customers. So they had to immediately sign multi-year contracts, pretty much guaranteed revenue for a couple of years.

[00:19:31] Andrew Michael: To make it work. Yeah. And just in the context of the study then as well, like when you talk about the company sizes and so forth, this is your customer's company size. It is not the customer size of the companies that they serve.

[00:19:44] Emilia Korczynska: Yeah.

[00:19:45] Andrew Michael: Because that differs a little bit in like the PLG versus SLG, because that's a little bit about the motion and their go-to markets, which distinguishes. 'Cause I think also the… what would also be interesting to see is the size of, customer that… your customers serve and how that differs as well. And I wonder if that's something that's going to be in a follow-up report in the next year's one. Is it something you could even do with the data you have today?

[00:20:08] Andrew Michael: But that's something that I'm interested specifically in the moment, personally, selfishly, is that really trying to look at the, like a self-serve motion and the sales-assisted motion, and then looking into the data and trying to understand what are the conversion rates by very small business, small business and looking at all the different metrics across the board. So you can get a good indication of, like what should be a good benchmark for you to shoot for, even though I'm not a fan of benchmarks in general.

[00:20:31] Emilia Korczynska: Why aren't you a fan of benchmarks? That's so unrealistic.

[00:20:34] Andrew Michael: I think in the context of like Churn.FM, like they're a lot of b*llshit because, like they vary so much and so drastically depending on a hundred different factors, like I could just start listing them off for you, like company size, segment, market, stage of growth. Like, and so for you to start to like, compare yourself against others, it's very difficult. And most of the time, the benchmarks that get put out, they're done with a very, very small sample size.

[00:20:58] Andrew Michael: Like the audience might be a 500, it might be a thousand, but when you narrow it into your specific segment thing, those can be skewed so easily just by like one outlier, and if they're doing averages with medians, I can go on and on about it.

[00:21:11] Emilia Korczynska: Yeah, no, I totally agree. And honestly, I'm not a huge fan of benchmarks either, but you know, I'm also, I also have to do what the industry is expecting, and everyone's running benchmark reports. So I think, you know, to some extent, we've also jumped on the bandwagon, but I totally agree that these results should be taken with a pinch of salt.

[00:21:33] Emilia Korczynska: It's obviously because of the sample size, we couldn't slice and dice the companies in a way that would be granular enough to really have full certainty that this is a representative sample of this company type. Because even these breakdowns by industry, by company size, by PLG versus SLG, we haven't applied all the criteria to all the breakdowns. So we haven't, for instance, broken down PLG versus SLG companies by company size and then by industry. Because we would get the sample size.

[00:22:08] Andrew Michael: And you've also put the sample size for each example.

[00:22:11] Emilia Korczynska: Exactly. So we just couldn't do it. And I don't think a lot of SaaS companies that are publishing these benchmarks actually have enough, put a set of a size that would allow them to make this really, really granular and statistically significant comparisons.

[00:22:29] Andrew Michael: Yeah. And I think it's also very subjective as well. It's very hard to do. So like the way one company might define their activation metric versus another company and like how strict versus lenient are there and these sorts of things. I think like one might say it's adding a task, the other one might say activation is actually when they've added five tasks because that's when they're coming back in.

[00:22:48] Andrew Michael: But I think they are very helpful though, just to sort of get an idea and a direction in terms of, like where things are at. So you can set yourself a baseline, but it's important not to get discouraged. I think as well, by looking at some of the metrics, sometimes when you think, oh, wow, like I was absolutely crap, but there could be a number of reasons why they're crap at this point in time. And it just, means cause of where they are today doesn't mean they can get to where they need to be in the future as well.

[00:23:12] Emilia Korczynska: 100%. Yeah, yeah. I'm always saying, you know, treat all benchmarks with a pinch of salt and kind of, tried to think out of the box when analyzing what, anything in your company, because for instance, a very simple example, the benchmark that is, or the metric that is commonly used to evaluate user stickiness, right? So the number of daily active users, divided by monthly active users.

[00:23:37] Emilia Korczynska: Like for some companies that are designed to be used only monthly, for instance, this is like complete b*llshit, doesn't really show you anything of value and yet some companies can use it or even some, you know, like VCs can misinterpret data like that. So I would also suggest that SaaS companies are cautious about just publishing their metrics without context or, you know, like that.

[00:24:08] Andrew Michael: Yeah. I've, like over the last year, I've been reviewing a few different deals for VCs and when metrics come in and definitely like, if you don't really understand, to your point as well, like what, just what the basic frequency of usage is of your product or service. And it's the example I love from Nir Eyal that he talks about in his book, Hooked, is that, like there's a natural frequency for you to take specific actions.

[00:24:31] Andrew Michael: So, like as an example, brushing your teeth and you only really need to do that twice a day. You can do it more, but it's not like a necessity. And people aren't doing it more so you can't really measure or think by like the number of times that people are brushing their teeth per day, because like there is a set frequency and usage and you only do specific things like maybe once a month or once a week or once a year, you'll book like a trip maybe twice a year.

[00:24:56] Andrew Michael: So if you're trying to measure your performance on the monthly bookings that people are making, it's going to look crap compared to other industries and other segments. So understanding the frequency of usage of your product is just as important as sort of defining what activation or what engagement should look like for it.

[00:25:11] Emilia Korczynska: And understanding the context, and overall, I think SaaS companies don't understand their users enough. And what their users are really trying to achieve with their products, the most frustrating when you are the user and you are trying to get something done and either have to wait on the support that is often not really equipped with enough knowledge to answer your questions. Yeah, we had a few situations at Userpilot already where our marketing ops manager was more knowledgeable at that point in the software that we were using than their customer support.

[00:25:49] Emilia Korczynska: So frustratingly, but I think companies overall should be watching more session recordings, doing more user interviews, and being on top of what the users are really doing in their product and what they're doing it for, understanding the why, right? Because a lot of times you're experiencing these dead ends and really frustrating situations when nobody knows how the product actually works for your use case.

[00:26:15] Andrew Michael: Yeah. It's interesting as well, coming from a company now that's producing analytics that you say this as well. And I think it's always been like, when I first started in my startup career, I thought data and analytics was like the be-all and end-all. That's what you absolutely need to have at the start. And then what I realized is like at the start, it's actually less useful data because there's just so much noise in the data and specific metrics can be skewed very, very easily. And when I realized this, joining HotJar, like when I previously, used to work at HotJar and at the time I think HotJar were doing like 7 million, 6, 7 million in revenue already at that point. And there was almost like zero data being used in the company.

[00:26:55] Andrew Michael: Like everything was qualitative. Everyone was speaking to customers, understanding pain points and really getting close to the customer. And then only like when we started to get to about 10, 12, like then we said, okay, we really need to take this data thing seriously now because like the impacts and changes we're making have monumental [effects] to me and you just start experimentation. But up until that point, it had been like zero data almost to a certain level of degree, mostly relying on qualitative data. And then over time, as you grow and scale, like when you have, significant amount of data to get any sort of significance out of it. That's when it becomes very, very valuable to start using it.

[00:27:32] Emilia Korczynska: You said it yourself. Still qualitative data is data. So by data, I didn't just mean quantitative data, although this is what a lot of, especially growth managers mean by data. I think there is a bit of a bias towards quantitative data, just because it'll grow, people like to use the scientific method and they like to use basically statistical analysis to prove their points. I think the trend is kind of towards becoming more scientific and predictable and measurable overall because then it's easier to prove some conclusions, right, or prove that an experiment has worked.

[00:28:18] Emilia Korczynska: Well, you may prove that it has moved the needle in terms of a specific metric, but that change may be completely insignificant, or you may not actually understand what the impact of the experiment really was if you're only looking at the quantitative data without having the wider context of qualitative data. So session recordings, user interviews, what was the actual impact of this change?

[00:28:44] Andrew Michael: Yeah, absolutely. I'm busy working on a course at the moment around how to identify your ICP, and one of the questions that came through was sort of like, how can we be data-driven and define our ICP if we don't have a freemium or free trial product with high volume? And I think this speaks to like a lot of what you're saying now is like, they were really thinking it from the perspective of like, I need to analyze the data of my existing customers and look at thermographics and sort of define a profile in that sense, but what they weren't really neglecting is like in these cases where you have limited amounts of data, like qualitative data is your friend, like panel studies, surveys, speaking to users, you get a ton of data in that way.

‍[00:29:25] Andrew Michael: As long as you structure it in a specific point and to the point earlier, about statistical significance, like when you're looking for a sample size in a survey and a panel, it's much, much, you need a much lower volume of users to get to any level of significance than you do actually when you're analyzing your user activation flows and trying to understand the conversion rates that are going through each part. So I think it's also specifically more interesting at an earlier stage to really lean into the qualitative aspects for your business. Nice. So this report out you've released now product analytics as well. What's next for you and Userpilot’s over the next couple of quarters?

[00:30:04] Emilia Korczynska: Qualitative data, right? So we've just discussed the importance of putting context into the data. So we're about to release session recording as well to complement that and quantitative analysis. And basically the users will be able to like watch what their users are doing in their product. So you know, like get an idea why their metrics are what they are.

[00:30:32] Andrew Michael: It's definitely a trend I'm noticing that everybody's eating everybody's lunch money, in the space at the moment. I mentioned before, it's like Hotjar was acquired by Contentsquare, which now also acquired Heap, which is product analytics and everything in one. You obviously have Pendo, like you have yourselves entering the space now. I saw Amplitude the other day, introduced session recordings or I'm sure they probably had heat maps, there's PostHog. How like as a marketer, do you like, see yourself now entering into this market and trying to think about differentiation from that perspective?

[00:31:06] Andrew Michael: Because like, I think from my perspective, it would be very intimidating, especially coming at like the stage that you as Userpilot going up against some of these larger organizations now that are really starting to consolidate. And I'm pretty sure it's probably going to have… continuous to happen cause I only gave a few, I saw like Sprig the other day also launched now. They were doing the qualitative aspect. Now they've introduced recordings. I think it is and heat maps. So sitting in your position today, looking at the market and the landscape, like what's going through your head? How are you thinking about navigating through this?

[00:31:34] Emilia Korczynska: Yeah, it is very intimidating. So as you said, consolidation is definitely the trend and kind of re-bundling tools to create an all-in-one experience because especially after this recession that we've been experiencing since 2022 in tech, tech companies are a lot more price-sensitive and budget-conscious. They are looking for solutions that can do five things in one so they can basically cut down on other subscriptions. That's the trend we've also followed.

[00:32:08] Emilia Korczynska: Doesn't make it any easier to differentiate yourself if everyone is playing the same game, not necessarily. What we've been trying to do is offer, you know, the same or better value at a more affordable price point by actually investing in better tech. We basically did a pretty much proper rewrite of the solution in 2021, which kind of unlocked some capabilities that some of our, let’s put it that way, all the competitors didn't have, because they were using legacy technology. So for instance, real-time event-based triggering of content inside your product, so you can react to your user's behavior in real time. Is that a significant differentiator?

[00:32:54] Emilia Korczynska: Honestly, not really. Not everyone cares about being able to respond to their user's behavior in real time. But this is kind of a side effect of the streamlining of the whole product that allowed us to, you know, offer the same functionality at a lower price point. So is it the best position to be on the market? Not really, again, but we're just trying to be the best, most comprehensive solution that is still affordable and that is still, you know, product-led for the mid-market, I would say.

[00:33:31] Andrew Michael: Yeah, this is a little bit of a concern that I have in general about the software markets, because there's definitely is this trend of companies now starting to consolidate one and then to compete on price a lot more. The ability to actually like, build product now has become significantly easier with the rise of generative AI. So you're able to do a lot more as well, like in the past, a lot faster. And if this trend continues, like all we're going to see is like a fight to the bottom and then these tools become commodities.

‍[00:34:02] Andrew Michael: And it's interesting because like I recently chatted to the CEO of PostHog, James Hawkins, and his sort of philosophy as well was like, this is, I don't know if you mentioned this degree, but sort of like the way he thinks about pricing is that this should be just like a service like you use like AWS and it's meter billing, you understand the costs that go into it, like it's very transparent and it just becomes a commodity as opposed to like this product or service that you're paying value-based pricing against and trying to extract as much from your customers as possible.

[00:34:35] Andrew Michael: And I think that is the best way to price your product. But in today's market, as you say, things are shifting very fast. And if you're having competitors, they're coming around and saying, Hey, this is no longer value-based pricing anymore. This is a commodity and you shouldn't, like this is what it costs us. And we're just adding our margin on top of that and come compete with us. I think, like, it's Jeff Bezos as well. Like your margin is my opportunity model. And I think it's going to make it over the next few years, very, very hard for SaaS businesses in general, to be able to stay competitive and to actually grow their businesses. I don't know if you're seeing anything similar.

[00:35:11] Emilia Korczynska: I do. And you know, value-based pricing is a really, you know, beautiful concept, but it is still a concept which has its limitations. And the biggest limitation being that you can't always easily extract the value of your product especially if your product is more complex and with this trend for bundling and consolidating more and more products into one, how will you know exactly what value you're offering to all the different user personas that end up using your product? So we're facing this as well, that proving this value in a relevant way is becoming more challenging.

[00:35:40] Emilia Korczynska: And if you were to segment your audience in such a granular way to offer value-based pricing that would be different for every persona that happens to use your product, you would have dozens of pricing models running at the same time, and your pricing would become so complex that not only product-led or self-serve motion would be practically impossible because your users would be so confused about how to build out the product that you could then effectively price based on the value it offers to that particular user.

[00:36:26] Emilia Korczynska: But also, even your sales team would be super confused, like, how do we price these modules based on the value they offer to this particular user persona? So yeah, I'm all for value-based pricing, honestly, but it only works for certain types of products where you can easily prove the value and where the value is pretty consistent across your user base, rather than having very different value points for different personas.

[00:36:55] Andrew Michael: Yeah. I see that to some degree. I was thinking there's always a way you could probably find a common value trigger or value points and value metric that works across the board. And I think that's like something that needs to be done through qualitative research, if you wanted to get on a granular level, like really understand the true value that gets delivered to each individual user. I think that's, as you say, like a totally different ball game and overly complex for what most businesses need or can support.

[00:37:21] Andrew Michael: But I think through, like good pricing research, you can determine, like a good value metric. But I think even in that case today, the market is demanding, like, as you say, these all-in-ones, these cheaper products, they need to save money, they need to consolidate, and if somebody's positioning themselves as a value-based offering versus somebody who's just saying like I'm giving you the cheapest product to come to me.

[00:37:44] Andrew Michael: Like there's a lot of deals are going to be one just on that cheaper product basis now and not really on the merits of the actual quality and craft of the overall product. And I think this is, like a little bit of a concern for me as well for thinking about like the samurai sword concept of like, we build the best in class product versus like we build just enough of what you need now today and you get everything else with it.

[00:38:06] Andrew Michael: So it'd be interesting to follow the different companies that approach these two different strategies and see over the next couple of years, how it evolves and progresses for them both.

[00:38:16] Emilia Korczynska: Yeah. But we're also approaching it very much from the company's perspective, rather than from the user or buyer's perspective. For instance, now I'm in the buying process with a few companies. I'm looking for, demand generation/ABM solution for Userpilot. And the process is really hard because it's so hard to compare the different products and the ultimate value they would give us with the differences being so miniscule that I just wanted to know which of them can get the job done, which is also not always a given because you have different levels of integrations, different depth of integrations.

[00:38:54] Emilia Korczynska: You can push different data to your CRM or only to these or these properties. So really confirming all these questions and trying to extract of the value that you would get from a product without getting a proper proof of concept in the process is super hard and super intimidating. So I do understand that prospects, they just want to establish if your product is going to get the job they came for, done and then from the ones that do, which one is the cheapest. And the minuscule differences that the products may be trying to differentiate themselves with like are often pretty much unimportant.

[00:39:37] Andrew Michael: Yeah, for sure. I'll just put one caveat. It really depends on who the audience is because I know my previous company, Avrio, we were targeting user researchers and the level and degree in amount of research that user researchers do to research a tool for user research is on another level. Like the number of times I got onto calls with spreadsheets where you could see competitors lined up and the list of features and the list of features by role and by individual team member.

[00:40:08] Andrew Michael: And like just starting, ticking through lists and really trying to make sure like who's hitting the criteria across the board. But for the most part, as you say, it's like, we want to get the job done today. Does your product or service do what I needed to do and can I make it happen with you? ‍

[00:40:21] Emilia Korczynska: Yeah. Might be that the researcher's job is just a lot more complex where they have a longer shopping list.

[00:40:28] Andrew Michael: That's a nice way to put it, I’ll say. What's one thing that you know today that you wish you knew when you got started with your career?

[00:40:34] Emilia Korczynska: Oh, I guess nothing is linear and nothing is as simple as, you know, following instructions that someone else has put together. Right? So a lot of, I think, marketers get hung up on certain ways of doing things and they get hung up on guides, how to achieve eggs. I came to realize that case studies are the biggest lie in marketing because, again, you can overfit your data to basically present a certain result.

[00:41:09] Emilia Korczynska: And as we discussed earlier with benchmarking, it's very similar. It's practically impossible to compare your business and your situation to any other business, including, even your direct competitors. There are so many variables at play. The landscape is constantly changing. So you know, I would probably just try to work hard and making things work rather than, you know, like testing certain proven strategies and then realizing that, oh, they don't work for us.

[00:41:44] Andrew Michael: Yeah, definitely. I think there's like, Dr. O used to say, like screw best practices quite a bit. And the idea is that there's no alpha in best practices. If, like if it's a best practice it's, everybody's doing it. And then what are you really differentiating in there? And then the second, as you said, is like that I think reforge coin, this is like the JCPenney effect where you think like taking one strategy, one company, you're applying it, yours is immediately going to work and the energy came, I think from the Apple exec that left Apple. They went to become JCPenney CEO, if I'm not mistaken.

[00:42:14] Andrew Michael: And all of a sudden decided to throw out discounts and said, like, we don't do discounts anymore. We're a premium store and totally neglected that the only reason people shopped at JCPenney was for the discounts and totally ruined the business. But because that worked at Apple and there was like the vision, I was like, the strategy is going to work here.

‍[00:42:32] Andrew Michael: And as you said, like, I like that you mentioned this because, like you really need to treat your own business just like benchmarks. You need to, like understand your business better than anybody else and then figure out the strategies that are going to work for you as opposed to really drawing inspiration from these best practices and guides and at the end of it, sales tools for companies really when you get to the bottom of it.

[00:42:52] Emilia Korczynska: We've really shackled ourselves to this a bit, I feel, and it's very hard to get executive buy-in for more unorthodox approaches and testing things. Probably in your work, you've done a lot of experimentation and this was definitely an important part of your job but how often are marketers even allowed to experiment rather than copy what the competitors are doing?

[00:43:22] Emilia Korczynska: So it's sort of like the snake is eating its own tail where everyone is too intimidated to do something original and everyone's copying everyone. So the whole industry becomes indistinguishable. And that's kind of what I also meant in my answer to the previous question. Why it's difficult to buy and why it's difficult to differentiate yourself now. Because people are so afraid of trying new things and being different.

[00:43:47] Andrew Michael: Yeah, absolutely. And I think there's definitely a lot of people willing to go out to make bold statements as well in the markets. And then if it fits in with the narrative that somebody believes within your company's mind, like all of a sudden that narrative gets chanted internally and everybody buys into it as well. So like it's, I think we're definitely easily swayed as well in marketing products and in SaaS as well, depending on the latest trend that's been talked about online as well. And we started this conversation.

[00:44:16] Emilia Korczynska: We could do some experiments with publishing fake data on LinkedIn and some impressive results and just seeing how many people like it and reach out to ask if we can implement the same strategy of their business, like, you know, ethics aside, I'm sure a lot of people are, you know, doing something along these lines, maybe not directly lying, but again, presenting or misrepresenting the data in a way that leads people on to believe that things are the way they are.‍

[00:44:47] Andrew Michael: Yeah. Again, another reason why as well, it's important just to know your business better than anyone else. Nice, Emilia. It's been an absolute pleasure chatting today. I think we can continue chatting for hours, but we're gonna have to wrap up now. Is there any final thoughts you want to leave the listeners with? Anything you'd like to share before we close off? ‍

[00:45:03] Emilia Korczynska: Yeah, just to recap, you know, read benchmarks report, but treat them with a bit of salt and don't just blindly follow what everyone is doing. Try to really analyze and understand the reasons and the why behind the data.

[00:45:18] Andrew Michael: Very nice. Well, it's been a pleasure chatting to you today. For the listeners, we'll make sure to leave all the show notes and anything that we've discussed today there for you. So you can pick that up if you want to take a look at the report, it'll be linked as well in the show notes. So thank you so much again for joining, Emilia, and wish you best of luck now going forward.

[00:45:34] Emilia Korczynska: Thank you, Andrew, likewise.

[00:45:38] Andrew Michael: Cheers.

[00:45:40] Andrew Michael: And that's a wrap for the show today with me, Andrew Michael. I really hope you enjoyed it and you were able to pull out something valuable for your business. To keep up to date with Churn.FM and be notified about new episodes, blog posts and more, subscribe to our mailing list by visiting Churn.FM. Also don't forget to subscribe to our show on iTunes, Google Play or wherever you listen to your podcasts. If you have any feedback, good or bad, I would love to hear from you. And you can provide your blunt, direct feedback by sending it to Andrew@Churn.FM. Lastly, but most importantly, if you enjoyed this episode, please share it and leave a review as it really helps get the word out and grow the community. Thanks again for listening. See you again next week.

‍