How to Turn More Than 40% of Your Prospects Into Long Term Customers with the CEO of Attentive

So just to start off, give a little background on myself. Again, I'm Brian Long. I'm the CEO and co-founder of a company called Attentive. Attentive does personalized mobile messaging. Our goal is to create magical conversations between businesses and consumers. You know, company's been around for a little over 6 years and has reached over $350 million in revenue. Has raised about $850 million to date and over 5,000+ customers that we're working with today, sending and receiving billions of text messages each month today. And before starting Attentive about 6 years ago, I was also the CEO and co-founder of another company called TapCommerce. TapCommerce was a mobile app marketing and analytics software company. I started that in 2012 and sold that to Twitter for 9 figures in 2014. I ran the mobile app group at Twitter for a couple of years before starting Attentive. So, and before that, you know, worked in a variety of different startup software companies and some larger software and media companies as well. So a host of different things over, you know, the last 15 years or so. And hopefully bring some of those learnings and mistakes made to today's presentation. So today I'm gonna be focusing on ways to smooth it out and make your go-to-market processes a lot better so you can smooth your funnel out and drive more customers. But I think that the headline note that I would just bring to you and hope that you can bring, you know, to some regard to your companies each day is just remember that go-to-market innovation, today is significantly undervalued. And what I mean about that is, when a lot of companies talk about innovation today, you know, they often immediately jump to what that means for, you know, engineering and product. And, you know, I would just encourage everyone, when they think about innovation, to spend a similar amount of time on how they can innovate in their go-to-market team and their commercialization, just as much as they spend that time talking about and sort of evangelizing innovation within their product. Of course, product innovation is, is very, very important. But I think that we, we often forget how important go-to-market innovation is. And if you make innovations there, it can compound very quickly and come back into the product very quickly and help you grow a lot. And just as a basic place to get started there, you know, I like to go through every one of our departments in each one of the processes they do on a regular basis. And just constantly ask the question of, should we be doing this process differently? Are we doing it the best way we could? And just dissecting that process. And, you know, you might have had it right a year ago or 2 years ago, but something has changed, or there's new, there's new software, there's some, someone on the team found something really cool they're using now. And you should roll that out to everyone. I think you'll, you'll find a lot of opportunities tinkering and innovating in your go-to-market side that maybe you didn't think about before and weren't sort of under this umbrella of innovation. Now, getting a little more specific into the sales funnel and how to smooth the sales funnel, you know, to state the obvious, getting your sales funnel, particularly, you know, presale as well as post-sale with your customer service, customer success team, is extremely important. These things are going to be some of the primary drivers for ultimately how your business is valued, and what sort of cash flows your business can generate in the future. You sort of all the important ratios that you're gonna look at as you're scaling your business are going to be driven a lot by what you're doing right and what you're doing wrong within that sales funnel. So it's something that's worth spending a lot of time getting right, and that's gonna lead to a lot of important decisions that you end up making in the future. When I think about ultimately what stops a buyer, right? What are the key friction points within the sales funnel, I like to simplify that down really into 3 buckets of things. Number 1 is time. What is the investment in time that the buyer needs to make to set up and to use your product? Number 2 is risk. You know, what sort of risk, perceived risk, whatever it is, is the buyer taking? By choosing to use your service? And then number 3 is money. What budget do they actually have? And I would actually say, for me, I think this is the priority order. And I think oftentimes, you know, obviously, look, this comes with a caveat that, of course, it varies from buyer to buyer and from product to product. So it's an oversimplification. But, you know, for me, I think sometimes when you say what stops buyers, people really jump to this third bucket. They really jump to money. But for a lot of buyers, particularly medium to large business, you know, that's not so much the issue. It really focuses on the time component and the risk component. And I think not enough time is, is often spent in those components, and probably too much time is spent just focusing on the money. The money matters, but, uh, we'll, we'll spend a lot of time today talking about time and risk. So starting off with time, I do think this is usually the number one issue. People are often very busy. And people don't want to add more things that they have to do. They don't want to add more workflows, especially if it's something recurring that they're going to have to do all the time. And they also— it's not just the buyer's own time. Buyers are often very worried about the time that they will need from other resources within the company, particularly if they don't control the those resources, right? That's something that is going to make them unpopular, is going to make them unable to deliver and use maybe the software that they're buying. So you really have to think about the time that your buyer spends, but also how that time is spread across the org and whether or not they control those areas of time across the organization. So I kind of like to break that time down into a couple of different buckets. First bucket is decision time. So ultimately, you know, who is making the decision on using your product and how much time is that going to take for them to make that decision? Number 2 is integration time. How long does it take to actually set up your product and launch the product? You know, what sort of resources does that need? And then finally, maintenance time. Once that product is up and off the ground and flying, What does it take to continuously service and use this product? So let's say, you know, you, you do all this sort of analysis and you figure out that your product doesn't need a lot of time. Okay, step back for a second. That's great. You need to sell that immediately, right now, today. If you are someone who has a low time need across these buckets and it really is that easy and it, and it takes care of itself on an ongoing basis, that needs to be front and center and message continuously throughout your pitch. I think that there's, a lot of businesses that find that they're low, they have a low time need, but they're not doing enough to really market that low time need and hit the customers with that. But I think there's a lot of software, you know, probably the majority of software that does have a significant time need. And when you look at that, you need to think about every way that the buyer is spending that time. And how can we remove that burden from the buyer in spending that time to can make it easier for them to say yes and to wanna jump in. So I'll give a quick example from experience with Attentive. Just another reminder, at Attentive, we do text message-based marketing communication tools for over 5,000 different brands. You know, our, our goal is to drive a lot of revenue for each one of these brands. And in order to get started with Attentive in the beginning, it was taking about 30 to 60 days. When we, when we really started and started the company and started scaling it. And this was leading to a lot of meetings, a lot of resources, both at our company and across their company, engineering, design, marketing, finance, a lot of different stuff to get off the ground. And then on an ongoing maintenance, on an ongoing basis, there was a lot of maintenance too, right? They had to do a lot of work to schedule programs, set up programs, etc. So it was a significant amount of time to get the product off the ground when we were first getting started and scaling our business. And we spent a lot of time thinking about how do we make this a lot easier. So just a couple examples of the type of things we did to reduce that time spent. In order to get people off the ground, instead of relying on the customer to kind of do all of their get started process and do everything themself, we actually had a team that would step in and do all of the work for the customer that they needed in order to get started. And, you know, a mindset I, I'd get here overall is this bullet point at the bottom. Instead of a, a world where you have someone kind of require input and have to think a lot in order to get to the output to, to ultimately, you know, be ready or run, get to a world where you're just doing approvals. So if you can get to a place where the customer really just has to approve stuff rather than having to continuously add in stuff and think about stuff, it's gonna go a lot smoother because people ultimately want to approve it. And, and I think that actually can work a lot to your benefit too, because if you can get your, your product and processes in a position where they're just approving stuff, then guess what? The stuff that your team does is gonna be more in line with the stuff that works. For your product, right? And the stuff that ultimately will lead to higher retention and more happy customers. As another example of this, you know, initially we had to create all of these different signup units for customers so that consumers could sign up to get text messages from the brand. We changed that so that everything was prebuilt for the brand, and again, they just had to approve it. And this significantly smoothed out how easy it was for brands to get started. And then finally, we used to count on people to write a lot of their own copy, a lot of their own materials. Now most of that is automatically pre-written within our product. And, you know, that's also made it incredibly easier for people to get started and to scale their programs. So that's the first bucket, time. And I would spend the most time on that first bucket of time because I think that people often forget how important that is in the sales process. The number 2 thing in the sales process for me is risk. So, and again, you know, I have a leaning more towards larger mid-market to enterprise type of companies. And I think that these companies, the enterprise buyer is almost always going to pick the solution that doesn't get them fired, right? It is a much more risk-sensitive role, generally speaking, and they are going to lean for most buyers to that solution, the one that doesn't get them fired. So it's very important that you understand the risk that buyers are taking by selecting your solution and help them to not feel concerned when picking your solution. So I'll just go through a couple quick examples for for how we encountered this on Attentive. First, in the early days of Attentive, people were worried that by doing SMS, it was going to cannibalize a lot of their email-based revenue. Number 2, SMS is a highly regulated space, and companies were very worried about getting lawsuits for doing SMS-based communication with their consumers. And then finally, people were worried about annoying their consumers with SMS-based messages. So we spent a lot of time on each one of these problems and came up with solutions for each. For the first bucket, you know, for the first year and a half or so of the company, we only collected SMS signups. And what we found was people really liked us for the first 4 to 6 months. And then after 6 months, they noticed that the email signups was lower and they would freak out and want to find ways to grow their email list. To, and that would kind of call into issue their SMS-focused collection. So we came up with a new way for customers to capture both email and SMS signups. And you'll probably notice that on, you know, the majority of retail and e-commerce businesses in the United States today are now using, you know, a version of us in order to capture email and SMS together. Number 2, is on the legal side. So, you know, we found that there were a lot of brands, particularly larger brands, very worried about this on the regulatory side. So we built out a legal team and then worked with that legal team to help us build products specific to compliance. And those products have shielded our customers from this tremendous legal risk that no longer exists and now has become a major differentiator for our product. Number 3, on annoyance, we set up a system so that we could automatically not send too many SMS messages per consumer. So we keep track of how many messages we're sending per consumer. And if we see that you've gotten a message, you know, within X time period, let's say in the last 12 hours or something, then we will suppress additional messages from being sent to you. We also found that that was the biggest driver of people opting out from getting messages. So also helping the program in a long-term basis. So that's the second piece, risk. And if I just spent another second on risk, I'd say it, it could be helpful to go through your own buyer and really understand what are the biggest risks and concerns they have and how can you spend time making these types of products so that they align to solve your customers' risk points. Because again, I think we often put money as the number one thing, but I do think that time and risk are higher up in importance in smoothing it out. Okay, number 3 is money. And I don't think that's going to surprise most people here. I think that there are 3 types of software companies. Software that makes money, software that saves money, and software that you're not really sure what it does. And I think in the economy that we're kind of moving into right now, you're gonna see a lot of movement towards software that makes money and saves money. And you're gonna see people pulling back on stuff that they're not sure what it does. So, you know, you need to find a way to position your product as clearly as possible on how it makes or saves money, um, or your buyer problem needs to be just absolutely on fire. But I, I do think that these days you really are going to see companies gravitate towards the make money and save money buckets, and you need to find a way to associate your solution, uh, with one of those two buckets, making money or saving money, to be successful. You know, at Attentive, uh, we also have experimented, uh, with a couple other ways to smooth things out on the make money side. Um, obviously there's been a big, a big trend for a while now within SaaS software around free trials. But something I heard, you know, relatively early on and heard from, you know, a number of, of investors and folks was, well, you know, you don't need to give free trials to, you know, that, that company because they're a public company and they don't want to do free trials, you know, they want to sign big commitments, they want to sign big contracts, they don't like to try things out. And just in our experience, we found that not to be the case at all. We found that big companies often have the same level of appreciation for free trials just as much as medium or small companies. And it really, in many cases, helped us to sign very significant ultimately very significant customers that, you know, didn't have the dollars initially in order to do a 1-month or 2-month proof of concept. And we were able to get them to sign on to, you know, doing that free trial and then convert into being a paying customer, you know, 30 days, 60 days later, or whatever it might be. So, you know, I, I think that, um, you know, we, we saw that work tremendously, and I was very surprised by how much a relatively small and inexpensive trial had a very big impact for, you know, Fortune 500 brands that, you know, people, people thought there's no way that they would, they would need a trial. Just a few other things to keep in mind when optimizing for the money side of things. You know, I think that people can also feel a lot of trepidation when they see a very big sticker price. And, you know, I think finding a way to have lower sticker prices, but that just kind of on themselves grow over time. Is a much better strategy. And again, I think this is also true across different customer sizes. I think that there's a fallacy that big companies have big money all the time to spend. Number 2, I think this, this, there was this idea of kind of like a big decision, right? That you go through a sales process and you have like a very big contract and you need to get to a company to make a very big decision point. And, you know, it's good if you close 1 in 5 of those. I think it's much better if you can break down those big decisions into a bunch of much smaller decisions, and those decisions sort of compound and snowball, if you will, as you grow. And you're going to have much higher close rates by breaking it down into those smaller decisions than sort of one big go-or-no-go decision that I think can lead to inaction. On the side of the buyer. And then finally, you know, I think you need to be comfortable charging more as you add more value. You don't want one price to be there. And then, you know, it's kind of the same thing 2 years later, but you add tremendously more value 2 years later. So don't be afraid to add billing, add pricing as you grow more value. That also means to price in line with your value, particularly where your customer might be in their lifecycle. So, uh, in summary, before we jump into questions, just a few highlights that, that I've had here. I would break down the smoothing, uh, of your buyer process and sales process into the 3 things that I think have the most impact for the buyer's decision. Those things are time, risk, and money. And I think that's in priority order. I think that time is, is often the thing that people do not give nearly enough credit for, but is extremely important for how the buyer makes their decision. And you need to figure out what sort of time your product requires in order for them to say yes. Number 2 is risk. I think almost all products come with some component of risk with saying yes and trying out that product. And you want to minimize that risk as much as possible. You want to understand that risk and then work in your product to build against that risk so that it makes it much, much easier for that buyer to say yes. And then finally, on the money side, you know, we all know the money side is important, but be creative and, you know, really embrace that go-to-market innovation. To be creative about what you're ultimately doing so that you can set a really nice customer flow and have very, very smooth onboarding. So that's the extent of prepared remarks, and now I'm happy to go in and answer any questions people might have.

Great. Thank you so much for that, Brian. Lots of great questions came in, both via in the room and on our social media live streaming. We'll try to get through as many as possible, but super detailed. So we got a lot of questions that came in. Came in. First and foremost, you mentioned time as the number one blocker to buying. It was the first one that you went into detail in. For those who maybe aren't measuring this as great or as maybe as sophisticated as you might be, what are you doing to measure that time and duration? Any recommendations there for when people might just be getting started or they're feeling like time has become a barrier for them?

Yeah, I mean, look, I think that the easiest way to understand that time is to go talk to your customers or potential customers. And I think that you should be very open to heavily compensating your customers to, or potential customers to get that understanding, right? Offer, you know, $50, $100 gift card, whatever it is. To say, look, you know, how are you spending your time using my product? You know, what do you, what do you, how much time are you spending per week in my product? How are you spending that time? Like, sure, you can look at your own analytics and see what the analytics show, but it's almost more important what the buyer thinks they spend their time in your product versus how much they, how much your analytics might say it is. Because what you might find is they say, well, you know, sure, I have to log into your product, but before I even log in, I have a separate Excel spreadsheet that I'm doing a bunch of work in that I spend 3 hours doing. And then once I'm done that, then I open up your product and go use the product. You should say, well, you know what, you know what I should do? I should build a tool that solves the problem of what they're doing in the Excel spreadsheet for 3 hours beforehand before they go in my product. So I think you're, you're often surprised by what you learn talking to the customer rather than just sort of relying on your own analytics. You got to be comfortable talking customers, because, you know, that's how you're really going to learn that the analytics on their own is only going to get you so far.

Yeah. And who's doing that? Is it, is it still you? Is it your CS team? Like, where's the, where's that time being spent right now?

I mean, I think you have to have leadership and you have to have product talking directly to the buyer and the consumer. I think you have to always be doing surveys, you have to be getting on the phone, you have to be hearing them out. You know, I'm at a customer dinner last night talking to customers about, you know, what their problems are. So you have to, the minute that I, you just can't rely on someone to translate that directly to who's making it because you're not gonna, you're not gonna understand it. You have to be also be able to dig in, right? Someone says something, you need this, oh, that's interesting. I want to double-click into that. I want to understand more of that.

Yeah. And when you just did a dinner, you got a bunch of customer feedback, your team is getting feedback from, you know, the surveys and meetings that they're taking. How quickly are you guys to implement that feedback? Like, does it depend on what it is? Like, how do you guys kind of prioritize what to then implement?

Well, you know, that's, I think that's where the art meets the science a little bit. And I think that you, you know, need to look at that feedback and validate it across, you know, more than just one source of feedback, because You hear something once, you're not so sure. You hear something 20 times, you're feeling pretty good that that's a real problem. I would say if I was giving any additional sort of tip on a strategy there, something I like to ask is to say, OK, I understand this is a problem. On a scale from 1 to 10, 1 being the lowest, 10 being just, oh my God, you have to solve this tomorrow. It's a huge issue. It's my biggest problem. Give me your score. Because I think sometimes someone will say, oh my God, you have to fix this, whatever, whatever. And you say, okay, give me the score. And they're like, oh, okay, it's a 6. And you're like, what? You're like, what?

It felt to me like a 10. Yeah.

I thought we were at an 11. Yeah. You know, and it goes both ways too, because, you know, if you're pitching a new product to them, you know, I came up with this solution to your problem. Oh, it's so cool. That's great. Okay, great. And how would you rank that? And they're like, I give it a 6. And you're like, wait, I thought you just said it was really cool. And they're like, yeah, it seems cool. It's a 6.

But it's a 6.

Yeah, but it's a 6. And I think that that's, that's, I guess that's a bigger reminder I give people, which is that you are going to get— it's very hard to get critical feedback. Very, very hard. Almost no one wants to give it. And when they do give it, it's often done in a very polite and, and sort of wrapped, uh, procedure.

Sure.

Yeah. Then it's very hard to give them the space where they can actually give you the critical feedback that you really want to learn from and hear. So I do think systems like having someone score it, and if they give you a score that's less than an 8, you're like, okay, that's really bad. That's like a terrible score. They don't, they don't really want that thing. They're just being polite. So I think you have to remember that that feedback is almost always nonexistent.

No, those are some good, good tips and reminders. If it's something— there's really a question— if it's something that the latency issue, even if maybe the customer scores it as a 6, do you personally score it as like an 11 as a CEO and you're like, it's the latency thing, like we got to jump on it?

No, I would say that, okay, I look, I think that there's, there's, there's two things that you can determine what gets prioritized, right? Is it really, really important to the customer? Or is it really, really important to, you know, my business in some way? Yeah, right. Like, there could be a risk component for me at the company that I'm like, that's really important. Like, you know what, like security can be very important, but like the customer isn't banging the table saying your product needs to be more secure, but I know I need to be, have it be more secure because I need to protect the business, right? So there's, there are things that, that maybe the customer doesn't rank high that you do, but that there, I, I think much more so it's the case, it's, it's the stuff that the customer really has to rank high because there's very few things that, that if they're not for the customer, what are they for?

Sure. Now that makes sense, right? Okay, you mentioned this concept of getting to a world of approvals rather than, you know, maybe like you do these constant improvements, but you mentioned this concept of getting to a world of approvals in which you make it easier for the customer to use the product, right? Like lower their time or maybe barriers of time and make it more sticky for the customer. You mentioned it helps with your retention. For those who are maybe crystallizing on this concept for the first time and are now thinking about how to get to a world of approvals for their product, what are some of the things that you guys started out with to get that going? Because it sounds like— and maybe, maybe you've got it going fast, or like, you know, I don't know how long that journey quite was, but what do you recommend for people who are maybe just, you know, that a light bulb went off for them today and they want to start getting to a world of approvals for their product?

Yeah, I mean, look, it can be a hard road and it's one that I think you've got to, you know, commit to and spend time, you know, thoughtfully making product within because you are ultimately automating, you know, part of what your buyer would've been doing, right? So it's something where you probably need to learn from what the buyer does manually and you need to see what the best buyers do. And then you wanna replicate that behavior into your more automated product so that it does turn into a world of approvals But if you do get it into a world of approvals, that means that more of your buyers are going to be doing the right thing in your product, right? They're going to be doing the best practice in your product. And so they're going to be more likely to succeed. They're going to be more likely to spend more money if your product is, is kind of usage-based and things like that. And then, you know, on top of that, I think the retention is also going to be tremendously higher because, oh wow, I go on this product and it like automatically has this stuff teed up for me. If I go somewhere else, it's going to take me 5, 10 hours of time, right? Most people don't want to sign up for that. They don't want to sign up for it. It's going to go take 5 to 10 times, you know, 5 to 10x time or whatever, you know, even if it means saving a little money, I think most people will stay on with it. They value their time the most is, is I guess the message there.

Yep.

Okay.

And when you look at, you know, what you keep adding once you've gotten to a world of approvals, how often are you guys refreshing those kind of like templates that you made to continually improve it so that it doesn't fall out of a world of just approval.

Yeah, you've got to constantly be updating it, you know, regularly to see, you know, are we doing it the best way possible, right? And I kind of go back to that, maybe a shortcut here, find the people that have done it really well and then replicate that. So who are the companies that are doing really well that use your product? Learn from them, and use them to inject that into what becomes your best practice and your standard. And there's the— that's the great thing is there's always going to be some people that are pushing it and making it better.

Yeah, yeah, no, that makes sense. So you kind of lean on your power users there to kind of see like, okay, what are they doing? What can we steal from them?

What can we leverage from them? And what can we help What can we help them to make the product better from all of us? Yes, exactly. Steal is a very dangerous word, but no, leverage and enhance for them in order to make the platform better. Exactly.

Okay, I'm watching more questions come in from our live stream here. You mentioned risk as one of your blockers. I think it's the next one after time. For maybe companies who are starting to do, you know, SMS or working it into their marketing mix, can you share a few high-level examples of maybe what works and what to avoid, right? Like what's the hard, like what's a hard pass on SMS?

I mean, it was a hard pass for most companies for the first couple of years of the company, right? And I think that some of the biggest objections that we ran into were, you know, A, consumers don't want this, you know, I, they would say I myself don't want this. So therefore, sure. I don't believe my consumer wants it, right? So that was, that was, that was a very common objection. And that was one that it took us a lot of time to overcome. And, you know, the response there is, well, let your consumer decide that, you know, put, put it up for a day and see what your consumer does. And if they don't sign up and they don't engage, then you're right. But if they do sign up, and they do engage and they don't opt out, even though you've made it very, very clear, much more so than email, how to opt out, then the consumer did want it. And you can't really speak for your consumer, right? And I think that too often, that's the thing that you need to gently remind the buyer, and we should remind all of ourselves, is that we're all different people. And, you know, maybe you don't understand what that consumer wants, right? And that's something that you need to need to figure out and have a realistic conversation about. Number 2 biggest issue for us there was just around the legal risk. So there are a lot of companies that got into trouble for doing text message communication the wrong way, you know, a decade ago. And they'd say, oh, you know, a decade ago we had a lawsuit for X million dollars. It was a whole mess. You know, it's the— we still have the same general counsel and they just said no way. And I think for them, you know, you need to show what the monetary impact is of saying no, you know, so that, so that it's, it's clear that the money that they're giving up in order to get their protection. And for me, I'd be like, well, look, you're spending X amount of money, uh, you know, basically to, to not do this. So just understand how much this is costing you by, by not doing it. And I think once they have that position and they just kind of say, well, I'm balancing two different costs, then it's much easier to swallow.

What is the hard and fast rule, by the way? I mean, I don't know if you know, um, so for companies who are, you know, maybe into '23, they're going to start doing SMS, can they send one without an opt-in if they already have their phone number as an opt-in, or do they have to get the like formal opt-in first?

You can't send anything that's a marketing-based message without the consumer giving express written consent that they want to receive those messages. So yeah, that's something companies have gotten in trouble for, is sending the text message to say, hey, will you sign up? Well, guess what? The message you just sent was a marketing-based message. So you can't do that. You can't do that.

Okay, good to know. Another question here that's come in from the livestream that's related is there's maybe some mobile marketing overload, and you just mentioned it just You know, you said this tidbit earlier on the earlier question as an answer of making sure that it's super clear, even more than email, as an opt-out for SMS. So now that more, you know, companies, both B2C and B2B and SaaS, are doing SMS marketing, how much is too much, right? Because they're already getting a lot of emails, they're probably starting to get a lot of text messages. Do you know off the top of your head, like, what's the right mix for your customers of how many messages is the right, you know, kind of mix to send when it comes to SMS?

Yeah, look, I mean, the simple answer is that SMS, although it's getting a little hot today, the saturation on SMS is still very minimal, right? Still low.

Okay.

Yeah. Like the majority of people are still only signed up for one or less SMS programs today. And most people, if you went into that higher bucket of 80% of consumers, 80% are still only signed up for like 2 or 3 programs. If you compare that to email where the average consumer is getting like 110 unsolicited emails a day or something like that. It's a very big world. It's a very big world of difference between the two channels. So I'd say that SMS is like, you know, first inning or before that. That being said, in terms of best practice, you know, I think that really comes back to the company and whether or not you have something relevant to send to that particular consumer, right? So if you're a business that is constantly launching new products and interesting things and you're sending that to an audience that has signed up to get that type of content, you might have content that is worthy of being sent every day or every other day or something like that that the consumer actually likes getting, right? Like, I've seen, you know, uh, sneaker companies that have a different sneaker drop they do every day.

They do the drop. Yeah.

And they do the drop, right? And people love it, love it. I mean, like, you know, click-through rates over 100%.

They want it. Yeah.

But then you have other companies where they have 4 SKUs, you know, or 3 SKUs, and the SKUs don't change. It's been the same SKUs for 2 years. And there's nothing to update there, right? And, and unless they have content or other interesting things and ways to engage the consumer, which, you know, they should be doing, right? They should be making that content, they should be explaining the value prop, they should be engaging with the consumer, they should be serving them and asking them things and learning from them. And there's a lot of different things that they can do within that channel to build their, their relationship there. Um, but that, that's one of those cases where I think it comes back to, you know, does your company have relevant enough information to send? Because if it's just the same message, you know, a couple times a week, that, that's not a, that's not a value prop to the consumer.

Yeah. And right now, do most— do you see most companies have— they're just leveraging their existing, let's say, like email marketing teams to also do SMS? Maybe they're also doing social. Are you starting to see like a breakthrough of dedicated teams just for SMS?

Yeah, we've— in the last couple years, we've seen a big change where now you do have dedicated teams, right? For a long time, there was there weren't anyone who kind of knew how to do it, right? There was very, very few companies doing it. But now you do have a whole bunch of talent that know how to do it. And now that it's become for a lot of companies, you know, if not their number one, it's within their top 3 sources of revenue. Now they do have someone who's dedicated to it, right? And can make it, can make it really great by spending more time, you know, working on it and tweaking it and using, you know, tools and strategies to make it better.

Okay, no, these are great insights. There's still more questions. I'll try and get to a few more before we run out of time here. You've also identified and mentioned earlier on in your formal presentation on, you know, you guys minimized risk by adding a legal theme and a legal component where it was templatized as much as possible. You guys also added email in addition to SMS as like an additional sign-up tool. How is it that you're able to almost forecast and predict these issues, maybe seemingly before they happen?

Well, you know, I don't, I don't know how much we were able to do anything before it happened. I think we, I think we learned from hearing customer feedback, whether it was, hey, we just tried to, you know, sign this customer and they're not going to sign because they want to see XYZ legal product. Or hey, this customer has been live for 3 months and they like it, but they're going to turn it off because, you know, they want to grow their email list faster too, unless we add that product. So most of what we're doing is in reaction to learning from the customer. You know, I think whatever you're, whatever you're doing, anything on the product side that's coming from like your, your own true, you know, idea and, you know, whatever, I'm God complex and I'm just going to make this because this is the way it should be. You should probably stop for a second and say, I'm most worried about those things. Because, you know, really, the customer should be telling you what, you know, what they want as much as possible. And if you're not getting that from the customer, then you just need to spend more time learning about how to speak to the customer and how to get that information out from the customer about what they need, which I do think is one of the hardest things to do, you know, and how often I've seen Product people, you know, get on a customer call and say, oh, I did the call and, you know, the customer loves my idea. And you're like, well, okay, uh, I'm not so sure about that because, you know, how did we, how did we reach that endpoint? Well, we got on the call and I pitched the idea and they said really cool. And again, to our, our, our earlier point, I think if you can find ways to, um, really question that and, and go in skeptical and say, you know, really, do you think the help, like, is this absolutely necessary? And the person's like, no, you know, be more real about getting that, that type of critical feedback, which is very, very hard to get out of the buyer.

Yeah, it can be hard to do sometimes. So how, just related question that we got too, is how much of your product roadmap is then informed by the customer? Is it 100%? Is it 90%? Because it sounds like you guys are very reliant on like that real-time feedback, whether you're implementing it right in real time or not. You guys are using it very heavily.

Yeah, I mean, look, you have to, you have to. I think everything that you're doing, you know, most of it has to come back to the customer. There are components of a roadmap that are going to do some things that aren't customer-facing, right? Um, hey, you know, we've got to limit how much money we spend on X thing, so we're going to spend some time building something, or Hey, we've got to get some internal billing system, right? Which is kind of customer-facing, but maybe it's not, right? Maybe it's like do some migration you have to do or something. So there is going to be some stuff that doesn't fall, but I think you want to make as much as possible fall into that bucket. Now, that's not to say that every idea comes from the customer, but I think that the problem has to come from the customer, right? The higher-level problem has to come from the customer. I think where you see companies run into The biggest issues— and by the way, I think the reason that a lot of startups fail is that they're a solution in search of a problem, and they like came up with a solution, then they're like drastically just trying to find a problem for it. So you get— it has to start with what the buyer problem is and, and then move to the solution. You could have some interesting ideas, but those ideas have to be tied because that's, that's really where the value is, is, is making a great solution to a buyer problem.

Yeah, you're just constantly iterating on the solution. So as much of that as you can incorporate to the roadmap, the better.

And there could be high-level problems. Like, let me tell you something, no one told us that there were— there were not— no one— there were not a lot of companies that wanted to do SMS-based marketing communication in 2016 and 2017, right?

But there were a lot of hand raisers.

But there was a huge problem, which is we need to find ways to make more revenue, and email performance is declining significantly and I don't have a good way to communicate and reach my customer. They didn't know that SMS was a potential solution, but they had a very big burning problem. So, you know, I don't want to discourage people from coming up with creative solutions, but understand that it has to solve a real problem. And again, I'd come back to that bucket of software that makes money, software that saves money, software I'm not sure what it does. Make sure that if it's in that third bucket, folks, like, you really, you gotta have a really, really important operational burning problem, or it's gonna be very unpleasant selling that product. I've sold stuff in bucket 3 and it's a real tough— it's a tough sledding.

Yeah, especially now. Okay, 2 more questions I wanna try and hit before we run out of time. You mentioned cost. And obviously money is a barrier, we kind of just touched on it now. And have you seen, as you know, folks are going more upmarket, or even try to just land a few enterprise customers, have you seen just from your perspective, any sort of change in the landscape and how enterprise customers want to pay you? Like you mentioned a bit earlier, right? It's, it's maybe not those big multi-year contracts anymore, it might be even, I don't know, as if you would go as far to say that now it's monthly and like they're, they're putting it on credit cards, like bypassing procurement. But maybe what are you seeing in the system these days?

I think that most companies right now are in cut mode, right? Most companies are in cost savings mode, right? So even if your solution saves money, you know, they're going to be hard-pressed to actually prove why am I adding on something. And so, so I think in a world where everyone is in cost cut savings mode, not everyone, but most, most businesses are. Your value prop needs to be very clear. And you need to make it very easy to prove that value prop. And hopefully you can prove it before they have to pay you a dollar. Right now, it's totally fine to prove it, and then charge them and have a clear story on why that's going to be the case. But I think you got to prove it first in this, in this world. A lot more so than it was a year ago.

Yep, makes sense. Um, have you seen, um, anything— actually, sorry, related question— but, um, have you seen anything in hesitation with sales maybe as they get, you know, more, more enterprise customers that are maybe wanting, you know, not multi-year deals but maybe just one year or monthly? Like, have you seen any hesitation in the sales team itself on like how they approach that buyer? Because it's, you know, it's becoming more of an ask, a constant ask versus like, okay, I only have to ask you once for 5 years, you're locked in. Like, how do they kind of get over those nerves to maybe ask, you know, SAP for money more than once a year?

Well, I mean, look, the good news, I'd say that the other side of that argument, right? On the one hand, you know, people like the idea of, I'm going to sign a contract, it's great for 5 years, and that's it. But there's a big downside to that contract, right? That means you are locked into that price for 5 years. That means that it's much harder to upsell because you don't have those opportunities. So we already signed on to that for 5 years. Oh, we should have been sold that at that time. So I think this really long-term contract can actually be a pretty big detriment right now. I don't think a place to land for most businesses month to month is a great place to be either. But I think you want to have contracts where they're refreshing pretty regularly and you have opportunities to upsell. The customer very easily, hopefully with like more usage-based type pricing when possible, in order to really grow, right? Because if you're not, if you're not growing the account year over year, then, you know, the, the, the, the NDR numbers become really challenging.

Yeah, and there's a lot of risk in that. Okay, maybe last question if you have time for one more. Um, you mentioned a free trial. Um, you know, obviously this is the age-old question, free versus paid, right? Like What have you seen? What's maybe your final advice on converting those free users from free to paid? And is it working?

Look, I, I think that free trials should be offered to all of your medium to large customers. I think that the real thing that a lot of businesses probably don't spend enough time not doing is saying no to small companies, small customers, if your free trial has real costs and time associated with it. Yep. Right? So being able to say no, actually, to smaller companies is probably the thing that I think a lot of companies don't do enough of. And instead embracing the upside potential and the basic unit economics of medium to large customers. Because when you do your unit economics, I mean, there's a reason that almost every company ends up wanting to grow upmarket. The unit economics just work much better upmarket, right? So most people want to find a way to grow upmarket because the unit economics are much better and the numbers are much better. So, you know, I think you should smooth it out for upmarket as much as you can, and then step back. And look, it might sound a little unpopular, and I've seen some some companies, you know, like, like Brex and other folks who've taken some heat for not serving the long tail. But it really, if you, if you add that clarity, it helps a lot. And I think that very few, I think it's very hard to find businesses, there are some, but it's very hard to find businesses that effectively service both the long tail and the larger mid-market enterprise. With one product, right? It's very hard to make them both happy because the product roadmap, because the buyer problem is very different from, in most cases, for both those cohorts. And of course, you know, you can call it examples like a Slack or something and say, oh, they service both. I might go back and say, I don't know, I think enterprise Slack users want something very different than long-tail Slack.

The free, yeah.

And if you were really focused on enterprise, you might do a bunch of different things in that Slack product if, if you were trying to make something that really stands out for enterprise. So there's, there's, I think you, you pay a price if you really try to go across and reach everyone.