Course 3 • Lesson 6

How to navigate the sea of customer data tools

There are nearly 7,000 customer data tools to choose from and it can be overwhelming. In this lesson, you’ll learn how to think about selecting a tech stack for your needs today versus those you’ll need tomorrow.

As a fast-growing company, you need tools that optimize your limited resources and allow you and your team to more effectively understand, serve, and engage your customers. However, picking the right tools can be overwhelming, especially with the increasing number of available martech tools currently in the market.

There are nearly 7,000 tools to help you do the following:

  • Communicate with your customers

  • Understand how customers navigate through your product

  • Nurture customers who aren't ready to convert

  • Gather and prioritize product feedback

  • Answer granular questions about your product

  • Attribute new customers to the right channel

  • Optimize your onboarding flow

  • … and more!

For every possible task, there will be dozens of tools that could be used. How do you choose the right one for your company? And more importantly, how do you think about selecting the tools you need today versus those you'll need tomorrow?

martech-2018-copy.png

Marketing Technology Landscape of 2018 from Chief Martec

The key is to think about the job to be done based on your north star metrics.

What job do you need your tools to do?

There is a framework (mostly used for product strategy) called "Jobs to Be Done." The idea is to frame products or companies as something customers "hire" for a job that they have to complete.

"People don't want to buy a quarter-inch drill. They want a quarter-inch hole!" —Theodore Levitt, HBS Marketing Professor.

This same idea can be applied to your search for tools. What job do you need to get done right now? Drive users to your site? Get them to activate quicker?

Luckily, 500 Startups has already created a clear list of jobs to be done to achieve growth-- AARRR--which they aptly titled Pirate Metrics.

Ahoy, Matey!

If you haven't heard of Pirate Metrics, it's an easy way to break down the different steps of the customer lifecycle that can be optimized.

  • Acquisition: Drive users to your site through various channels and get them to sign up.

  • Activation: Engage users early on by having them participate with your most important feature(s).

  • Retention: Get users to come back, visit and use your product multiple times.

  • Referral: Leverage users who are jazzed about your product to refer others.

  • Revenue: Convert users to pay you money for your services.

Each of these areas corresponds to particular types of tools you might use to maximize that step of the funnel. Below are some examples of different tools within each lifecycle stage. (This is not an exhaustive list of all tools).

Acquisition

Activation

Retention

Referral

Revenue

You'll notice that several types of tools, such as "marketing automation," can appear in different growth areas. That's because those tools can support multiple growth functions.

If you're trying to figure out market fit, you're probably focused on retention — what makes people stick around? This will take a combination of analytics and customer feedback tools.

If you're a Series A company with some product-market fit intent on scaling, you're probably focused on acquisition. Your stack might layer on advertising and optimization tools.

If you've achieved fast growth, you're likely working on keeping your users around longer and activating more of them. This is where optimizing behavioral email campaigns and choosing sustainable ticket systems become important.

While this framework is really helpful for thinking through the types of "jobs to be done" and tools to use to grow your company, make sure to start small. Realistically, you won't have the resources to focus on all areas of growth at the same time.

The takeaway here is that you should focus on using tools to achieve one or two goals instead of introducing all of the tools at once.

Including qualitative vs. quantitative data tools in your stack

One other aspect to consider about the tool landscape is if you are looking for qualitative or quantitative information.

Qualitative tools give you unstructured customer feedback—think surveys, live chat, heat mapping, and even session recording tools. These tools allow you to talk to your customers or get a deeper understanding of how a customer is using your product.

We suggest using these tools for product development--when you are exploring new types of features to add and want to understand how customers are using your existing product in detail. Another good time to use qualitative data is if you don't have enough users to make quantitative analyses statistically significant.

The tools in this category include:

Quantitative tools, on the other hand, give you hard facts about how folks are using your product. These are great for helping you understand higher level trends in product usage, and they do the heavy lifting when it comes to calculating sums, cohorts, and funnels. If you want to see an overview of customer behavior, then these are the tools to use.

We often see companies using a combination of these tools in product development and growth. If you find a trend like a funnel drop off (no one enters their credit card) with a quantitative tool, you might want to investigate it with a qualitative one (Why are people leaving? What is confusing or not compelling?) If you hear a number of anecdotal stories (this part of your product is useless), you'll want to see if those opinions hold up with data (what percentage of customers aren't using it?)

Finding the right tools for you

Yes, it can often be a struggle to find a tool that fits your business needs. But hopefully, this above framework helps give you an idea of how to begin your search.

And if you want to see how other teams have chosen their tools, you can check out these examples:

The most important thing is to focus on the job you need to do to get your business to the next level! Then look at the tools that can help you do that job. Then get some ice cream or something.

icon-choosing-the-right-stackChoosing the right stack

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