How to Find the Right Growth Channels & Generate Long-term Revenue

How Guillaume Built His Career Through Give-First Networking

Louis: Yeah. And there’s a bit of survivorship bias in tech, right? You see a lot of those people extremely successful, and then you look back at what they’ve done and you try to say, well, if I do the same, I’ll succeed as well. But it’s not really the case, right. So I get a chance in IT podcasts to talk to the survivors, right, the people successful. But there’s probably plenty of people who try to do what you did, who struggle. I know a lot of French fellow who studied in marketing as well, who had good business school, studying a good business school like you did, never had the CV that you have. So do you think it’s all down to luck? Do you think there’s a bit of skills?

Guillaume Cabane: You know, I often say that if I’m not a good marketer, at least I’m a good logo picker. I’ve been pretty good at picking logos of companies that succeeded, which is there’s this strange halo effect of like, you think that someone that works at a successful company is a successful person and a good person, which honestly is not true. Like, that person joined the right company and sure, that person got in and got through the interview process, but it’s very much like a business school, right? Like, getting in the business school is hard, but like, does it mean that you’re a good person or that you’re smart? Like, debatable. Right. And so. And so, yeah, there’s a strong halo effect, that’s for sure. And so I think I’m a good thinker. I’ve been able to pick the right companies that will succeed and grow. And that, my friend, unfortunately, is mostly lucky because I think that I don’t have as much insights as investors. VCs and good VCs, bad VCs, you know what we say, they all have a 10% success rate. So there’s no such thing as choosing the companies which will succeed. Listeners, if you have a way to know which companies will succeed, invest. You will be massively successful.

Louis: And I mean, that brings a question then. So you pick Mansion, you work with Mansion, you work with Drift, you work with others. What was your thought process then when you kind of started to work with them? Like, how did you know or how did you feel? Actually, that sounds like a nice rocket ship to be part of.

Guillaume Cabane: So it’s an interesting story. I never talked about it because I get a lot of questions, which is like, how was I able to. To join Segment, which was like a massive rocket ship, and Drift, which is also a massive rocket ship at a stage where they were already very advanced. I joined Segment when there were 50 people, just after Swiss B. And I left 18 months later when there were like 200 something. And I joined Drift at 50 people. I’m not sure people realize it’s really hard. Those roles, those opportunities are almost impossible to get once the acceleration curve has started. All right, because everyone’s in. And so my strategy that I’ve been working on for a long time is I build long lasting connections and trust. Look, segments. Segments are a good example. I joined in 2016, early 2016, like February 2016, and I’ve been talking to the three founders. I found an email since late 2013 and we had back and forth for three years about product and market. And then when I was mentioned, I became a customer. Then I started doing speaking. I did keynotes on how marketers should use segments. And eventually in 2015, they said, hey, gee, we think that we should work together. And it was not a question of do we trust each other? Because we did. Do we know each other? We do. They know exactly who I am, I know who they are, I know the product, trust the product. And so like, it’s just a question of like, is this the right time for both of us? And so all the rest is eliminated. Okay, Drift, exactly. Same story. I was the first enterprise customer when there were less than 10 people. And I pushed them to integrate with Clearbit, with Segment and a lot of other things, right? And eventually like same trust, connections. I knew the product, I knew the team. Right. And, and all of that stems from me starting. So I was an entrepreneur a long time ago in 2012, 2013, and a failed one, I have to say. And so when I stopped that, I did a part time mentoring of a free in a French incubator called NUMA in a couple of the places and started helping people. And that is what has produced the career, the network building through mentorship than through advisory, building connections, helping. Like I realized how much like the American thing, like, you know, like you paid forward and it comes back one day. It does, it really does. You know, it takes time. If you expect something like that’s the wrong, let’s say mental model, right? But if you expect nothing, if you really help, it pays back. And I think one difference between me and many, many marketers is that I usually accept quick demos or quick coffees or calls with entrepreneurs who are at the very beginning of their projects and just want to bounce a couple of ideas, want to show me what they’re working on or want me to try their tool and get some feedback. I usually take most of those if they’re at least in my space, which is like B2B SaaS where I think it can be helpful and then I keep in touch and some of them succeed. So I create my own survivor bias where of course those who survive, those who succeed over time, they have seen the value. And if they don’t see the value, that’s fine, they go somewhere else, but some do and that creates the resume you see today.

Louis: And so you didn’t growth hack your way into success, into finding those companies. Actually it took you a long time. And I think that isn’t it a great lesson in terms of what we’re going to talk about in the next few minutes? Because you took your time, you built trust, you treated those people like people build relationships, didn’t expect anything. You just gave, gave, gave and then you received in return, didn’t you?

Guillaume Cabane: Yeah, and the same is true for me. Being together on a podcast. I expect nothing when I do keynotes. I do a very high number of speaking engagements per year. And I do it to help people succeed because I believe I can help them. And yeah, it is true that sometimes people reach back years after saying, hey, I watched this, I would like you to help me and I’d like to work with you. And sometimes the stars align. But I think one thing people need to realize is that for the stars, for the planets to align to become a great project, you need to have a ton of things going on because the percentage is low. It’s just that conversion rate on your website for somebody to be in love with your product, with your marketing message and say, yes, I want to buy, you need hundreds of people. The same is true for job opportunities or advisories or whatever it is personally, right? You need to have a lot of those things going on so that you can select the best, the top of the top.

Louis: That’s a great summary what we just discussed there. So in terms of your specialty, right, Growth marketing, Growth hacking, it definitely has a bad rap, right? And I personally think sometimes, right. If in the side or in the opinion that too many use growth hacking as an excuse to use shitty short term tactics that serve them over the customers and overall it gives a bad rap to the methodology that is not new but has been employed in those businesses. So I’m curious for you, what’s the difference between what’s the limit between being persuasive in your marketing and being scammy, spammy and shitty in your marketing.

The Problem with Growth Hacking’s Bad Reputation

Guillaume Cabane: So I mean, it’s interesting, you know, so I’m in Silicon Valley, I’m in the ceph and so I have a higher concentration in my network and people I talk to in the day to day of like larger successful startups. So again, I have like a survivor bias or at least a selection bias in my perception my day to day. And of course, like if you, the growth people that I talk to, there’s very little scammy, shitty or I’d say intrusive marketing going on. Like if you look at Airbnb or Dropbox or other companies like that today, there’s definitely none of that going on because that would not fly at all. And we’re talking more usually of new ways to penetrate markets or channels or how to do things differently to different differentiate. And it’s a lot around creating an experimentation model to be able to be very efficient at experimenting to find stuff that works better than competitors. Now the bad rap comes from if you’re pressured to find a leverage, have higher performance, you don’t have ideas and you don’t care about the brand, although long term, then yeah, sure, things can go south. Yeah, for sure. But if we go back to my experience, it’s funny if you roll back almost 10 years now, I worked in IT security for two years, the CMO for French IT security consulting firm. And so I worked a lot in social engineering and pen testing and things like that, and for two years. And there are very interesting similarities between scammers and people who do social engineering for, let’s say malicious purposes and marketers. In both cases we are trying to convince a random stranger or anonymous person on the Internet of what we say is true. In both cases we’re trying to have them pay or shell or give us the credit card or some money. Both cases, right. We’re trying to get a transaction. And both cases we usually start with an ad or an email. So the only difference is that marketers, in the end there’s a product. Now I have a talk track recently where I say the issue is that marketers are incentivized to over promise. And I think that’s where it starts to slide a bit. And I explained, I think the problem comes from marketers a bit. It also comes from how are marketers incentivized and how the company is structured to push marketers to do the right thing or the wrong thing. Marketers are usually incentivized for fluffy KPIs, fluffy metrics, traffic signups, leads, maybe social engagement, stuff like that. All of that is bs. It has absolutely no value because we can cheat on any of those metrics to create a perception of that engagement with very low quality. And I’m French, so I know that cheating is. I know about cheating, right? And it’s staggering that very few organizations have marketers incentivized for the bottom line for revenue. Okay? The only thing that matters and don’t mean just immediate revenue, we’re talking of ltv, lifetime value of the customer. Now my argument for you is if you’re marketing incentivized for the long term value, and you assume that. I usually assume that people paying for a long time are happy customers. And that’s a good thing for both of us. That’s my assumption and I think we can all agree on that. People stay for a long time, they’re happy, it means they get value. So it’s good. It’s good. So that’s what I try to optimize for. That’s what I want organizations to optimize for.

Why Marketer Incentives Lead to Shady Tactics

Louis: And that’s the answer, right? In a sense, as long as your goals are really geared towards the happiness of customers, then you’re very unlikely to use shady manipulative tactics because it’s going to bite you in the ass. This person is never going to turn into a happy customer. Right?

Guillaume Cabane: I have a slide man that I’ve used recently where I say so personal, my wife is a salesperson. So at the dinner table we have both sides of the conversation. And salespeople, they have clawback. So for those who don’t understand what is clawback, it means as a salesperson, if you oversell, if you push a customer to buy and that person churns within a defined time frame, you usually three months, four months, something like that, that person churns, the company will claw back. You can imagine a bear clawing the food back. So your company will claw back the commission, take it back and you will lose the commission from that sale because it has assumed that you have oversold. We have sold someone who would not be happy. And that is honestly pretty standard these days. And it’s a good thing. It prevents salespeople from over promising, overselling, what, whatever, right? There is no such thing for marketers, but there should. 100% should, because it’s even worse example, marketers is pressed for results like signups. Okay, if I’m a shitty marketer, let’s put my shitty Marketer hat on. Right. And I don’t have any negative incentive, right. Only I will take a bonus if we reach a sign up goal. What am I incentivized to do? I will over promise on my ads by saying this product will change your life. It will do it in only two clicks and it’s free forever. And none of that is true. That’s not exact what we do. But we do some of it. We definitely do some of it. We all put some ads saying like, oh, as easy as two clicks and like no man, this takes a of lot, a lot more than two clicks even just for signing up, right? So we minimize the perception of friction of effort and we maximize the perception of value when actually. And so we’re not honest, we’re dishonest in some ways. And what we do when we’re doing that is we’re pushing the friction, the churn, okay downwards in the funnel on the sales, on the CS people, on the company. Right. The disillusion will happen. It is going to happen, just not within your org. It’s going to happen somewhere else. And that is what we need to solve. The marketing tactic, the growth marketing only matters if you create long term value and then it’s fine.

Louis: So let’s take the scenario of you starting to work for a B2B SaaS company, right? I mean that’s your specialty. We’ll take that as an example. As I mentioned in the intro, you’re an advisor to multiple so you know exactly the scenario. Let’s say you start working with a new one, right? And you might want to take a real example of fictional one depending on your NDAs and whatnot. It’s up to you. But let’s say they come to you with a problem. Usually they want to grow more. Can I say that’s kind of the problem.

Guillaume Cabane: Usually they want to grow more and they don’t know how to.

Louis: All right, so they come up with this problem and the goal is they want to grow more. And you know that LTV is a North Star, right? They need to generate happy customer at the end. What is the first step that you take to help them or at least what do you tell them to do as first step?

The Three-Scenario Framework for Channel Auditing

Guillaume Cabane: Yeah, so my process, the first thing is that before accepting a customer I will start looking to the data because there’s a lot of people who will not work though because it’s a lost cause. And so I’m good at identifying. That’s the first thing. And so let’s look at that. The first thing Is I’ll try to look at the funnel and to understand do we have enough high quality interested prospects somewhere in the funnel, but we need to improve the conversion throughout the funnel or are we lacking quality of people or we’re just lacking volume? It’s one of those three. You can simplify the world like that. If you have enough high quality prospects in your funnel, then you need to improve your sales efficiency. Maybe you need to touch the people a bit more, you need to educate them a bit more. You need to. There’s a couple of things you can go in like that and you look at where your funnel contracts, where you’re losing revenue, potential revenue. Okay. If you have a lot of folks in your funnel, especially at the top, but they don’t convert, we probably have a quality issue. Again, usually I’ll go into strategies around that. I do enrichment. I try to understand who do we have, why are not converting, how do we bring them? And basically that’s usually a disalignment of marketing or branding and the product. It’s like we have a blog that talks about fantastic things, which brings lots of entrepreneurs, but we actually sell a product that is completely different. Like yeah, that’s not going to work. And the third is that you just don’t have enough volume. And then we got to wonder have we tried stuff or have we not? And do we even have a marketing audience?

Louis: So quality of prospects, enough quality prospects in the funnel that are not converting. Prospect, but maybe not quality and then no prospect.

Guillaume Cabane: Correct? Yeah. And the people I won’t take usually is people who don’t know because they’re not tracking and they’re like, yeah, that’s not going to work folks. Okay. If you don’t know what’s happening, that’s a lost cause usually. And so that’s that. Um, and, and so once I go through the sort of the first three and identify that I try to understand. So if we look at usually what happens, people who come to me, they have some volume. Growth marketing is usually helpful only post product market fits. Okay? If we take the words growth marketing is to grow, you know, something that exists. It’s not market education, it’s not finding product, market fit. All of those are great things. It is not what I do. I usually am not helpful. If you’re creating something brand new that needs, that has no competition, that has no existing market and you need to create the market, that is a completely different branch of marketing like traditional branding and market education, which I don’t do at all, I respect all but I don’t do so those are also exclude. So usually people come to me and they have, they already have a product which is usually pretty good. Honestly, usually entrepreneurs build pretty good products. The product is rarely the core problem. I mean you can see the problem if there’s high churn and stuff like that. It’s rarely the core problem. Usually have a pretty good product. And when I look at companies that succeed and fail, I see companies of great products that fail. I also see companies with 3D average products that succeed. So usually success is not tied that much to product quality. It can help, but it’s not tied that much. Usually what we’re going to see is that one lack of marketing. Just like they’re not testing channels, they don’t have the habit of testing channels and that is low volume. And that could be because they, they just don’t have the habit of experimenting. And so they’re going to help them like come with a framework of okay, let’s test messages on channels. Let’s understand who the audience should be for this product. Where are those people and then what messages makes them resonate? Okay, and then I’m going to understand like I look on a very granular like channel by channel, message by message, all those people converting. I’m trying to find what fits, what makes people taught. Okay? And so I have a tip here. I’d say nine out of 10 companies where I get access to the data, I see something really funny. One, they pay a lot of money to acquire customers, huge acquisition budgets. Okay. Two, they really don’t track, they don’t keep the information of the acquisition. In their CRM. Example, you buy stuff on AdWords, you’re going to buy some clicks and some traffic from AdWords. If you’re good at AdWords, you know that you should have very granular campaigns and ad groups and ad messages. Okay? All of that, all of those insights you can pass in the query string and then pass into the lead. When, if there’s a lead form, you can store it in the lead form and thus on the CRM, which can help your salesperson understand what made this specific person take, what made them interested in my product. What was the core message? 9 out of 10 companies just don’t capture the data or throw it away. And salespeople need to do a discovery call to understand, oh, why are you coming to us? What made you interested? And that is a good example of what I solve. You see, because I work across all of the silos of the company, I see what, where we are losing interesting insights that we have paid for and that are helpful to help us create a better experience. And that is the core thing I do. I try to create a better experience through the entire lifecycle of the customer to make them happier and more likely to pay for my product.

Louis: Okay, so let’s cover those two aspects. One is the auditing and I want to know more about how you do that. And the second part is like the insight on how you make sure that you don’t lose insight throughout the funnel. But the first one is audit. I think that will be interesting to people listening right now who probably have some of the tools that you’re looking into. I suspect you use Google Analytics, Google AdWords, anything that you can get your hand on. So how do you actually audit those channels? So you said you look at the channels and then you look message by message, ad by ad, or whatever else. What is your method there?

How to Analyze Traffic Quality Using Data Enrichment

Guillaume Cabane: Yeah, so I had one recently. I’m not going to name them, but I had one recently. They have, I’d say reasonably good traffic. Okay. And I’m going to call that in. I’d say let’s call it like 1,000 to 3,000 unique visitors a day. It’s like reasonably good. Not huge, but reasonably good. Of which half is organic, is half is paid or activated. Through marketing channels, I start creating funnels. I understand. Okay, what is the conversion rate of my organic channel at all steps? So how many go to my homepage, my sign up and activate my product and eventually pay and stay for let’s call it 90 days. Then I roll back the revenue from each visitor and so I have a value per visitor. So I’m going to say, okay, well an organic visitor on average is worth, it’s called like $10. Okay. Based on like lifetime value. So LTV is like $10. If, if the math works out, then I compare that with other channels. What’s the ltv? What’s my LTV of paid? Maybe of social and other things that gives you an average. Now most people stop here, which is a mistake. What I usually do is I start to, I start to break down within each channel. Okay. Because the average number is very misleading. You actually have a huge distribution because if you look within organic, that average $10 is actually spread on 3% who pay and 97% who don’t pay. Making an average on such a big distribution is statistically a very, very big mistake. Now you need to understand who are the people who pay? What do they have in common? They signed up, they sign up. Which means you know who they are. I do. B2B, you know the company, you can do some analysis. I usually pull data from Clearbit, so I use Clipit, which is a data enrichment provider to enrich those companies to know more about their size, their industry, a couple of graphics. I also work with a company called Matt Kudu, which I do advise, which does like lead scoring models and gives me insights into like what do they have in common? The trick I have my. One of my core tricks recently is I will use an API from Clarebit which is called Clarebit Reveal, which helps me understand from a set of IP addresses which companies are in that set. So which companies are visiting my site anonymously but not converting. Score them, look which ones have paid. And understand within one channel, let’s call it organic, let’s call it 100 people. How many are actually qualified? Is it 50, is it 10? How many have signed up within those? Now if I have like for example, the average I see is like 30% quality, like pretty good quality, right? If I have like 10 people out of 30 that qualified out of 100 from that channel, it means my actual sign up rate is not 10 out of 100, it’s 10 out of the 30 because the others are not qualified, they’re never going to pay. Okay, now 10 out of 30 is a pretty decent conversion rate, right? It’s a third 30%, 32%. Okay, if my conversion rate within that segment is actually 5. Now I know I have an issue. If it’s 2, I have a huge issue, right? And I try to understand the other people who have not converted but are qualified. Why have they not converted? Is it a different message that they have clicked on? Maybe that message resonates for people who will never convert. Example, you have in your AdWords ads around free and free trial and stuff like that. And you have other ads which are more on the features and the product. If you treat AdWords as a global group, you’re going to miss that detail of who are the people who are coming, even if they don’t sign up. Maybe you are destroying value by pushing qualified people through a free message and then they see a pricing page and they have, let’s say, disillusionment. And so you’re destroying value and you should actually remove those free messages, those free ads, because anyways they’re not doing people who are going to pay. So I try to be very specific and I try to understand and then I do an average on the small percentage of people who are qualified and should be able to convert. And so I do a lot of data enrichment. Clipboard is one example. I also use Datanize, for example. I was at Drift in the past. Drift is a live chat tool. Okay. And look at the traffic. So who are we selling to? We’re selling to businesses that have salespeople. Okay, that’s a good, that’s good. Let’s say smaller sample. Now if people are using a competitor, Intercom, that’s even better. I know they’re qualified. They’re already paying for the tool. If somebody who uses Intercom comes to Drift, that means they’re unhappy about that tool. If they don’t convert, it means we were unable to convince them that we have a better solution. Which means that marketing needs to change. And here, this is positive marketing. I know enough to know that I’m doing a bad job for that specific segment. So that’s my audit phase. And I pulled examples and I showed to myself into my CRTO example saying, hey, those 20, 50, 200 accounts came viewed five pages. I have six different cookies coming. They have Intercom, they have this thing, they have the right size. They’re in the U.S. they did not sign up. We have an issue. We need to change the message. And that is clear as water because I can tell them how much value we have lost.

Louis: So let me try to repeat it in my own words and please correct me if I’m explaining it wrong. So traditionally, marketers have a very tough job to try to understand the traffic coming to their site. Its traffic is anonymized. You don’t know who they are until they sign up. So what you do first is you look at their behavior. You look at sign up customers, you try to identify what are the common attributes that make them convert, whether they’re for Drift. They have salespeople, they used to use Intercom. Maybe that’s the best attribute. And what you do there is. Then you try to do the same for traffic that haven’t converted yet and try to guess kind of what is the quality of this traffic based on information you can glean online.

Guillaume Cabane: Because I’m in B2B and that’s specific to B2B people. I can go from the IP address to a company name.

Louis: Yeah, sometimes it’s not perfect. Right. I mean, let’s be clear.

Guillaume Cabane: No, totally. It’s not meant to say, here’s all the people. It’s like 30% coverage, but for statistical analysis, it’s more than I need.

Louis: Yeah. And that’s important to say.

Guillaume Cabane: Right.

Louis: So don’t Expect those type of tools, like, as you said, data nice or clear bit arrangement to, to actually tell you every single anonymous visitor and to tell them who they are, their name and whatever. That’s not going to happen. Right?

Guillaume Cabane: That’s not going to happen. The point is only statistical analysis because the distribution of coverage is the same from one channel to the other, more or less. And so if you have much lower quality on one channel than the other, then it tells you something. One quick example, when I was at Segments, Quora was bringing fantastic traffic, great conversions, great quality, fantastic signups. And we said, we want more of that. At the same time, Quora launched Quora ads. And so I thought, hey, this is a great channel to experiment on. Let’s buy more of that traffic. And by doing this very quick iteration on traffic quality, I was able to see in 48 hours that the paid traffic from Quora was of a much lower quality than the organic traffic.

Louis: And so we stopped within what, 48 hours.

Guillaume Cabane: You said 48 hours. Yeah. And the benefit here is that if you look at segment, segment’s sales cycle, so trial sales whatnot is months. Okay. And so usually marketers need to pay for traffic or for that channel for months before they realize that there’s no ltv. In my case, because I run predictions real time based on past conversion, past data, I’m able to know, yeah. As soon as it has statistical significance within a couple of days, whether it’s worth continuing or not, which in this case it wasn’t.

Louis: So you basically get an understanding of the quality of the traffic. And you said if it’s. What if the quality is 30%, it’s usually quite high. If 30% of the traffic matches the type of people you want to attract, it’s quite high. And you said if it’s below 5, you see it’s really bad, right?

Guillaume Cabane: Yeah, for sure. 30% of people in your ICP, your ideal customer profile, it’s a very high percentage, Very, very high. But 5% is also very low. And you can do the math yourself on a napkin. You just calculate your cap to LTV and you see that going from a third of the traffic you pay for. Imagine that your cost per click, you know, on AdWords is going to be like in the couple dollars, you know, and you have like one third of those that are qualified, you know, it means that your qualified visitors can be like, Scott, like 10 bucks, like three times three, like 10 bucks. Got it. Okay. And you have a 10% promotion to sign up, which means now your sign up cost is $100. And if you have 10% of those who pay, that means your paid is like $1,000. Can you recover $1,000 if you SaaS product? Yeah, usually in a couple of months you can do that. Now if it’s 5% now, it’s like five times more expensive. Your paid is now 5,000, 6,000 bucks. That’s hard to recover and that’s the way I think about it.

Louis: So that’s your audit and basically the end result of your audit is a funnel with conversion rate after conversion rate from visits to, to first touch, second touch, etc. Etc. Up to revenue. And as you mentioned at the start, right up until the business metric that actually matters, not the fluffy city metrics that you can add in the middle of it. Right. So at the end of this, once you have this information, you also said a few minutes ago, you said 9 out of 10 companies don’t carry across the insight. Right. They kind of miss all of that. So how do you advise folks to do it better without necessarily spending thousands and thousands of months on a tool? But how do you advise people to do it so that they actually get data and not waste money on losing it in the middle?

Guillaume Cabane: Yeah, I mean, so once the art is done, usually what I see is on a channel by channel basis, which channels have high quality, which channels convert, and I see opportunities. It’s clear as water you’re going to see channels with good traffic, good quality of traffic, low conversions. And you say, well, let’s start, let’s drive that traffic to a specific landing page that we’re going to try iterate multiple messages, it’s the first thing. Let’s try to engage those people differently with a different channel. Maybe we should have a chat on that page and maybe need more help. Depending on the channel and the type of company you’re bringing in the channels, you’re going to cut them, like reduce cost because you know the quality is not there. Right. Third channels you say, well, we have good traffic, good quality, which need more volume, let’s invest more there. Right. And so those are all very obvious outcomes, to be honest.

Louis: So let’s talk about the scenarios. They might be obvious for you, but I think it’s good to repeat them and to see the type of scenarios. Right. So you have the first one being good traffic, low conversions. Right. So that means, okay, we’re bringing good people, let’s optimize the page or the funnel. Then you could have shitty traffic, therefore, like shitty conversion.

Guillaume Cabane: Let’s scrap that or let’s change completely how we’re approaching that channel. It’s wrong messages, wrong audience, wrong targeting.

Louis: Let’s see, completely start from zero again, scratch, and then you might have good traffic, good conversion, but not enough volume, right? It’s converting two leads a day. It’s not enough. Let’s find ways to improve the channel. Are those the three scenarios or do you have more?

Guillaume Cabane: It’s basically those are the three main scenarios that you have.

Louis: What are the most common? What are the ones that you see the most out of the three to start with?

Guillaume Cabane: Sure. Good channel, low conversions, low volume. Sorry. So low volume is a typical problem and that happens. And that leads to. For entrepreneurs who are building their business plan, it’s a typical mistake is that they start doing some stuff on social and LinkedIn, Twitter, stuff like that, and they have a couple of clicks a day, visits a day that convert pretty well and then they built a whole business plan around that. That’s a misunderstanding because the channel, the market will react, the early adopters will find you and will react positively to your message because that’s who they are, they are the adopters, right? It does not mean that there’s an infinite supply of those people. Usually as you scale, costs go up and conversion goes down, it gets harder and harder. Just think like there’s a tree in. What we see in English is low hanging fruits, right? You pick those fruits, then you need to climb the tree. So people forget that after the low hanging fruit you need to climb the tree, right? And so usually there’s just not more of those people and you just need to accept that you’ve mined the easy conversions of that channel and now you need to see if the rest makes sense. Sometimes you can say, okay, I’m going to completely exploit that channel. Example at Drift, we found in the early days that posting on Product Hunt was good. It was free and brought really good traffic that converted well. Problem is you post once and it’s done. So how do you maximize that? What we did is we said, well, we’re going to post every month a new feature called the Product. We’re going to have a nice video, we’re going to have influencers repost and upvote it and whatnot and we’re going to win. We’re going to be the number one every time we post. We built a machine that we knew how to crank and relaunch. Every month we posted for 12 months straight. If you look on Product Hunt for Drift, you’re going to see 12 products month after month. We Mined that channel completely. Everyone on that channel who was going to learn about drift learned about drift. Then we moved on to the next channel. I think there’s a strong benefit to maximizing your presence on a channel being all in, right? And then moving on. Rather than being very dispersed and having very limited returns. There is a take all strategy.

Why Channels Exhaust Like Mines

Louis: And that’s interesting because I do remember seeing Drift every single fucking month and being like Jesus Christ, yet another product. But yeah, it works. People remember that, right? So as you said, yes, let’s take the scenario. You’re a new entrepreneur. You’ve no notice that your first product and product hunt worked really well. You build your entire business plan on it saying, hey, the next five years our growth is going to be 100x and we’re going to do product hunts every month for the next five years. It’s not going to work, right? Because one, you’re going to plateau, right? You’re going to reach the same people. And two, as you said, diminishing returns. It’s not because you have 10% conversion rate today on a channel that if you multiply the volume by 10 that you’re going to have 10% to that, right?

Guillaume Cabane: Yeah. You really got to think the reason I use mine, you got to think a channel like a mine. I explained that this recently in a keynote and I said costs on Facebook are going up, cpcs are going up on average. And the reason for that is that inventory is stable. But there are more advertisers. Think about this. Facebook is doing a lot of interesting and shady stuff. One thing they’re not doing, creating more Americans. Okay, so the number of people you can advertise to on Facebook is stable. That’s what it is, right?

Louis: Maybe that’s why they are launching their dating products.

Guillaume Cabane: I think sure, long term strategy, long term, very long term. But for the moment, as a marketer, if you’re marketing to some profession or some type of role in businesses on Facebook, that is a finite market. It is as finite as if you were mining gold in a mine. And so you’re trying to do it the most efficiently possible and you’re trying to understand that this has a limit. You’re going to get to the end of it. Which is different for b2cuz b2c the volume is big enough that you can almost close to infinite in B2B. If you look at drift, drift is a good example. Companies that or have over 10 salespeople in the U.S. there’s a finite number of that. Now if you look, they Have a website and they sell through Internet. We’re talking of a couple hundred thousand in the US and that’s it. If we go back to the quality of marketing and how we invest for the long term, I always think, okay, I could burn that market to the ground in two days if I wanted to spam everyone. It’s easy. You know, I could definitely spam all those companies and I would do a great quarter and then I’d be fired. Okay, now the question is like, how do I maximize my revenue over the smallest number of people so I can be the most efficient possible? So I need to find, I need to know who is ready to buy now. Who is the right person? What is the right message? Okay, Those are the things I’m trying to figure out. And which channel should I use? Okay? I don’t want to spam them. I want to convert with as little effort as possible. It’s margin maximization, CAC2LTV. Okay? And so I try. And that’s why I’m buying a lot of data. We talked of data knives of clipita. I do a lot of other things to understand who’s in the buying cycle, which tool are they using? Am I a competitive situation? Are they like, are they hiring salespeople? Like, what’s happening that I can know I can leverage to help my sales process to help my conversion? And if they don’t match that, it’s not the right time. I know that I’m going to need to push too strong. And we talked of clawback. It means I will face cloudback. Okay? It’s if I’m pushing an expensive live chat tool on people who don’t need it now, they’re going to churn.

Louis: I mean, that’s a great lesson. And that’s something we talked about before in the podcast about sales, actually, and the sales principle of don’t bother knocking on doors of people who don’t have a bleeding neck problem. They have a bleeding neck. Don’t bother talking to people who don’t have money. Don’t bother talking to people who don’t have the permission to say yes. Those five qualifiers from sales, and that’s basically what you describe, you identify through your work of your data analysis the people who are the most likely to convert because they’re actually looking for a tool. You don’t need to convince them or anything. They are fucking looking. You just need to be there for them. Right?

Guillaume Cabane: And don’t lie to yourself. And I think an issue of marketers is we tend to lie to Ourselves because we need those numbers. And I think white papers and webinars is a good example of what we lie to ourselves. We need to give leads to salespeople. And so we produce a white paper, we do a webinar on a topic that is really just tangential to our core product. And then we have like a thousand people who down the white paper and we say to sales, hey, here’s a thousand leads. Honestly, I think the leads. And we have there’s like one intern from IBM who downloaded the white paper. Is IBM a lead? I see that all the time. I see those big brands I once had. There was one guy from Delta Airlines who downloaded something when I was a segment. I’m like, yeah, guys, there’s 10,000 people in the IT department at Delta. This is means nothing. This means absolutely nothing. Now if we have 20 people from Delta that read something, then yeah, then I have a signal. But it’s a bell curve logic. One person from a right logo means nothing.

Louis: So you mentioned data analysis to do this. Let’s talk about how you manage to build the typical profile of someone ready to buy. Because your, your tools that you mentioned, like Datanize and Clearbit, they are great at giving you firmographics demographics roles and industry and shit like that. But do you go beyond that and look at psychographics? Do you look at behavioral stuff like triggers? Just give you an example quickly. It’s pretty clear that people buying Pampers or planning to organic buying Pampers in the next few weeks are going to have a baby. They have a baby and then that’s going to happen. So it’s a life event. If you only look at the person professionally speaking or whatever, you’re never going to fucking know if she’s pregnant. Right? So I mean, that’s One example. In B2B. There are other scenarios. That’s the only one I could come up with right now on the fly. So long question, but do you have ways to identify stuff beyond traditional demographics information?

Building Buyer Profiles Beyond Demographics

Guillaume Cabane: Yes. So I’ve built a specialty of acquiring, I’d say what we call a signal data. Business signal data. Before I go into that, I want to say something. I have found no benefits in looking to personal stuff. Personal stuff? Life stuff. Like you said, knowing what they do on their own personal life. When I’m selling business software, one, it’s creepy. Two, it really just doesn’t help conversion. Okay, so stay there. Second and third, it’s legally complex, whereas business stuff is very legal and okay to capture. And so I’ll go through A couple of examples we talked of Datanize, which technographics. What are companies using as technologies? Yeah, that’s a good one. I’ve used stuff from Predict Leads, which is a company that tells me what are companies, what role the company is having, are they currently hiring for salespeople, CS people, VPs of sales, VPs of product, whatever. Right. This is public data that’s on that job board. And so the company scrapes all the job boards of all companies in the US and structures that. And so it’s legal, it’s out there. It’s just structured in the way I can use it. Because for me, a company hiring a bunch of salespeople is a good signal. If I’m selling a sales tool, that’s one example. I buy data from G2 G2I, a customer initially because they have intent data telling you which companies are currently in a buying process and looking at multiple tools in your category. So also great signal. I look at Bombora, which tells me what companies are reading on the web. I have tons and tons and tons of signals like that to try and understand what’s happening in the life of that company. And I use it both to understand is it the right time and also to craft the best message.

Louis: So let’s say you used the hiring data. So you know people in the industry that you want to target are hiring a lot of salespeople. Now you know the business name, right? You’re able to extract that as part of it. Then this is where you, what do you do with this information then? Like, what do you typically do with. When you have that information?

Guillaume Cabane: Typically that will go up to, in my case, which is say, a bit advanced, it automatically flows into enrichment and contact discovery and then goes into outbound emails and advertising. In a more simple use case, you could just add it to your CRM and give it to a salesperson to reach out to. In my case, because of the volume, it’s completely automated. And if you want to go there, like I built a system which is kind of like a bid management system where we, based on the behaviors, business behaviors, we create a virtual bid in dollars of like, how valuable is the company, how likely they are to close multiplied by the future predicted ltv. And we know how much of the LTV we’re allowed to spend on the cac, which means we have a bid. And based on the bid, we have augmented outcomes in terms of marketing, especially going up to like giving them a gift, sending them a gift to send those up, because it is a profitable Gift profitable business.

Louis: Simple, right? Simple stuff.

Guillaume Cabane: Yeah. So I have that example which I like to use to explain how that works. Two years ago, if you went to segments website anonymously from a large enough company, you would have a live chat bot that popped up and just if you were in that category and a live chat bot instead of saying how can we help you? Which is not very differentiated, the live chat bot would say how do you like your coffee? That’s a weird thing to ask for live chatbot because people are like, what? What do you mean? Like, what is this thing? I’m on a business website. And so they would click interact. I already win, right? They are now interacting with my marketing and the bot would ask, do you like tea or coffee? Do you want milk? Do you want sugar? And what’s doing? It’s building an order. I know the IP address, which means I know the company, which means I know the HQ now only to ask for the first name to put like Louis on the cup. What was happening is that we’re building the order, sending it through sendozo, through Postmates and delivering the desired hot drink in most US cities within 20 minutes. It’s about 15 to $17 for us, which for the right company is an amazing CAC. Because it’s a memorable experience. I’m delivering something of value. If we go into psychology, I’m creating reciprocity. People are now on my chat, on my site and what happens? The salesperson jumps in and says, hey, while you’re waiting for the coffee, do you want a demo? It’s hard to say no. Now I have a $17 demo. With a large company, this is an amazing cost. All right. It’s a great bid. The example of bidding on the right

Louis: experience, how did you come up with this idea? I’m not necessarily interested in this idea in particular, but when you know the opportunities, as we mentioned, the three scenarios, when you know there’s an opportunity, how do you like to experiment or at least come up with ideas like that? Where does it come from?

Scaling Human Sales Behaviors Through Automation

Guillaume Cabane: I mean, I, as a marketer, I try to be very close to salespeople. I try to see how are the best salespeople selling. The reason why is that my job is to automate the best human actions. I’m not doing much more. Look at the best salespeople, the very best ones. They learn a lot about their customer, their future customer. They will ask lots of great questions, they’re going to invite the people to great experience. They will send them gifts, they will send them really well Crafted emails. They’re going to be helpful, right? They’re going to do all those things. And I really wonder, can I do it without interacting manually? Can I do this, can I do that? And so, for example, like me buying third party data is the same as the salesperson going to a call and asking the questions. Me sending gifts is the same as salespeople sending gifts. My emails, outbound emails, cold emails, have value in them. They are helpful because I have realized that being helpful is one of the best ones. I have another example for you. Outbound, helpful, outbound. I work for this company called Gorgias, which is a help desk for Shopify stores. People who sell on Shopify E Commerce. We realized that those brands, digital native brands, they are very present on Instagram. And so they post their new products on Instagram. And if they have a good following, people react and will post messages, most of them positive, some of them negative. As a brand manager, as a CEO of such a brand, you should react to those negative messages and try to calm things down a bit. If it ever happens and some people forget what we did, we look at all the brands in the US we scrape their Instagram profiles. We then scrape the posts regularly. We look at the post with high engagement. We then look at the responses, those posts, we scrape the content. We use Monkeylon for natural language processing and nlp. Sorry. And sentiment analysis. We look for negative messages. If there’s negative message, we then look back to see is that response from the company. If within 48 hours, there’s no response from the company, we screenshot the interaction, inject it into the email to the founder and say, hey, you should take care of this. And that’s it. We do not talk of a product. We do not talk about themselves. We just say, there’s something, you should take care of it. Which is valuable, really. It is. You should do something and creates trust over time. We do that once, two times, three times. Eventually the guy thinks, these guys are pretty good. I should look into what they’re doing. We have built trust now and I have created positive, good marketing here.

Louis: It sounds like the way you come up with ideas really is about scaling what humans do in a sense, right? You’re scaling what salespeople do, scaling what you would normally do. Let’s say you would, you would talk to this founder next to you and go through Instagram and say, you know, you didn’t answer to this guy, you didn’t understand to this girl. And you basically scale that using technology so that it’s like, it’s good marketing, right?

Guillaume Cabane: Yeah. I’m just displacing humans by doing what they’re doing 100%. Yeah. Don’t forget my wife is a salesperson. So like, I learn a lot from like what really good sales people do.

Louis: That’s like unfair advantage on you, huh?

Guillaume Cabane: I guess. Well, you know. Yeah, you take what you have.

Louis: Guillaume, thanks so much for going through this. A lot of interesting stuff. I think people can take a lot from what you said in terms of the method you use and the thinking behind it, not the ideas themselves because every company is different, but the methods and the way you’re thinking about it is extremely interesting. There’s one thing I’ve been dying to ask you, actually looking at your CV a bit and your experience and maybe other people have asked you, but I’m curious. You stayed less than two years at Drift, less than two years at segment, less than two years, I’d mention. Right. Why is that?

Guillaume Cabane: Yeah, I am very efficient at a specific scale. I’m really good at taking companies that have almost no Martech stack, almost nothing in place in creating the right infrastructure, the team, the processes to automate all of that. And eventually companies grow and they become market ships. And if you look at Drift during when there were 50, there was like marketing wise, very little from a marketing automation and growth standpoint. Right. And I left, it was like a bit beyond 300. At 300, my job as VP of Growth in charge of a team of like 10, 12 people is really a couple of things. Hiring, firing one on ones, exec meetings, none of which are actually coming up or producing experiments. And I have enough ego to believe I’m a pretty decent growth marketer. I’m definitely not a 10x manager, and that’s what the job is eventually. And so I then rinse the repeat. I say, okay, it’s good now I can go somewhere else and start again. And if I can do that a couple of times, then it’s a pretty good story.

Louis: Gotcha. And this is why you switch to Advisor, which is a bit easier to do what you do best. Right.

Guillaume Cabane: It’s easier to get out. It’s easier to get out. Indeed. And help them. And they come to me because they say, hey, we just raised a series A or series B and we’re like 30, 40 people and we really need to now we have the budget, we need to set up all of those things and say, okay, I know how to do that.

Louis: What do you think marketers should learn today that will help them in the next 10 years, 20 years, 50 years.

What Marketers Should Learn for the Next Decade

Guillaume Cabane: Yep. I think sales jobs and marketing jobs are slowly getting displaced by automation. And so if you think for example of people who do paid marketing, that job is disappearing, it’s being replaced by ML engineers, which makes kind of sense. Changing your bids based on yes or less data is the job that’s really well replaced by algorithms. The same is true for like a lot of other things in marketing, which is like deciding who should get what piece of content. A couple of years from now that is going to get completely automated, which means we have a couple of like things that will resist. One is coming up with the copy and the creative that’s going to resist longer. It will eventually get automated but much further downwards. Right. So coming being a very creative, a very good brand and like great copy person, that has a lot of value. And the second is somebody who builds the systems, the automation. And so being a technical marketer, which is like of course, like the path I have taken and being able to stack the bricks or connect the pipes if you want, between existing tools, being extremely good at knowing what’s the next wave. One thing I want to say here is if you work for a company and you’re using Marketo, Marketo is a good tool. Sure, fantastic. But how do you differentiate? Do you think you can have 10x better copy than anyone else in your market? Honestly difficult. And you have the same technology, which means you’re going to send the same kind of emails with the same tool. You don’t have a competitive edge. My strategy, if it’s not copy, my strategy is to use the bleeding edge of tools. Be always on the lookout for how can I get a competitive edge through technology. What’s the new and upcoming tool to send emails? How is it better and same for doing social engagement or doing anything and scraping and anything else. I always am on the lookout for that. Always, always. I try to use things that people are not using. So marketing is extremely competitive, especially if you go to Silicon Valley with the vast amounts of money that are here. It is extremely competitive. So if you look at what I’m doing, we talk about crazy stuff. I do stuff like yeah, I deliver coffees on websites, but I also do content personalization and email personalization down to the user level. Yeah, it’s expensive, it’s complicated, but I have to do it because I want to create a better experience than my competitors.

Louis: And it’s about better user experience, as you mentioned, and LTV happy customers. Right. Let’s not forget that. Thanks for this Answer, what are the top three resources you’d recommend listeners today? So it could be anything from podcasts to books to tools to whatever.

Guillaume Cabane: So I think one of the things, the more experienced you become, hopefully the better network you have. And I think good chunk of the value I get comes from being in closed communities. To be honest, the best advice, tips and tricks isn’t publicly shared. And so I am in many slack groups and WhatsApp groups of small communities that will share privately. The learning, especially the failures. It’s essential to know what hasn’t worked for others. Essential, right. So that’s one thing. Second, I read many books on psychology. If you haven’t read Robert Chadney’s book on influence, read it. And if you have read it, go read his latest book on freestrusion, which is a lot what I’m doing. Psychology books, a lot of that, of course. And the third thing I’d say is try to understand what are others doing. Spend time looking to competitors and try to understand, like, what are they doing? What is their edge? Or can I find something? I spend a lot of time doing that. Marketing is competitive. You don’t live in a bubble. Okay. You compete like most of the people compete with someone else.

Louis: Yeah, I concur with Chalini’s book. I mean, it’s been mentioned so many times on the podcast. It’s actually the most mentioned book on the podcast, most mentioned resource. But you know what? Every time I force myself to reread it every six 12 months and every time you’re like, fuck, I forgot this. I forgot this actual thing and let me try something on this. You know, you need to really. Humans are really good at a lot of things, but we are so bad at empathy and understanding others because it’s so counterintuitive. So you need to force yourself to fucking, you know, to force. Feed yourself in terms of the biases that we all that we have, and then you can use that in your marketing.

Guillaume Cabane: I could also recommend the Freakonomics. Really, really good book on understanding, like human behavior. And there’s a couple of those also. There’s the one from Dan Ariely also. So yeah, there’s a couple of good books there that I would recommend to understand. Like how are humans irrational? Right. I think the book from Dan Ariely is like, predictably rational. It’s a really, really good book also, and I use a lot of that in my day to day.

Louis: I read the Choice Factory recently and I don’t know if you read it. It’s really good. It’s also psychology studies and stuff. It’s 50 studies and it’s really well written and it’s quite simple to digest.

Guillaume Cabane: A quick example, I read a bit of studies from Harvard HBS Harper Review, and one of those I read a couple years ago was how hot drinks increased likelihood of accepting a business offer of this cold drinks, which is the basis for my hot coffee experiment. I read that and I said damn, this is interesting and recommended if you’re buying a house or a car, always take cold water.

Louis: Guillermi, you’ve been a pleasure to talk to. Thanks for sharing your some of your secrets. For the real real secrets probably are going to have to join your Facebook or your WhatsApp group, but where can listeners connect with you, learn more from you, and ask you questions if any?

Guillaume Cabane: Yeah, LinkedIn is a good source of choice. There’s a bunch of videos of me on YouTube. Also, if you want to check out the different keynotes I’ve done, they’re all on YouTube. There’s like probably 30 or 40 of those.

Louis: Nice. Once again, thank you so much.

Guillaume Cabane: Thanks. Thanks everyone.

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