The Physics of Customer Acquisition

Written by Ash Maurya

A basic tenet of running lean is validating a product or feature ideally without having to building it first. This makes complete sense when you look at every product or feature as it’s own customer factory.

Battle of the Mind

The first battle isn’t fought on the ground but in the mind of the customer.
It isn’t fought with your built out solution but instead with an offer.

This is true not just at the earliest stages of defining your minimum viable product but at every stage of the product development cycle.

And here’s the key insight:

If you can’t get people inside your customer factory,
it doesn’t matter what’s inside.

The way you get them inside is with an offer.

What is an Offer

An offer is essentially a stand-in for your solution that validates sufficient customer pull for that solution.

The offer is basically made up of 3 elements:

Offer

  • Your unique value proposition which gets the customer’s attention
  • Your demo which shows them how you get them from point A (current reality) to point B (desired reality)
  • Your price or derivative currency of exchange which locks in commitment

Assembling a Compelling Offer

Before you can create a compelling offer, you have to gain a deep understanding of your customers and their problems.

You have to understand your customers better than they even understand themselves.

In my book, Running Lean, I detailed several customer interviewing (Problem Interviews) and observation techniques for doing this.

Since the book though, I’ve taken the work further in my workshops and bootcamps to make it more practicable – incorporating the customer factory work, customer journey maps, and the jobs-to-be-done framework.

Here’s an example of one of the deliverables from the early problem/solution fit stage:

Customer Journey Map

It’s a marked up customer journey map that details your customer’s current reality workflow. We can then extract several layers of insights and inject our solution into this diagram that feed directly into making a more compelling offer.

I’m not going to walkthrough the detailed analysis steps today but I will walkthrough the resulting diagram that captures the job of your offer.

The job of the offer is acquiring customers i.e. turning unaware visitors into interested prospects.

The 3 elements I shared above are what go into assembling an offer but you additionally need to understand how customers buy in order to deliver your offer.

The Motivational Forces That Drive Customers to Buy

This diagram is best built up as a story.
So here we go…

Scene 1: The Push of the Trigger

Here you have a customer who is merrily going along his way until he has some kind of a triggering event.

Triggerring Event

This triggering event pushes the customer to seek some desired better outcome or make some change towards progress.

The bottom of the hill is his current reality and the top is the desired future reality he wants to achieve.

This triggerring event could be something explicit like having a new baby or it could be something more subtle like maybe having 2 of your friends purchase a new car in the last month.

These subtle triggering events can sometimes be hard to find, but if you look, they are almost always there.

A new baby is a significant life-changing event that pushes people to seek out all sorts of new desired outcomes or products. The more subtle car example trigger might not actively push a person to purchase a new car but it may all of sudden make him more receptive to car advertisements or promotions.

For this reason, some triggers are more *immediately* actionable than others, but knowing the trigger(s) can help uncover both active and passive leads.

Scene 2: The Pull of Your Offer

Understanding the key trigger and desired outcome establishes the situational context you need to best deliver your offer and the success criteria you need to communicate in your offer.

Offer Pull

If you get these right and place your offer in the right context, it pulls customers towards your solution versus other alternatives. This is where your carefully crafted UVP, demo, and pricing come into play.

If you have a big enough audience and/or brand, it is often possible to make your offer the triggering event.

Think of an Apple product launch.
A less extreme example is an educational webinar that upsells a product.

Scene 3: Overcoming Inertia and Friction

But only communicating the positive attributes of your product is not enough. You also have to address two negative forces that hold the customer back.

The first one is friction caused by the anxiety or uncertainty of embracing something new.

Anxeity

Here, the customer visualizes taking this journey towards your solution which triggers them into contingency planning mode. These are usually mental roadblocks that keep people from taking a chance on a new solution: “What if I pick the wrong solution?”

Some typical remedies to overcome this friction are building in risk reversals into your offer. 30 day trials, no credit card required, money-back guarantees, social proof, are all examples of these.

The other negative force is caused by inertia which keeps people from trying something new.

Inertia

You can think of this as the switching cost of moving from the current solution to your solution. These may be caused by actual switching costs like annual contracts or more cognitive switching costs ingrained in current behavior or habits.

A key insight here is realizing that even when delivering a potentially new disruptive solution, you don’t get to recreate the customer’s workflow from scratch.

When Steve Jobs introduced the iPad, he didn’t tell us 10 new things we could do with the iPad, but rather showed us 10 old things we could do with the iPad – only much better.

So the right approach here isn’t redrawing the workflow or ignoring this inertia, but making the transition to your product as seamless as possible.

Note: You can see the solution injection (blue box) in the customer journey map above with an appreciation for the customer’s existing workflow.

I will also add that not all friction and inertia is bad. I often use some friction and inertia as a qualifying criteria for identifying my best early adopters.

Your early adopters should have above average push and pull to overcome some of these negative forces.

But make sure you focus on the right force:

Pick the right force



Here is the completed diagram with some additional annotation.

Physics of Customer Acquisition

This diagram is what I use in my work with entrepreneurs. After all the interviews, observations, and analysis, this is the macro level view that gets us talking about how best to craft and deliver a compelling offer.

Remember this is a journey that happens inside your customer’s mind which is why I show thought bubbles in the pictures above. The end result isn’t always a sale but commitment that gets your closer to turning that unaware visitor into a happy customer.

I’d like to acknowledge 2 sources of inspiration in the creation of this diagram:


Additional Resources

3-physics

When you become a Practice Trumps Theory member (it’s free), you’ll get access to a more in-depth 10 minute video lecture on the “Physics of Customer Acquisition” from my Customer Factory Blueprint bootcamp program and a PDF worksheet for creating your own forces diagram.

CLICK here to login or become a member



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  • http://www.customer-rivet.com/ Anupam Bonanthaya

    Nice article Ash. I can relate to this very well with our experience with CustomerRivet. in the 1st version of our product – the ramp from status-quo to the desired outcome was very steep. it was more of a rock climbing and we were not helping much. that was a huge learning for us. therefore what we did for the version 2 (still working on this one) is we totally changed our thinking. we looked at the ramp as steps and kept asking ourselves – what is the incentive for the customer to take each step and if the returns is much greater than the investment (we keep asking – what do i get in return if i spend 1min of my time on this ?). very similar to the gaming world where you get those energy shots after every task. this made us re-innovate and re-design everything from scratch. but we are super excited and looking forward to the re-launch. of-course, the proof is in the pudding :-)

    [Reply]

  • Rod King

    An excellent article that synthesizes many great ideas!

    [Reply]

  • Marc M.

    It’s fantastic to put names to what we actually observe when doing customer dev.: pain, friction, inertia.
    It allows us to better schematize what we see when doing the interviews.

    [Reply]

  • Cameron Goble

    Once again, a brilliant insight into how customers think. The intertia/resistance/switching element is SO helpful… I’m really looking forward to putting these ideas into practice as I learn how to draw students toward the classes that are my teaching bread-and-butter.

    [Reply]

  • http://grantgrigorian.com Grant

    Very helpful. Thanks for documenting in detail.

    I was literally crafting an offer to send to an early adopter when I got Ash’s email with this blog post. I stopped writing my offer, read through this post, went back to re-writing the offer and just sent it. I can’t help but think that the resulting offer is better than it would have been had I not read this first.

    [Reply]

    Ash Maurya Reply:

    Awesome!

    [Reply]

  • andreyostrovskymd

    Ash, great idea..but the “physics” is wrong. The more appropriate analogy is looking at the customer’s “satisfaction of a need” as “potential energy”. Your uphill climb would be the activation enegery which would equal the “customer giving up a scarse resource like time, attention, or money” and after getting over that activation energy hump, they would get some UVP that would make their “pain go away” hence lowering their potential energy to a level lower to when they started. happy to elaborate. great ideas.

    [Reply]

    Ash Maurya Reply:

    I like where you are going and was also considering representing the final stage at a lower level which should be the final outcome if value is indeed delivered.

    But I stopped myself because this is meant to only capture the mental journey of taking the first step – customer acquisition.

    I agree the next scene should capture the physical journey which would be another uphill climb until activation and value delivery which will eventually lower their potential energy.

    If I misunderstood, please share a sketch…

    Cheers.

    [Reply]

  • Tom

    Ash, I’m curious – does this mean we should take for granted that once someone spots our product or service, that if they respond to our marketing, pitch or presentation (assuming we are spot on with our offer), that it’s because they’ve already been ‘triggered’ elsewhere?
    I know this seems like minutia – and I know the point of the article is more on the overarching process behind customer acquisition – but it just got me thinking about the subtleties and importance of the triggers themselves.
    I suppose that’s why massive companies spend so much on their brand (logo, imagery, wording, etc.) – because while a billboard at a baseball game seems like a waste of advertising money, maybe it’s use is as a trigger?
    Great stuff. And applies beyond software businesses – I’ve literally used this to refine my publishing companies protocols for gaining new authors and artists, as well as acquiring new customers to our subscription services.
    Thanks Ash!

    [Reply]

    Ash Maurya Reply:

    Exactly. The ads you and I don’t get are indeed intended to trigger or make connections in people’s minds. The ROI of these passive triggers can be harder to measure which is why at the earliest stages focusing on early adopters is the easy-button.

    Cheers.

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  • http://www.theconversionstrategist.com/ Yassin Shaar

    cant wait to get my hands on the customer journey design framework. ive always struglled with getting to understand my customers journey at this deep level.

    [Reply]

  • Ali Anani

    I scooped this lovely post. It shows in very simple terms how to attract customers. I may extend this approach to many other business arenas.

    [Reply]

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  • http://alfredlua.com/ Alfred Lua

    I decided to download the worksheet and filled it up. Although I am still working on my product, it helped me think of how I should construct my offer when my product is ready. I like how holistic it is. Thanks!

    [Reply]

  • Nevada Tex

    Ash has discovered something that top salespeople knew long ago. You have to follow the customer’s buying process, not the seller’s selling process.

    [Reply]

    Ash Maurya Reply:

    Why didn’t they (or you) publicly share before ;-)

    [Reply]

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