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‍Arnav: Hi everyone, and welcome to the ValueSaaS Podcast, the show where we talk to people from around the B2B SaaS world about their experience building capital efficient businesses. In this episode, I spoke to Tejas Mehta, co-founder of SocialPilot, which is a social media scheduling, marketing and analytics tool oriented primarily towards digital marketing agencies who have to manage multiple accounts for multiple clients at a time. 

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In this session, Tejas spoke about how SocialPilot moved upmarket by investing an immense amount of time, effort, and money into the customer discovery process, which is a recurring theme in this podcast. 

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I think the most interesting part of the conversation was how increasing their pricing helped them grow faster and manage his churn, which seems counterintuitive, at least to me, because on the surface you'd think that people would be less likely to buy a product or more likely to churn if you increase prices. Anyways, there's a lot of actionable insights in this interview that you can take, so enjoy the conversation.

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Meeting customers where they are

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Tejas: So most of the brands, all of the brands are on social media. And for example, if Tars is a brand, Tars would have a LinkedIn page, a Facebook page, a Twitter page and whatnot. Now, instead of going to each platform and kind of managing your media there, you'd come to SocialPilot, connect all your profiles and manage all social media from SocialPilot. So that's like a centralized place to kind of manage all your engagements, all your analytics and all your publishing as well. Now, for a brand like Tars, it's a smaller problem because you have three or four profiles. Imagine this for a brand like 3M, which has hundreds of thousands of profiles because they have tons of brands. So this becomes a mega problem for them, and then everybody in between.

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Tejas: So Tars and 3M, if you see those as a spectrum, everybody in between faces the same problem. Now this problem is multiplied when we talk about agencies because agencies are managing multiple brands. So they have multiple brands, and then each brand has multiple profiles. If they start doing things manually they go crazy, they have to employ two, three more people. Instead they use a tool like SocialPilot where they connect all their social media profiles for the clients as well, and then kind of manage publishing, manage analytics, and then manage engagement.

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Arnav: One follow up question I do have is this is a problem I would've never known about. I would never be able to found SocialPilot because I would have never known that this problem existed, because as you mentioned, with Tars we don't face this problem because we have three or four profiles, a single brand. So managing those social media accounts is not too hard for us. How did you figure out that this was a problem? Is this something that you came across while consulting or did you just make SocialPilot and then find it out along the way from talking to customers? 

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Tejas: So, interesting story. So my co-founder Jimit, he used to run an agency. He used to develop websites for e-commerce folks and apps for multiple people. So the e-commerce guys had a tough time marketing on social media because one average e-commerce store would have 500, 700 SKUs. And if they want to market, let's say 50 products from their store on social media, it becomes crazy. There's a lot of content to post. Multiply that by the number of stores that they have and number of social media profiles that they have. So the first project of SocialPilot was basically an attempt to help e-commerce guys market on social media better. 

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So when we started SocialPilot, our pitch was - connect your e-commerce stores and then connect your social media and then see the magic. So that's how we started over a period of time. We realized that people are not using the e-commerce part, but just looking at the publishing part. More and more non eCommerce people are coming into SocialPilot just for publishing. So we said, let's chuck eCommerce and focus on publishing, that's how we came to SocialPilot.

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Arnav: Got it. So it seems like a key aspect of your journey was understanding who your customers were. So you entered the market with a specific product in mind, based on your own knowledge and you saw how people were using it. It wasn't exactly how you expected them to use it, so you kind of recalibrated to meet customers where they were.

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Now I'd be curious to know what that process looks like - of understanding who your customers are? Because this is something we often talk about in discussions like this. I think in the three past episodes that we've recorded, we've talked about the importance of talking to your customers, understanding your customer's problem. But what does it look like where the rubber meets the road? How do you go about understanding who your customers are, what they need, what problems they're trying to solve? 

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Tejas: Yeah, so we did try to have a process framework in mind. When we started SocialPilot, we kind used to analyze once in a while as to how many people are connecting their stores, how many people are connecting their social media profiles. And then that's when we discovered that people are not connecting their stores, they're just connecting their social media profiles and working from there. 

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Later on, after joining Upekkha, one of the first things that we learned was how important it's to talk to customers. When we started talking to customers on a weekly basis - each week we would talk to like five and 15 customers - those would be like eureka moments multiple times a week because you would get to know about problems that you never thought existed, and then you'd think about the use cases that never thought existed. So for us, customer discovery happened, did not happen in a framework manner, very organized manner. It was just looking at the database and seeing how people are using the product and then we started talking to customers. 

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Now we have a product cycle story which is installed just to understand how customers are using the product and what issues they're facing, what are the frustration points, what are the error clicks and stuff like that. So it evolved over a period of time, but that's in a nutshell how we went about discovery.

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Tejas: When you're small and you have like seven people working on the product, you don't have a lot of processes, you don't have various tools in process. And so then you kind of fight fires every single day. And then you figure out that customer discovery is a problem, and then you work on that through the database and whatever information is available.

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Arnav: In hindsight, if you could go back in time, would you change things? Would you try to go at it with a process-based, framework-oriented approach right from the start or do you think that it's a natural and inevitable way for small companies to have to go with your gut feel, see if you can find any pieces of intelligence in whatever user data that you have, and then iterate on top of that.

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Tejas: So, you'll definitely change the approach. One of the things that we would change, for the social part, we imagined the problem - that e-commerce guys have this problem, let's connect e-commerce to social media and see the magic. In reality, although the solution was not connecting stores to social media. The solution was hiring an agency because it is impractical for a store owner to do that. 

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If we were to go back and do it, we would first talk to customers. That is the first thing that we would do, even for writing a line of code, we would talk to customers, understand what their problems are, understand what they're trying to solve, and understand how solving the problem will help their business overall. Would it be, topline generator? How does it solve the problem?

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So before writing a line of code we would talk to customers; have three, four, five customers who are ready to try out things, commit to us for some time, and then try to work on the product with them and see how it goes.

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Compounding positives of customer discovery done right

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Arnav: So I'm definitely seeing a recurring theme in all of these interviews that I do - of one part of the business, one process yielding and compounding positive effects in other parts of the business. For you guys, you were able to effectively understand who your customers were, and that translated into having a better product that actually suited the needs of your customers more. I'd be curious to know about the transition of adapting your product to your customer's needs, did it have any impact on any other parts of the business, any other processes? 

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Tejas: It kind of impacted every decision. So one of the decisions was product usage. Are people actually using the product? How do we figure that out? Are people actually churning? Now how do we figure that out? Are people actually happy with the product, do they want some more features, do they want less features, is something more complex, is something less complex? So after talking to customers, you kind of figure out that these are the problems that you can solve. Even your marketing messaging, your website copy, your pricing, all of those things can be discovered through customer communication. 

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If you talk to customers and find out how much they're charging for their end customers, we realize that we are charging 120th or 150th of the cost that they're getting from their customers. So then we can increase the pricing, understanding the value that we are adding. It kind of affected all decisions. From which feature to build to how to market the product, to how to ensure that customers use the product to discovering problems - are there other use cases that we can solve for the customers? 

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Why pricing low hurts business overall

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Arnav: A lot of processes you mentioned there, but a couple of them stand out to me as things which I don't feel people talk about enough, and one was pricing.

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You mentioned that understanding who your customers were helped you price your product more accurately, where your pricing was initially much lower than your competitors, but you were able to increase that pricing to match the value that you were providing. For a lot of founders out there, I imagine that seems like a very counterintuitive move to make. I think that most people would assume that the lower your prices, the easier it is to get customers, the easier it is to retain customers. So it might seem a little daunting to have to increase your pricing because there's obviously going to be a natural sense of fear around ‘am I going to scare away potential customers who would have otherwise closed if I increase my pricing? Am I going to scare away my existing customers, is this going to throw away all of the processes that I've worked so hard to build up for a task? 

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So maybe could you speak a little bit about that transition of what it's like to increase your pricing and any potential hurdles, any potential considerations, that founders out there who are considering this should keep in mind? 

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Tejas: Sure, the limitations and constraints are in your mind. As a founder, you are absolutely worried about increasing pricing because you lose customers. So that's the idea that we have in mind, and that's because a lot of founders from India feel that they cannot compete in terms of pricing with products built in the US or built in Europe. So that's a misconception that we have. 

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Now, the right way of pricing is understanding the customers’ needs, understanding how much they're willing to pay and what value you're adding. That's the right way to price the customers and most of us don't do that. People start with, looking at their competitor’s price, slash it by 50% and then enter the market. Sure, when you enter the market, that's good, but you can't sustain that way. 

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Things that happen when you don't decrease price is that you'll get customers who are extremely price-sensitive. Meaning if somebody's offering the same service or product cheaper, they'll jump very fast. So ultimately this affects your churn. So lower the pricing, higher the churn.

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Tejas: The second factor is that if you increase your pricing, it is always a factor of experimentation. In the first week of Upekkha’s first cohort, one thing that Prasanna told us was to double the pricing overnight and see what happens. And imagine the amount of terror that we might have experienced when you said, "If you don't double your pricing, I'm not letting you go from here." I was visiting from US to India just for one week for that program, and he was like, "You're not going anywhere, you're gonna miss your flight if you don't increase your pricing." We increased our pricing overnight and we realized that old customers don't run away and new customers do not reduce. It was the same amount of inflow in terms of views and in terms of upgrades. So you have to be cheap is a misconception that a lot of people, a lot of us have.

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Tejas: It's okay, you can start there, but you understand pricing based on customer’s perception of value, and increase from there. The CEO of one of our competitors, he's a very good friend, also mentor. He advises me and guides me on a lot of things. 

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He said that if you don't go to an offshore market, you're always going to get the cheaper customers who are going to be giving you $50 and think they own you. The customer who is giving you $100 understands that you are running a business and hence it can go down sometimes, etc. So the majority of customers also go down, go up, when you increase the pricing, if you are a founder, you want to increase pricing every single year, just don't miss out on that, you'll see the magic.

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Pricing as a churn-management tool

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Arnav: Another thing that you touched upon that I find very interesting is using pricing as a churn management tool. So, correct me if I'm wrong, but I'm just gonna repeat the mechanism at play over here. But the idea is that if price-sensitivity is a part of your ICP, then you are essentially setting yourself up for failure because those customers are more likely to jump ship if they find a cheaper product. And then if you increase your pricing and you meet more mature customers, larger customers maybe, and you peg the pricing to the value that you are offering them, they're less likely to churn even if you increase the price. Because when they're thinking about your product, they're not thinking about it in terms of price, they're thinking about it in terms of value.

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Tejas: And then here's what happens. So some SaaS products have the strategy of using pricing as an entry point, which is great. But that can't be your core strategy, that can't be your positioning, your ICP. There are some SaaS products that just do lifetime deals on apps and more, and they're very happy with that. They'll have a year-round lifetime deal you can order on apps and more. And that's their strategy, so that's great, but it's not sustainable. 

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If you are building SaaS, you have increased pricing so that you can provide more value to your customers, and in turn increase more pricing, in turn increase more value. So here, just kind of increasing pricing does not help. You have to deliver a corresponding value. You continuously better your product, you continuously build capabilities and solve more problems, adjust more use cases, only then increasing the pricing would make sense. Otherwise, it's, instead of churn management, it's a churn attraction.

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Arnav: So it's almost a feedback loop over here. Good product translates to higher pricing, and higher pricing translates into good product because you have to justify your higher pricing. So what I'm understanding, what I have understood as someone who's never founded a SaaS company before, who's only ever worked at a SaaS company and only ever worked in marketing at a SaaS company, is that customer discovery is sort of the ultimate process within a SaaS business. Without customer discovery, everything else falls apart. You can't really have a good product if you don't know who your customers are. You can't really have the right pricing if you don't know who your customers are. You won't be able to manage your churn if you don't know who your customers are.

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Tejas: Yep, that's true for SaaS as well as non-SaaS, irrespective of the industry. If you're opening up a restaurant - we're talking about food business here - if you open up a restaurant, and you don't know who you're serving, people are not going to come in. People aren't going to eat. They will come once but they'll not repeat because you don't understand their case, it's as simple as that and I think that's true for every business.

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Setting up & navigating early customer calls

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Arnav: We talk about customer discovery a lot on this podcast, but what does that actually look like in, what does that actually look to implement? When you are a small SaaS company, you have maybe a handful of customers, how do you go about learning about these customers? What's the process like? 

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Tejas: Yep, I'll tell you what we did. My co-founder and I, individually, we kind of emailed 50 customers. We said, "Hey, we wanna talk to you and understand how you're using SocialPilot and understand how we can make the product better." As simple as that, a four-liner email, and then you get on a call. 

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Getting on the call is the scariest part because if you're a small company, a lot of small company founders are either marketers or they're developers and they will develop the product and they do not talk to customers. So talking to customers is pretty scary, but once you kind work on that fear and you understand that they are happy to talk to you because you're building a product for them, it becomes easy. But the first five calls are going to be very difficult. Irrespective of that you had to pick up the phone and call them and talk to them and find out what are the problems and what are they trying to solve? That's the only way to discover customers initially if you're small.

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Arnav: Got it, any tactics for getting over that fear, or is it kind of just a thing that you need to do? 

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Tejas: You just have to dive in, man.

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Arnav: Okay, interesting now as I constantly mention on these podcasts, I studied social science. And in social science one of the things that we often talk about, especially in social science research, is the limitations of our research methods. So whether you're doing an interview, whether you're doing participant observation or whether you're running surveys, there are always limitations to those research methods. And one of the big limitations that we talk about across research methods, but I think it's particularly salient when you're talking about interviewing someone, where you get on a call with them and you're talking to them about their problem, is that self-reported data is often the most unreliable data.

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So how do you get actionable insights from your customers on these calls? What are some strategies that you can use to extract that information from your customers? 

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To give you some more context around this question, I often find that if you go to someone and say, "Hey, what's the problem that you face in your workplace?" They're often not aware of it in clear cogent terms. It's something that they experience everyday, but it's not something they necessarily have to verbalize all the time. So getting them to describe what that is on a call seems a bit of a hard ask. And it seems there is some element of skill required to extract that from a customer. So how do you approach those conversations? 

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Tejas: Sure, so when you have 15 customers, 20 customers, 30 customers, it's pretty simple. Get them on Zoom, ask them questions, ask them to show you how they're using stuff. How they're using your product. And then find out why they have to kind of create this particular action or take this particular action. For example, if somebody has to create groups, why do you have to create groups. So I ask them one, how, so that kind of solves the problem, it's peeling the onion. You go layer by layer, layer by layer, but you don't understand the core problem. What we understood of our core problem the customers are trying to solve, it's not just lead generation, but also branding, for example.

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So then it kind of gave us more perspective that, okay, it's not true that if you post on social media people will come to your site and will buy products, but it's also letting people know that, "Hey, we are alive." So you have to kind of go deeper and then go wider and that will give a lot of insights. For a smaller company, that's fine. Self-reporting is okay. 

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When you grow, then you have to put in tools and a matrix in place. And then you use tools like Mixpanel in place to understand what features customers are using. And then you put in tools like FullStory in place to understand how they're using the problems, or how they're using the products. And then, at what particular point they're feeling the frustration. What particular point they're editing out or they're page clicking. So those things kind of then help you at scale, but to start with, you have to understand how they're using the product. 

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Open Zoom, have them share the screen, if needed offer them like $50 for that, for their time. Just be generous. Be honest, they are giving you time to kind of better your own product. Wouldn't you kinda give them some incentive? Give them one month free, how does it matter? So start small, but then at scale, understand that things will have to improve.

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Arnav: One thing that stood out to me about what you just said there is getting them to share their screen and go through the processes that they use everyday in their workflows. That, I feel a golden piece of advice over there because, like I said, it's very hard for people to verbalize the problems that they face everyday, because if you ask me what my problems are as a marketer at Tars I certainly feel a great degree of stress being a marketer at Tars. But if you ask me on a Zoom call to tell you what the exact problems I face, I'm going to be all over the place. I'm going to be like, "I guess my problem is bandwidth because I have all these tasks to do, but I don't have enough people to do them." And then that'll send me on a whole other tangent. But if you ask me to get on a Zoom call and show you what I do on a day-to-day basis for project management, I'd totally be able to hit screen-share, show you our Jira, show you our Trello, walk you through what checklists we have, walk you through the process that I go through to keep that up to date, walk you through the process that we go through to get a Webinar from start to finish.

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Arnav: So that's a very different ask for people. And it reminds me of this one research method that I read a paper about called The Narrative Method where instead of asking people point blank what you want to understand from them, you sort of get them to recollect a story to you, which involves that particular thing that you're studying. So in this paper, they were trying to understand what makes people get a specific vaccine. And instead of saying, "Hey, why did you get this vaccine?" The question that they asked them was, "Can you tell me how you spoke to your parents about getting this vaccine?"

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And when they spoke about that conversation, they can recollect that story. Human beings love stories so they can recollect that series of events and then a researcher can go back and sort of pull out the insights that they think are important from that story. But it's a lot easier for that research subject to recollect that story versus telling you point blank what their intentions were when they wanted to get this vaccine. And it sounds very similar to customer discovery, where if you get on a call, get on a Zoom call and say, "Hey, what's your biggest problem at the workplace?" The person's gonna be like, "I don't know, I have a million things on my plate." Versus if you say, "Hey, share your screen and show me what your process is to set up your social post schedule for the month."

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Tejas: Yep, and you also have to keep in mind that I have eight years of consulting experience. So in consulting advisory, it's not that you show up at the client space and start advising them. You first understand the problem and there either you go through the process step by step - I have seen financial statements of the insurance companies and I kind of understood that process, in a matter of three days. So it comes pretty naturally for me to understand the process and deep dive, ask the right questions. So some of it is borrowed from the past life, past experience, but it's a skill that everybody can develop for a period of time.

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Arnav: Yeah, I think this is why we probably see so many consultants, ex-consultants in the B2B SaaS space. Because you sort of come into the space with the tools that you need to know to execute well on customer discovery, which then translates into pretty much everything else.

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Tejas: Yep, it helps.

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Arnav: Anyways, I honestly, Tejas, I think I have pretty much everything that I need, we covered a lot of good ground on this, but thanks for jumping to this call with me.

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Tejas: Absolutely, it's a pleasure. Thanks for your time.

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Arnav: Well folks, that's the end of the episode. Thanks for listening and if you haven't already done so, please subscribe and rate the podcast on your preferred podcasting app. And of course, join us in a couple of weeks for the next episode, have a good one.

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