Influence: How to Design Growth in B2B SaaS

A ‘Jedi Push’ to change behaviors and drive outcomes.
This is Part 1 of a series on leveraging behavior change to drive outcomes in B2B SaaS.

Steve Jobs, in a 1994 interview, stated that one of his greatest insights was realizing that life itself is a construct that is malleable. That when we ‘push’, it changes. And that life itself should not simply be lived but molded, changed and improved upon.

But how and where should we ‘push’?

Have you ever wished you had a methodically and reusable framework to think about diverse topics from; how to add more customers, how to drive deeper engagement or how to motivate your employees? Have you ever wondered why companies such as Google and Microsoft offer benefits such as on-site childcare, free transportation and dedicated time to ‘explore’ personal projects? There is a pattern here and it revolves around leveraging ‘pressures’ to drive behaviors which then drive outcomes.

I believe growth in B2B SaaS can be deliberately designed. Growth is the output and the inputs we can push include acquisition, monetization, retention and engagement. To move these levers, let’s apply an idea called "Opposing Forces", which is a tool that allows you to identify, segment and experiment on the underlying reasons behind a behavior.

I was first introduced to this model through a friend and colleague, Matt Wallaert while at Microsoft Ventures. At the time I was heading up Microsoft's East Coast Venture Capital Partnerships and as a former startup founder, I've always been interested in leveraging behavioral change in product design, strategy and operating processes. While the Opposing Forces framework can be used in a variety of situations, I've customized it for the portfolio companies I work with at Riverside Acceleration Capital, which are all B2B SaaS companies.

Introduction: The Forces

Let's give a quick definition of behavioral change: it is an intervention that shifts us from a world as it is to a world that we want it to be. Every time we sell, every product we build and every meeting we run depends on behaviors. If you were to break apart a single behavior, it comes down to this. There are two opposing forces at work in every decision: the reason to do something and the reason not to do something.

Let's call the reasons to do something = "promoting pressures"
Let's call the reasons not to something = "inhibiting pressures"

If a promoting pressure overcomes an inhibiting pressure, users act. If inhibiting pressures are stronger, they don't.

Imagine for a moment a balloon suspended in air. The balloon represents a behavior you would like to change. On the one hand, if you want the balloon to rise, that is, if you wanted more of this action or outcome, you could increase the promoting pressures, that is, the reasons for this behavior to occur.

On the other hand, if you wanted the balloon to sink, that is, if you wanted less of this behavior, you could increase the inhibiting pressures.

Often the simplest ideas around promoting and inhibiting pressures will have the greatest outcomes. For example, translating the user interface (UI) for international audiences was key to Facebook expanding beyond 50 million users (i.e. focusing on ‘access’ which is an inhibiting pressure). Another example is Airbnb, where they extended the “cookie sessions” so that users could return to where they were without needing to remember their passwords. The website only asked users to log in later in the session when a more sensitive action (such as booking) was made. Understanding what was inhibiting the user and reprioritizing the flow removed the cognitive friction around remembering, typing or looking up their passwords before a ‘reward’ was clearly present.

So think creatively about your product or service. Perhaps you can offer a canvas to "play" with your product without email verification and solve for the security issue later in the user journey (i.e when they purchase).

Can we tap a users desire for uniqueness and personalization while at the same time leveraging community knowledge? For example by displaying a user's name and profile picture in the UI (i.e. a promoting pressure reward) and offering email templates (i.e. removing an inhibiting pressure) for contacting coaches, as in the case of our portfolio company, SportsRecruits.com

Examples of Promoting and Inhibiting Pressures

Promoting Pressures: reasons users do 'X':

• Rewards, Bonus, Commissions:
  • Motivating employees to sell or do more.
• Features:
  • In the SaaS product or benefits of using software, platform or network
• Efficiency:
  • For example, user will save 5 hours a week leveraging our solution.
• Desire:
  • Creating an emotional need.
• Identity and Culture:
  • Who we are as a company, employer or partner.
• Quality:
  • We check our code before we ship it.
• Luxury:
  • Enterprise-grade product. Tools used at Microsoft or Google.

Inhibiting pressures: reasons users do not do 'X':

• Price:
  • It's too expensive. We don't have the budget for this software.
• Availability:
  • They don't have an office or presence in my country. It's not easy to get.
• Access:
  • The UI is only in English and my users need Chinese or German.
• Cognitive Friction:
  • I don't understand or believe the claims on the website.
  • Once I log into the product, I have no idea what to do next.
  • This is too complicated.
• Physical Friction:
  • Why do you need my zip code address in your lead generation form?
  • Is there no auto-renew subscription service?
  • Your next salesperson is only available two weeks from now?
• Context / Environment:
  • What traffic sources brought your user arrive to your website?
  • What state of mind are they in?
  • What time of day is it?
• Brand Anxiety:
  • Could I champion this startup's solution within Microsoft?

Three Insights on Promoting and Inhibiting Pressures

There are three main insights we can draw:

Insight #1:

When you want an outcome to occur (or when you want more of the same action), focus more on the inhibiting pressures than on the promoting pressures. That is, for every ounce of effort spent on reasons for an outcome to occur (i.e. promoting pressures), you will generate more results by identifying the reason they do not occur (i.e. inhibiting pressures). The reason is that inhibiting pressures are typically homogeneous (same per user across your cohort) while promoting pressures are heterogeneous (different per user across your cohort). More on this below.

Insight #2:

You can't change behaviors directly. Your only option is to move around the promoting or inhibiting pressures to affect the outcome you are looking to change.

For example, let's say you wanted to capture more leads on your landing page. While you can increase the promoting pressures, for example, by offering a free ebook or some other reward, you can't make visitors fill in their information. Examples of reducing inhibiting pressures include removing the physical friction (e.g. the number of fields you ask users to fill out) or the cognitive friction (e.g. does the text connect to the user emotionally).

Think about the pressures surrounding the balloon (i.e. behavior) while being cognizant of timing and environment to make your outcome more likely.

Insight #3:

You have more partners or competitors than you think. A competitor is not only a company that sells a similar product or service. Rather a competitor is a company that takes away from the behavior we are trying to induce. And a partner is a company that helps your users do more of a particular behavior.

For example, with our portfolio company SportsRecruits; the behavior they are trying to induce is for athletes to record more videos and send the clips to college recruiters. That is, being out in the field. What competes with this action? Arguably Netflix, which would like you to stay home and watch an entire season of Stranger Things. A non-obvious competitor. So think creatively about which companies encourage or discourage your desired behavior when looking for channels or distribution partners.

Why Focus on Inhibiting Pressures?

Let's dive deeper into Insight #1: why focus more on inhibiting than promoting pressures. Again, the theory is: every effort spent on reducing the reasons not to do something will have a greater impact than focusing on reasons to do something.

Let's put a caveat here. Despite the title, you shouldn't simply ignore promoting pressures. There are many benefits to promoting pressures and both sides are responsible for ultimate behavior. Often promoting pressures are needed to 'seed a market' or to get the flywheel of demand going. Or, if the product or service is new, you still need to tell the world about it.

Also, recognize that behaviors naturally compete with other behaviors. You can want to sleep and watch Netflix at the same time. The timing and environment matters. Finally, it's important to keep in mind that if you change one behavior, there could be downstream effects on other variables. For example, removing friction in our sign up forms could result in more leads, but they might be less qualified or require more time for the SDR side to research.

To fight our natural brain wiring

There is a natural tendency when asked to "do more" to gravitate towards promoting pressures or rewards. When asked to do more (e.g more sales, more customers, more leads), our brain is wired to immediately list the "reasons to do something", that is, focus on promoting pressures such as throwing more money or salespeople at the problem. Or perhaps copying a feature our competitor has. Because everyone tends to think this way, tactics get crowded very quickly and are less effective.

Notice that the reasons to do something are different for everyone (i.e. heterogeneous). What benefits one customer may not benefit the other. What motivates one employee may not work on another. It's hard to change behaviors when the reasons are all different.

However classic inhibiting pressures such as cost, availability and access tend to be universal (homogeneous) and affect us all. Added to the fact that inhibiting pressures are counter-intuitive, typically more innovation that can happen here. Try this thought experiment. Invert the problem. In what world can we make it so that no one will want to use your product?

3 Reasons to Focus on Inhibiting Pressures

1. Homogeneous:

• All your customers are affected by the price of your software.

2. Have longevity:

• Removing inhibiting pressure will have a longer-lasting effect. For example, making a product more available via channel partners will have more impact than an extra feature (such as an updated analytics dashboard). In 2019, distribution almost always wins over product or technology.

3. Loss Aversion:

• The pain from losing $1 outweighs the pleasure of gaining $1. We can extend that here by saying; the release of friction (i.e reduction in inhibiting pressures) will be felt more strongly than the corresponding benefit of a new feature (i.e. increase in promoting pressure).

Conclusion

Since one of Steve Job’s last creations was a ‘spaceship’ headquarters, you have to assume he was a science fiction fan. And what is Science Fiction, if not a designed reality in which all the inhibiting pressures have been reduced to zero? Space exploration? The inhibiting pressures around gravity, distance and propulsion have all been removed.

As startup founders, we replicate this. We seek to push forward a reality in which our product, company and market did not previously exist. Understanding promoting and inhibiting pressures can help us to answer questions such as:

• How do we drive users to log back into our website?
• How do we motivate employees to work more productively?
• How do we sell more of anything?

The use cases are vast. For example, if you want your employees to stay healthy, instead of educating them on why healthy choices are important (i.e. promoting pressures), focus on making healthy food cheaper and easier to access (i.e. by reducing inhibiting pressures). That is why at Google, they keep the cookies and candies in opaque containers while using clear containers to showcase fruits and nuts.

If you want to increase employee productivity, instead of a new commission structure, consider what is stopping them from being productive. Could it be employees are thinking about their kids or worried about getting to work on time? Reducing these inhibiting pressures is why both Microsoft and Google offer on demand access to concierge daycare, free shuttles and unlimited coffee. Though to be frank, Microsoft's coffee is much worse than Google's.

In future posts, I will dive deeper into a concept of “energy” levels needed to create conversions within a customer journey while being cognizant of the location and timing of the ‘balloon’ (i.e. behavior).

But that is for another day. In the meantime, having fun poking at Steve Job’s ‘construct of life’.