Psychology for SaaS Startups

All the while, this brand building effort is a substantial investment in reducing cost-of-customer-acquisition.

Dale Carnegie’s seminal book How to Make Friends and Influence People introduced the powerful notion of social proof to millions. Social proof is the psychological phenomenon behind the power of word-of-mouth marketing. The old trope “No one gets fired for buying IBM” is a manifestation of social proof in an enterprise sales process.

Social proof is an incredibly powerful force. The Buffer team wrote a great post detailing the five types of social proof: expert, celebrity, users, wisdom of the crowds, and wisdom of friends. Sales and marketing teams already leverage social proof because it’s so effective. Many SaaS websites feature customer stories very prominently.

Customer success teams can employ the same playbook. Terrific customer success teams identify evangelists, nurture relationships and direct their enthusiasm to help the company grow. Examples include finding and selecting the customers to provide references and testimonials for marketing material and sales pitches; or speaking on behalf of a company at an event; or very simply, encouraging fans to refer new customers.

Initially, these efforts build user social proof. Soon, wisdom of friends and expert social proof come into play. And some companies like Zendesk achieve wisdom of the crowds social proof, which can drive huge volumes of new organic business. Throughout this process, the company is building a brand for itself and a product.

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Tomasz Tunguz is partner at Redpoint. I write daily, data-driven blog posts about key questions facing startups. I co-authored the book, Winning with Data. Join more than 20,000 others receiving these blog posts by email.


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