I recently sat down with Ian Siegel, Co-founder and CEO of ZipRecruiter, a data-driven hiring marketplace for employers and job seekers. As we talked about the substantial growth his company has experienced since its launch in 2010, Siegel shared his unique approach to routine areas of any software business: product development, pricing and marketing. It’s his one-of-a-kind outlook that’s enabled Siegel and team to build a business that’s grown to north of $150 million and still climbing.
Product management is an area that has diverted and/or diluted the focus of more than one company. It’s challenging to maintain the discipline required to stay the course. It’s too easy to be seduced by shiny-object syndrome, feature bloat, or any number of other focus-related product development pitfalls. My conversation with Siegel turned up several product management rules that will benefit any organization hoping to emulate ZipRecruiter’s marketplace model.
Rule #1, identify your “One Thing.”
Siegel is adamant that each business only really sells one thing. One of the main secrets of success is knowing what that one thing is and putting all your effort and resources into being the best at that. Obsess over it.
His tip for uncovering what your one thing is (if you’re not sure) is to have a current customer who loves what you do describe your product to a prospect. How your happy customer describes what you do and the value it delivers is your one thing.
Rule #2, study your conversion funnel.
At ZipRecruiter, every idea and business case begins with the conversion funnel. The team looks at each step in the process to uncover where there’s friction. The goal is to remove all the potential stumbling blocks so that new customers experience nothing but smooth sailing through the entire sign up, free trial, and so forth.
Whenever you discover a speed bump in your conversion funnel, your job is to test different ways of getting people past it. Talk to customers. Invite them to participate in surveys. Do A/B testing on page layouts and copy. It’s not always obvious why people are getting hung up or abandoning a form, but it’s always worthwhile to spend the time figuring it out.
Rule #3, keep it simple.
As most teams will admit, it’s easy to get caught up in adding features. It’s natural to want to do more for your customers, but you have to remember why they became customers in the first place. Remember what you promised. Know which features you need to deliver on that promise. Everything else is fluff, or — worse — a distraction and/or resource drain.
The tricky thing about features is that they don’t just add functionality, they also add complexity; and complexity slows things down. It makes the on-boarding process difficult, creates technical debt, and drives demand for additional customer service support. Siegel believes one of the real secrets of ZipRecruiter’s success in a competitive market has been the restraint they’ve shown when it comes to adding more features. He’s even thought about putting out press releases highlighting the features his company turns off each year due to low usage.
When it comes to pricing, Siegel’s best tactic is to keep things simple and focused. His two-step formula for success is to default each customer into a plan and then give them a single upgrade option. This approach is very different from the tiered plan that is the traditional way to present pricing, and which can cause prospects to pause in the conversion process while they try to figure out which option they want.
Instead, Siegel uses a “clarifying question” to help a customer self select into the appropriate subscription tier. He doesn’t even bother showing them the other options, because they aren’t relevant. Once customers have been sorted into the right plan, they see one more simple question, “Do you want standard or premium?” Again, the options for the customer are limited and simple.
A key element of this pricing tactic is knowing which feature is your “key feature” — the thing that people want most. It might be the number of user seats or the ability to white label the software or any number of other features. Learn which feature your customers covet most, and make that your premium feature. By focusing on exactly what your customers want most, you can increase your profits and stop leaving money on the table.
When it comes to marketing, what works for one company won’t always work for another. In fact, what works for one company today, may not work for that same company tomorrow. There’s a lot of trial and error and optimization to be done, and that requires loads of discipline.
One of Siegel’s main takeaways from his success at ZipRecruiter is that, once you have a solution that works, your job is to invest in it lock, stock and barrel. Build the biggest megaphone you can, and get the word out there. Remember, however, that while each marketing strategy and tactic has the potential to work for you, none of them are easy. You have to do a lot of intense, focused detective work and more than your fair share of due diligence and testing to find the formula that works best.
Before you get started, remind yourself who your customer is and make sure that your marketing strategy is designed to engage that audience. And then, start experimenting with different channels and mediums. For ZipRecruiter, some of the early failures were elevator ads and billboards; and some of the most effective channels were satellite radio and podcasts. Your results may vary, so you really have to do the work yourself.
On the other end of the marketing process, it’s critical to measure everything. Attribution is hard, but it matters. Understanding how your customers are finding you and what’s making them convert is some of the most valuable information you can have. One of the keys to solving attribution is to layer your channel launches. Don’t turn everything on at once. Be thoughtful and test in small ways before taking it to the next level. You might be surprised at what actually works.
No one ever said that launching and growing a marketplace is an easy thing to do. But, it’s clear, based on the stories of ZipRecruiter and other organizations with a similar philosophy, that staying focused, exercising discipline, and keeping things simple can take you far on the road to success.