Can I Get Your Attention Please?

Attentive - Company analysis

Photo by Daria Nepriakhina 🇺🇦 on Unsplash

Today I wanted to try something new.

Many product managers who heard me talking about the ‘Product spheres of responsibility’ (AKA - ‘the pyramid') have found this framework to make a lot of sense. However, when they are trying to apply it in their workplace they are sometimes struggling with some of the ‘layers’ of this pyramid and require my assistance with designing it properly.

I therefore thought it’d be useful to provide some actual examples by selecting some companies at various stages and explaining how I’d apply this pyramid on each of these companies.

Each post will be devoted to a different company.

I will be choosing only companies I have no inside information about, so I can’t be blamed for ‘cheating’ or providing an internal/confidential information.

With this guideline in mind - let’s start with our first guest: Attentive

I came across this company by going over the list of unicorns and narrowing it down to companies with valuation of less than $10B. This company is currently worth $6B. Good for them.

Overview

Attentive tagline is:

The World’s #1 SMS marketing platform

They help e-commerce sites automate their SMS marketing campaigns and personalize the content of these SMS and by that help them generate more conversions and bottom line sales.

They claim to have more than 8K brands ‘relying on them’. That’s a very big number of customers which can indeed justify their valuation.

As for their business model (which is key for trying to determine what should be the ‘north star’ KPI) - it’s a bit more tricky. Attentive doesn’t disclose their pricing model on their site. I hate when they do that.

However, digging through their competitors and evaluating some assumptions - I believe it’d be fair to assume that they are getting paid per SMS sent through their platform. I don’t know if they have an additional setup fee - but it doesn’t matter for our cause.

Digesting it all together - we have a B2B2C business whose customers are e-commerce sites. They send SMS messages on their customers’ behalf and they are getting paid for each SMS sent. They have thousands of customers.

Cool.

Let’s now proceed to the pyramid.

The Pyramid

I always recommend starting with the top of the pyramid and going down the layers. Let’s roll.

The North Star

Remember - a good north star metric needs to accomplish 3 things (see here a post I wrote on the topic):

1. A good indicator of our market dominance - e.g. - If it goes up - it means we’re gaining market share (and the opposite if it goes down.. dah)

2. A good indicator of the revenue trend - e.g. - If it goes up - our revenues are going to go up as well.

3. A good indicator of the value we deliver - If it goes up - it means more customers are getting value from our products

I always start with the business model of the company for understanding what would make the revenues go up. It speeds up the process of finding the north star.

Since we assume they are getting paid for each SMS sent, then my initial guess is defining the north star as the ‘amount of SMS sent over a week’.

Such a north star clearly covers #1 and #2 from above, but doesn’t necessarily cover #3. The fact that we are spamming the users of our customers, doesn’t mean by itself that a value is delivered to either the end users or our customers. If it’s unclear - let’s take it to the extreme for a second to make it clearer:

Let’s say there is a bug and Attentive platform sends blank SMS for the whole week. In such a case - there is clearly no value delivered to anyone. On the contrary.

Therefore, this KPI, while being an important metric we should keep track of - is not good enough for being our north star. 

Let’s upgrade it.

If I fine tune it to be ‘The amount of SMS messages that were engaged by the end users during the last week’ then I think we are onto something. We need to define what ‘engagement’ means though.

I would make it ‘easy’ for Attentive fellows by requiring the end user to reply to the SMS to be counted as an ‘engagement’. It doesn’t mean that the end user actually made a purchase.

We could make it stricter and define an engagement as a purchase, but there are several caveats with that:

1. The value of this KPI (which is based on actual purchases) would be relatively small, and it doesn’t look good for a unicorn company (marketing wise, for investors). So even though we’re still doing great work, it’s preferred to have ‘big figures’ for the north star KPI.

2. Many steps towards the purchase are out of the control of Attentive. They improve the chances of such a purchase to happen eventually, but many of these factors depend on the e-commerce site. We don’t wish to be measured on things we cannot control.

There are other forms of engagement we could choose, but I believe the metric above is a solid north star KPI for this company as it fulfills all 3 requirements. Let’s move on to the next stage.

The product strategy

As a reminder, the way I think about product strategy can be read here.

Essentially, we’re trying to come up with a plan on how to push the north star to the sky in the fastest way possible. 

Now, the first thing I usually ask myself is whether the product has reached product market fit (PMF) or not. If you don’t recall how to test it - you can read about it here.

Since they have 8K customers - I think it’s safe to assume that they have reached a decent PMF (the quest to PMF never ends… but at some stage - when customers are reaching out to you - you are definitely in a good spot).

And if they indeed cracked the PMF then they have several options for further growth:

1. Take their technology to a new vertical (such as digital publishers)

2. Extend their offerings within the verticals they are already working in

Now, I’ve seen on their site that they are already selling to retail customers and other verticals, so it seems they are already exploring the first option. Either they just started - and in that case they need to push aggressively there, or they see a modest success so far. I’m saying this because everything on their site still indicates that they are mainly targeting e-commerce.

So, with the limited knowledge I managed to gather about them - I’d focus my strategy on #2 - extending and improving their current offerings.

Going back to the north star - if we said that it tracks replies to SMS messages we send, and we wish to improve on that - then we need to put an extra focus on improving the chances of the end user interacting with the messages we send.

This is the stage where you need to step away for a second from your day-2-day and focus on your creative self. I wrote a post about creativity back then. You can find it here. But anyway - what I’m trying to say is that there are plenty of ways to increase engagement with users. At the end of the day, in our case - you’re trying to encourage the user to buy a product.

I guess there are plenty of playbooks on the web about how to phrase and time your messages for increasing the chances of a successful transaction. However, I don’t like playbooks when it comes to grabbing the users’ attention. Everyone is fighting for the users’ attention, so they have seen it all by now. If you really want to grab their attention - you need to think out of the box, and you need to understand who is in front of you. 

Now, a human can’t do that. Not in a scalable way anyway. You need to leverage AI. A combination of AI and generative AI (you can read about genAI here) should give you the right mix to be successful here, in my humble opinion. The AI will be used to create and maintain a user profile, and the generative AI will be used to leverage such a profile for fine tuning the message to each and every user.

It’s easy to say but challenging to do. This requires a data science team, proper research and then implementation and testing of various models.

I’d therefore focus my product strategy on providing the state of the art AI for product recommendations and ‘sales pitches’ for these products. The first half already has best practices in the industry (product recommendations) but the second is a relatively new field. Thus, the core of the strategy means to focus Attentive’s DS team on building such core capabilities.

A product strategy can be multi-dimensional. And in fact I recommend that. Hence, focusing on increasing engagement with the messages sent through the platform should be the main focus, but not the only one.

As always, a company needs to stay ahead of the curve and its competition. What’s missing to keep the retention high?

Is it audience insights? Proper dashboard? Integrations with other e-commerce systems? Something else?

If I was a product manager there, I’d definitely look into that based on customer interviews and indirect signals received through sales, support and customer success. Based on those I’d evaluate what other main capabilities (I’m not talking about specific features) are still missing. Then I’d make them part of the strategy. E.g. - ‘within the next 18 months we need to provide a strong offering in the realm of audience insights’.

And with that in mind - let’s proceed to the roadmap.

The product roadmap

So we have a strategy which is focused on building the state of the art recommendation engine for products and the ability to ‘sell’ each product to each end user using generative AI.

On the side lanes we may have 2-3 other capabilities we’d like to focus on as part of the strategy.

This is more than enough to draw our product roadmap.

On the AI angle - most likely the next couple of quarters should be focused on ‘getting to know’ the users of each customer. Meaning - building and maintaining a profile about their interests and probably also segmenting the audience into specific categories. We can also start experimenting with generative AI if the team is big enough.

12 months from now - we should have a strong offering out there. A bot that can recommend the right product to the right person, accompanied with a strong sales pitch for this product, tailored to this person. Depending on what we already have at our disposal - it may take much less, but I guess not less than 6 months.

Such projects can go on for years, being constantly fine tuned and improved. But here we’re talking about a solid version 1.0.

As for the side projects - depending on the chosen ones and how much work is needed for each - we can draw a similar timeline which details the various building blocks for each. Spanning anywhere from 3 to 5 quarters.

For example - if we decide to focus on audience insights - then we first need to take care of the data layer and make sure the data is stored and aggregated in the proper manner. Then we need to implement the various logic modules that process the data streams and produce these insights. Last - We need to add the user interface for the customer so they can ‘play’ with the various filters and receive the insights they are looking for.

The quarterly plan

Going down the pyramid  - the next step is the quarterly plan. Meaning - what we’re going to work on in the next quarter. I wrote a post about how to do it properly here.

However, I won’t be able to do it for a company that I’m not well familiar with because the quarterly planning process requires knowing the intimate working items and features that may be candidates for this quarter.

Once you gather all the candidates properly - you can work according to my post as for how to generate a proper plan according to that.

And once you have the quarterly plan - the rest is the day-2-day hands on aspect of product management: 

Sprint planning, day 2 day priorities, writing specs and conducting spec reviews, etc..

Naturally, I can’t relate to the exact working items here, since it’s highly dependent on the quarterly plan you come up with.

However, once you master the hands-on aspect of your work as a product manager - this should be a walk in the park.

And that’s it. You have the pyramid right there.

If you have other companies you’d like me to analyze in the same manner - just let me know in the comments.

If you have any ideas for posts or topics you want me to cover - PLEASE LET ME KNOW.

Last - If you found this post/series useful - feel free to ‘like’ it. If you think others can benefit from it - feel free to share it with them.

Thank you, and until next time :-)