Traditional Buyer Personas Don’t Work: How Matt Lerner Understands Consumers
Startup growth expert, Matt Lerner, talks about his million dollar lesson learned while characterizing consumers.
By Tremis Skeete, for Product Coalition
Product people know that their greatest value lies in how well they understand consumers. It’s because when they are prioritizing product decisions, especially in regard to which products or features to release—understanding what satisfies consumer needs makes all the difference.
Traditionally, user personas [in marketing, they are called ‘buyer personas’] have been the tool of choice in understanding consumers. With personas, the idea is that you take market research data, identify target consumer groups, and generate a series of statements that describe each group with respect to their lifestyles, challenges, how they make choices, and what’s important to them overall.
Apparently, user personas are supposed to help product and marketing people empathize with consumers, but when startup growth strategist, Matt Lerner decided to spend one million dollars of PayPal’s money on creating personas — he discovered something.
He realized he was asking the wrong questions about consumers.
In his LinkedIn post, Matt tells a story about how he wasted one million dollars to build personas, only to realize afterwards, the information in the personas would not empower marketing teams to craft an effective engagement strategy.
Since that time, he took those lessons learned and crafted an alternative approach to learning about consumers.
Matt also shared in his post, action steps and resources for others to download — so that you would not make the same mistake.
Read a copy of Matt’s LinkedIn post below to learn more:
At PayPal, I once wasted $1M on a marketing segmentation to build personas.
Here’s what we actually learned, plus what I now do instead.
First of all, the research was exquisite. Ipsos started with dozens of interviews, then fielded thousands of surveys and clustered their findings into a segmentation.
It teased out nuances among our merchant segments: eBay sellers, DtC, multi-channel, etc. Each persona had psychometric scores for risk tolerance, price sensitivity, ambition, tech savvy, etc.
Eventually I asked myself “how will this help our marketing?”
And I realized it never would.
These differences were fascinating but inconsequential. In payments, merchants basically all want the same six things:
1. Buyers trust it
2. Makes checkout easy
3. Works with merchants’ existing systems
4. Isn’t too expensive
5. Helps manage fraud
6. Good customer service
You don’t need to be a PayPal expert to know that, and I definitely didn’t need to spend $1M to figure it out! But here’s my real lesson…
Personas, even well-researched ones, are worthless for marketing.
Try this thought experiment…
Imagine you own a beachside restaurant and you’re trying to get more customers. Which one of these facts is more useful to you?
1) Tammy is a 39 y/o divorced mother of 2, from Atlanta, she works in compliance, earns $58K/yr, throws right, votes left.
2) Tammy is on the sweltering hot beach with two kids, they’re getting hungry, and one of them has to pee.
Option 2 wins, it tells us that ice-cold air conditioner and a no-fuss kids menu will draw Tammy in, where #1 leaves us guessing.
As a marketer, I need to understand five things:
1) What do prospects stress about? So I can play up that pain in ads & headlines. (It usually converts better than talking about the product.)
2) Where do they look for solutions? So I can turn up there (e.g. good search terms, complementary services that can send referrals).
3) Which alternatives did they try and how did those come up short? So I can position against them.
4) How do they describe success? So I can write a great landing page!
5) What are they nervous about? So I can call out and address each objection on my landing page and in my nurture emails. How do I get those five answers? (For a lot less than $1M?)
Eventually, I discovered Jobs To Be Done. And here’s how I use it specifically for marketing.
First, I interview people who recently signed up for my service or a competitor and ask questions like:
1. What were you hoping to do?
2. Why is that important to you?
3. Where did you look?
4. What else did you try?
Instead of personas, I fill out a “Job Card” for each use case.
Thanks to, Ellen Fishbein, April Dunford, Adam Waxman for providing feedback on my early drafts!
