Podcast Summary: Always Be Testing - Episode #69: Unlocking True Activation: Strategies for SaaS and Marketplaces | Ely Lerner

Introduction

In episode #69 of the Always Be Testing podcast, host Ty Grange engages in an insightful conversation with Eli Lerner, a seasoned growth practitioner and Executive in Residence at Reforge. The discussion delves into Eli’s unique approach to advising SaaS and marketplace companies, emphasizing the critical role of true activation in driving sustainable growth. Released on January 28, 2025, this episode offers valuable strategies and real-world examples for businesses aiming to enhance their customer activation and retention.

Advising vs. Consulting: Eli’s Unique Approach

Eli Lerner begins by distinguishing his advisory role from traditional consulting. He explains that his focus is on "teach to fish" rather than delivering solutions, allowing him to work closely with multiple companies without becoming entangled in execution.

Eli Lerner [01:49]: "Advising is all about teach to fish. And then you have this line where when you cross that line, you're in consulting... What I do these days entirely is it's all on the advising side of the line."

Eli highlights his engagement with software verticals, including consumer marketplaces, fintech, SMB SaaS, enterprise SaaS, and AI development tools. His hands-on approach involves spending an hour weekly with each CEO, acting as a thought partner to identify and focus on the most critical growth levers.

The Impact of Hands-On Advising

Eli emphasizes the profound impact of his advisory method, which goes beyond high-level strategies to involve detailed, day-to-day implementation support. This proximity to the operational aspects enables him to drive significant growth and navigate companies through various inflection points.

Eli Lerner [07:58]: "I can actually help drive that impact in a much more hands-on way."

He shares that his engagements are typically long-term, often spanning multiple inflection points from Seed to Series C funding stages. This sustained collaboration accelerates his learning curve and allows for pattern recognition across different companies, enhancing his advisory effectiveness.

Unlocking True Activation in SaaS and Marketplaces

A central theme of the episode is the concept of "true activation" and its pivotal role in SaaS and marketplace success. Eli defines true activation as more than just the initial sign-up or first use of the product; it involves establishing habitual use aligned with the user's natural frequency of need.

Eli Lerner [09:44]: "True activation is really going through sign up, set up, which is all of the activities needed to experience the core value of the product the first time... as close to the natural frequency of need as possible."

He warns against common misconceptions where churn is mistakenly attributed to incomplete activation. Eli points out that up to 50% of churn can result from users never fully integrating the product into their regular routines.

Eli Lerner [10:15]: "In a huge number of cases now, sometimes up to 50% of what people see as churn is actually just incomplete activation."

Eli provides practical strategies for identifying and enhancing activation, such as segmenting users based on their activation status and understanding the specific barriers preventing full engagement.

Influencer Marketing as a New Wave of Distribution

Transitioning to distribution strategies, Eli discusses the emerging potential of micro and mid-tier influencers as a significant distribution channel. He argues that while traditional platforms like search and social have been fully leveraged, influencer marketing, particularly targeting influencers with 100k to 1M followers, represents an untapped opportunity.

Eli Lerner [27:10]: "There's a lot of potential in this space, especially when you're talking about influencers broadly... the platforms end up taking the majority of the value."

Eli highlights the challenges influencers face in monetizing their audiences due to platform constraints and the limited value they receive. He suggests that synergistic partnerships between brands and influencers can create mutually beneficial value exchanges beyond transactional engagements.

Eli Lerner [35:02]: "The more incentive alignment you have, the better this goes."

The discussion touches on how authentic and personalized content from influencers can bridge trust gaps and build deeper connections with audiences, fostering greater loyalty and long-term engagement.

Strategies for Effective Influencer Partnerships

Eli outlines key factors that make influencer partnerships successful:

1. Incentive Alignment: Ensuring that both the brand and the influencer benefit significantly from the partnership.
2. ICP Overlap: Matching the brand’s Ideal Customer Profile (ICP) with the influencer’s audience attributes.
3. Authenticity and Personalization: Influencers should genuinely resonate with the brand, offering authentic endorsements that align with their personal brand.

Ty Grange [34:58]: "There's this mutual selection or buy-in where this isn't just the brand convincing me with a dollar, waving a dollar. This is like I'm a user, I'm an enthusiast, I'm fired up about this product or service."

Eli also discusses how early adopters among influencers can play a crucial role in educating and influencing the broader market, effectively bridging the gap between early and late majority segments.

Conclusion: The Future of Growth and Distribution

The episode concludes with Eli and Ty acknowledging the evolving landscape of growth and distribution. Eli anticipates that influencer marketing will continue to grow as a potent distribution channel, provided that brands and influencers can navigate its inherent complexities and leverage authentic value exchanges.

Eli Lerner [40:40]: "The audience is there, the authenticity is there, the personalization of the attributes is there. The next unlock is how do you synergistically work together to provide value."

Ty Grange echoes Eli’s sentiments, emphasizing the importance of trust and authenticity in modern marketing strategies.

Ty Grange [38:37]: "That trust building where there's like, hey, I don't know, I'm human. I'm figuring it out... that gives people so much more than anything that's a Polish perfection attempt."

Key Takeaways

• True Activation: Beyond initial sign-up, establishing habitual use aligned with users’ natural needs is crucial for retention.
• Hands-On Advising: Eli’s advisory approach fosters deeper impact through sustained, hands-on collaboration with multiple companies.
• Influencer Marketing: Micro and mid-tier influencers represent a promising, yet underleveraged, distribution channel that requires strategic partnerships and authentic value exchanges.
• ICP Alignment: Ensuring that influencers’ audiences align with the brand’s ICP enhances the effectiveness of marketing efforts.
• Trust and Authenticity: Building genuine relationships and authentic endorsements are essential for modern marketing success.

Notable Quotes

• Eli Lerner [01:49]: "Advising is all about teach to fish. And then you have this line where when you cross that line, you're in consulting..."
• Eli Lerner [09:44]: "True activation is really going through sign up, set up... as close to the natural frequency of need as possible."
• Eli Lerner [10:15]: "Sometimes up to 50% of what people see as churn is actually just incomplete activation."
• Eli Lerner [27:10]: "There's a lot of potential in this space, especially when you're talking about influencers broadly..."
• Ty Grange [34:58]: "Mutual selection or buy-in where this isn't just the brand convincing me with a dollar..."
• Eli Lerner [40:40]: "The audience is there, the authenticity is there, the personalization of the attributes is there..."

Final Thoughts

Episode #69 of Always Be Testing offers a deep dive into effective growth strategies for SaaS and marketplace businesses, highlighting the critical importance of true activation and innovative distribution channels like influencer marketing. Eli Lerner’s expertise provides listeners with actionable insights to drive sustainable growth and enhance customer retention through authentic and strategic partnerships.