Turing's Tofu #15

📰 This Week in AI & SaaS 📰

• Google is considering charging users for content generated by its SGE (Search Generative Experience) which provides users with AI-generated summaries of search topics, to safeguard its primary revenue source—its search-related ads—which makes $175B p/y. Read more. 

• YouTube has declared (without concrete evidence) that OpenAI has violated its content policy by using its data to train its text-to-video model, Sora (OpenAI have yet to comment…) Read more. 

• To protect users from deceptive content, Meta will add a 'Made with AI' label to all AI-generated videos, images, and audio and, to protect people’s freedom of speech, will also stop removing content unless it violates other policies voter interference or harassment. Read more.

🌟Turing’s Top Picks 🌟

FEATURED TOOLS 

• Seona AI:  Seona AI is a free, AI-powered tool designed for optimizing SEO outcomes and expanding customer reach for businesses.  Try it. 

• MapMindAI: MapMindAI is designed to help users visualize and organize their thoughts and ideas, efficiently, into visually effective mind maps. Try it. 

• Validator by Yazero: Validator by Yazero provides comprehensive, accurate, and reliable insights to help entrepreneurs validate their startup concepts. Try it.

Read of the Week: 

AI, Algorithmic Pricing, and Collusion

This research paper focuses on the effects of AI and ML on pricing strategies among firms, shedding light on the complexities of pricing decisions in the age of AI and underscoring the need for a nuanced understanding of pricing algorithms to ensure fair competition and consumer welfare. 

Read it.

💡 Marketing Moments with Mounier 💡

In a recent episode of the "B2B Revenue Leaders" podcast, I had an engaging conversation with Dustin Tysick from Testimonial Hero. We dove into the transformative power of AI in marketing and discussed its perceived threats and real opportunities. Here are some key insights from our discussion:

• AI as an Assistant, Not a Replacement: AI should be viewed as a powerful assistant that handles mundane tasks, allowing marketers to focus on strategic and creative efforts.

• Creative Storytelling with AI: Leveraging AI in marketing isn't just about automation; it's also about enhancing creative storytelling. With the right prompts and understanding of user intent, AI can help craft compelling narratives that resonate with audiences.

• Ethical Use and Non-Creepiness: The ethical use of AI is crucial. It's about striking the right balance between personalization and privacy, ensuring that marketing efforts do not become intrusive or creepy.

• Driving Value with AI: For AI to be effective, it must add real value to marketing processes. This involves automating tasks that are repetitive or data-intensive while maintaining a human touch in customer interactions.

To hear more about how AI can elevate your marketing strategy without crossing ethical boundaries, and for a deeper dive into how AI can serve as a strategic partner rather than a threat to marketing jobs, click below to watch the full podcast episode.

👇 Watch the full episode 👇

👾 TOFU Quick Bytes: Outreach.io Teardown 👾

Outreach.io teardown

Founded in 2011, Outreach.io is a sales engagement platform designed to help businesses and sales teams close deals quicker, more consistently, and more predictably. The platform aims to improve outbound sales efforts by facilitating faster engagements, making engagements more effective, improving scheduling, and optimizing coaching efforts.

Strategy overview: 

The software is geared towards sales teams, not individuals, and focuses on meeting the needs of the remote sales world. The tool has been specifically designed and continuously iterated on to meet the needs of five different personas:

1. Sales Development Reps (SDRs)

2. Customer Success Managers

3. Sales Management and Leadership

4. Sales Operations 

5. Marketing

Performance Analysis:

• Outreach made over $250 million in revenue last year

• It’s valued at around $4.4 billion with a growth rate of 11% YoY

• It’s raised over $489.00M in funding 

• It has over 6,000 global customers 

• Their annual, net revenue retention is 140%

How have they achieved this? 

Critical Teardown:

What does Outreach.io do well?

Frequently action, build and release new features: Outreach.io release new features every Monday, Wednesday and Friday. These features are usually a response to customer feedback on UI/UX issues or improvements that not only keep their customers happy and, therefore, loyal, but the small performance improvements drive them closer to their North Star Metric. 

Prioritize B2C metrics: Outreach.io prioritizes the number of monthly active users they have, over anything else: That is their North Star Metric. They care how many people are using their software more than how many active customers they have or how much ARR they’re making because if their customers aren’t using their product, they’re going to churn. They even have a dedicated ‘System Implementation Manager’ who is solely focused on getting 70% of new Outreach licenses to daily usage. As a result, their annual net revenue retention is 140% which means that if Outreach acquired no new customers over the next 12 months, they’d still grow by 40%. 

Target specific personas for sales outreach: Outreach.io customizes its outbound sales process based on personas (Sales Development Reps (SDRs), Customer Success Managers, Sales Management, Sales Operations, and Marketing) and the industry that persona sits in. 

They base their persona/industry-based sales strategy around CAC, ACV, and time to close. For example, they know that selling to a sales manager in retail usually takes twice as long, delivers half the deal size and costs twice as much as selling to a sales operations manager in the SaaS space. So, they tweak their approach and time spent on outreach, accordingly.

Steal competitor-branded traffic

Outreach was able to scale its Google Ad spend from £3k to £23k over 2 years by running two successful SEO strategies.

1. They maintain a longtail keyword strategy that focuses on keywords like:

• Sales process automation

• Inside sales framework

• Sales engagement software

2. They bid on competitor brand names

Although slightly controversial, over 61% of Outreach’s current Google Ad traffic comes from competitor brand name terms. People searching for their competitors are educated about the market and usually looking for a solution to their problem, so this type of traffic is more likely to convert than someone searching for “how to sell more effectively”, for example.

What doesn’t Outreach.io do well? 

Because Outreach releases new features and updates 3x a week, users say that the interface can be a bit overwhelming–especially during the onboarding stage–which can make the product difficult to use. Plus they don’t offer users a free trial, so they can’t try the platform out, and see the benefits it brings before they commit. This could lead to churn if users are left feeling confused and unable to get the maximum value from the platform. 

This also removes self-serve revenue and requires every new account to go through a sales rep - potentially slowing down growth rates.

Pricing is also not publicly displayed. I understand that every enterprise organization is different - but having some sort of baseline cost number helps build consumer trust and allows prospects to self-select prior to spending the time on a demo.

AI integration:
Outreach io has built an AI-powered Sales Execution Platform that delivers insights taken from over 33 million weekly sales interactions–across the entire sales cycle–from over 6,000 of their customers to help reps automate their sales processes, find the right time to reach out to prospects, and remove a lot of the guesswork from their sales development efforts.

They also have an AI conversation intelligence tool–Kaia–which analyzes and extracts valuable insights from sales conversations to improve the quality of interactions, help teams understand deals better, close faster, and coach reps more effectively.

It also recently launched a new set of AI assist capability features to provide reps with detailed visibility into the status of meetings, prospects, and leads, telling reps which high-value deals to focus on first, so they can accelerate deals and deliver more revenue.

Key takeaways: 

• Small but with a regular cadence is best for releasing new features or updates, get into a regular, fast-release schedule to keep customers happy and your product up-to-date and useful.
  

• Consider tracking and working towards B2C metrics, like how many users use your product each month, because if they’re not using it, you can guarantee they will leave.
   

• Customize outbound sales processes first by persona, then by industry, and apportion your time accordingly.
  

• Although considered controversial, consider bidding on competitor brand terms to attract an audience that’s market-educated and more likely to convert.
  

• Consider offering users AI-powered features that automate processes, provide deeper insights and take care of manual tasks. 

What campaign or content marketing strategy would you like to see torn apart, next? Let me know! 

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