Opportunity Sizing A Major Acquisition In Only 3 Days

When Respondly approached Buffer about a potential sale, it presented a rare opportunity. But we only had a few research signals and just 3 days to gather enough evidence to inform a decision.

"I chatted with several team members and also worked with Patrick to do some fast customer development around whether our customers were already also doing customer service and using a tool for that."

— Joel Gascoigne, Co-Founder and CEO

The Problem

Respondly approached Buffer to explore the possibility of an acquisition in 2015. Although we knew that there was some interest in a customer support tool, there was no previous research that we could refer back to.

In particular, we didn't know how many Buffer customers were currently using a tool to handle customer service on their social media channels. As senior leadership prepared a Build or Buy analysis, it became clear that we needed more data before making a decision.

So I worked with Buffer's CEO, Joel Gascoigne, to run a study that would give us an accurate snapshot of how many Buffer users were engaged in customer support on social media channels, what tools they were using, and how much they were paying for those tools.

Identifying the Risk

I started building out the study by looking at the existing data that we had on hand. This is where keeping a detailed repository of insights paid off, and I was able to gather and analyze all existing signals in a single day.

Because most of these were inbound requests, feature suggestions, and snippets from previous interviews, this gave us some foundational qualitative feedback to work with.

It became clear that what we were missing was a large-scale, quantitative understanding of how Buffer users were utilizing customer support tools.

This presented a risk to any potential acquisition, because current users were a large part of the Buy or Build model that senior leadership was working on.

Choosing the Methodology

In an ideal world, I might have designed a study that balanced in-depth interviews and quantitative methods to get a full picture of the pain points and opportunities for a customer support tool. However, Respondly was waiting on our decision and the team needed data quickly.

So I decided to leverage our existing qualitative feedback and create a survey that included questions like:

  • Which channels are important for your customer support?

  • How often do you engage in customer support activities on social media?

  • Which tools do you currently use for customer support?

These questions were aimed at understanding both the frequency and the necessity of customer support among our users.

The survey was sent out to a portion of users on all plans. By keeping the survey short and leveraging in-app messaging, we received close to a 10% response rate to the campaign.

Analyzing the Data

This response rate was high enough that we ended up with several hundred responses within a 3-day time period.

I took the results and segmented responses according to plan. This allowed us to clearly separate out customers who were on the Free plan, the consumer-level plan, and business-level plans.

Next, I worked with the data team to get up-to-date estimates of how many customers were subscribed to each plan.

This allowed me to transform the raw percentages from the survey into a more actionable estimate of how many users on each plan were already doing customer support on social media and using tools.

The survey results also provided insight into the competitive landscape, giving us data on what customer support tools our users were already paying for.

Informing the Buy or Build Analysis

The findings from this study played a key role in ensuring the accuracy of the Buy or Build analysis being performed by the leadership team, giving them confidence in the opportunity size.

The survey results ultimately supported the idea that there was interest in a customer support tool and that it could be worthwhile as a strategic opportunity.

This quick data helped improved the accuracy of the analysis and enabled Buffer to make an informed decision regarding the acquisition of Respondly.

Lessons Learned

Maintaining an organized, searchable research repository is critical if you want to react quickly to new opportunities.

How long it would take you to get 5 interviews or 200 survey responses can be a good gauge of your research readiness. This entire study was designed and completed within 3 days.

Research can be a better partner to leadership by proactively gathering key signals on areas that could be a strategic priority for the company, even if there is no urgent need for the data.

Get in touch

Email: hello [at] patrickward [dot] io