Contactually Case Study: The Power of Focus

Ben Foster October 12 2020

The following is adapted from Build What Matters.

Initially, Contactually was a customer relationship management (CRM) tool for the long tail, allowing small businesses in virtually any industry to manage customer relationships and communications with easy-to-understand, web-based software. The product team had been receiving input from all directions. Customers requested additional features, sales wanted new demo capabilities, customer support identified bugs to fix, and engineering felt an urgency in addressing overdue technical debt. Internal stakeholders became disconnected and frustrated with the product team, yet further trade-offs still needed to be made.

At the same time, co-founders Zvi Band and Tony Cappaert had discovered that they were seeing better traction with real estate agents than customers in other industries, so they were faced with a difficult decision: continue to serve a broad but disjointed customer base or narrow the target market to focus exclusively on the real estate market and risk alienating a subset of (paying) customers.

The company made the difficult but ultimately correct decision to focus their product strategy solely on real estate. As expected, several non-real estate customers failed to renew and new customer acquisition dropped as the product became less relevant to the wider market of small businesses and consultants, but the senior leadership of Contactually understood this was the short-term fallout which would soon be followed by several major benefits.

The marketing and sales teams consolidated go-to-market activities and concentrated messaging on a specific persona. The product management team was able to filter out all inbound requests that weren’t directly tied to the needs of real estate agents. They filled the space in the roadmap with items that drove customer value, such as:

  • Understanding and solving the more cohesive set of business problems that mattered most to real estate customers.
  • Launching real estate-focused onboarding and configurations that improved time to value and utility for end users and increased average sales price (ASP) by over 50 percent.
  • Making a strategic bet to move upmarket to support larger brokerages that contracted with real estate agents.

Rather than building a mediocre product for a broader potential market, Contactually developed a higher quality product for a smaller but still large, accessible market. The results were clear: increases in revenue per customer, willingness to pay, and customer retention. Improvements in growth rate and unit economics eventually led to Contactually’s successful exit, as they were acquired by technology-enabled real estate juggernaut Compass.

On reflection, Tony said,

“I’ve become such a big believer in the power of focus. Learning to say ‘no’ is crucial to success. In doing so, you’ll lose some customers and that’s okay.”

Zvi added, “Once we focused on real estate, we could concentrate on the cohesive set of user needs and how those translated into larger brokerages as the buyer and user diverged.” Both agreed, “Our only regret is that we didn’t make these decisions earlier.”

Written by Ben Foster

Ben is a co-founder of Prodify and Principal Product Advisor / Coach. In his career, he has been the Chief Product Officer at WHOOP and GoCanvas, the VP of Product & Design at Opower (which went public in 2014) and previously worked for Marty Cagan at eBay.

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