Product Led Growth Strategy
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7 steps for creating the ultimate product-led growth strategy A practical guide for B2B product leaders Mickey Alon, Former CEO and co-founder of Insightera, CPO and co-founder of Aptrinsic (Gainsight PX).
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Product Led Growth Strategy
- 1. Product Led Growth Strategy Mickey Alon, CTO & Founder – Gainsight PX
- 2. About Me 2 • CTO and Founder of Gainsight PX (Aptrinsic) - A Product Growth Platform • CEO & Co-founder of InsightEra (Marketo RTP), GVP at Marketo • Co-Author of “Mastering Product Experience”
- 3. THE GTM EVOLUTION • Sales Led: high ACV, high touch, limited growth velocity • Marketing Led: lower ACV high-med touch, scaling efficiency • Product Led: low touch/tech touch, ultimate growth efficiently, competitive advantage. Incremental ACV 3
- 4. MARKETING LED GROWTH • Scaling using marketing automation, focused on top-of-funnel to MQL for increased sales efficiency • Marketing & sales owns customer acquisition and growth metrics • Handoff from marketing to sales using buyer intent and from sales to success – less customer experience focused 4 Sales driven buying experience
- 5. PRODUCT LED GROWTH • Scaling by providing access to the product earlier in the buying cycle for increased sales efficiency • Product teams increasingly more responsible for customer acquisition and growth metrics • Customer experience delivered by the product throughout the customer lifecycle, (Awareness -> PQLs) 5 Consumer grade buying experience
- 6. Why Now? 6 Consumerization of customer expectations, experience counts Economics behind fast growth – it’s a competitive advantage Proliferation of SaaS vendors and low switching cost The TAM is constantly growing – sales, marketing & success need to scale. Shorter cycles to launch new features, experiment & learn = faster innovation
- 8. [Case Study] Slack – Exceptional Product Launch • Delivering better communication experience for companies • Great product experience • Strong messaging / PR: “Email Killer” • Strong execution of online content, videos, podcast to target different buying stages • Iterative, data driven, growth process 8
- 9. [Case Study] Slack – Exceptional Outcome • Record high usage 8 million DAU (free & paid) • Having the highest conversion rate (30%) among B2B freemium software products • Being used by 43% of Fortune 100 companies as well as reaching corner markets • Reported valuation of $7.1 billion (08/2018) 9
- 10. [Case Study] Slack – Product Strategy • PLG: Using features & usage as primary drivers of customer acquisition, retention and expansion • Transparent pricing – freemium, no upfront commitment, differentiated by premium features • Viral - Slack is used as part of the daily routine. Easy to onboard new users. • Frictionless onboarding: ungated and quick time to value • Sticky: adds value over time and hard to replace with enterprise grade ecosystem. 10
- 11. LONG TERM PRODUCT STRATEGY IMPACT • Tech touch/low touch • Usage driven upsell • Multi-product expansion • Transparent pricing 11 $7.75B $4.7B $871mm • Medium touch/demo • Usage driven upsell • Multi-product expansion • Gated Pricing • High touch • Enterprise sales • Single product • Gated Pricing *First mover, enterprise focus, strong branding, highly complex product *SMB focus moving up-market, strong branding, simpler product, advanced features *SMB focus moving up-market, strong branding, simple/modern UX product
- 13. B2B ENTERPRISE SAAS UNICORN 13
- 14. 7 Principles for Product-Led Growth Strategy 14
- 15. Define the North Star Metric 15 Measure the success of your product by the value it provides to your users #1
- 16. #2 Accelerate time to value • Understand & Optimize the first mile of product towards the moment of value experienced by the user [Initial Value] • Identify challenges and improve the usability and discoverability for core features. • Prioritize product roadmap to support exceptional product experience – demo/trial/onboarding
- 17. 17 #3 On Boarding Experience • Master The First Interaction: set user expectations as they onboard to your product, engage & guide users consistently to the first moment of value • Capture the desired outcome: understand the customer’s desired outcome as part of onboarding. • Nurture track: map the user journey and nurture with best practices / webinars / community
- 18. 18
- 19. #4 Feature Activation • Raise feature awareness through outbound/inbound efforts • Promote in-context based on who they are and what they do • Increase discoverability using shortcuts or in-app engagement
- 21. User Activation
- 22. The TRUST framework • Timely: trigger engagements based on what they do, be contextual. Guide and feedbacks should be tied to a desired action performed. • Relevant: trigger engagements based on who they are, address different roles and desired outcome with different product journeys • Useful: help users learn something new, reduce time to value. • Straightforward: be clear and concise - “Verbosity is the enemy”. • Track results: validate your hypothesis, measure the impact on feature usage uplift, iterate and experiment. 22
- 23. #5 Focus On Product Adoption • Adoption is the best cure for retention, helps drive sustainable growth and advocacy • Understand product market fit (PMF) & go-to-market fit (GMF) • Tie usage to retention analysis of the different cohorts
- 24. Avoid The Product Death Cycle 24 https://brianbalfour.com/landing/p-100m-frameworks
- 26. #6 Closed Loop Feedback • Capture user feedback to connect directly with end users rather than extracting feedback from multiple layers. • Stay close to users and close the loop instantly using tools like Slack/Calendly. • Capture the desired outcome (survey) as part of the on-boarding experience • Targeted NPS driven by usage • Feature/release rating
- 27. 27 The Cross Functional Team Effort#7
- 28. Marketing Focus • Product Launch & positioning • Driving trials/demos • SEO & Paid media channels • Social/Podcast/G2Crowed • Product oriented PR and thought leadership
- 29. MQL to PQL • Product-qualified lead represents a lead that signed up and demonstrated buying intent based on product interest, usage, and behavioral data. • PQLs provide a more accurate method of tracking customer journeys from signup to x-sell/upsell. • PQL is a key metric for companies that’s transitioning to a tech touch / product-led GTM strategy.
- 30. Sales • Show me vs Tell me – using the product to demonstrate value • Product oriented sales team – where the buyer tends to be in control of the process • Using usage and features as levers • Land & expand strategy, incremental spend • Strong understanding of the competitive landscape
- 31. Success • Scaling Onboarding through the product • Focused on outcome and expansion • Drive Adoption Plays
- 32. Product • Product road-mapping is shifting from feature- centric to outcome and growth driven • Drive cross functional alignment around growth • Prioritizing usability enhancements to drive adoption
- 33. Thank You! Mickey Alon, CTO & Founder – Gainsight PX
Notas del editor
- Marketo was one of the leaders around marketing led GTM We built new products and launched them to market AND in that process I came to realize that some companies are using a more effective GTM, leading with their product.
- Sales led: classic enterprise sales, human driven, pitch deck, higher ACV, longer decision to buy Marketing led: enabled scaling by using the digital channels, nurturing leads until they are ready to buy Product led: is the emerging GTM which is about using your product as the most effective GTM tool
- Scaling using marketing automation, focused on top-of-funnel to MQL for increased sales efficiency Marketing & sales owns customer acquisition and growth metrics Handoff from marketing to sales using buyer intent and from sales to success – less customer experience focused
- Scaling by providing access to the product earlier in the buying cycle via demo, trials or freemium for increased sales efficiency Product teams increasingly more responsible for customer acquisition and growth metrics Customer experience delivered by the product throughout the customer lifecycle, (Awareness -> PQLs)
- Consumerization of customer expectations, experience counts – I will advocate or be less tolarent Economics behind fast growth – it’s a competitive advantage Proliferation of SaaS vendors and low switching cost The TAM is constantly growing – sales, marketing & success need to scale. Shorter cycles to launch new features, experiment & learn = faster innovation
- Delivering better communication experience for companies Great product experience Strong messaging / PR: “Email Killer” Strong execution of online content, videos, podcast to target different buying stages Iterative, data driven, growth process
- Record high usage 8 million DAU (free & paid) Having the highest conversion rate (30%) among B2B freemium software products Being used by 43% of Fortune 100 companies as well as reaching corner markets Reported valuation of $7.1 billion (08/2018)
- PLG: Using features & usage as primary drivers of customer acquisition, retention and expansion Transparent pricing – freemium, no upfront commitment, differentiated by premium features Viral - Slack is used as part of the daily routine. Easy to onboard new users. Frictionless onboarding: ungated and quick time to value Sticky: adds value over time and hard to replace with enterprise grade ecosystem.
- Eloqua was the 800 pound gorilla, the first mover! Hubspot adopted the low-touch/tech touch model and multi-product early.
- There are many great examples of the new generation of companies Consumer grade product with Enterprise grade ecosystem Weather you’re sales-led, marketing-led or product led – the moment your customer starts using your product is the moment the rubber meets the road.
- The North Star metric is the one that shows the true success of your product. A good North Star metric is driven by the value your product provides to your users. Focus everyone on moving it – product, marketing, sales, success This metric differs from business to business. Uber might focus on the number of drivers hired and the number of rides given, whereas an operational app like SFDC might measure Daily Active Users (DAU)/Monthly Active Users (MAU) focusing on retention and expansion. Then again, a fast-growing startup will usually focus on New Users (i.e., customer acquisition). In most cases, the North Star metric is a combination of user behavior correlated with core feature usage and business results.
- Understand & Optimize the first mile of product towards the moment of value experienced by the user [Initial Value] Identify challenges and improve the usability and discoverability for core features. Prioritize product roadmap to support exceptional product experience – demo/trial/onboarding
- Master The First Interaction: set user expectations as they onboard to your product, engage & guide users consistently to the first moment of value Capture the desired outcome: understand the customer’s desired outcome as part of onboarding. Nurture track: map the user journey and nurture with best practices / webinars / community
- Great example of setting expectations is part of the onboarding flow Engaging users in a consistent way
- Raise feature awareness through outbound/inbound efforts Promote in-context based on who they are and what they do Increase discoverability using shortcuts or in-app engagement
- Zoom provides a great example of applying product experience as diffrent
- When building in-app engagements at Gainsight, we’ve developed the TRUST framework as guidelines.
- Adoption is the best cure for retention, helps drive sustainable growth and advocacy Understand product market fit (PMF) & go-to-market fit (GMF) Tie usage to retention analysis of different cohorts
- Add New Features: Team adds new exciting product features. Launch: Features are launched with some press. Spike: A short term spike in growth occurs. Growth Flattens: Within weeks the growth flattens off. (repeat) Add New Features: Team ends up back where they started, adding new features to get another spike.
- Know how well your product retains its users Measure product market fit and avoid leaky bucket Measure release impact on retention Discover account of user profile of your growth cohorts Discover your golden features
- Adoption is the best cure for retention, helps drive sustainable growth and advocacy Understand product market fit (PMF) & go-to-market fit (GMF) Tie usage to retention of different cohorts Know how well your product retains its users Measure product market fit and avoid leaky bucket Measure release impact on retention Discover account of user profile of your growth cohorts Discover your golden features
- Product Launch & positioning Driving trials/demos SEO & Paid media channels Social/Podcast/G2Crowed Product oriented PR and thought leadership
- Product-qualified lead represents a lead that signed up and demonstrated buying intent based on product interest, usage, and behavioral data. PQLs provide a more accurate method of tracking customer journeys from signup to x-sell/upsell. PQL is a key metric for companies that’s transitioning to a tech touch / product-led GTM strategy.
- Show me vs Tell me – using the product to demonstrate value Product oriented sales team – where the buyer tends to be in control of the process Using usage and features as levers Land & expand strategy, incremental spend Strong understanding of the competitive landscape
- Scaling Onboarding through the product Focused on outcome and expansion Drive Adoption Plays
- Leading product teams are moving from feature-centric to a more outcome-driven approach. Instead of tracking vanity metrics, like how many features a product team has shipped to focusing on driving customer value, measured by outcomes and longer term metric like customer lifetime value (CLTV). Product road-mapping is shifting from feature-centric to outcome and growth driven Drive cross functional alignment around growth Prioritizing usability enhancements to drive adoption Data driven decisions tying bookings & revenue to product investments