Product-Led Growth: The Most Effective Go-To-Market Strategy
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This document discusses how a product-led growth strategy can be more effective than traditional sales-led approaches. It advocates building products that drive customer acquisition, retention, and expansion through early access and personalized onboarding. Key aspects include focusing on product usage metrics to identify high-value customers, continuously optimizing the first user experience, and ensuring alignment between product, sales, and success teams around a north star metric. Adopting this approach can result in benefits like better correlating user behavior with buying intent and building products customers love.
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Product-Led Growth: The Most Effective Go-To-Market Strategy
- 1. Leading With Your Product is the Most Effective Go-To-Market Strategy Mickey Alon CEO & Founder Aptrinsic Helping you build products that drive growth!
- 2. 2 About me • Always been a product guy, passionate about innovation • Former founder and CEO of InsightEra (acquired by Marketo), GVP of Engineering @Marketo • Co-author of “Mastering Product Experience”
- 3. 3 “ 34% of product features go unused by customers 65% of B2B buyers prefer NOT to interact with a sales rep 52% of users said that a bad product experience made them less likely to engage with a company Did you know?
- 4. GTMEvolution Confidential. Copyright © 2016-2017. All rights reserved. Sales-led Customer acquisition led primarily by sales teams Product Assisted Driven by customer expectations to try the product earlier in buying process Product-led Product as main channel for customer acquisition, retention and expansion
- 5. 5 Traditional Acquisition Model What’s Wrong With This Picture?
- 7. How is product-led GTM different? Confidential. Copyright © 2016-2017. All rights reserved. Today’s Strategy • Companies force prospects to jump through hoops, such as filling out lead forms or requesting a free trial, a quote or a demo to learn about the product • Companies focused on marketing/sales funnels and the size of those fiunnels as their primary framework (MQLs/SQLs) • Product teams played limited role in customer acquisition process Product-led Strategy • Companies provide access to products earlier in the buying cycle via trials or freemium and personalize each user’s journey • Companies focus on customers while they use product, throughout the lifecycle, for increased sales efficiency (Awareness -> PQLs) • Product teams increasingly more responsible for customer acquisition metrics
- 8. Confidential. Copyright © 2016–2017. All rights reserved. slack Slack became fastest growing SaaS company of all time (grew from $0 to $4B in valuation in just 4 years). • Converts 30% of their free users to paid • Adds $1 million in new contracts every 11 days • Excellent onboarding and initial adoption process Case Study
- 9. Introducing Product Led Growth Confidential. Copyright © 2016–2017. All rights reserved.
- 10. 10 What is Product-Led Growth? A go-to-market strategy that relies on product features & usage as the primary drivers of customer acquisition, retention and expansion.
- 11. 11 Build, Measure, Grow = Iterative Process Trial Conversion Customer Adoption Drive Adoption Measure Success Gather Feedback Expansion Up-Sell, X-Sell Feature Onboarding Copyright © 2016-2018. All rights reserved. • Product Instrumentation is key to tie usage with revenue • Identify growth cohorts and cohorts at risk • Experiment using controlled availability, engagements & feedback
- 12. 12 The North Star Metric Confidential. Copyright © 2016–2017. All rights reserved. • Define the metric that measures the value your product provides. • Correlate with revenue attribution • Focus everyone on moving it
- 13. 13 The First Mile Of Product Confidential. Copyright © 2016–2017. All rights reserved. • Onboard & Activate – drive users to the a-ha moment • Measure impact of every release on new sign-ups, focus on marginal users • Define journeys based on stages and goals, make those easy for your users • Collect targeted feedback not just NPS
- 14. 14 Why Product Experience Matters? Confidential. Copyright © 2016–2017. All rights reserved. The Hook Canvas (Nir Eyal) Fogg Behavior Model
- 15. 15 Onboard users based on product interest (Track – Derive – Ask) Create DocInvite Team
- 16. 16 Onboarding Sequences Welcome Email In-App Personalized Onboarding Based on Product Interest Benefits How-To Onboarding Urgency Guides EducateFeature Activation
- 17. 17 Retention vs Acquisition Confidential. Copyright © 2016–2017. All rights reserved. • Look for clear indication of product market fit – avoid the leaky bucket problem • Majority of the revenue is created after the initial sale • Delivering meaningful features should increase usage over time – strive for the smiley face
- 18. 18 Feature Activation Confidential. Copyright © 2016–2017. All rights reserved. • Build release experience – raise awareness, message to your users, set adoption goals. • Promote features in-context – driven by user behavior • Increase discoverability through user engagement and additional entry points
- 19. 5 Pillars to Accelerate Growth using PQLs Confidential. Copyright © 2016–2017. All rights reserved.
- 20. 20 What is a Product Qualified Lead? In a nutshell PQLs are qualified leads that demonstrated buying intent based on product interest, usage, and behavioral data. LEAD PQL Opportunity Revenue LEAD Revenue Opportunity MQL SQL User and Account demographics and firmographics Usage and frequency metrics Engagement metrics Package limits Support metrics
- 21. 21 Become a product-led company, make growth an important part of your product initiatives
- 22. 22 Drive prospects to signups, minimize gating Confidential. Copyright © 2016–2017. All rights reserved. SIGN UP NOW!
- 23. 23 Have a product oriented sales team Confidential. Copyright © 2016–2017. All rights reserved. PRODUCT LED GROWTH
- 24. 24 Continuously Measure & Onboard users Confidential. Copyright © 2016–2017. All rights reserved. Identify high converting usage behaviors Paying customer Guided onboarding Always optimize your first mile of product! 1 Mile
- 25. 25Confidential. Copyright © 2016–2017. All rights reserved. Democratize Your Product’s Data
- 26. 26 What are the benefits of a Product-Led Growth Strategy? Aligned with how customers want to buy Able to personalize experience earlier in buying cycle Product usage is better correlated with buying intent Focuses sales, product and success around solving customer problems Build innovative products that people love to use
- 27. Q&A Mickey Alon CEO & Co-founder Aptrinsic
- 28. Thank You Download free copy @ Aptrinsic.com
Editor's Notes
- Another key thing that is happening with SaaS companies, is scale challenges from customer acquisition costs. If you think about it as us coming from a very Sales-led process during the SaaS 1.0 era, and that during our time at Marketo, we helped pioneer less expensive Marketing-led approaches with broad demand-gen for generating leads that were funneled into Marketing Qualified Leads during the SaaS 2.0 era. We made improvements to the expensive Sales-led approaches but that wasn’t enough. Next And so, in the SaaS 3.0 era, we believe that to get more cost effective, you will need to harness the product itself as the tool to help you get lower touch and more qualified leads. We are calling these Product Qualified Leads that ware based on the behavior of prospects during a trial to understand and guide customer to see the initial value of your offering.
- There are three key ways in how a product-led GTM strategy is different from what we do today. First, in the current model, companies tend to gate their content in order to generate leads and sometimes hide their product until after first sales contact. In product-led, we believe you need to get customers into your product earlier and provide more personalized, self-service journeys. Second, in the current model, companies are focused on marketing and sales funnels and the size of these funnels. In product-led, we believe that you get better sales efficiency by focusing on the customer in the product throughout the lifecycle. And third, in the current model, we saw product teams playing a more limited role in customer acquisition and adoption. In product-led, and what makes me happy, is that product leaders are becoming more responsible for these things, including the ROI of R&D spend.
- The other I like to use is Slack. Everyone knows the story here, but their freemium model has allowed them to become the fastest growing company of all time. This is very much a great example of a product-let company that has great onboarding, aided adoption and upsell capabilities.
- 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. 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.
- 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. 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.
- Product-qualified lead (PQL)is a prospect 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. This is a key metric for any company that’s transitioning to a product-led GTM strategy.