The old marketing playbook: create content, use landing pages to capture leads, and nurture those leads with automated emails until, one day, they converted into paying customers (or unsubscribed)
By making it easy for people to experience the value of our product, we transformed it into a powerful customer acquisition model
We expect to try product before we buy them
With product-led companies, the company focuses on helping the buyer improve their life. Upgrading to a paid plan becomes a no-brainer
Your product needs to do the heavy lifting when it comes to getting new users up to speed
You need to know your market conditions, competitive positioning, ideal customer, and product offering
CAC = customer acquisition cost
A free trial or freemium model opens up your funnel to people earlier in the customer journey
MOAT framework for picking the right go-to-market GTM strategy
Market strategy: is your GTM strategy dominant, disruptive, or differentiated?
Dominant strategy: win all types of customers by being better and charging less
Differentiated strategy: win underserved customers by being better and charging more
Disruptive strategy: win over-served customers by charging less but with a worse and simpler product
Ocean conditions: Are you in a red- or blue-ocean business?
If you’re in a blue ocean and creating demand, your product may have a steep learning curve. Before you can make the sale, you need to educate your market on why your new way of doing something is better
You don’t become a market behemoth by selling products nobody can understand. For this reason, most companies leverage a sales or marketing-driven go-to-market strategy in a blue ocean.
If you’re in a blue ocean and have a quick time-to-value in your product, use a product-led model. However, if your product is complex, start with a sales-led go-to-market strategy to educate your audience and create demand. Still, ask “when” not “if” you’re going to launch a product-led arm of the business.
If you’re in a red ocean, use a product-led model to widen your funnel, decrease your CAC, and expand globally. You need to grow as fast and profitably as possible.
Audience: Do you have a top-down or bottom-up marketing strategy?
Bottom-up selling strategies are the norm in the consumer market
Businesses deploy a free-trial or freemium model to make a bottom-up selling strategy work. A big reason to choose a product-led model is that if people can’t see the value in using your product quickly, few will upgrade
Top-down selling strategies result in high annual contract value, additional services, and low customer churn
Bottom-up marketing strategies result in a wider top-of-funnel, lower CAC, predictable sales figures, revenue diversity, and the ability to scale globally fast
If you have the resources, hire a Product-Led Growth expert or consultant to help launch and optimize your free trial or freemium model. It may be expensive upfront, but they can save you hundreds of hours and millions in sales. If you don’t have the resources, expect to spend lots of time experimenting and trying to figure out what works
Time-to-value: How fast can you showcase value?
“Product-led is the only distribution model worth undertaking once the market is mature.” - Pankaj Prasad
'Risk comes from not knowing what you're doing.' - Warren Buffett
UCD framework:
Understand your value
We're selling an outcome
What outcome do people expect when they buy your product?
Most technology companies get caught up in the features and don't really know why people buy their product
The three reasons that people buy a product:
Functional outcome: the core tasks that customers want to get done
Emotional outcome: how customers want to feel or avoid feeling as a result of executing the core functional outcome
Social outcome: how customers want to be perceived by others by using your product
Monitor usage patterns to see if users are accomplishing meaningful outcomes
Value metrics are a way to measure value exchange in your product and help you price your product, set up your product metrics, and build your team
It's easy for the customer to understand
It's aligned with the value the customer receives in the product
Grows with your customer's usage of that value
Usually don't charge by the user
Communicate the perceived value of your product
If users cant understand what plan is right from them almost immediately you're hurting customer acquisition
Sending a message to visitors simply asking 'Have any questions about our pricing?' when people have been on our pricing page for more than 30 seconds has helped us convert 100s of visitors in real-time
Look at the number of customers who use only the tools and features you're about to give away for free
Make the customer look like a badass for choosing your product
Deliver on what you promise
Does the first product experience lead to a specific, relevant, meaningful 'quick win'?
Do tooltips and hotspots spur meaningful action in the product, not just point at buttons?
Are key task completions indicated with a success state? A celebration?
Are all unnecessary points of friction and distraction removed from critical workflows?
If you don't understand your product's value, what's stopping you from showing unnecessary features that might not be helpful?
ICE prioritization method:
Impact: how big of an impact could this input have on an output I want to improve?
Confidence: How confident am I that this input will improve my output metrics?
Ease: How easy is it to implement?
'It's not enough to be busy, so are the ants. The question is, what are we busy about?' - Henry David Thoreau
Conversational bumpers: user onboarding emails, in-app messages, sales outreach, customer success outreach, direct mail
Product bumpers: welcome messages, product tours, progress bars, checklists, onboarding tooltips, empty states
By understanding the problems people were searching to solve and customizing the onboarding experience to help users solve them can cut their time-to-value in half
Knowing your users' intent behind using your product helps us catapult them to the areas where they can experience value as soon as possible
If you help people accomplish something meaningful in their life with your product, they'll come back on their own
We have an innate desire to feel welcomed
What steps does a user need to complete to experience a quick win?
How can I make sure that the majority of users complete this step?
Top nine user onboarding emails:
Welcome emails
Train your audience to open your emails and set expectations for what's coming next
Why did you sign up to use our product?
Welcome email #1
Subject: a personal hello
Body:
Hey,
I’m one of the co-founders of [Your Company], and I’m excited you’ve decided to sign up.
The [Your Company] Team and I have poured our heart and soul into making [key outcome your product solves for] suck less, so I get really fired up when someone new, like you, joins the ranks.
My top priority is to make sure that you’re able to [insert value proposition], so if you have any questions about our product, the website, or even my lackluster mustache, feel free to reply directly to this email.
I hope you can [accomplish key outcome in product]! Stay in touch!
P.S. Yes, I’m a real human.
– Wes, Co-Founder
Usage tips
If an activity you're encouraging doesn't help them experience meaningful value in the product, you dampen user motivation
Sales touches
Craft sales-touch emails to help users get more value out of the platform
Usage reviews
Case study
Better life
Functional outcome: the core tasks that customers want to get done
Emotional outcome: how customers want to feel, or avoid feeling, as a result of the functional task
Social outcome: how customers want to be perceived by others
Post-trial survey
Expiry warning/trial extension
Customer welcome emails
There's no focus on selling. It's about setting up users for success
A repeat customer will spend 67% more than a new customer
ARPU: Average Revenue Per Paying User
ARPU = MRR / Total Users
You can upsell via add-ons and services that help customers kick ass at whatever you help them do
Increasing your customer retention rate by as little as 5% can increase your profits by 25-95%
Customer churn = (churned customers / total customers) * 100
You don't need to send a 'We miss you' email to every user who goes a week without using your application. People take vacations. You don't want to smother users with annoying messages
A robust customer onboarding process is one of the most powerful ways to reduce churn. You can send customer welcome emails, have a dedicated 1:1 onboarding call, or send new customers incredible content to help them get value from your product
Customer success actively looks for ways to help customers succeed
A go-to-market (GTM) strategy is an action plan that specifies how a company will reach target customers and achieve a competitive advantage
Total addressable market: (TAM) is the overall revenue opportunity available or foreseen for a specific product or service, taking into account the future expansion scenarios
Shared from Twos ✌️