Finding true product/market fit (PMF) is a hard but enjoyable experience. After you find PMF, all of a sudden, things that were hard before are now much easier. This includes acquiring customers, which starts happening with little effort. Word of mouth just happens, customers come back daily, and churn is low.
Life is good, right?
But, as we know, finding PMF is only phase 1. What happens after product/market fit is where the real journey begins.
Here are some misconceptions about how products grow and the mistakes companies make as they start the next phase of product development.
Hire an advertising agency, and they will figure out how to acquire more customers since we’ll be throwing more money into ads and awareness. This has to work, right?
Hire a PR agency, and they will figure out how to get us more press and coverage, resulting in more customers.
Keep building more features, and we’ll acquire more customers, and our existing users will never churn. More features = more growth.
Hire more engineers to keep scaling the product to support more users.
Using the same growth principles from similar products the company has worked on in the past.
Building the same product for a similar industry and expecting the same results. If it worked for us, it must work for this industry as well, right?
Now, I’m not saying these don’t work. In many cases, they do. But what’s missing from these is context.
I’ve narrowed next-stage product growth down to three critical questions.
Question #1: Build more features or build more growth?
During your weekly product and marketing meeting, start by asking this question: Should we work on more features, or should we double-down on growth? The answers might surprise you.
Here are a few great questions to ask:
Will building more features help our company retain and acquire more customers in our target market? How do we know this?
What features do we maintain that do not have any material impact on our growth? Meaning, deleting these features, regardless of how long it took us to build, will have zero positive or negative impact on our overall growth.
What features are core to us that we should reposition or rethink that can impact growth?
What critical bugs that cause an impact on growth are being delayed because we’re prioritizing feature work?
How can we test and experiment to figure out what marketing channels or features will result in growth without spending six months implementing and waiting for results?
A great example of this is in the early days of Airbnb. They figured out how to tap into the Craigslist audience by making it easy to cross-post their listings to Craigslist. In this case, focusing on distribution, not building more features, was the initial reason they grew.
Question #2: Could this product grow by tapping into new, similar markets?
When Facebook started, it was open to universities only. After reaching critical capacity of that market, it worked on adding high school students. Now, of course, everyone who wasn’t in high school objected. Facebook didn’t listen to them and expanded into a new similar market. Then expanded again by opening up to the public, which turned out to be a great decision.
Facebook wouldn’t be Facebook if they didn’t grow into new markets. Now, the question is, what market isn’t Facebook in?
Here are some questions to ask when thinking about expansion:
Will building more features help our company acquire more customers in new or similar markets?
How can we expand into these new markets through experimentation? What bets and tests should we execute immediately to see how this new industry or market will take to our product?
How do we structure this new team to expand into new markets? Is it marketing only? Is it marketing + product? There is a higher chance that it is a combination of marketing + product working together, but this question should still be asked.
Are we going to build the same product and expand into a new market, or are we thinking about building a new product for our existing customer base?
Question #3: Who is responsible for growth?
This question alone could serve as a full-blown conference. The answer depends on who you ask, and what maturity stage the company is in..
If you ask a traditional enterprise company or a later stage company, they often rely on marketing and sales for growth. The engineering and product team builds the product based on the specifications they’ve been given, and marketing, sales, and leadership do the rest. It’s as simple as that.
I’ve spoken to several organizations where this is exactly their model, and in their words, “It’s not as effective as they would like it to be.”
The product team owns growth.
But if you’re new to growth marketing, this doesn’t make sense. How is it possible that the people who build the product are also responsible for the growth of the product?
Well, a few things:
Growth must be built into the product, and not an “our marketing and sales team will figure it out” afterthought. Product managers should be working directly with the growth marketing team to understand what features will drive the best results. It’s why so many companies are dissatisfied with their marketing teams. They hired a team that only understands marketing, not product. Marketing and product development must be done side by side.
Growth requires product testing, experimentation, and an iteration culture mindset. It’s an Agile approach, and companies who understand it will see the results quicker. Instead of hiring a full marketing and sales team to promote a product that was dead in the water the day it was released, you could hire a growth marketing and product team that will guide the entire company through a growth marketing process.
Growth requires marketing testing, experimentation, and an iteration culture. What works for product also works for marketing. The marketing team should be testing different messages to see what’s working and what’s not. Do this properly on Facebook, Google, and LinkedIn, and you’ll learn about what messages, images, and landing pages are converting. Most importantly, this is all about learning! In no way, shape, or form should a marketing agency be able to guess the winning ad on the first try. If you hire a marketing agency, dig deep into this. Experimentation is a core ethos of ours.
Product teams build habits into the product. Marketing or sales can’t do this. How do customers keep coming back to the product? What are the triggers that cause them to come back? Does our product build habit-forming engagement, or do we have a “use it only when I really need it” type of product?
There is no growth playbook, only principles to find growth faster than the rest.
This was the hardest for me to realize, and I know many still struggle with it. There is no growth playbook.
Every product is different. Even with the same product as a competitor, the approach should be different to utilize a company’s strengths. But we do know that growth marketing can simply not exist without it being ingrained with the product teams.
How Can We Help?
Digital superstars come out of venture firms, and at Vokal, we help brands compete by providing services that help grow the most important metrics that indicate the level of success of your digital efforts, allowing you to increase the value and attractiveness of your company.
When we engage with a client and are measuring digital success, we carefully analyze metrics like WAU/MAU, user retention (and retention by cohort), and lifetime value against benchmarks that tell us how we can help you move the needle, finding the speed to value when it comes to the return on your investment.
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