Charles Lindberg elaborates on some concepts in which he elaborated during his internship at Rebel and Bird.
Product led growth is a method that you can use to grow your business. In this method, the product itself is the primary tool for growth. It’s the opposite of sales and marketing-led growth. Product-led growth is a way of working that includes the whole business and not only the marketing team, unlike growth marketing.
Growth marketing is a marketing strategy where you test and experiment with different ways to grow your marketing side. You have ideas and hypotheses, which you think will work, and then you go out and test those ideas.
Growth marketing is testing different marketing strategies, experimenting and finding out what works. Growth marketing is a marketing strategy, while product-led growth is a business metho
To begin with, if you want to be product-led, your product needs to be “good enough” so that the time and effort you put into making it grow is justified. “Good enough” means there is a need for your product or service and that you can provide something original or better than the competition.
You can test whether your product is good enough with a survey. Ask users if they would be disappointed if they were unable to use your product. If at least 40% are disappointed, or if it is a new product, 50% or more, you have a good enough product. And of course, look at your retention metrics. Are users coming back again and again?
It is easier to sell something that people want (and if they don’t, what’s the point really). Therefore, if less than 40% are disappointed if you were to stop selling your product, your business isn’t scaling organically. Then it would be best if you started improving the product rather than expanding the user base.
How to make the product better and more valuable for the customer is the focal point for product-led companies. They don’t worry too much about what the competition is doing, or specific sales targets. Those companies, first and foremost, worry about how the product can become better.
All the different parts of the company (sales, marketing, customer service, design, production) need to work closely together towards the same goal. It’s about cooperating and hitting that shared goal rather than everybody hitting their separate targets.
For example, the customer service department will probably receive loads of data about the customer’s wants and needs, which are crucial for the production team. The design team probably knows lots about customer behavior that is useful for the sales and marketing teams. Make it easy for everybody involved to share their insights with everyone else.
An excellent way to make sure that everybody is on the same page is by having a North Star Metric. A North Star Metric is something that you can look to for guidance when making decisions. Airbnb’s North Star Metric is “Booked nights.” Before making a decision, they ask themselves if this will help them achieve more booked nights or not. Another famous example is Facebook’s NSM “Daily active users” and Whatsapp’s “Number of messages sent”.
Product-led companies use data as much as possible to make decisions, trying to be as scientific as they can and leave as little as possible to chance.
And with data-driven decisions, the similarities to Growth Marketing comes in. Growth Marketing is just about conducting experiments to collect as much data as possible and then implementing that knowledge into your marketing plan.
The process of growth marketing is that you come up with different hypotheses. Then you design experiments to test if these hypotheses are true. With this method, you will find out what marketing strategy works best for you so you can keep doing that and stop doing the ineffective ones.
Working product-led is working smart. It might seem to be common sense, but not for everyone, this is your competitive advantage. Of course, you should make your product as useful to the consumer as possible. Of course, data should guide your decisions. That goes without saying. However, it’s easy to get caught up with individual deadlines and targets and forget about the bigger picture unless you have a clear plan. Therefore, communicating your vision is essential.
Using the product-led methodology is something most companies should think about doing. Whereas using growth marketing might be for you if you’re trying to expand your business. Using both these strategies might be the way to go if you’re a start-up with a unique idea who wants to scale up quickly.
To summarise, The product and it’s features should help drive demand. Demonstrate customer value. Minimize friction. If you do that while internally working in cross-functional teams, use data to make decisions, and have a clear goal. Then you are doing product-led growth. If you create experiments to determine your marketing strategy, then you are doing growth marketing as well.