3
EXPERIENCE
tips to becoming a more productled organization WRIT TEN BY: ALEX COHEN,
VP, PRODUCT MANAGEMENT, BOTTLE ROCKET
When you hear the term “product,” you might think shoes, cereal, a cell phone — something you can touch or hold in two hands. But today, the word has taken on a whole new meaning and carries greater value, especially for companies looking to become truly product led. These days, there are many different definitions to product-led growth and can often be molded to fit an organization’s goal. However, for this article, I’m going to reference a blog on ProductLed. com by Wes Bush, who defines it as a “go-to-market strategy”. In this sense, the product is the primary asset used to gain and retain customers. It’s about prioritizing the end-to-end user experience in everything you do - from product and pricing, to customer engagement and purchase. In product management, nothing should matter more that addressing customer needs. That’s why, with higher barriers to entry and heightening expectations to contend with, brands are purposefully weaving product into the fabric of the company. This is in stark contrast to sales-led companies, where the goal is to simply take a buyer from point A to point B in a sales cycle. Although customer acquisition is the lifeblood of any profitable company, it still costs five times as much to acquire new customers than retain existing ones. Product-led companies flip this traditional sales model on its head, and are able to minimize churn, by giving the buyer the “keys” to use the product. This is why we see the likes of streaming giant, Spotify – a classic example of a product-led company – offering one-month trial periods for their premium “no ads” subscription. Users understand how they can benefit from using the product and find value before paying. They then commit to pay when they feel it’s warranted, and Spotify achieves a 46 percent conversion rate in the process. This motivates product-led companies to maintain clarity of focus on making their product the best it can be. The product-led growth model is typically a strategy reserved for the Software-as-a-Service (SaaS) industry – used by Spotify, Slack, Dropbox, and Salesforce. But how might other organizations take lessons from this durable go-to-market approach? Here are three tips to get you started down the right path.
70
