Have you felt the deep correlation that exists between product and market growth? Do you contemplate the factors that pull customers to a particular product of a specific brand? Have you ever wondered why certain products succeed in establishing a place for themselves in the customer market despite no extensive marketing campaigns?
The answers to all the above questions bring us to the key influencer of the brand or organizational growth – the product. In this article, we provide valuable insights on the product-driven growth formula that has the grandeur to attract customers time and again.
What Does Product-Driven Growth Mean?
The best growth marketing strategies falter if the product fails to deliver value to the customer. Let us understand this in the real-world scenario. A company manufactures and launches a product in the market to serve customer needs or provide a solution to their problems. When the product gets their attention, they start purchasing it with the expectation to get a good value for their money. Unfortunately, the product fails as it falls short of their expectations. Consequently, the company falls flat in retaining the customers for long, and the product gets withdrawn from the market.
Now consider the opposite scenario where the customer is delighted to use the product as it surpasses their expectations. They reckon it to be a valuable product capable of satiating their requirements and solving their specific problem. They even get willing to spend extra money to buy that product again.
The above two scenarios state that a product holds the dominion to drive the success of a brand and a company. This powerful influence is known as product-driven growth. In business terms, it is a marketing strategy where the product performs the lead role in acquiring and retaining customers. The product is the growth enabler that facilitates the inflow of engaged and unswerving customers into a product.
Product management forms the primary function of the product-driven growth strategy. It focuses on steering all the stages of a product life cycle, from developing the features and regulating the price to promoting for the end-users.
Several top-notch companies, such as Pinterest, Calendly, Dropbox, and Slack, have adopted product-driven growth strategies to gain an extensive market reach and build a loyal customer base.
Product-Driven Growth Model That Brings Customers Back
The key to attaining product-driven growth is to provide the customers with an immersive experience of using the product to lead to a substantial outcome (onboarding). Then, supersede it with follow-up sales that require them to use more of that product or upgrade to its higher version. The product makes the initial user experience so enticing that they cannot resist the main and upgraded offers.
OTT subscriptions are the best example of this. The customers initially subscribe to a basic ‘freemium’ plan (or a free trial for a certain period) and then upgrade to the premium one (or the paid subscriptions) to get more benefits. Thus, the product handles the entire buying process based on its unique functionalities.
Some vital elements of this growth strategy include:
- Getting customer feedback
- Fostering customer relationships
- Using data and metrics to design product management plans
- Developing the core product
The three main steps of the product-driven growth model are:
- Analyze customer behavior – Understand your customer well and decipher what value the product will offer them.
- Engage with the customer – Communicate the significance of the product to the customer in delivering that value.
- Enhance user experience – Deliver value to them.
To sum up, product-driven growth is a strategy to acquire, convert, retain, and expand customers relying solely on the product.
The Significance of Product-Driven Growth in Organizations
- Product-driven growth is a prominent development engine of the companies
It creates a continuous market expansion loop where the customers keep coming back to get more. They get hooked and emotionally connected to the product and make it a habit or a part of their lifestyle. It leads them to replicate the purchases and thus gives the company a loyal customer base for long-term growth and sustainability.
- Product-driven growth increases the market share
It is a sustained pull marketing strategy to take hold of customer demand from the competitors in the market. The product is the focal point that itself acts as a marketing channel. The product management and marketing teams collaborate to create a dynamic product-driven marketing plan. The aim is to grab the attention of the target customers, generate demand, hold their interest in the product, and drive them to keep coming back. In addition, they need to ensure that the product does not lose its vitality and appeal at any product lifecycle stage.
For example, the apps have the lowest interest and attention span and hence the highest uninstallation rate after a few days or months. Thus, the app developers keep adding new features and utilities to facilitate more revisits. It prevents the customers get swayed to the products of the competitors.
- Customers bring more business to the company
Product-driven growth is, in a way, also a customer-focused approach that cares about the needs of the end-users. When customers get what they want, it benefits the company in two ways. First, they get repeat purchases from the same customer and gain access to new customers with their referral marketing.
- Companies benefit due to lowering of costs and boost in revenues
A significant chunk of the marketing and sales expenditure goes into acquiring new customers and retaining the existing ones. The product management teams design the product that speaks for itself. It lowers the customer acquisition and retention costs, such as advertising and marketing campaigns. The strategy further elevates the revenue stream of the company.
Product-driven growth is a go-to marketing strategy that relies heavily on the core product for reaching out to the end-users. It is the organic acquisition and retention of customers based solely on unique and constructive product attributes. This dynamic growth model fosters organizational growth by increasing the market share and strengthening customers’ loyalty and retention.
If you want to learn more about product-driven growth strategies or aspire to upskill yourself in product management techniques, enroll in a comprehensive course and build a successful career in this field. Join the Seekho Select Membership today to know more!