Marketing is moving from a teach approach to a learn approach
When HubSpot launched the CRM(product) for companies of 100-1000 employees, their marketing strategy was to educate the buyer.
They targeted marketing professionals teaching them nuances of the digital ecosystem and pushing them along the sales funnel that had a cycle of up to 18 months. The idea was to focus on users who can potentially be their clients. This simple teaching approach would help establish the company as an industry benchmark as HubSpot academy and a unicorn in the next few years.
Such was the success of the teach approach that many other companies followed the same principle.
You educate the buyer earning their trust in the process. Often this led to word-of-mouth press over various community forums.
However, the teach approach seems to be the last decade marketing tactic. The reason being marketing becomes saturated when everyone is following the same thing.
Product-led Marketing
With new-age companies like Notion & Zoom, product-led growth is becoming the norm. As marketing is constantly adapting, We are transitioning from a teach approach to learn approach under product-led growth.
As the name states, The product leads the way.
You focus on the Users than the buyers.
Sales funnel stages in acquisition, expansion, conversion, retention is lead by the product.
Marketing caters to the existing users as the focus is on users upgrading services and metrics like revenue per user take primary importance.
Let us try to understand using an example: Notion.so
Notion product is so versatile that its users have been the largest channel for growth. The majority of users kept raving about new features among their social circle. Features like share to the web and linking to a domain became viral among the tech community.
A simple breakdown can be:
- Notion's product is perceived by the user as being a unique “highest-value-product” that they want to use regularly
- The user realizes significant ongoing value quickly and easily with little-to-no help from company personnel
- The product “paywalls” follow, rather than lead, the actual value that the user receives and pricing scales as usage increases and more value is delivered
- The notion has features that allow the product to market, sell and onboard new users
- Marketing aims to engage users with the product rather than engaging buyers with a sales team
My focus is to decipher it from a marketing perspective.
Marketing takes the form of helping the user to learn the product and use its feature so that the user gets maximum value. Often marketing purpose is to empower the user. If done correctly, chances are the user will become a fan.
Traditionally core metric in marketing and sales has always been making sales. Pressure on executives led to practices like the hard sell. In the internet era, buyers are aware.
In fact, with the way modern society has evolved, it is primary that users don't feel they are being sold. It has a negative effect especially if your core audience is Gen Y and Gen X.
Product-led approach seems to solve the issue with hard sell as the aim is to help the user learn the product and how it will solve the pain points.
Marketing Strategy
A few basic questions before setting up a marketing campaign are:
- Who is buying your product?
- Where will they find out about your product?
- Why are they buying your product?
- How are they buying your product?
Let us take a look at how the Product-led marketing approach answers these questions:
- Who is buying your product?
You sell to users, not buyers.
The focus is on inbound growth. A cost-efficient and relatively easy sell compared to new user acquisition, where the cost of acquiring new customers and time to make a sale is higher.
- Where will they find out about your product?
Word of mouth leads the way. More specifically, happy users will share your product with friends and coworkers.
As former Slack CMO Bill Macaitis states "I tell my team members that their gold standard is not whether customers bought a product, but did they recommend us?"
- Why are they buying your product?
Your product should be trustworthy, deliver value, and have better UX than your competitors.
Product is the centre around which you build everything up. You need a product that is simple to use and gets the job done.
- How are they buying your product?
Users should become buyers within the product itself—or after experiencing the product first-hand—rather than via sales reps.
Monetization
Generally but not always, the freemium model leads the way that allows users to experience the product without going through a sales or marketing team.
The product “paywall” follow, rather than lead.
As per the need of the user, pricing scales and more value is delivered.
Let us try to understand via a simple example: Carrd.co A landing page builder.
- Free service up to 3 landing pages. [Freemium model]
- If you want to remove carrd branding on free service, you upgrade to the lite package. [Paywall follows]
- For embedding forms, you further upgrade to the standard package. [Increasing revenue per user]
A user never feels compelled but can always scale as per the requirement.
A product-led approach focuses on the existing audience and increasing revenue per user. One of the many reasons why building an audience is go-to advice. One can always launch a service or a product around the audience.
Conclusion
Learn approach is the next evolution of inbound marketing when rather than teaching buyers, you make the users learn about the product.
It is an efficient way to increase your revenue, win loyalty and scale your business.
By its very nature, a product-led approach is only as successful as the underlying product. Companies aim to build truly stellar products that put the user, not the buyer, front and centre.
The neo-marketing approach seems to be gaining prevalence across the tech industry. Early adopters will have an advantage. As it is with marketing tactics, the popular strategy will get saturated after a while. So make the best use as long as you can.
Until next time,
Vivek
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