What being a product led company means for marketing teams
Product-led marketing is a business strategy that applies product-led principles to marketing functions. Product-led marketing teams put the product at the center of the customer experience and their go-to-market activities. They leverage the product as its own sales and marketing tool by allowing users to experience its value first-hand. And they bring key marketing communications inside the product to more effectively engage the most captive audience possible.
As expectations heighten and software as a service (SaaS) models make it easier for customers to change vendors at a moment’s notice, users have also become less tolerant of “traditional” marketing techniques that tell consumers about (rather than show them) a product or service’s value. Today’s business buyers are savvier and more guarded with their software investments. And in place of lengthy sales processes or flashy marketing pitches, they want hard proof and the ability to experience the product for themselves.
In product-led organizations, marketing teams partner closely with product and sales to deliver this proof by demonstrating the product’s value—without giving its full functionality away—in a strategy coined “freemium.” Freemium models help product-led organizations expand and enrich how they classify leads as they move through the funnel, giving both marketing and sales valuable behavioral clues into how to best engage with these prospective users. Specifically, beyond traditional marketing qualified leads (MQLs), product-led organizations also track product-qualified leads (PQLs): individuals or organizations who have reached a usage threshold at which they experience the value of the product, like time spent engaging with the product during a free trial or limited support offering. Because PQLs are already “warm” and familiar with the product, they’re easier to nurture (and hopefully, convert) into loyal customers.
Product-led marketing teams also leverage in-app messaging to improve users’ initial experiences, guide them through the product, and encourage good habits focused around the product’s key features. This makes it possible for customers to experience the benefit of the product for themselves, on their own terms, while freeing up marketing resources for higher value activities.
The guiding principles of product-led marketing teams
They are data driven
Product-led marketing teams understand the importance of using data to plan their go-to-market strategies. They leverage product analytics to monitor and learn from user behaviors, so they can make informed decisions about where to focus their efforts. This data also helps them identify key activation points that drive usage and conversions across their customer base, so they can improve their messaging and adoption motions within the product (e.g. working with customer success to build a better onboarding experience for new users). Product-led marketers also use product usage and customer sentiment insights to identify power users and potential advocates—and engage with them to solicit reviews or testimonials that contribute to the product’s virality.
They use the product as a primary marketing channel
Product-led marketing teams leverage the product as a channel to communicate with customers. Instead of relying on traditional (and largely oversaturated) channels like email or externally-hosted content alone, they use in-app messaging to help users navigate the product; share updates, announcements, or news; and direct attention to key features. Bringing these kinds of activities within the product helps marketing teams deliver more targeted, contextual guidance. Paired with product analytics, in-app messaging also allows marketers to segment and target messages for specific subsets of users based on their behaviors and intent. This way, marketers can deliver more relevant information to help customers achieve their goals, while also driving effective upsell opportunities.
Their operating model aligns to product launches
It’s typical for product-led organizations to include specialized product marketing teams within their marketing org. Generally speaking, product marketing managers are responsible for overseeing the go-to-market strategy for specific products. They work with teams across the organization, including product and sales, to promote key features and functionality to customers and prospects and help drive demand and usage. As it’s become easier for customers and buyers to leave vendors (and then tell the world about their experiences), aligning marketing campaigns to upcoming releases and updates has never been more important for accurately positioning and articulating the product’s value.
They understand the value of free users
At product-led companies, the belief is that the product itself will nurture free users into paying customers as they experience its value (i.e. product-led growth). But to make this happen at scale, businesses need a massive pool of free users to nurture. Traditionally, marketers would address this audience by creating a dedicated organic acquisition channel to expand the body of potential customers—but this approach can be expensive and time-consuming. So instead, product-led marketing teams market and sell into free users to increase conversion rates and expedite the upsell process. The benefits? These freemium users are an already-primed and captive audience. They know your company and product (and likely value it), which means you can spend less time educating them. Plus, with in-app messaging, they’re easy to target and reach.
They focus heavily on driving adoption
If your customers aren’t adopting your products, that means they aren’t getting value—which could signal the risk of churn. Conversely, customers with high adoption are generally happier, and thus more likely to tell their friends about their experiences or write a review on an external site. Product-led marketing teams play a critical role in influencing and increasing adoption, through activities like highlighting value narratives, collecting social proof, promoting offers, and sharing educational content—all especially beneficial when delivered via in-app guides.
They play a critical role in customer expansion
In addition to a product marketing specialization, some companies also divide responsibilities between the teams focused on marketing to prospective vs. current customers and users. The latter is called customer marketing. In general, customer marketers focus on activities to improve retention, reduce churn, and encourage long-term loyalty—often partnering with the customer success team to develop holistic engagement plans. Customer marketers might also partner with product and sales teams to focus on expansion opportunities. A product-led approach allows customer marketers to reach customers within the context of the product—while they are actively experiencing the value of the features they’ve come to rely on. Customer marketing teams can also leverage product analytics to learn how customers are using the product, then create campaigns to encourage targeted user groups to engage with premium features they haven’t yet used, but would benefit greatly from.
The benefits of product-led marketing
A product-led approach has many benefits for marketing teams, including:
- Holistic and data-informed understanding of the entire customer journey
- Closer collaboration with the product team
- Analytics-informed (and thus more accurate) audience segmentation and targeting
- More efficient use of resources and budget
- Ability to solicit feedback, reviews, and other forms of social proof directly in-app
- Higher likelihood of customer conversion or expansion
The product-led marketing tech stack
There are a number of tools, with varying levels of sophistication, available to help marketing teams become more product led. But in general, there are a few key solution categories most marketing organizations should consider to round out their product-led tech stack.
Self-guided tours allow users to tour a pre-programmed, sandboxed version of your product before creating an account or committing to a purchase. Self-guided tours are a powerful sales and marketing tool because they give users the opportunity to see what your product actually looks like in action, while clicking through real-life examples of common use cases. This gives prospective customers a taste of what they can expect when they start working with you, and helps them grasp the core functionality of your product, even before the point of sale (added bonus: this familiarity improves adoption when they do eventually sign up). Self-guided tours are also a great way to engage with prospects who might not be ready to talk directly to sales or are unreceptive to traditional marketing messages, but who have a strong interest in learning more about what your company has to offer. Plus, self-guided tours are always available and don’t require dedicated marketing or sales resources to run, so they scale exceptionally well.
Product analytics is a type of business intelligence software that captures and exposes usage patterns from digital products like web and mobile applications via event tracking, event properties, and event and property grouping. This data informs decisions about how to improve the product experience, increase engagement, and drive business outcomes. Product analytics is considered a form of quantitative data, and is critical to help ground any product-led organization’s understanding of the customer experience. Here are a couple examples of how marketing teams can use product analytics:
- Monitor freemium users’ behaviors, then target expansion or upsell messages to encourage them to try a paid plan with features that would improve their current workflows
- Identify customers who are struggling to effectively use a particular feature, then guide that cohort of users to targeted resources or enablement materials (e.g. upcoming webinars)
Learn how to use product data to understand user journeys by taking a self-guided tour of Pendo.Take a tour ->
In-app messaging is a technical capability that allows a company to communicate with customers and users directly through the product by displaying lightboxes, tooltips, carousels, banners, and other messaging formats right inside the app. In-app messages can be used to help users get past friction points, support cross-sell and upsell initiatives, collect user feedback, and more. Because in-app messages are displayed while the user is actively using the product, they tend to have a higher response rate than push notifications or emails. Product-led marketing teams can leverage in-app guides to inform customers of upcoming releases or new features, share news about helpful resources or events, solicit feedback or reviews, and more.
Product-led tactics for marketing teams
Check out these articles to learn more strategies and tactics to help your marketing organization become more product led:
- The KPIs of product-led marketing teams
- The product-led marketing team’s guide to in-app campaigns
- How marketers use product-led strategies to drive growth
- How product-led marketing teams drive adoption
- Launching (and retiring) products and features the product-led way
- Using product-led strategies to collect social proof