A new way to grow: Product-led growth?

Advertising cost are like sea levels. Slowing rising but no one wants to talk about it.

Managing customer acquisition costs (CAC) has always been under the purview of Chief Marketing Officers (CMO).

No one wants to admit that prices are getting out of hand because that would be admitting that they are doing a bad job.

Regardless, it's happening.

Unless small businesses find other ways to grow, they will all eventually get crushed by incumbents.

What is Product-Led Growth?

A business methodology in which user acquisition, expansion, conversion, and retention are all driven primarily by the product itself.

In layman's term, you grow through products-first. Advertising comes in later.

"Don't find customers for your products, find products for your customers" - Seth Godin

Why does it matter?

1. The Job of a Retailer

Although the "form-factor" of retail has changed quite a bit since the advent of the internet, the meta-job of a retailer hasn't.

The word "retail" comes from an Anglo-Norman French word meaning ‘a piece cut off’ or ‘to cut’.

The job of a retailer is not marketing, but rather, product curation.

On this level, retail hasn't changed that much.

Shoppers since depend on retailers and brands to curate, design, source, and/or manufacture the best set of products for them.

So product-led growth isn't a "new" concept, but rather, the OG* of growth strategies.

*Note: Slang for old-school

2. Cost of Marketing Channels

Ask any marketer what has changed over the last 5 years and they would point to the rising cost of advertising channels.

This isn't because they are bad at their job but rather a systematic side effect of how the internet has developed.

With fixed channels, increasing number of bidders and an acquisition power law, solely depending on advertising as a growth channel is increasingly becoming less attractive.

3. Lowest Hanging Fruit

Ironically, if you are retailers and brands that have built up quite an audience through marketing, you've done quite well up to this point.

You should have a sizeable audience on social media and quite a large mailing list by this point.

Rather than increasing the frequency of social media post, why not invest some efforts and budget into shortening product innovation cycles.

New products mean new opportunities to up-sell, cross-sell, re-market and re-engage the audience that you've already built up over time.

From the financial perspective, you should see movement across three metrics

  • Average Order Value
  • Frequency of Returning Purchase
  • Lifetime Value of Customers

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Why I write

Product marketing has become an increasingly important role in many businesses.

But what does that mean for you?

I write about marketing strategy and tactics from the lens of product marketing so that you can keep tabs on the product marketing landscape.

Whenever I learn something new, I share it here on this blog

As an added bonus, we use it to reflect on our own product development and marketing efforts.

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