This article is based on a presentation from the Product Marketing Summit, London. Watch this presentation, and others, with our OnDemand service.
I’ve gone through a few transitions in my life. I'm a lawyer by training but a product marketer by passion and trade. I’m Czech by origin, but after living in London and Brussels, I’ve settled in France. Most recently, I transitioned from a market-led company to a product-led company. This is the transition I want to talk about in this article.
Before I transitioned into product-led growth, I had a ton of misconceptions. When I heard “product-led growth,” I thought it meant PM-led growth, and I was worried that my career would take a downturn; the only question was how quickly. In reality, product-led growth is full of exciting opportunities.
Today, I'm thrilled to be working for Spendesk, a B2B spend management company. We help 3,500 companies spend smarter. Just this year, we handled €2 billion on our platform. We also raised our Series C funding, and we were voted the best FinTech company to work for in Europe.
In this article, I'll be focusing on:
- The evolution of product-led growth
- Marketing-led growth vs. product-led growth
- Universal truths of product marketing
The evolution of product-led growth
Before I get into the differences you’ll come up against as a product marketer switching from marketing-led to product-led growth, I should probably explain the concepts.
Let’s start at the very beginning. In the 1980s, software was just these big on-prem boxes. Back then, sales-led growth was the main model. Reps would go on the road, dining and playing golf with CTOs, and that's how software was sold. It was based on trust between the sales rep and the CTO.
Then, Salesforce and the like entered the scene, and they started to focus on non-tech execs.
That's where marketing started to take the lead in growing the funnel. There was a big focus on KPIs, ROI, and the value that software can bring to different business departments across the company. The goal was to sell through value.
Now, we’re seeing the rise of product-led growth, which focuses on the user’s experience and pain points. Because the cloud has gotten super cheap, we can offer our product for free, which allows users to try it and see its value before they decide to buy it.
Marketing-led growth vs. product-led growth
Let’s look at what it means to be a product marketer switching from a marketing-led to a product-led company. In my experience, there are five key differences:
Key difference #1: Customer retention
The first difference is that we’re moving from the funnel, which is typical in market-led growth, to the flywheel, which is typical in product-led growth. What's key here is that the funnel maps the acquisition process and the journey a lead goes on before they become a customer, whereas the flywheel is all about experience and retention.
As product marketers, we’re usually obsessed with product launches and entering new markets. In other words, we're fixated on the top of the funnel. In my previous jobs, once we got to the purchase stage, I moved on to the next sales campaign for the next product. As for retention, we only focused on it if it was a huge problem.
On the flip side, customer retention and experience are at the heart of the product-led growth model. Everything is based on how the end user interacts with the product. We want to make sure they have an awesome experience that makes them want to become a paying user and refer other people to the flywheel.
Key difference #2: Personas
Big difference number two is that as a product marketer, you focus on a totally different persona. That’s because marketing-led growth is all about buying committees.
According to Gartner, each buying committee is made up of six to 10 people, including execs, budget holders, and people representing various business and technical departments. These committees tend to be hyper-focused on ROI and KPIs.
The user has very little power in this sales model. They may provide their input or help shortlist the solutions, but they don't have budgets or relationships with the vendors.
On top of all that, in the marketing-led model, product marketers study the buyers and the buying journey, and we have a key role in discovering who the buyer is and how to sell to them. Those sales are also extremely complex; they can easily take a couple of years, depending on how complex the software we're selling is.
When we move to product-led growth, it's all about a single user, and that single user has the power. We want to create a frictionless experience for them. What's interesting from a product marketing perspective is that it’s the user research department that does the work to better understand the user.
Key difference #3: Content
We’ve all moved through our careers with the idea that we should write with the target audience in mind, so it's no surprise that our content is completely different when we focus on a different persona.
