A product-led GTM strategy is all about optimizing the customer acquisition process through personalized customer experiences and engagements. Designing those personalized customer experiences the right way is key to scaling and making the customer acquisition process more repeatable.
You can achieve this goal by combining customer segmentation, customer journeys, and nurturing.
The two primary aspects of customer segmentation are demographics and behavioral data.
Segmentation = Demographics + Behavioral Data
This is not a new idea. However, when we talk about a product-led approach to customer acquisition, we emphasize the importance of in-product behavior. This is in contrast to behavior that happens in cross-channel marketing environments, including interactions with ads, e-mail opens, website visits, and so forth.
In-product customer behavior unlocks insights into the needs and values of your prospects and customers. (For a step-by-step process on segmenting customers, see this detailed article — “Customer Segmentation: A Guide to the Best B2B Practices”). A product-led strategy enhances the effectiveness of traditional segmentation. In addition, it enables you to better track and measure the performance of a particular segment throughout the customer lifecycle, including revenue impact and CLV vs. CAC ratio.
It’s critical for companies to map in-product customer journeys, because they can uncover important customer segments and needs based on the sequence of events and actions taken by customers on their way to achieving a goal.
For example, say your company provides a solution to streamline expense reports. Your teams originally designed a “first expense report” customer journey that required users to navigate four pages and five clicks. However, a large portion of your users reach this desired outcome in eight clicks. Seeing this, you could segment these users, and closely guide them through this process with a tutorial or walkthroughs. This use case illustrates an effective way to collaborate and experiment within the product before designing completely new product experiences.
Behavioral data also includes production data and customer journeys. Knowing that prospects interacted with a product feature is helpful. Connecting these insights with customer subscription data enables your teams to be more intelligent.
Most product analytics solutions tell you how a certain user or segment interacts with a product or feature. However, you must also know their subscription level, or how much revenue comes from the segment of customers that experience difficulties using the product — for example, if they need to take extra (i.e., too many) steps to execute a core action, such as sending an expense report. Without connecting these different data points, it is hard to estimate potential churn and revenue impact.
Mapping customer journeys helps teams understand whether product flows and features make sense to customers. The speed at which prospects move through the core journey enables your company to make some assumptions about the level of pain they are experiencing, as well as their buying intent.
Tip: Map customer journeys that lead to important desired outcomes; understand how quickly customers travel through these journeys and any associated risk of losing customers before they reach their goals.
In-product behavior is essential to personalized customer experiences, as it is the first step for influencing prospect and customer habit. Dr. BJ Fogg, the creator of “The Fogg Behavioral Model”, outlined three elements that must occur for behaviors to change: motivation, ability, and trigger. Your users need all three before your product will become an essential part of their daily lives.
Although you normally want more product usage, there are some cases when the less customers use the product, the more value they receive. For example, a product that sends an automated notification to customers when something is broken can be seen as valuable when the customers receive fewer of these notifications. However, for most software products, the more customers are engaged inside a product, the more value they experience.
With a product-led strategy, we filter out less-motivated prospects by asking them to sign up for a product. Assuming motivation is there, do prospects have the ability to execute actions leading to initial value? And when they realize initial value (which is the desired outcome), what triggers can be used to encourage a prospect or customer to repeat this action so they experience follow-on value?
Let’s take Salesforce as an example. Marc Benioff has done a tremendous job making the Salesforce brand the most synonymous with CRM. Every organization needs CRM — it’s where organizations aggregate customer relationship data. When a company starts reaching out to customers, the obvious question arises: Where do we keep track of all customer data and interactions? This is one of a few triggers that Salesforce uses effectively to create desire and a habit for their CRM solution.