Product Growth Strategies for Startups and Growing Businesses

Engage new users and grow your audience whether you’re launching a new product or continuing to grow your business

The following is a guest post written by Carlos González de Villaumbrosia, CEO of Product School.

According to a 2019 survey by SunTrust, only 49% of small businesses have some kind of growth plan. Many small business owners know that they need growth, but feel they lack the resources or budget to properly invest in a strategy.

With so many tools and techniques available to suit any budget, all it takes is some strategic thinking to get on your way to growth. Even the largest, most market-dominating businesses had to start somewhere, and there’s no reason your marketing shouldn’t take you to great places.

Here, we’ll go through some strategies used by companies of all sizes to achieve sustainable and even viral growth.

Product-led growth strategy

Product-led growth” (PLG) is a major 2020 buzzword in the product world. It’s a strategy that positions your product as the primary lead-generation tool for your company. Particularly popular with B2C and SaaS companies, PLG has been shown to cut costs and encourage viral growth.

With a PLG strategy, your product is your main marketing resource. With some strategic thinking, you can maximize the way people use your product and turn it into the ultimate marketing tool.

Does that mean you can do away with the rest of your marketing campaign? No. Many of the tools used in digital marketing will form part of your PLG strategy. Having one doesn’t make the other useless. So don’t throw away those email templates and whitepaper drafts just yet.

Tools like landing pages, ads, and email campaigns all support your PLG strategy. Good marketing will always involve funnels, and you need tools like these to guide customers through them. For small businesses and startups, Mailchimp’s all-in-one Marketing Platform comes with everything needed for a solid strategy.

For example, sending a newsletter about product updates helps retain and retarget customers who are thinking of leaving, and building a free email training course can help with user onboarding.

Viral loops: Incentivizing customers to share your product

One method within product-led growth is viral-loop marketing. You connect with your current customers and encourage them to share your product with their friends and contacts. It’s something that Mailchimp has already mastered, which, combined with an accessible introductory price point (what’s more accessible than free?), has helped them grow to around 11 million active users.

Viral-loop marketing tactics vary depending on your product or industry, but can include:

  • User-generated content: Giving your users in-app awards and achievements to share on social media. (Fitbit and Apple Watch do this very well.)
  • Referral incentives: Give your users discounts or access to special features in exchange for referring friends to your product.
  • Gamification: Allow users to add their friends as friends within your app to follow each other’s progress or share resources. This works well for self-development apps like Duolingo.
  • Community: Apps like Slack, Dropbox, and social media networks are more fun when you have lots of friends. In the case of Dropbox, the more people users connect with, the more free storage space they get.

Instead of casting a wide net and hoping to catch something, target those who already know and love you. In an ideal world, each new user invites 2 more users, and so it goes, giving you viral growth.

This is great if you already have an established user base and a high enough NPS score, but what if you don’t?

Make your product design a priority

There’s definitely something to be said for substance over style. Your product needs to work. It needs to be an answer to the problem it’s designed to solve, or it has no reason for being. However, your style and your storytelling are what will set it apart from the competition.

According to the design maturity model report by InVision, the top 5% of companies reaping the benefits of product design are the ones who invest in it most heavily. By running multiple product-market fit tests and building cross-platform strategies, these companies end up saving money, pleasing customers, and gaining more leads than less design-centric competitors. Aesthetics sells.

If your product is going to be front and center in your growth strategy, make sure it looks its best! To learn how to build products and build them well, check out Product School’s product management certification track.

One of the most growth-stopping pitfalls in product marketing strategies is a lackluster user onboarding experience. This is particularly important if you decide on a freemium strategy (more on that below) as your users have nothing to lose if they decide to leave. Apps can be installed and uninstalled in a flash, so you need to make sure your user’s time-to-value is as short as possible.

During development, empower your design team with all the data they need, bring them into any conversation where their input could be valuable, and ask for their feedback on feature choices. Invest in an awesome onboarding experience to grab your customers’ attention and help them understand your product.

Building loyalty with customer feedback loops

New customers are meaningless if you can’t retain them. Build customer feedback loops into your product to make sure that they feel heard. Not only are these loops a great way to actually make improvements to your product, but they create a dialogue between you and your users. A report by Thematic found that when users complained about not feeling valued, they were much more likely to jump ship than those who complained about delivery or quality of service.

The bottom line is that customer relationships matter and you can’t afford to overlook them.

For small businesses, you don’t have to build these loops using fancy and expensive tools. It can be as simple as making sure you respond to messages you receive on social media or installing a chat bot on your website to start a dialogue with users as soon as they visit you. It doesn’t take a huge budget or a massive investment, and many small businesses and startups successfully implement these loops. No matter which method you go with, you need to follow 4 basic steps:

  • Gather data: Find out what customers want.
  • Learn: Get insights and figure out what you can change.
  • Apply: Implement changes and make improvements.
  • Communicate: Close the loop meaningfully by telling customers what you did and thank them for their feedback.

Freemium creates FOMO

When you’ve built something awesome, and it’s taken all your time, resources, and creativity, it can feel counterintuitive to hand it out for free. Especially if you don’t have a huge budget behind you.

But freemium models have helped companies like Slack and Mailchimp grow exponentially. By putting your product into people’s hands, letting them love it, and making it easy for them to share, they become your best promoters.

Freemium won’t work for everyone, as many companies will need to recoup the cost of development and/or production. It all depends on your business model. If you can’t give away your product for free, there’s always the option of creating free complementary resources or training. For example, Product School produces blogs, books, and podcasts, and Mailchimp offers tips and entertainment for entrepreneurs.

Give your users something of value without needing their credit card details first. This welcomes them into your community and starts building the vital relationships needed for sustainable growth. When enough people are using your product, it’ll pique the curiosity of others who’ll wonder what they’re missing out on.

The key do’s and don’ts of product growth

Do: Keep your interactions authentic

As a small business or startup, you’re probably competing with some big brand names who have the advantage of a huge marketing team and corporate budgets. Use your authenticity and your story to your benefit. Customers are more likely to convert and stick around if they like your “why.”

Don’t: Obsess over your referral scheme

If all you do is tell customers to bring you more customers, it sends the message that you only care about the business they can bring you, not about them. Don’t incessantly ask them to import their contacts, and definitely don’t try to trick them into sending invites to their entire network.

Instead, change the narrative to make it all about them. Show them what they can gain by inviting friends to your product. Make it clear that you care about your existing customers, or instead of new customers all you’ll get is a high churn rate.

Do: Keep your teams aligned on product-led growth

If you decide that a product-led growth strategy is the one for you, make sure all your teams are aligned. In an interview with UserVoice, Pinterest’s Engineering Manager talked about how they managed to grow from 1 million monthly users to 100 million monthly users in just 4 years. He said that their keys to success with PLG were putting user experience over metrics, making sure growth teams were full-stack and could implement features for themselves, and encouraging collaboration between teams.

With PLG, all teams work on different parts of the same strategy, from sales and marketing to tech and design. Keeping your teams focused on your PLG strategy will give your product the potential for growth it deserves.

Value comes first

It’s good to have your eyes on the horizon and think about your growth strategy. But the quickest way to sustainable growth is a focus on value. As author and behavioral design expert Nir Eyal tells us, “Users who continually find value in a product are more likely to tell their friends about it.” A company who doesn’t provide value to its users will find itself stuck and unable to grow.

Your product or service is actually only your second most valuable asset. Your first is your user base. Keep them happy by showing them you’re listening and finding ways to delight them, and they’ll take care of your growth for you.

This article was written and contributed by Carlos González de Villaumbrosia, CEO of Product School. Carlos González de Villaumbrosia has over 10 years of experience building teams and digital products in the US, Europe, and Latin America. Carlos founded Product School in San Francisco in 2014. Today, the company is the global leader in product management training with 20 campuses worldwide and a live online campus.

Designed to fit into work schedules, classes are held in the evenings or on weekends. All the instructors are real-world product managers, working at renowned tech companies like Netflix, Airbnb, Google, Facebook, Amazon, and Paypal.

In addition to individual classes, Product School also delivers custom corporate training programs to Fortune 500 companies seeking to upskill their existing teams or onboard new talent.