PRODUCT MARKETING
The Product Marketing Foundations Guidebook
Managing product life-cycles, product-market fit, go-to-market plans, and product launches
The most successful aspect of marketing is understanding what the customers want and aligning offerings to their needs. Product marketing is the sum of all the efforts necessary to research, message, position, promote, and support a product so that it successfully resonates with the target audience. Product marketing requires participating in the discovery, delivery, and go-to-market strategy of a product.
Product marketing tasks include:
- Coordinating with product teams to understand plans and deliverables.
- Conducting market research to understand customer needs and wants.
- Forecasting and measuring results.
- Gathering competitive intelligence to understand the market.
- Go-to-market campaigns.
Success at product marketing requires constant risk mitigation. A product marketer’s work starts well before the product is developed. They have to understand the market, what the customer wants, and how to position the product. A product marketer may need to put on the brakes and pivot in the middle of the project.
Product Management vs. Product Marketing
A product manager’s job is to get the product to the shelf and the product marketing manager’s job is to get it off the shelf. The product manager develops the product, the product marketer packages it, and designs campaigns to motivate consumers to purchase it. Despite different roles, product managers and marketers have a few things in common:
- They both invest tremendous effort in understanding the customer.
- They collaborate with teams across the entire organization.
- They need to work together to deliver meaningful results.
The product marketing manager typically takes on the following responsibilities:
- Researching the market and segmenting the target customers.
- Positioning and messaging the product and its features.
- Understanding the competitive landscape.
- Securing product message market fit.
- Driving demand for and adoption of the product.
The product manager is focused on:
- Championing for the customers and what they want.
- Deciding what to build and organizing that process.
- Understanding technology and managing scalability.
- Shipping the right product.
- Prioritizing what to build.
Product managers often use a different set of success metrics to determine what they’re prioritizing. They may be focused on positive user reviews, whereas product marketing might be measuring success by consumer activations or overall brand awareness. To prevent friction, product managers and marketers should sit down and clarify project goals aligning with the company’s major objectives. They need to meet weekly and be transparent and thorough in their communication.
1. The Product Life-Cycle
All successful products go through the product life-cycle: development, introduction, growth, maturity, and decline. It’s important to know this life-cycle because roles and goals in product marketing change depending on which phase the product is in.
- Every product starts with development where all the effort is to create the product and prepare it for release into the market.
- From there, the product is launched into the market. Tremendous effort goes to generate awareness, build brand identity, and achieve market penetration.
- Once the product is launched and receives favorable consumer reactions, it enters the growth stage. The goal is to grow. Here, we need to increase adoption, build brand preference and gain market share.
- Once aggressive growth is no longer possible, a product is said to have matured. Marketing is now focused on maintaining market share, defending itself from the competition, building a reputation, and finding ways to increase revenue.
- During the decline stage, a product loses desirability, and companies must decide to improve it with new features, discontinue it, or pivot. A successful move here could move the product back to an earlier stage.
The technology adoption curve
The technology adoption life cycle describes the adoption or acceptance of a new product, broken down by the demographics and psychological traits of defined adopter groups. It allows you to speak directly to the needs of your consumer, delivering far better marketing results. At launch, you’ll be attracting innovators, followed by early adopters, early majority, late majority, and then laggards.
- Innovators are the very first customers to try a product. They’re willing to take risks.
- Early adopters tend to be thought leaders. They have financial liquidity and higher levels of education.
- The early majority is more risk-averse, and tend to be conservative with their spending. They tend to follow the opinions of thought leaders or influencers and are younger. This is the largest consumer group.
- The late majority customers are skeptics and very risk-averse. They’ll have limited financial liquidity and be less educated. This is the second-largest consumer group.
- Laggards are the last to adopt an innovation. Laggards don’t like to stray from tradition, and they’re among the oldest of the adopters. Their contact is typically with family and friends who will refer them to this product.
As you move through the phases of your product life-cycle you’re attracting different consumers, which means, you need to continuously adapt your messaging to cater to this audience. The technology adoption life-cycle and the product life-cycle go hand-in-hand to help marketers focus their efforts.
The development phase
In the development stage, you’re figuring out what it is that you’re building. It might be an entirely new product, a major improvement, or a new feature. During this phase, the focus is to figure out what the innovators and early adopters want. You need to research the competition, understand the users, and determine product features for a successful launch.
Despite massive expenditure, the Amazon Fire phone failed in the market, proving that even huge marketing budgets can’t overcome a product that misses the mark. So here are the steps that you want to take during the development stage.
- As a product marketer, embed yourself in the product development process hand in hand with product development. Find ways to be part of the process. If the product team has daily sessions, start showing up. Attend every planning meeting and get access to the planning software that’s being used.
- Research the target market. You need to understand who you’re targeting, what you’re building, and how you’re going to message it to the ultimate buyer. Have answers for: who is the target market? Who is the decision-maker in the purchasing process? What is the awareness of the existing products available on the market? Are customers satisfied with the products available?
- Measure how your audience will perceive the new product. Start describing how you think your audience will perceive this new product. Include a summary of their needs. Why their needs aren’t being met and how you plan to meet those needs. Test your hypotheses in the marketplace. Release a beta, launch a landing page, conduct a survey, or setting up focus groups with your target audience.
- Understand your offering, completely. Go beyond just the features. Know what it will cost to produce. What the risks are in development, and how much it will cost to maintain. You also want to know what happens if consumers are unhappy and what features are going to come later. Know your roadmap.
All the questions above will be raised in the later stages of the life-cycle.
Introduction phase
In the introduction phase, sales are likely to be minimal and growth is fairly flat. You’re working to validate that what you built resonates with the early adopters in your target market. In this stage, start by focusing on testing.
Once you’ve seen favorable responses from customers, you push forward with marketing to generate awareness and grab a market share. By taking a step back, you can utilize the slow pace of the introduction phase to iron out the kinks before you flood the funnel.
Now during the introduction phase, you can get away with higher prices, more selective placements, and very personalized promotions. Your immediate goal is to evaluate consumer response. Answer these three questions in this stage:
- What is the consumer reaction to the product? For example, are they responding favorably to the initial exposure? Are there specific features or attributes they like or dislike? Are there specific elements they prefer against the competition?
- What are the consumer concerns about the product?
- What are the consumers’ unmet or unstated needs? You can conduct surveys, review your customer support interactions, or listen to conversations happening on social media to gather this data.
Once you know the market response, you can decide to go back and fine-tune the product or press on to generate more awareness. This phase can take a while. Work to constantly improve your messaging, adjust your value propositions, and keep the feedback loop open with your customers, so you can fine-tune your marketing and unlock the next stage.
Growth phase
When consumer demand for your offering has increased, you’ll move into your growth phase. Throughout this phase, you’ll be activating various marketing strategies to significantly increase your growth. The focus will be to get consumers to prefer your brand over other options. This will require you to start differentiating your offering.
A few key attributes of this stage are:
- You will see an increase in competition. With an increase in demand, other companies will look to enter the market. Marketers will need to adjust strategies so that they can defend the company from new market entrants.
- The size of the market will increase, which increases the demand for the product and ultimately leads to a sharp increase in sales.
- Potentially increasing profits. At this stage, you need to have figured out how to reduce costs, with business operations becoming more efficient.
Tesla, for example, started with an expensive all-electric sports car aimed at innovators or early adopters, and with growing demand from innovators and early adopters, Tesla moved on to more mainstream but still high-priced vehicles such as their sedan and SUV models.
From there, Tesla launched an affordable sedan aimed at a much larger market, and that’s when growth really took off. With the entry of other car manufacturers such as BMW and Audi into the fully electric vehicles space, the competition helped the market increase in size and Tesla’s growth accelerated.
During the growth phase:
- Evaluate existing value propositions. With the market expansion, consumers’ perceptions shift, and therefore entrants need to reevaluate value propositions and key differentiators. The companies’ messaging needs to resonate with the new audience, and marketing needs to work to improve product quality or add new features, or support services to increase market share.
- New customer requirements need to be assessed. Marketers need to dig deeper into why new customers are coming on board and to review customer records to understand pain points. Sales frictions need to be minimized, and competitors’ advantages to be benchmarked.
- New strategies need to be operationalized. Opportunities in content marketing, digital, PR, trade shows, etc. need to be assessed and re-assessed. Distribution efforts need to aim towards the creation of product preference rather than awareness.
- Metrics that matter need to be measured. Understand your success goals and perform a robust analysis to help you readjust marketing strategies. Keep efforts lean and agile, in order to cover a wider range of tactics.
Maturity phase
The market is nearly saturated. Your focus now is to defend your turf and prolong your product life cycle. You’re working to maintain brand preference and trying to keep the price competitive so you maintain profitability. You’ll be making finer and finer differentiation in your product as longevity causes competing for products to become identical.
You need to start thinking about ways to disrupt your business model before someone else does. The case of Blue Apron, and how it lost 81% market value since its public offering, is an example. However, maturity isn’t all bad and doesn’t always mean a loss in market value. Rather, it comes with a certain set of unique challenges. During the maturity stage:
Understand what changes have occurred since the introduction and growth phases. Evaluate where the brand started and where it is now. Understand the consumer mindset. How they became aware? Why they considered and purchased it? What are they saying about the competition? Any perceived differentiators or new features?
- Consider new segments. Redefine target markets. Try to pivot or find different ways other markets can use your product.
- Attack the competition. For example, the iPhone is a mature product and never stops chasing after its competition. And the competition never stops chasing the iPhone.
- Seek a bigger opportunity. What other key brand advocates have emerged? Can partnerships be built? Are there new products in the market that are in their growth stage where alignment or strategic partnership becomes valuable?
- Leverage your loyal customers. Survey evangelists, offer them incentives, and consider ways to get them to spread the word to laggards who you know to be skeptical and difficult to convert.
The maturity phase is a great place to be, but don’t get complacent and assume that you’re in bedrock. It’s a different marketing game, so stay on top of it.
Decline phase
During the decline stages of a product, there will be declining sales and profits. Consumers get bored, technology evolves, companies make mistakes, and people’s preferences change. Examples can be DVD subscriptions and Netflix, Apple’s iPod line and iPhone, digital cameras and phone cameras, and standalone GPS and Google Maps.
However, all of these forgotten products still have a foothold somewhere. They’ve just shifted to new markets, reduced sales, cut prices, or adjusted the features. They’re in decline and very few of such products will make it out of the decline stage. They might resist discontinuation for some time, but eventually, they will disappear.
At this stage, a product marketer’s primary goal is to pick a strategy that makes the most sense for the product. The most popular strategies are:
- Reduce marketing expenses on the product.
- Reduce the product team’s overheads and costs.
- Implement price cuts to convince laggards to buy.
- Find some other use for the product.
- Maintain the product in the hope that the market might shift back.
- Sell the product off to another company.
- Discontinue it all together.
There is little for marketing to do during a decline. Sometimes a product in the midst of growth is all of a sudden fast-tracked to decline, and this typically happens for two reasons:
- The product saw too high a rate of a refresh.
- The product failed to meet the necessary rate of a refresh.
Product marketers must keep track of consumer trends and the status of their product-market fit. If a product is updated too frequently where core features that consumers liked are changed, customers will probably depart. In some markets, consumers expect seasonal refreshes. They expect new features such is the manner by which iPhone evolves. If Apple stops innovating, the consumer will probably opt for a product that does.
If you’re in decline, accept it, discontinue the product or find a way to reinvent it so that it moves back to an earlier stage of the life-cycle. By creatively re-positioning a product, product marketers may change the way consumers evaluate a product and potentially push it back into growth.
2. Product-Market Fit
Usually, marketers may misunderstand whether they have a product-market fit. Product-market fit is defined as having developed a product that satisfies the market. It may not even be profitable, but the consumer wants it. Product-market fit is about finding those customers who are desperate for your product. If a product does not achieve this fit, it’ll never grow.
Marketers need to be careful not to form bias over product-market fit. It’s okay if a product does not quite have a product-market fit yet, most products go through many iterations before finding the fit that clicks. But teams involved must constantly be seeking it. Until growth is unlocked, product marketing should be focused on figuring out the fit.
You’ll see plenty of clues that product-market fit isn’t happening:
- Customers aren’t quite understanding the product or seeing its full value.
- Word of mouth isn’t spreading.
- Reviews are sparse or mediocre.
- Sales cycles are long, or customer acquisition costs, CACs, are very high.
On the other hand, if the product-market fit is happening:
- The growth curve is impressive.
- Money is coming in faster than it is spent.
- Deals are easy to close.
- Customers are coming in outside of the marketing campaigns.
- The press is constantly looking for information.
Do not think that if a product is not growing, it’s because of the product-market fit. Product marketers need to find an effective approach to communicate the product’s value. Product-market fit does not exist without a message-customer fit. In order to achieve message-customer fit, you need to:
- Find a way to message your product so that it can punch through a market that strongly favors existing solutions.
- Master the art of understanding how customers think, and perceive the pain you are trying to solve.
- Tell stories that make customers feel positive about your offering.
In other words, you will need to sell a purpose, not a product. Spend time to understand your customer’s pains, values, and perceptions.
The value proposition
Your value proposition is a short, distinct statement that outlines exactly why a customer should buy your product. It should be something that can live as a headline with a supporting sentence or a few bullet points. It will be the foundation of all your marketing efforts. It must be simple, clear, and easy for someone to understand in five seconds.
Uber’s first value proposition was: “The smartest way to get around,” calling out everything people hate about traditional taxis in under five seconds. It’s tempting to create a value proposition that lists the key differentiators of a product but this isn’t the right approach.
· You want to sell the result, or the experience, of using the product not just what features get you to the result.
· You’re telling a story, attacking pains and focusing on the outcomes, and in a competitive market you’re attacking pain points of the existing solutions.
Read this article by Stewart Butterfield, the co-founder of Slack, titled ‘We Don’t Sell Saddles Here’ to get a grasp of how he defines a value proposition. When developing a value proposition, determine not how your product will be better than the others in the market, but how your outcome is better.
The target customer
Target entered the Canadian market in 2013 with higher prices and not realizing that 70% of regular Target shoppers in Canada shopped in the company’s U.S. stores. In 2015, they closed all of their stores and took a two-and-a-half billion dollar loss.
It’s not enough to simply define your target customer, you must truly understand their needs and how to effectively communicate with them. To define a target customer, you’ll take the broad market, and divide it into segments organized by one or more attributes. These attributes can be demographic, psychographic, behavioral, or need-based:
- Demographics factor in age, gender, marital status, income, and education level. For example, 24 to 45-year-olds, who make less than $50,000 annually, and are single.
- Psychographics classify people according to psychological attributes, such as opinions, beliefs, values, attitudes, and interests. With psychographic attributes, instead of focusing on everyone in the demographic, you focus on the segment that has beliefs and values that align with your ideal consumer. For example, you might be targeting single 24 to 45-year-olds who make less than $50K, value environmentally conscious companies, and like reading books.
- Behavioral attributes identify consumers based on an action they take, and how frequently they take it. For example, people who buy a cup of coffee every day or who watch at least three YouTube videos per week.
- Needs-based segmentation divides the market into customer segments that each have distinct needs. For example, the Nest thermostat for some is a valuable way to reduce energy usage, and for others, it’s useful to turn on a heater at a vacation property.
Every target customer segment needs to have a persona. A persona is a hypothetical description of someone who represents the shared traits among all the people in that specific segment. You create a persona so you can answer the question: what will motivate this specific person with their specific traits to use your product?
Personas should fit on a single page and provide a snapshot of the customer that’s quick to digest. For starters be sure to include the following information: name, representative job title, customer segment attributes, their needs and goals, frustrations and pain points with current solutions, and wherein the technology adoption life-cycle they are. You can either survey existing customers for this data, or use your judgment to make initial hypotheses about your target customer’s attributes, and then test those hypotheses.
Generally, four to seven personas are needed. From there, start working on your product market and message market fits per persona.
Messaging: understand customers, tell a story, be authentic
Some may believe that a product should scale based on its inherent design and offering and through word of mouth. But the product’s messaging is how a consumer comes to interact with the product to decide if it’s right for them. This messaging is present at every stage of the marketing funnel from the first interaction to the decision to purchase.
Even if your product allows you to not spend on advertising, you still need to have powerful messaging. If the product is misinterpreted, expectations incorrectly set, or the value not convincing, it will be incredibly difficult to change that perception once it has been formed.
To convert a customer, you’ll use strategic messaging. To build effective messaging, consider these practices:
- Tell a good, convincing story. Storytelling captures people’s attention and motivates them to take action. Make sure your product or brand comes across as trustworthy, confident, empathetic, and composed.
- Appeal to emotions. People buy on emotion and justify with fact. Remember to focus on outcomes that are inspirational, aspirational, or would represent a significant milestone for your customers.
- Be consistent. Repeat a simple message over and over again and don’t change that message too often.
- Be clear. Avoid complicated words; use conventional language.
- Be obvious. Don’t assume that your audience understands the terms that you use in your communication.
In order to come up with better ideas, ask everyone in the company to participate in developing your messages. Have them send you an email with one sentence answering each of the following questions.
- What is it that we do?
- What is the problem we are solving?
- How are we different from our competitors?
- Why should customers buy from us?
Competitive analysis
No matter how unique or differentiated your product, you have competition. When Uber came onto the market, they were competing with the taxi industry itself, and then shortly after its launch, we saw Lyft vie for market shares. Competition may not be direct or indirect and always present. In order to have a constant pulse on the competition follow the following steps for effective competitive research:
- Make a list of your competitors and categorize them into the following. Primary competitors, which are targeting the same audience or have a similar product. Secondary competitors, which are offering a higher or lower-end version of your product or selling something similar but to a completely different target market. Tertiary competitors are related businesses that can pivot towards your business. For instance, if you were to sell tennis rackets, a tertiary competitor may sell tennis balls.
- Identify your competitor’s positioning. Take a look at their website, buy their product, sign up for their newsletters, and review their messaging and ask yourself the following. What is their value proposition? Why would their customer buy this? Is it price, experience? What makes them different? What features do they highlight in their marketing copy? And what makes them unique?
- Read reviews. Find as many reviews of your competitors, read them, categorize them, and highlight what customers like and dislike. Use these reviews to strengths or weaknesses to can capitalize on.
3. Go-To-Market
Work on your Lean Canvas
To be fast, nimble, and develop successful product launch campaigns, organize your thoughts by using a one-page business model template called the Lean Canvas. The Lean Canvas is a one-page document that creates an actionable and product-focused plan to work with.
Team and communication
One of the biggest challenges in product marketing is the alignment of responsibilities and goals between various teams within a company. There are many ways that you can keep teams in alignment and here are a few tips:
- Develop an internal product outline. Put together a document that explains the what, the why, the how, the when, and the where. Answer questions such as: what is our product? Why are we building this product? How will the consumer hear about this product? When will we launch? Where will the product be sold?
- Consider in-person training. Arrange short in-person meetings to share your plan for messaging, what value proposition to be consistent with, what the competition looks like, and where the customer is likely to experience friction when buying or using your product.
- Create a shareable deck that demonstrates the product and outlines the key elements of the Lean Canvas. Explain not only the product, but who the target market is, what the major selling points are, and how feedback will be collected.
- Develop physical one-pagers. If you have a sales team, they’ll be appreciative of a one-sheet that contains your value-rich messaging.
- Create a system for collecting feedback. Decide not only how the team can share their thoughts, but how you’re reviewing customer feedback.
Product marketing is a deeply cross-functional process. There are lots of moving parts. So be sure you’re getting everyone on the team aligned and educating them on the marketing plan and their role in it.
Product marketing metrics
Effective marketing needs you to be capturing and analyzing data. We live in a world that is data-driven. We have the tools and resources to measure anything we want. Reviewing analytics as part of your day-to-day will help you become a better product marketer and provide you with ideas on how to improve your marketing strategy.
To avoid information overload, focus on the metrics that matter most to your product vision, customer needs, and company goals. What metrics you measure depends on your life-cycle stage and your goals. There are five critical areas to any business regardless of the life-cycle stage which will need to be monitored via metrics — the AARRR model:
- Acquisition, which is converting your consumer.
- Activation, which is users having a good first-time experience.
- Retention, keeping the customer.
- Referral, customers telling their friends.
- Revenue, the money you’re bringing in.
For a brand new product just entering the market, before you’ve proven out product-market fit, you can get away with focusing on the qualitative metrics across the stages. As you move towards the tail end of the introduction, you need to start looking at the foundational qualitative metrics.
- Acquisition, your number of conversions.
- Activation, time in product or customer support ticket volume.
- Retention, the churn rate.
- Referral, the number of conversions.
- Revenue, monthly revenue.
In the growth stage, layer in more metrics:
- Acquisition, conversion rate, or your cost per acquisition.
- Activation, customer lifetime value.
- Retention, churn recapture, and email open rate.
- Referral, program growth rate.
- Revenue, compound monthly or annual growth rate.
The goal is to make sure everyone is looking at their metrics daily, and the metrics cover the five critical business areas. The key metrics should act as the vital signs to help you understand the overall health of your product and serve to influence the changes you make to your marketing strategy.
The most successful aspect of marketing is understanding what the customers want and aligning offerings with their needs. Product marketing is the sum of all the efforts necessary to research, message, position, promote, and support a product so that it successfully resonates with the target audience. Product marketing requires participating in the discovery, delivery, and go-to-market strategy of a product.
