How I use Marketing + Product for Growth

In 2007, Facebook reached a plateau with 90 million users. Chamath Palihapitiya, the former VP of Operations, played a role in driving the company's growth by addressing user churn.

He advocated for a shift in focus from daily users / total sign-ups to Monthly Active Users (MAUs) as the North Star metric because it was a better indicator for churn.

Palihapitiya's key insight was that users with 7 friends or fewer were more likely to churn.

He created a team called Growth Circle and they came up with "People You May Know" (PYMK), which suggested potential friends to users. This feature helped new users connect with 7 friends quickly, boosting engagement and retention.

Implementing this significantly improved user retention and engagement, as well as rekindled Facebook's exponential growth trajectory.

Palihapitiya's emphasis on MAUs and the introduction of features like PYMK highlight how a targeted approach to product development and user engagement can fuel growth (even amid controversies and privacy concerns). 

The Dynamic Duo: How Product and Marketing Drive Growth

Product and marketing are inextricably linked. They complement each other and, when working harmoniously, create a powerful engine for growth.

The AARRR "Pirate Metrics" 🏴‍☠️

For your growth strategy, it's important to truly understand how a product grows and generates revenue. Most focus on top-of-funnel strategies to drive awareness. But you’re leaving money on the table if you’re not simultaneously working on the other stages.

Let's break down this journey into these steps:

1. Acquisition → How does your market discover your product?

Your primary challenge lies in identifying scalable acquisition channels while keeping a reasonable Customer Acquisition Cost (CAC).

• Explore acquisition channels: Take a close look at how you're getting users.

• Evaluate channel performance: Use analytics to see which channels are working best.

• Experiment and scale: Try new channels, and invest more in the ones that perform well.

• Build conversion systems: Create processes that turn user actions into outcomes.

• Prioritise key conversions: Focus on sign-ups and demos, not just website traffic

2. Activation → Maximising your product’s value

Ensure that users who sign up grasp the product's value and how to use it, leading to higher engagement, retention, and revenue.

• Define Activation: when users do important things in your product, showing they find it valuable, like using key features.

• Define the "Aha" moment: when users realise why your product is special and useful, often when they see how it solves their problems or meets their needs.

• Provide quick value: Give users a reason to stay interested right away.

• Guide users: Use in-app messages, pop-up screens, and interactive notifications (including banners, push notifications, and emails) to make your product more understandable to users.

• Improve activation: Experiment with A/B testing to see what gets users engaged.

• Monitor: Keep an eye on how your changes affect how much users use your product over time.

3. Retention → Sustaining user engagement over time

After activation, focus on ensuring users consistently use your product by focusing on its core value.

• Study power users: Examine how your most engaged users use the product.

• Monitor user groups: Keep an eye on user engagement and retention patterns over time.

• User commitment: Introduce engagement and loyalty programs to strengthen user dedication.

4. Revenue → Converting engaged users into paying customers

To turn users who really like your product into customers, you need a clear plan for how you make money and what you charge, which has a big impact on how much money you earn and how reasonable it is to get new customers.

• Effective Monetisation: Determine your product's money-making strategy.

• Pricing Strategy: Decide if you want to be budget-friendly or premium.

• Fine-tune Pricing: Continuously improve your prices and package choices.

• Maximise Revenue: Strike a balance between expanding your user base and maximising revenue from each user.

5. Referral → Maximise growth through happy customers

Transform happy customers into advocates by using user referrals to supercharge your product's expansion.

• Referral Program: Simplify user recommendations for your product.

• Reward System: Provide attractive incentives for both referrers & referrals.

• Boost Growth: Multiply users through referrals using viral loops.

• Monitoring: Keep track of your referral program's effectiveness, measuring new users acquired and its impact on revenue.

• Feedback: Continually enhance your referral program based on customer input to encourage more users to advocate for your product.

Instead of working "top-down", which often results in the classic "leaky bucket syndrome," work your way "bottom-up" to build a solid foundation and optimise for retention. 

Taking the product from Nice-to-Have to Must-Have:

To transform a product from a "nice-to-have" to a "must-have," you need to focus on creating genuine value for your users:

a. Customer-Centricic: Understand your target audience deeply. What problems are they trying to solve? What are their pain points? Tailor your product to address these issues effectively.

b. Iterative Development: Continuously gather user feedback and iteratively improve the product. Prioritize features and enhancements that align with the core needs of your users.

c. Onboarding: Set up a process where users can quickly understand and harness the full potential of the product, they are more likely to see it as a necessity.

Addressing Common Problems:

a. Launches Falling Flat: To avoid shipping features without impact, ensure that you have a marketing plan in place for each release. Create excitement and highlight the value additions to drive new signups or user adoption.

b. Neglected Onboarding: Invest time in crafting a smooth onboarding process. Simplify user journeys and provide adequate guidance to ensure users get the most out of your product.

c. Endless Backlog: Prioritise tasks strategically based on their potential impact on growth. Clear communication between product and marketing teams is essential to prevent bottlenecks in feature development.

d. Lackluster Copy: While it's essential to move quickly, investing in effective copywriting is worthwhile. A clear, persuasive, and relatable copy can significantly impact user engagement and conversion rates.

TL;DR:

The relationship between product and marketing is crucial for business growth. To make your product a "must-have," focus on customer needs, iterate continuously, and improve onboarding. Utilize the AARRR "Pirate Metrics" for growth:

• Acquisition: Identify scalable user acquisition channels.

• Activation: Ensure users understand and value your product quickly.

• Retention: Sustain user engagement over time.

• Revenue: Convert engaged users into paying customers.

• Referral: Turn happy customers into advocates through referral programs.

Address common issues like underwhelming product launches, neglected onboarding, endless backlog, and lacklustre copywriting by working together and optimizing for retention.