Every newly-launched product is unique and requires a specific marketing strategy. Around 80% of new products fail, with no clear product differentiation, missed demand, and cheaper competitive products being the major reasons. This boils down to ineffective product marketing.
In this guide, you’ll learn about the importance and useful techniques for defining and enhancing product marketing performance.
Let’s get started.
What Is Product Marketing?
Product marketing is a strategic digital marketing approach focused on increasing product adoption and bridging the gap between product management and marketing functions. Product marketing aims to bring products to the market and keep them there while acquiring more users and increasing sales and revenue.
Since product marketing is a subset of traditional marketing, the two have a lot in common. However, product marketing is more strategic, analytical, and data-driven than traditional marketing which aligns more towards communications and engagement.
An effective product marketing strategy helps you achieve three goals:
- Deciding the product’s positioning and messaging before its launch.
- Launching the product in a clearly defined market
- Drive demand, adoption, usage, and advocacy
Despite the clear benefits of product marketing, only 5% of product marketers fully understand its importance, as stated in the 2020 State of Product Marketing report. Therefore, it’s essential to realize what product marketing does and how to use it to drive the best outcomes.
How to Define Your Product Marketing Performance?
Product marketing, in a nutshell, is divided into two segments: pre-product launch and post-product launch. Before the launch, product marketing revolves around positioning, communication, and customer development. After the launch, it focuses on sales enablement and driving demand and adoption.
Marketers can track the following metrics and key performance indicators to define and measure their product marketing performance.
- Product Launch Metrics: These metrics measure awareness and demand. Some KPIs to track are trials or demos, content views, new customers, etc.
- Product Usage: When analyzing product usage, focus on two factors: new users and retention. You can track the number of users added each month, along with the number of existing users each month.
- Win Rates: You can measure your sales success by win rates, where one sale means one win. The higher the win rate, the more sales you’re getting.
- Overall Revenue Goal: The ultimate KPI to measure your product marketing performance is the overall revenue generated. This includes the revenue coming from new acquisitions, retentions, and up-sells/cross-sells.
- Customer Happiness and Retention: You can track any customer happiness metric, such as the net promoter score (NPS). A higher NPS and customer retention rates indicate higher customer satisfaction.
- Internal and External Qualitative Feedback: Internal qualitative feedback is what you get from stakeholders and other internal members. External feedback refers to what your customers think about your product.
Aggregating these metrics together can help you accurately measure the performance of your product marketing strategy.
Developing Key Marketing Strategies to Enhance Product Marketing Performance
Having a great product is only getting your foot in the door. You need to take a lot of steps to ensure your target audience likes your product and adopts and uses it. This boils down to creating a product marketing strategy that highlights your product’s benefits and drives usage, sales, and revenue.
Let’s look at some essential steps to take to set your product marketing strategies up for success.
Research Your Market and Know Your Customers
The first step in developing any product marketing strategy is to analyze your market. This step is further divided into two steps.
In the first step, you research your audience and identify your potential customers. This stage involves creating buyer personas that specify key characteristics and traits of your customers. These include age, gender, location, occupation, income level, goals, challenges, interests, etc.
The next step is to research your market, including your competitors and the overall market landscape. Here’s where building a SWOT analysis grid comes into the picture. Based on your product and business plan, you can define your Strengths, Weaknesses, Opportunities, and Threats (SWOT).
After that, combine all the data to determine your product-market fit.
Determine Your Positioning and Messaging
The next step is to develop positioning and messaging for your product. Once you know your target customers and competitors, you can tailor your product’s messaging in a way that stands out from the crowd and interests your audience.
At this step, you create the unique value proposition (USP) of your product. You can easily determine the unique positioning of your product by answering these four questions:
- Who is the product for?
- Which problem does it solve?
- What solution does it offer?
- What makes it unique, and how is it different from other similar products?
Let’s take the example of Zendesk, a customer service management solution.
The product is for businesses that want to simplify and streamline their customer support and service. It helps companies to overcome customer service challenges like ticket management and providing integrated support across channels. It offers a cloud-based helpdesk solution that allows businesses to integrate all their customer support channels into a single dashboard. And it’s different from other solutions because of its flexibility, ease of use, and affordable pricing.
Similarly, you can answer the above questions to define your positioning. Once your positioning is clear, you need to develop your product’s messaging. Product messaging is usually a one-liner that describes your product’s USP.
For Zendesk, the product message could be “A cloud-based solution that helps you provide integrated customer support across all channels.”
Once you have developed your positioning and messaging, you are set to market your product.
Develop a Go-To-Market Strategy
By now, you’ll have all the elements needed to create a go-to-market (GTM) strategy. A GTM strategy is part of a product marketing strategy that outlines your target audience, market scenario, positioning and messaging, pricing and distribution, and marketing strategy.
We have already covered the target audience, market scenario, and positioning and messaging. Let’s talk about pricing, distribution, and promotion.
Let’s talk about pricing first. You can follow two strategies here. The first is a competitive pricing strategy, where you set prices in line with your competitors. The second approach is a value-based pricing strategy. In this approach, you offer a series of packages priced low to high based on the features in each plan. Follow this pricing strategy matrix guide to better understand value-based pricing.
Coming to distribution, you can either offer a cloud-based or an on-premise solution. Nowadays, almost all SaaS vendors provide cloud-based products because of their seamless accessibility.
Develop a Promotional Strategy
Now comes the sales and marketing part, and there is a multitude of strategies you can follow. You can start a blog a few months before launching the product and leverage content marketing to achieve higher rankings and build an audience. This way, you’ll already have an audience waiting for the product when you launch it. A blog helps you generate leads that you can nurture through email marketing.
You can support your organic marketing efforts by running paid ads to encourage people to sign up for your free trial or demo. Many businesses have a dedicated sales team that uses cold calling and cold emails to generate leads and get sales. You can test all these techniques and determine which one works best for you.
However, there are a couple of tactics you can use to increase the performance of your promotional strategies and drive more adoption.
Launch a New Product as a New Brand
If you’re launching a new product, think of launching it as a new brand. Many physical product retailers do this all the time. Think of Cadbury, a UK-based chocolate manufacturer. Dairy Milk, one of Cadbury’s most popular products, has gained so much popularity that Cadbury developed a separate product line for Dairy Milk products.
You’ll notice similar strategies among SaaS vendors too. Let’s look at Beaconstac, a QR code generator, and proximity marketing solution. Beaconstac is a product by Mobstac, a phygital solutions company. However, the company has promoted Beaconstac as a separate brand.
Leverage Storytelling to Engage Customers
Storytelling has been out there for centuries, and it won’t fade away anytime soon. Showing your product’s features and benefits in a product demo video can be impactful, but telling a great story is truly game-changing. When you tell a story your audience can relate to, they are more likely to engage with your product.
Airbnb is a classic example of brand-driven storytelling. Instead of telling stories that promote their products and services, Airbnb shares stories that are 100% about their customers. “Belong Anywhere” was one of the recent examples of storytelling campaigns by Airbnb to raise over a million dollars for refugees.
Always Pay Attention to Your Existing Customers
You must’ve heard multiple times that selling to an existing customer is easier and more profitable. The probability of selling to an existing customer is over 60% (compared to <20% for new customers), and a mere 5% increase in customer retention can increase profitability by up to 95%.
Therefore, marketing to your existing customers is an essential aspect of a product marketing strategy. You can leverage plan upgrades, upselling, and cross-selling to drive more revenue from existing customers.
Launching a new product involves a lot more than just developing an amazing product. Sales and marketing teams need to devise effective product marketing strategies to generate demand, drive adoption, and increase sales and revenue. Follow the strategies discussed above to develop a product marketing strategy that sets your product up for success.
About the author
Akshay is a digital marketer and a startup enthusiast exploring the myriad avenues of everything marketing. At Beaconstac, he enables companies to bridge the gap between the physical and digital worlds through the use of custom QR codes.