107. How to Use Product-Led Growth to Meet Customers’ Needs for Instant Gratification
(Episode 2 of 2 with Eric Keating)
I once completed a focus group for a company that showed about 70% of their customers did not talk to any other competitor before doing business with them. We found that customers didn’t choose the business with the cheapest price, or the best features or services, they chose the business they connected with first.
In the past, people would compare the pricing and features of many businesses, but now, an increasing number of potential customers just aren’t investing time to do that. It’s all about the ease of doing business. In order to be successful and gain customers, we need to meet our customers’ needs as quickly as possible.
In the last episode, Eric Keating and I discussed three ways to increase product-led growth and monetization. In today’s episode, we’re going to discuss how product-led growth can help businesses meet the consumer’s need for instant gratification.
The market is shifting towards product-led growth. With more and more businesses offering self-service free product trials, customers expect instant gratification when they look at our services and products. In order to use product-led growth effectively to meet the needs of our customers, we should consider using free trials and freemium experiences.
“There is this massive shift happening; it’s been happening for a very long time in the consumer world and much more in B2B,” Eric said. “It’s this expectation that we all have from using Amazon and other consumer products that are completely self-service . . . [It’s] all about instant gratification.”
When a consumer has a need or a problem, they expect an immediate solution when they come to our website or landing page. A lot of this is due to increased amounts of free value
In today’s market, so many companies are offering free trials and freemium experiences. We can book appointments online or sign up for our own monthly subscription for a piece of software. In contrast, we have older companies who require us to request a demo or fill out a form before we can use their software. Then, we have to wait for somebody to get back to us before we can use their service or product. Between the two companies, customers almost always choose the first option — the one that leads to the fastest result.
Eric explained how companies such as IBM, with maybe 100,000 employees and years of experience, are making the shift towards free trials and freemium. “When you see companies at this scale adopting this approach to be going to market and getting the product into the user’s hands, I think that’s a sign that this is not just a little trend. This is the expectation moving forward,” Eric said.
A product-led growth model is becoming essential in today’s market as it allows customers to serve themselves, and gain instant gratification for their needs and problems.
Choosing a Service Provider
When customers are choosing a service provider, they often look for the business that will help them meet their needs the fastest.
Let’s say we are looking for a carpet cleaning service. How do we find a local business? Most people would first do a Google search. After the Google search, three local businesses pop up. Which one do we choose? Most people will choose the business near them with the largest number of reviews and a strong average star rating. We call the business and the phone rings, and rings, and rings. No one answers. They ask us to leave a voicemail. But do we?
Most people today aren’t even leaving a message. They call the first person with the best reviews, but if that person doesn’t answer, most people are hanging up and calling the next most highly-reviewed company on the list.
Keep in mind that a huge percentage of customers don’t like to make phone calls anymore. If there is a business with an instant chat on their website, a customer is more likely to ask their question in the online chat than call in. Better yet, if a customer can sign up for a free trial themselves, they can hit download and instantly serve themselves without ever needing to talk to someone.
In product-led growth, we need to focus on self-service. We should make it easy for our customers to serve themselves and contact us if necessary.
Low Barrier to Entry
Having a very low barrier to entry, such as a free trial with no credit card required, is essential.
“[If] you have a very compelling call to action and it’s easier than filling out a demo request form to start using this product . . . you get people using your product. Thousands of people are starting to use our product every month because we have this low barrier to entry,” Eric said.
In the example above, it is clear how important ease is. A customer will often choose a service that is easy and quick to use over a service that might cost less.
“You’re going to get more leads with the free trial,” Eric said. “It’s just a lower barrier to entry. There’s less friction. When you do that, you’re going to start to have exponentially more people using your product, and how they use your product is very important to understand.”
Once we get our customers to sign up for our free trial, our job isn’t done yet. We need to use data and make sure they are getting the best experience we can offer.
Data is essential in determining friction points within our users’ experiences. If we aren’t tracking the user’s flow through our funnel, it will be extremely hard to know where our customers are getting hung up. It will also be difficult to see where users are converting at the highest rates and having long-term success.
“Data is not only going to enable you to answer the long list of questions that I’m sure you’ll have as you start down this path, but also open up a ton of opportunities for you to monetize your user base to better serve your customers so that they retain longer and adopt more of your product,” Eric said.
What about the sales team?
In today’s market, the product is replacing a lot of traditional one-on-one sales and marketing communications. However, in product-led growth, companies can still take advantage of a sales team. Even with self-serve products, a sales team can provide additional help in lengthening the customer’s journey with the business.
The main question is, “How do we exceed our customer’s expectations?” While most of our potential customers expect to be able to serve themselves instantly, the sales team can help those that require more information.
“Even though [more than] 90 percent of our eventual customers start with a self-service free trial, we do have a sales team,” Eric said. “They behave a bit more like a hybrid between a salesperson and a support person, or a customer success person . . . They aid our prospects or free trial users in their path to success. . . We’re seeing a lot of sales teams adapt to focus more on expansion opportunities versus net new business.”
Instead of focusing on making the initial sale, the sales team can expand and guide the customer into making another purchase.
“As a marketer, as a salesperson, you have to start thinking about products more than you ever have. You need to be invested in the product experience and understand that the product experience is going to play a role in the sales and marketing go-to-market funnel now,” Eric said.
We need to make sure we have a voice in the product experience, especially as customers expect to access our product or service immediately, without needing to go through a sales team or marketer, or without reading a lot of instructions.
Thank you so much Eric for sharing your stories and knowledge with us today. Here are some of my key takeaways from this episode:
1. With more businesses offering self-service products, customers expect instant gratification when they look at our services and products.
2. A product-led growth model is becoming essential in today’s market as it allows customers to serve themselves and instantly get a “taste test” to see if your product or service meets their needs.
3. Free trials and the freemium model are a great way to help meet the customers’ needs for instant gratification.
4. When customers are choosing a service provider, they often look for a business that will give them the help they need the fastest.
5. We must eliminate as much friction as possible in our customer journey and create a low barrier of entry.
6. We need to make sure we have a voice in the product experience.
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