Product School

Why Customers Come Back: Product-Driven Growth

Ellen Merryweather

Ellen Merryweather

January 09, 2023 - 7 min read

Updated: January 24, 2024 - 7 min read

Editor’s note: You’re about to read an extract from “Ship It 2.0”. You can get the full book here.

While all Product Managers have heard of internal selling in terms of products, Satya Singh is all about external selling, and thinks that growth marketing should be embedded in the product to begin with.

Satya Singh

As a Product Manager, Satya has always battled with the question: why do products fail? Especially in tech where products experience massive growth, then stagnate and sometimes fail. Friendster, MySpace, Google+…all really good products when they started but when a disruptor entered the market, their growth marketing failed and they couldn’t sustain the number of users they needed to survive.

So what are the secrets to growth marketing, and how can Product Managers use it to keep their products in the game even when a disruptor appears?

team in the game

The Evolution of Product-Driven Marketing

It’s easy to see how far product marketing has come. In the 80s, tech companies stuck to Field Sales, generating as many leads as possible in the hopes that a small percentage would convert to customers. But this was a very high bandwidth and high-cost affair. It evolved into Inside Sales (which Salesforce did very well by cold-calling and creating prospects) and eventually became marketing. This evolution slides down the scale towards being low-cost and low-bandwidth, until we reach product-driven marketing. This is the future of effective marketing.

Product-Driven marketing essentially means building a product that markets itself, through word of mouth and customers creating virality. In this way, the product is growth-enabled. To be successful, you have to build this approach from the very beginning, you have to experiment, fail fast, test, and learn. As opposed to the old days of releasing a product and then saying “OK, great, now let’s go and get ten million subscribers somehow.”

The Attention Economy

It’s no secret that people’s attention is like gold dust on the internet, which gives us The Attention Economy. Not just for marketers, but everyone involved in product. If your product doesn’t grab your user’s/target market’s attention from the beginning, it’s bound to fail. A survey by The Mobile Intelligence Report shows that: 

  • 23% of users abandon an app after one use

  • 77% of users on average are lost after 3 days

  • 90% of users on average are lost after 30 days

Some products lose their attention-grabbing appeal halfway through, some never had it to begin with, and some lose it further along the product lifecycle. Satya’s goal is to make sure it is ingrained throughout the journey.

To make it even simpler, Satya gives us the example he gave his grandmother when he was trying to explain to her what he does.

“Just like Finance owns the flow of cash in and out of a company, Growth owns the flow of customers in and out of a product. Growth marketing is attracting more engaged customers to your product.”


Blurring the Lines

Touching briefly on his engineering background, Satya explains that if you have a solid engineering background and can understand the chaotic nature of business, then you can be a great Product Manager. 

You already understand many important aspects of Product Management, which involves much more than simply building the product. It involves marketing, pricing, and sales. Some companies still view these pillars of product in a very siloed way, but the truth is that the lines between them are blurring.

Nowadays, you have to build your product in the right way from the beginning. When your users first come to your product, they have to be hooked and understand how it solves their problem.

How Products Become Habits

Slack is a great example of how a product becomes a habit, which is ultimately the goal of Growth Marketing. The two aspects of habit-forming products are emotional and social. Not going on Slack for a day leads to FOMO (fear of missing out) for many people, as they don’t know what their colleagues are doing. The communities people build on Slack help to create the social aspect, further tying them to the product.

This network effect shows very clearly that Slack is a product with marketing built into it, as users invite their community members, team members, and friends to it. The investment of the team in Growth Marketing led to a platform which essentially sells itself, rather than the alternative of viewing marketing as a separate channel.

On the other end of the spectrum, and further evidence of the blurring lines, we see marketing campaigns which become products. For example, the ALS Ice Bucket Challenge started as a few videos on Facebook, before generating a million videos on 4 weeks along with more than $90 million. 

They did this through reciprocity and social proof. The reciprocity effect came from users sharing their videos and encouraging others to do the same. The social proof was a side-effect of seeing that this is a real person who you probably know in real life, and knowing that they are genuinely trying to raise money for charity.

Can You Manufacture Virality?

One thing a Product Manager can do to build in Growth Marketing is to enable virality both internally and externally. In the attention-grabbing economy, you can focus on collective intelligence, and think about how to embed growth loops within the product itself. 

For example, when Pinterest started they tapped into the Facebook market, where they let you log in with your Facebook account. They immediately saw the value in this and benefitted from a network effect, which led to virality and lots of users joining in.

Once they understood that the Facebook algorithm had changed and they were starting to lose numbers, they switched to Google and focused more on their content and SEO. These are the key aspects of Growth Marketing – experimentation and the product acting as its own marketing channel.

What Does a Growth Loop Look Like?

A good growth loop is what keeps your users coming back for more. This is the key to keeping users ‘hooked’ and turns your product into a habit. It can start small like a notification, conscious or unconscious. 

For example, users will sometimes open WhatsApp without a notification, just in case there’s something they’re missing out on. The lottery effect of not knowing what you’re going to get, but anticipating some kind of value, keeps users hooked on products.

Social networks are the perfect example and beneficiaries of the lottery effect. The more time users spend using a social network, the more value they get out of it every time they open the app, as they’ve been slowing building their online ecosystem. It’s important to use the effect positively, as it can be used negatively.

Some companies do this through rewards and gamification, where as the user moves along the journey they receive bonuses or points. For example, Snapchat has streaks which users lose if they don’t use the app for a day, therefore rewarding the users who log in regularly. Loyalty is also rewarded by some companies through a points system, which can be used for discounts.

Woman on mobile phone

So You Want to Be a Unicorn Growth PM?

Even if you’re acquiring more and more customers, a high churn rate looks bad and makes your growth unsustainable. So how can you make sure your customers come back?

You have to sell more to existing customers. Product led growth is more important than inorganic acquisition and retention. You can market yourself on every channel available, but without providing value and building in organic growth, it’s hard to have your product be a sustainable marketing channel.

PMs are generalists, where they look at lots of different things and understand what’s going on at a broader level. But the secret to being a unicorn PM is to have deep knowledge of a particular area. For example, you could learn a lot about SEO or PPC on top of your general understanding of UX, UI, Analytics, etc.

Updated: January 24, 2024

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