Subha Shetty, Head of Product at Loop Commerce, a Synchrony company, spoke with Products that Count host, Neha Taleja, about product-led go-to-market strategies. As a veteran at leading GTM strategies from an engineering background, her insight was invaluable to attendees. After breaking down market data regarding the increase in customer acquisition costs (CAC), she proceeded to deep dive into the problems inherent within the different approaches to GTM.
On the value of a product-led strategy
“The problem basically is that your costs are going up to acquire your customers, your customer’s propensity to pay is going down, and more than half of your customers are not going to come back if they have a bad experience. You don’t need to be a financial whiz to figure out that ultimately, this is not what a profitable company would actually be.”
“A go-to-market strategy is intended to ensure that your product launch reaches the right audience, with the right message, with the right positioning, and your audience understands what the value of the product is and the solution that you’re offering.”
On the evolution of go-to-market strategies
Subha spoke briefly on traditional go-to-market strategies such as sales teams led and product assisted. Taking time to highlight the problems that lie within each, she then dove into the real meat of her presentation – the benefits of a product-led go-to-market strategy.
“What we’re going to talk about today, and the evolution of go-to-market strategy, is [a] strategy called the product-led go-to-market strategy. It’s not a white paper, sales team, or webinar that actually drives customer acquisition. It is the product itself that is the main customer acquisition channel – having the freedom to be able to use the product as a customer, in their safe space, is the primary way that customers are actually acquired.”
On problems with a legacy strategy, aka ”Your CAC is Out of Whack”.
“There are some problems with the old go to market models. The first is that your KPIs are probably out of whack. Meaning, you have extremely high customer acquisition costs. Think about large sales team funnels, sales cycles, marketing teams, generating lead gen and the funnel behind that. Because of those cycles, and costs associated with that, your revenue per employee, the RPE, is probably pretty low. This means, overall, you have very low unit economics across the board. If your unit economics are out of whack, you have extremely high customer acquisition costs. That’s a clear signal, an indicator, that that has to evolve.
“What happens is your customer feedback is basically second or third degree. You’re getting it from the marketing teams, or the sales teams, or the customer success teams. If you’re not getting direct customer feedback your ability to innovate based on customer needs is limited.”
“Organizationally, it causes silos between what’s called an execution team and what’s called the business team. We work in a world right now that is so dynamically changing that we need these silos to come down. We need more collaboration across the board to really push product out faster, and the right product out faster. Imagine high cost of acquisition, low unit economics, and silos across teams, and then imagine scaling that model. It’s only a problem that is waiting to become bigger.”
Breaking down product-led go-to-market
Using products like LinkedIn, MailChimp, and Calendly as industry examples, Subha described the clear benefits of a product-led go-to-market strategy.
“A go-to-market strategy that’s focused on the end-user means the product itself is the primary way to acquire customers, to convert customers, and to expand customers. It means you are allowing your customers to evaluate your product in a frictionless, safe way. There is research that actually says customers nowadays want to self learn, and they want a self-serve product. Imagine if you can carve an experience of the product where customers are able to trial through a freemium model, then your product becomes part of the buying experience as your primary go-to-market channel, which is really powerful.”
“While a product-led go-to-market plan doesn’t absolve us of the responsibility of building a great product with the team internally, what it really helps us with is to get out there from an outbound standpoint. To get in front of customers and really hand it off to sales teams and field teams.
On the benefit of allowing customer feedback to lead design improvements
Any great product manager knows that customer feedback is vital to the success of a product launch. Subha emphasized the importance of using that feedback to guide the design process before, during, and after GTM.
“The most important feedback for you to improve your product must be your customer’s voice. Putting the product out there early is the best, sure sharp way for you to improve your product. Product-led go-to-market forces you to do that because your product is truly front and center and the primary way that you will acquire, convert, retain, and grow your customers.”
“Simplicity in terms of experience is actually very powerful.”
About the Video:
About the speaker
About the host
Neha is the Senior Director of Product at Macmillan Learning leading a set of start-up products under the institutional group aimed to address challenges in higher education such as affordability of educational materials, retention and student success. She has been bu.ilding, growing and scaling products in the ed-tech space for the past decade with her experience ranging from course-ware solutions, student facing applications, to analytics and insights tools for decision makers. She loves to travel and lives in South San Francisco to stay close to the airport