Product marketing is the process that includes developing a product positioning, launching the product, and driving the demand after the launch. It is aimed to connect product management and marketing communications to attract customers to the product.
What is the role of product marketing?
According to Investopedia, the failure rate of startups was around 90% in 2019. This rate has been almost the same for the last 20 years, and such statistics are disappointing. However, there are some ways to minimize risks, and a good product marketing strategy is one of them.
Product marketing is the process of developing and promoting a product. It serves as a link between product management and traditional marketing. The final goal of product marketing is to make the target audience buy your product again and again. Product marketers responsibilities are the following:
- conducting market research;
- analyzing the competitors;
- developing product positioning;
- creating product roadmap;
- developing visual language and tone of voice;
- managing product launches;
- attracting new customers;
- increasing customer lifetime value;
All the stages require a deep understanding of the product features and the chosen market. Product marketing is aimed to drive customer engagement throughout the product life cycle and convert clients into loyal buyers.
It is sometimes difficult to distinguish between product and traditional marketing, and we will cover their main differences in the next section.
Product Marketing vs Traditional Marketing
The division between product marketing and traditional is blurry. However, some points that can help you differentiate these two marketing types.
Traditional marketing focuses on marketing communications, project management, and content creation. At the same time, product marketing includes lots of data analysis and research. One more difference is that product marketing works on the bottom of the sales funnel. Product marketers develop product messages, while traditional marketers focus on the top of the funnel and get these messages out to the world.
Although traditional and product marketing are separate, they work together to promote the company's products. Look at the table below. Here we provide the main tasks of product and traditional marketers on each stage of the product development and its life cycle.
|Building a strategy
|Identify the perfect market and target audience;
develop unique proposition;
build a go-to-market strategy;
make a product roadmap.
|Develop brand personality;
bring the strategy to life.
|Identify the messages the target audience need to hear;
control that traditional marketers convey these messages accurately.
|Develop a tone of voice and visual language;
create the messages and put them into context.
|Analyze the customers’ behavior and define the ways to persuade them;
focus on increasing customer lifetime value, not on attracting leads.
Focus on attracting new customers and producing short-term revenue.
Note that traditional and product marketers can work together on these tasks and the differences are conditional. However, the essence is simple: traditional marketing is more practical, while product marketing is more analytical. Product marketing strategy is its inalienable part.
Continue reading to discover how to create a successful product marketing strategy for your business.
Product Marketing Strategy
One of the main responsibilities of product marketers is to develop product marketing strategies. However, you do not have to be a product marketer to launch the product successfully. Below we provide the main things you should do at all product launch stages.
Conducting research is the first step in product development. Market research consists of two parts: analysis of the target audience and the competitors.
To analyze the target audience, answer these questions:
- What people might need your product?
- What are their needs and pains?
- What features should your product have to solve their problems?
To analyze the competitors, you should find answers to these questions:
- What are your direct and indirect competitors?
- What are their products’ advantages and disadvantages?
- What are their prices?
- How do they promote their products?
Also, you should discover all the market features, such as economic or political regulations, prospects for future development, possible weaknesses, etc.
When you have carried out all the analysis and got the information about the market's peculiarities, it is time to think about the product idea. There are a few strategic points: the variety of the product line, pricing, positioning, and the distribution channel. Having decided on them, you should develop and test the minimum viable product on a limited number of potential customers.
To finalize the product concept, writing a product story will be a good idea. It should describe the target audience, product value, its personality, unique features, visual language, tone of voice needed for marketing campaigns, etc.
Planning and product launch
To launch the product successfully, product marketers write down a go-to-market strategy and work with traditional marketers to create the messages and put them into context. Before the launch, you should:
- agree on a budget and pricing;
- highlight the main metrics;
- decide on the minimum set of features needed;
- choose the region to start from;
- choose the main marketing channels to attract potential customers;
- prepare marketing materials;
- improve the sales funnel in collaboration with other departments;
- test various types of content within groups of the target audience before the launch.
When everything is ready, product marketers launch the product according to the marketing strategy.
Community engagement and sales
The responsibilities of product marketers do not finish after the launch. They should work actively with an attracted audience to boost sales and increase customer lifetime value. Product marketers communicate with sales staff to ensure consistent product personality. They question existing customers and improve the product constantly.
Now you are ready to develop a product marketing strategy for your company. Read about the most important marketing metrics in the next section.
8 Most Important Product Marketing Metrics
Product marketers track lots of metrics to control the success of marketing campaigns. Below we provide the most important ones influencing every company’s marketing promotion.
- Revenue is the amount of income generated by all business operations. To calculate it, you should multiply the average sales price by the number of products sold.
- Adoption rate is the percentage of customers using the product regularly. To calculate it, divide the number of new active users by the number of sign-ups and multiply by 100%.
- Retention rate is the percentage of customers who continue to use the product over some time. The ideal retention rate is 100%, but this percentage is almost impossible. To keep the retention rate high, you should constantly improve the product’s features.
- Churn rate is the opposite of the retention rate, and t is the percentage of customers who stopped using your product. When the retention rate goes up, the churn rate goes down and vice versa. The goal of every company is to decrease the churn rate.
- Customer lifetime value (LTV) is the total profit a customer delivers to the company during their lifetime. Product marketers improve products and service quality to increase LTV. This metric is closely connected with retention. It also helps decide how much to invest in customer acquisition.
- Customer Acquisition Cost (CAC) is the money needed to attract a single customer. The goal of the marketing department is to reduce CAC. You should do cost optimization LTV/CAC regularly. You can aim for a value of 3:1 or even more than 3:1.
- Average deal size is the average revenue of the company from one purchase. This metric helps understand the capacity of different sales channels and choose the best ones. A few ways to increase the average deal size include cross-selling, upselling, using a well-developed product line, etc.
- Close rate is the percentage of leads that turn into customers. The high close rate means the efficiency of marketing and proficiency of the sales team.
It is vital to notice the problem immediately and make necessary changes in the strategy as quickly as possible. Check these metrics regularly to ensure that the marketing campaign is going well.
Examples of Product Marketing
There are lots of inspiring product marketing examples in different spheres that help business owners boost their companies. This section provides six of them to suggest some fresh ideas for your product promotion.
Unsplash is a website for sharing photos. It is well-known throughout the world due to its well-defined launch strategy. The Unsplash team decided to make a book when they had only 30,000 photos uploaded to promote their website. They launched a campaign to raise $75,000 and created a video masterclass on positioning to attract more attention to the idea. The fundraising was successful, and Unsplash published a book. This website has 158,881 photographers and a collection of over 1.2 million photos.
The main problem with such stores is that people can’t try their products before buying them. However, ASOS made the decision. They use visual marketing and provide videos to show the products from all angles. One more advantage of their product marketing strategy is social proof: people can upload photos of the ordered clothes with the hashtag #asseenonme. The result is a market capitalization of more than $6.5 billion, and ASOS continues to develop.
Man Crates sells gifts for the men, such as snacks, drinks, and sports items. They add unique packaging and free personalization to every crate. Besides the fact that the product is made for men, their target audience is women searching for present ideas. Man Crates are positioned as amazing gifts. They promote their product using video marketing and highlight their excellent customer service that is extremely important for the female audience.
Congrats, now you know the difference between product and traditional marketing, the steps to develop a product marketing strategy, and the most important product marketing metrics. Use this information to promote your company and launch new products successfully.
Last Updated: 22.03.2023