Why and How to Invest in Product Marketing

WRITTEN BY Lyle Burns, Fluvio Consultant

Whether your organization is looking to drive growth or become more resilient in the face of economic uncertainty, understanding where to invest resources is critical. Making the most informed decisions requires awareness of the market landscape and a deep understanding of customers. From there, organizations can determine options such as:

If the most efficient and effective ways to reach their most profitable segments is through new customer acquisition or customer retention
Whether to invest in expansion, or
To scale down to focus product on core competitive differentiators.

During times where companies are growth-focused or looking to become more resilient, smart marketing investments can deliver high ROI. Chris Smith, Chief Strategy Officer at Grant Thornton, says “growth starts with defining and segmenting customers, listening to the needs they express and drawing inferences about the needs they aren’t expressing. Then after developing an understanding of customers’ needs, organizations need to align their marketing and sales strategies to fulfill those needs.”(1)

Building resiliency similarly requires honing focus on what drives the most value with customers and having cross functional teams that can quickly respond to changes in customer behavior. Those are core to the role of product marketing, putting it in a unique position to help drive growth strategy and deliver ROI.

PRODUCT MARKETING DRIVES STRATEGY ACROSS THE ORGANIZATION

Product marketers work with product, marketing, sales and customer success teams to gather market and customer insights, help determine product-market fit, build ideal customer profiles, personas, and messaging, lead go-to-market (GTM) efforts, and support pricing, packaging, and sales enablement strategy. Effective product marketers have their hands on high-impact strategic and tactical initiatives that drive value across the organization.

When product marketing is working effectively, it works cross-functionally to accelerate initiatives across each team, bring teams the necessary information to make informed customer-centric decisions, maximize effectiveness, and drive revenue.

PRODUCT MARKETING HELPS UNDERSTAND AND TARGET YOUR MOST YOUR IDEAL, MOST PROFITABLE CUSTOMERS

The first key to driving strategy is awareness of the market and ongoing trends that can influence your business, and then identifying, verifying, and developing a deep understanding of your target audience in the market. This is one of the primary areas where product marketing can take the reins in guiding strategy as the expert on the voice of the customer.

Customer-centricity has been a focus by organizations over the past year with markets becoming more competitive, customers having more options and doing more research before engaging with sales teams, and customer experience becoming a bigger dealbreaker, costing businesses an estimated $35 billion annually (2). In fact, data shows that improved customer experience increases revenue, drives profitability, and is a key area of competition for companies. (3)

Product marketers should be regularly speaking with customers and lost prospects to uncover insights into the buying process, the customer’s experience, and their perception of a product. These conversations allow them to understand customers’ problems, needs, and goals, along with what motivates them and drives their behavior, giving your PMM teams access to a wealth of data that creates positive impact across marketing, sales, and product.

With only 32% of customer experience professionals having the access to information needed to understand customer needs and previous interactions (4), there’s a gap between the importance of customer centricity and an organization's ability to act. Making customer insights and data actionable starts with using that information directly from the customer, along with broader market trends and research, and internal knowledge and data in order to create ideal customer profiles, buyer personas, and user personas, as well as segment customers. Added definition allows an organization to focus on the customers that not only convert, but are most profitable so that spend is focused and not wasted.

From there, this understanding of the customer should cascade into multiple parts of the business.

A MORE INFORMED PRODUCT TEAM DRIVES GROWTH AND DIFFERENTIATION

While product managers and the overall product team have a deeper understanding of the product’s technical details and own the development of the product roadmap, there are key benefits to involving product marketing. Working closely with product marketing helps bring in the customer perspective and can be crucial when prioritizing which request in a backlog would deliver the most value based on understanding the ideal buyers, the business, and the competitive landscape.

Beyond just the decision making process, product marketers are always working to effectively communicate the product’s value and roadmaps are key in telling the story of where the product is going, why it’s going in a particular direction, and the value it will be delivering. As a product marketer, I often find that product teams can benefit from talking through what they’re building and why to have the technical value translated into customer and business benefits, or even discover how the approach may need to be made more standard to serve customers more effectively. Including product marketing in the conversation introduces a different perspective and stops a decision from being made in a silo.

Finally, early involvement by product marketing helps with the communication of what is being built and allows for time for effective go-to-market (GTM) planning.

PROVEN GTM PROCESSES MAXIMIZE THE ROI OF PRODUCT INVESTMENT

At Fluvio, we believe that we offer the most comprehensive and repeatable go-to-market model, built around eight inbound initiatives that support sales and marketing (outbound) activity, nine outbound initiatives to target audiences with precision, and six initiatives that serve as accelerators.

Whether using the Fluvio GTM Model or a different model, an effective go-to-market strategy ensures that the investment of building a product or feature is maximized. From confirming product market fit, selecting the proper target audience, planning demand, positioning the product, and sales enablement plans, all to accelerate the adoption of products and features and drive continued usage, by aligning marketing, product, sales, and customer success.

According to research from SoftwareReviews, a well-developed and executed GTM increases the chances of product launch success by 50%. (5) McKinsey notes that an agile and data-driven GTM approach can improve conversion rates and lower the cost to serve by 5 to 15 percent. (6) By contrast, a weak or poorly defined GTM strategy can slow product revenue growth.

MESSAGING THAT RESONATES AND SALES TOOLS TO ENGAGE CUSTOMERS EFFECTIVELY

A key part of a product marketer’s role is supporting sales. According to Hubspot, organizations with sales enablement achieve a 7% higher win rate (7) than organizations without and according to G2, 76% of organizations see an increase in sales between 6% and 20% when adding sales enablement support. (8)

No matter how great a product is, its value needs to be communicated and sales needs to be set up to effectively reach your target audience with a compelling message and story. Product marketers take in all of the customer insights, competitor research, and market research in order to speak to customer pain points and highlight the most relevant outcomes that matter to those customers.

This sets the foundation for the sales enablement assets that the sales team will use to close more deals or that customer success teams will use to cross-sell and upsell. This process can include creating battlecards with key talking points, sales scripts, pitch decks, one-pages, and more. As product marketing works closely with sales, the feedback loop is strengthened, giving product marketing more insights to distribute and the ability to refine the messaging and collateral to more effectively reach buyers.

ENGAGE AND GROW WITH YOUR CURRENT CUSTOMER BASE

In many cases the best way to drive growth is by retaining and growing with your current customer base. According to McKinsey, “80% of the value creation achieved by the world’s most successful growth companies comes from… unlocking new revenues from existing customers.” (9)

Putting focus on existing customer growth is not a new strategy, but it is often taken for granted. However, its effectiveness is a reason for the increasing focus on product-led growth. Product-led growth strives to allow the product to speak for itself and demonstrate its value in action. This allows for the collection of more data to help marketers and product teams collect more data on user data. Product marketing is essential in retaining and driving growth with existing customers, whether it’s product-led or in a traditional fashion.

In a product-led growth environment, companies often use a free trial to convert customers to paying clients or customers have to up their level of subscription to unlock additional features as needed. Onboarding becomes more essential than ever as does communicating the additional features that are upsold.

Product marketers create strategies, messaging, and collateral to streamline onboarding for customers and communicate and reinforce the value and encourage action that drives conversion with in-app messages. In a traditional approach, product marketers are working with customer success to map out user journeys, identify power users, understand high value, but underutilized features, and constantly marketing to current users to drive usage and create upsell and cross-sell opportunities, with the goal of optimizing the customer experience while increasing revenue.

INVESTING IN PRODUCT MARKETING MEANS INVESTING IN GROWTH

Product marketing, when empowered and done correctly is an extremely high value role and function within a company. As it touches and supports so many strategic and tactical projects across the organization, PMM can have a significant impact in driving growth opportunities and building more resiliency in the company. In fact, clients that have worked with Fluvio have experienced these results for themselves. As Fluvio consultants, with expertise in product marketing embed themselves into an organization, clients have mentioned seeing “deepened relationships with Product and Revenue teams”, “development of go to market capabilities”, “increased alignment across functional teams”, “identification of new market opportunities”, and “more impactful sales conversations”.

Even during times of economic instability and contraction, product marketing is an area where companies should invest in as a way to align key teams, get a deeper understanding of the market and customers, reinforce the product’s message and position in market, put key strategic processes in place, and to support revenue generating teams in sales and customer success.