How to build a product that sells itself | Product-led Growth | Book Summary | Read a book with me

Key Takeaways

Hello friends welcome to my Channel today in this video we're talking about how to build a product that sales itself I'm going to talk about what I have learned from reading this book product Le growth by West Bush which came highly recommended to me this book covers three main parts how to choose between a product Le growth model and a sales Le growth model how to build a product Le business and how to optimize your business each of those sections comes with its own interesting Frameworks and ideas if you're interested in learning more please keep watching okay let's get started the essence of a product Le business is to let users try before they buy either through a free trial which provides a partial or Complete product to customers free of charge for a limited time or through a premium feature which provides access to part of a product to customer free of charge without any time limit unlike the traditional sales Le business model where customers request a demo and go through a very long sales cycle a product Le business relies on using your product as the main vehicle to acquire activate and retain your customers product Le businesses tend to scale a lot faster and has a significantly lower customer acquisition costs however product Le growth model is not for everyone first part of this book talks about how to choose between a sales Le growth model with demos or a product Le growth model with free trials or premium this book introduces a Mot mode framework to help you choose m stands for Market strategy there are three Market strategies dominant strategy differentiated strategy and disruptive strategy the dominant strategy works the best when your product is much better than your market and charges significantly less companies like Netflix Uber and Shopify are in this category because you want to keep the cost low and be competitive in the market free MIM and free trial models work better than the traditional sales models with demo requests differentiated strategy requires a company to do a specific job better than the competitors in charge significantly more more this strategy works great with free trials and demos however because of the market size limitations and the complexity of the product framing will not work disruptive strategy charges less for a worse product an example is canva compared to Adobe K provides fewer features and charges less the frame model works great in a disruptive environment o stands for ocean conditions red ocean companies try to outperform their competitors to grab a great greater share of existing demand blue ocean companies access untapped Market space and create demands if you're in a blue ocean company and have a complex product like Salesforce using a sales LED strategy to educate your audience and create demand if you are in a red ocean company use a product LE model to widen your funnel and convert non-customers a stands for audience are you selling to Executives who are at the top or are you trying to attract users first with the bottom up selling strategy take slack for an example slack starts with one user who invites colleagues and then a team to join and eventually business invests in slack because everyone is using it product Le growth model works the best with the bottom up selling strategy T stands for time to Value the key to a successful product Le business is to have a quick time to Value new users need to be able to experience a key outcome in your product quickly and without any Assistance or handh holding so that is the mode framework mode framework helps you decide whether to choose a sales lead or a product Le growth model and if you choose a product Le growth model you also need to decide on whether to choose a frame trial or a fremium model and of course you can consider whether a hybrid model might work better for you the second part of this book talks about how to build a product Le business using a US CD framework you is understand your value there are three reasons that people buy a product functional outcome describes the core tasks that customers want to get done emotional outcome is what you want your customer to feel as a result of using the product social outcome is how the customers want to be perceived by others by using the product product-led companies should consistently monitor customer usage patterns to see if users accomplish those three outcomes this is where value matrics are important for example for slack a value metric could be the number of messages sent a good value metric is easy for customers to understand it's aligned with the value that customers received in the product and grows with the customers usage of that value companies should use a data driven approach to find the appropriate value metrics by asking what do the best customers do in the product and what do churn users do differently this is where your data teams coming to play and help you understand your data C is communicate the proceed value of your product the section about communicating the perceived value of your product is actually tied to pricing unlike sales Le companies who love to hide their pricing behind closing doors product Le Growth Company show their price up front the four common pricing strategies are the best judgment pricing where you and your team decid on the price Cost Plus pricing where you add a profit margin on the top of your cost competitor based pricing benchmarks your pricing based on your competitors and then finally value based pricing bases your price on the value you provide for a successful product-led business you should use the value based pricing but how do you determine your price either through a pricing economic value analysis or through market and customer research one example of the pricing economic value analysis is to use an outcome BAS value metric tied to revenue to uncover how much value your product provides and follow a 10x rule meaning that if I sell something for $100 I want to provide at least $1,000 in value to my customer one example of conducting a market in customer research is through the van Western Dorp pricing sensitivity meter research I actually wrote a blog post on this and how to calculate the optimal pricing points using python I will link this article in the description below D is deliver on what you promise what we promise in our marketing and sales is the perceived value and what we deliver in our product is the experienced value ideally the perceived value should align with the experienced value there are three main reasons why you feel to deliver your value first is your product has serious ability debt you can't have a restaurant selling spaghetti but expect customers to go to the kitchen with all the tools and features and make it themselves say second is you don't understand why your customers buy third is you overpromise what the solution is capable of observing customer on boarding sessions will help you understand where you feel and you can correct in the observations we can write down the key outcomes that someone wants to accomplish focus on where you need to offer a helping hand and clear the path to improve the product so that's the UCD framework understanding your value communicate your value and then finally deliver on what you promise those are the foundations of building a product Le business the third part of this book talks about how to optimize your product Le business through the AAA Sprint framework the bowling alley framework and your average revenue per user and also churn strategies the the AAA Brint framework talks about a monthly Sprint session of three tasks analyze ask and act the IC method to prioritize tasks is quite interesting so we compile a list of items that could improve your product experience and we score each input on three elements impact how big of an impact could this input have on an output I want to improve second is confidence how confident am I that this input will improve my output Matrix third is ease how easy it is to implement so we can use the IC method to calculate a IC score for each input filter out your ideas and find the best one or two opportunities to implement on that will have the biggest impact on your business so that was quite interesting I also think the bowling alley framework is quite interesting it's probably my favorite uh framework in this book bowling alley framework talks about that we would like to keep our users focus on the product if the user get sidetracked or leave the product we use a product bumper and a conversational bumper to bump them back in the right direction product bumper includes welcome messages product tours progress bars checklist on boarding tool tips in empty states welcome messages restate your value proposition and set expectations product tools ask what users want to accomplish and set users up for Success progress bars increase the desire to complete the task checklist motivates people to complete crucial setup tasks because of the endowed progress effect and the Z garnic effect endowed progress effect describes the scenario where people who think they're close to complete something or more like lik ly to see it through that's why we should partially fill out the checklist by the time users see them Zen carnik effect describes our tendency to think about incomplete tasks more than completed tasks onboarding two tips show firsttime users how to use the product and show experienced users new areas of the product empty States prompt users to take an action that will lead them closer to experience meaningful value in the product conversational bumper includes user onboarding email emails push notifications explainer videos and direct mails onboarding emails are the most important since it has the highest clickthrough rate the top nine onboarding emails are welcome emails usage tips sales touches usage reviews case studies better life emails post-trial survey expiry warning or trial extension emails and finally customer welcome emails the common theme and goal for those emails are to communicate values set expectations help users accomplish a quick win and enoy people into different email onboarding tracks based on where the user is in their Journey so that's it for this book overall this book uses several interesting Frameworks to talk about how to choose build and optimize a product Le business it's very easy to read and straightforward thank you for watching and I'll see you next time