💎 Growth Gems #63 - Product-led Growth, Branding and Acquisition
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This week I’m sharing gems on collaboration between teams, brand building, habit forming products and product personalization. These insights come from Clément Halloo, Scott Dodson, Maggi Ngai, Nir Eyal and Andy Carvell.
🥇 TOP GEM OF THE WEEK
Acquisition: working with creative and product teams
Clément Halloo (now Head of Marketing at Finimize) has been a major actor in the growth of Fabulous.
He discussed growth strategy with Jess Overton (Director of Demand at ironSource Aura), and especially collaboration between teams.
💎 The first step for acquisition is to spend time on understanding which type of users the app can be the most useful for.
💎 For new channels or scaling channels, there needs to be a knowledge transfer from the UA team to the creative team. Example: if you need to scale Google UAC but not enough images/videos, you need to go beyond the specifications and explain to the creative team how the assets will be displayed.
💎 It’s incredibly important for the Product/Growth team to understand the kind of traffic/audience that is brought to the app (e.g. impact of TikTok audience on conversions). For the UA team, it’s important to understand the app and web funnels (e.g. impact of an experiment on UA).
This time, he appeared in Storemaven’s Mobile Growth & Pancakes podcast and I especially liked the part about brand strategy.
💎 You need to carve out the space and time to do the work of figuring out “what you’re about”, your brand. (e.g. at Play Magnus: giving people the means to be the best chess players they can be). Then, your messaging and investments need to reflect this vision.
⛏️ Going Deeper: Scott recommends to watch The Short of It from Les Binet, where he talks about sales activation vs. brand building and the fact that in the long term brand building is what will generate the biggest uplift in sales. He says that in a digital world, emotional brand building is more important than it’s ever been.
💎 Almost every performance marketing channel has diminishing returns in the long run. So you need to figure out how to build the highway out in front of you for the next few quarters and beyond that. Brand helps with this.
💎 You should start ASO by thinking about what you want to do with your app, your overall marketing strategy and how to present your brand. You should not start with keywords or screenshots.
💎 Phiture starts ASO with a health check audit of the app vs. category benchmarks: keyword rankings and conversion rates. Depending on this, they might start tackling search discovery first (e.g if discovery is a weakness) or with conversion optimization first (e.g. if metadata is optimized already).
Product: product-led growth and personalization
You might have also read Nir Eyal’s book Hooked.
If you haven’t, you should.
Even being quite familiar with his work, this discussion from the Growth Summit by Demand Curve still got me reflecting!
💎 The “investment” is something you build into the product to make it better with use, and load the next external trigger. Habit forming products appreciate and get better and better as you use them, so you have to find a way to make the product better with use (“stored value”).
⛏️ Going Deeper: to put this into context, below is the hook model discussed.
3 examples of the investing phase of the hook:
Games: getting players to rack up higher scores, to earn or tend to virtual goods (e.g. a farm, an avatar, etc.)
Airbnb (as a host): replying to messages, improving your home listing, etc.
Bottomless coffee: thought this one was pretty genius, as customers place their coffee bag on the provided scale so that the company always knows when they’re going to run out.
💎 The most important thing to realize is that at an early stage, engagement is more important than growth. If you don’t nail engagement first, it will die down.
💎 You can always buy growth, but you can’t buy engagement. You must design it, it must be build into the product.
💎 We think about the viral coefficient needing to be > 1, but we do not think about the viral cycle time (VCT): the amount of time that elapses between one person sharing your product to one person or more. If that time is longer than it takes people to churn, then you’re losing users.
💎 It’s crucial to know what the internal trigger is. You need to understand the psychological itch, the uncomfortable emotional state that gets people to come back to your product.
💎 Gamification works if the internal trigger is boredom. It tends not to work because it tends to serve chocolate-covered broccoli: something we think people should eat, covered with something people love.
💎 You have to first understand what the internal trigger is for your users to form the habit, then craft the variable reward that scratches the user’s itch. Examples: boredom -> entertain; loneliness -> connect people together; stress/anxiety -> insurance.
💎 If you can’t tell where people currently go to solve the problem, it probably means it’s not a problem.
💎 4 ways to capture the competition’s customer habits:
Greater velocity through the hook: you need to find a way to go through trigger -> action -> reward -> investment quicker
Increasing frequency through a change in interface (e.g. wearables, Alexa, etc.)
Making the reward more rewarding (i.e. scratching the user’s itch better, which requires a 9x product)
Making it easier to get people into the hook (e.g. Microsoft Office vs. Google Docs at the time)
💎 Not every product has to be habit forming. The line of demarcation is not enterprise vs. consumer, it’s frequent vs. infrequent: if your product is not used frequently, you don’t need to form a habit in the product.
💎 If you’re looking at a two-sided marketplace, there might be one side where it does make sense to apply the habit-forming model. Example with Airbnb for owners: hook is uncertainty about who wants the property, action is opening the app/website, the reward is seeing what is the message (how much they’re willing to pay, etc.) and the investment is how much you invest on your Airbnb platform (changing listing, responding to customers, etc.).
💎 If your product is not used frequently enough to build a habit, you can bolt on a habit-forming mechanism on top of the experience. This is done with content or community.
⛏️ Going Deeper: a few examples to illustrate adding this habit-forming mechanism:
Content - Williams Sonoma: buying cookware is not something that is frequent enough to build a habit. So they created a website called Taste with recipes, interviews, videos, etc.
Community - Y Combinator: applying is never going to be a habit but the HackerNews community keeps people around and keeps Y Combinator top of mind.
His session “One Size Doesn't Fit All: Diversifying UX for Incremental Gains” made the case for personalizing the experience across the whole customer journey.
💎 Product-market fit is not a binary thing: it’s a continuum and you can always have more product-market fit. You can have multiple product-market fits if you’re dynamic with both your product and your marketing, which allows you to target multiple user-segments.
by Andy Carvell
💎 Thanks to product analytics we’re now in the golden age and can adapt our product on the fly. If we’re still building once and for everybody without adapting, we’re missing out.
by Andy Carvell
And before I leave, a quote to challenge you to think about the psychological itch that your product is scratching:
“If you can’t name your customers’ internal trigger, you’re flying blind” - Nir Eyal
See you next time. Stay savvy!
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