What we cover in Episode 26
For product-led companies focused on SMB and mid-market, a standard growth opportunity is to stretch their business upmarket.
Often companies with a low touch go-to-market are faced with the question of layering on a higher touch business to go after more advanced customers or lose those customers to competitors.
In this episode, we talk to Hana Abaza about her experience in marketing ShopifyPlus:
- How she created a marketing plan to sell into a new segment for Shopify
- What you need to consider when moving from low-touch to high-touch
- The role that product marketing plays.
Enjoy the episode and until next time,
1. Moving upmarket is about intent vs. volume
A lot of product-led companies who begin life in the SMB, Mid-Market will eventually get 'stretched' upmarket.
What do we mean by 'stretched' upmarket?
Companies who adopt your product grow in size. That growth causes many of them to switch to competitors who can better serve their more advanced needs.
You want to start building a product for that cohort of customers and so decide to stretch the product to meet their needs.
When you move upmarket, it causes you to invest in a higher touch model, one that requires dedicated sales and customer success teams. Your marketing plan becomes a lot more about intent vs. volume.
"Your marketing plan is a lot more focused on audience segmentation and targeting channels that may not be as scalable, but where there is very high intent from potential customers." - Hana Abaza
To start building this plan for ShopifyPlus, Hana started by building out a dedicated marketing team focused on the segment of companies who were a better fit for their more advanced product.
She then worked on shifting the mentality of the teams focused on that segment to be more intent driven in their approach to customer acquisition.
When you get stretched upmarket a lot of the things you'll do to acquire customers for higher priced plans is better marketing into the demand you're already capturing.
"A significant amount of our time is spent marketing into our existing audience." - Hana Abaza
Of course, you'll spend some time acquiring net new demand for higher-priced plans by leveraging higher intent channels.
For example, Hana's team finds channels and forums where people are talking about topics Shopify want to be visible for and engaging in conversations on those topics. Part of this plan is investing in things like events and other forms of offline marketing to engage with those prospects.
But a lot of your efforts will be spent on segmenting your audience and marketing directly to those segments.
"What's worked great for us is marketing to our existing database, and the ability to do that comes down to how well you can segment."
Hana segments on fit, engagement and intent.
Fit and engagement are relatively painless to work out. Sure, you'll need to find an endless amount of data sources to make them work well for you, but logically both make sense.
The intent is always the hardest piece of the puzzle to solve. Intent means you can identify companies who might be ready for your higher priced plans through their product usage, and other variables.
"Intent is tricky unless they explicitly raise a hand and say, give me a demo. What we're trying to figure out is what are those buying signals that might not be so obvious to us."
In product-led companies, you determine intent through product usage. For example, at HubSpot, I've talked before about how we built a PQL model and how we categorized PQLs into the following buckets:
a. Triggered - a user hits an upgrade trigger after hitting a limit on a free feature, e.g., X number of email templates, X number of call minutes.
b. Gated - a user hits a feature that is locked unless they upgrade
c. Usage - a user completes some actions that suggest they could be ready to upgrade.
For Shopify, product usage is one of the things they look at when figuring out intent:
"We look at how they use the product. What apps have they installed? What is their growth rate? What's their usage for certain features?"
Product usage is excellent for users/companies who are already using the product; it's less actionable for net new demand, e.g., a company requests to demo a product, and has not used the product before.
And it's not great for companies who convert on the free trial, as product usage for free trials tends to be a less accurate measure of intent.
2. Product marketing is crucial to stretching your business upmarket
Product marketing often means different things depending on the person you're asking.
Hana feels the critical responsibility of product marketing is to take a product/feature to market, have an end to end strategy that makes it successful and provides ongoing work to grow the usage of the product/feature.
The tricky part about this description is it sounds like the job of a lot of different groups to make all these things happen.
"The tricky part with product marketing is it's probably the most cross-functional function there is.
You can undoubtedly attach metrics to all of product marketings responsibilities, but they're not the ones that can solely influence it.
You need to think carefully about your team structure, roles, responsibilities, and KPI ownership." - Hana Abaza
Product marketing is crucial to how you position the product for each segment of your audience.
How you position, it will also change as the people using it move from early innovators to a mature market with a lot more competition. As an example, consider how Dropbox's tagline on their home page has changed from - "Sync your files online and across computers" to "Put your creative energy to work, with Dropbox."
Most companies struggle to find the balance between being too literal, or too abstract with their positioning.
"Your positioning either becomes too abstract and focuses on saving time, saving money or making money, no different than every other product, or too granular, and it describes the exact functionality but misses out on anything related to the customer." - Hana Abaza
The correct positioning is one that describes the mission of your product, why it matters to your customer, and talks to features they'll care about
The podcast provides a more in-depth look at these topics, so if you enjoyed reading the above, please do give it a listen.
And until next time,
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