3 tips to build your product growth strategy
I spent many years at Google’s central Growth Lab team, supporting growth across Google’s consumer apps, devices, and business solutions. While working alongside product and engineering teams on some of the most loved and valued apps in the world — Google Maps, YouTube, Gmail, Pay, Photos and others —I discovered the value of a strong growth strategy to help identify and improve key business metrics. Growth is an organizational priority, not just a product or sales & marketing responsibility.
Here are my top 3 tips that will help your product teams improve user acquisition and retention. It should become second nature to look across the entire user lifecycle closely and use insights to create compounding returns that drive more engaged users. I’ll be writing an in-depth post for each of these principles to guide you along the process:
Tip #1: Growth is a game of inches.
Small consistent wins compound over time and drive meaningful results. However, this is easier said than done and requires a mindset shift. Best-in-class growth organizations have an iterative, data-driven, fail-fast-and-often culture within the organization. Compare this to a product organization only focused on finding one “killer feature” which will dramatically help you reach an inflection point. (Ken Rudin has an excellent article on app growth marketing that goes in-depth on this topic: https://www.thinkwithgoogle.com/marketing-strategies/app-and-mobile/app-marketing-new-download-growth-engaged-users/)
Setup fortnightly / monthly brainstorming sessions to generate hypotheses and experiment ideas with your team. Before running any experiments make sure you’re prioritizing ruthlessly — what’s going to drive the biggest impact on your growth curve? By making sure you’re keeping rigorous records of which A/B tests and experiments resulted in moving the needle in a concrete way, you can take guesses about where future growth might come from. Lastly, don’t forget to compile results and share learnings with the broader team at your next brainstorm.
Growth is a long marathon, not a 100m sprint.
Tip #2: Use data to avoid experiments that are a shot in the dark.
Once you’ve established a growth mindset in the organization, the most critical element for success is data. With the right data you’re able to identify what day of the week and time of day users convert best on ads, testing the most effective ad headlines and copy, to minutely analyzing steps in the product funnel to avoid a leaky bucket.
Use data to avoid biases in the experiments you’re running, prioritize and validate hypotheses, and identify impact on metrics that matter the most.
However, this is easier said than done. Empowering your team with the right data at the right time requires 3 building blocks:
- Access to real-time reporting or daily/weekly reports (depending on the business need)
- Fully automated multi-channel reporting
- Measuring performance across tools in a single dashboard (Avinash Kaushik has an incredible post on action oriented dashboards: https://www.kaushik.net/avinash/the-action-dashboard-an-alternative-to-crappy-dashboards/)
As if setting-up an organization wide data culture wasn’t hard enough, you also have to navigate today’s cookie-less advertising world. Google is discontinuing support for third-party cookies on Chrome, and Apple has deprecated its IDFA (Identifier for Advertisers) with iOS 14.5. There are 2 alternatives to the cookie.
(1) Universal identifiers for better targeting (which allow for user opt-outs), are a simpler and more reliable alternatives to the third-party cookie. There are a handful of universal IDs in the market today, and each one is attempting to position itself as the standard for the internet. Common universal IDs include The Trade Desk’s Unified ID, LiveRamp’s IdentityLink.
(2) The Verge wrote an insightful piece on Google’s foray into the second alternative — FLOC: Federated Learning of Cohorts. Instead of letting advertisers know your identity, you’ll be associated with a “cohort,” a group of users sufficiently large enough to make you at least semi-anonymous to the companies targeting you.
Tip #3: Define a “North Star” metric to create clarity for your growth strategy.
The North Star has been an invaluable tool for navigation for hundreds of years. In business, the North Star Metric will provide focus to align your product and company-wide priorities in a single direction. Optimizing your efforts to grow this metric is key to driving sustainable growth across your full customer base.
Potential examples include Lyft — daily rides taken, Salesforce — average records created per account, Amazon — number of purchases per month, Zoom — Monthly video calls, YouTube — Watch time per user. The North Star metric is an exercise in simplifying the overall company strategy into terms all can remember, understand, and apply.
Before you pick a metric(s), make sure you have buy-in from your product team and leadership. Along with marketing, they’ll be the ones responsible for delivering the product roadmap outcome from your metric. Some examples of North Star Metrics by industry:
E-commerce
- Customer lifetime value (CLV)
- Average order value (AOV)
- Number of unique users completing orders
Consumer tech
- Daily active users (DAU)
- Monthly active users (MAU)
- Ratio of engaged users (DAU/MAU)
B2B SaaS
- Number of trial accounts with over 3 users in their first week
- Percentage year-two retention
- Monthly-recurring revenue (MRR)
Revenue is a lagging indicator of progress and is not a good North Star Metric. The metrics we choose result in revenue, but revenue itself doesn’t directly add value to the product roadmap. If more people actively watch YouTube Premium, they are more likely to keep their subscription. More subscription means YouTube earns more revenue. If revenue had been the focus, YouTube could double the subscription price, increasing churn and eventually hurting revenue.
Importantly, recognize that your North Star Metric should change as your product and industry evolve.
Conclusion: As you’re building your product roadmap for 2022, make sure to look at your product growth OKRs with fresh eyes. I look for founders who foster a strong growth culture from Day 1, reach out if this resonates with you or you have something to add!
~By Gaurav Bhogale of PJC
