There’s a growing wave of interest in defining how well a product serves its market. We’ll ask: what’s the ICP, or product/market fit? For a strategic product marketer, these are well placed questions as they both center on how well a product scales against its target market, and customers.
But I like to add an exclamation point to above. There’s a time in the product lifecycle when things are humming, the product has found its target market. This is the point where focused growth can be amplified with like-minded buyers. This is the point where product marketing can excel by identifying repeatable revenue and scaling that revenue to drive growth for the product. This has a measurable impact on a company’s bottom line––vs what I call non-repeatable revenue, which is unscaled revenue that can weigh down a company’s bottom line and veer the company into uncharted markets.
As I recently discussed in an episode of the PMM Hive podcast, there’s a growing wave of interest in defining how well a product serves its market. You can catch the full episode here for more insights, but in this blog post, we will examine how strategic product marketers can take a lead role in driving growth for a product that instills product/market fit.
Way 1: Lay the groundwork for understanding product/market fit
It’s all about the data. How well do you truly understand your users’ daily challenges and if your product effectively solves them?
Painting a picture of how far a company is off or close to product/market fit gives product marketers a seat at the table in go-to-market decisions––by understanding the user’s day-to-day, the challenges they have, and whether the product solves for it––and then using this data to inform common product marketing frameworks, such as ICP, segment analysis, and messaging frameworks. In short, product marketers can use their experience to navigate the art and science of data informing product go-to-market strategy.
And remember, we aren’t alone in this endeavor: modern technology, such as AI and data analytics tools, CRM systems, and marketing automation platforms, are game-changers. They not only facilitate efficient data aggregation but also enhance our analytical capacity, making the task of understanding and meeting our users’ needs more actionable and precise.
That said, it’s worth noting that one of the best ways product marketers can capture their buyers and users’ intent is still through conducting good old customer interviews, using what they learn in these interactions to translate what motivates them and challenges them in their day to day role into product/market fit understanding.
Speaking of data…
Way 2: Understand the ideal customer profile needed to boost revenue
As mentioned, when you think about the customer profile, it’s about understanding the market dynamics you’re serving––the behaviors, segments, challenges, pain points, buyers.
Take note: this is far more intuitive than demographic data! Research is vital to understanding these dynamics. It’s really difficult to rely solely on past assumptions as markets can change, and change rapidly! That’s where qualitative and quantitative research comes in, and they both have their place in understanding those buyers that will gravitate to the product.
How would you determine when to use which? It really depends on your needs: qualitative focuses on the why behind buyers, their behaviors, and their motivations, while quantitative is about validating hypotheses through statistically relevant responses, asking the “what” questions such as: what is their role in buying decision? What do they research when making a buying decision?
Product marketing, being in a pivotal position, can drive this understanding by commissioning research studies on buyers and the buyers’ journey and then actively enabling the organization (via GTM briefs, sales playbooks, and enablement, for example) on that data.
Way 3: Get a sense of the target market (or is it service obtainable market)?
When I loosely defined product/market fit, I mentioned product fit against target market. There’s a lot of interest in total addressable market (TAM) as the definition for target market, because it creates aspirations for a company’s growth. But is the total addressable market (TAM) truly reflective of your target market, or are there barriers you’re overlooking?
The issue here is there’s a big chunk of your TAM that’s unobtainable due to a number of factors, such as sales investment, geo reach, or product capabilities (there’s a great blog by Erik Huddleston on this topic). The true sense of market potential and where you think you can scale repeatable revenue is with service obtainable market, which is the revenue you can capture using existing resources.
Product marketing has an oversized influence in helping shape the organization’s market direction, because they are purveyors of the research determining how well a product aligns to the product/market revenue goals.
Way 4: Understand your internal metrics
There’s plenty that can be understood by looking at your internal metrics. Win/loss ratios are a great place to start, as they are an indicator of how close you are to target/market fit, with the assumption that a higher ratio leads to closer product/market fit.
Beyond the W/L ratio, you can dig a bit deeper to surmise the health of your product/market fit. Are problems being identified? Are sales converting? What is the lead-to-close ratio? Is CAC low? Are you growing CLTV? All of this leads to an informed picture of your go-to-market health.
Way 5: Take a lead role in pivoting the go-to-market from a product toward platform strategy
I recently published a blog discussing the benefits companies can pivot from a product toward a platform strategy in raising revenue and overall value of the company’s offerings. There’s an inflection point where a company’s revenue can plateau as each product is treated as a separate go-to-market. By moving toward a coordinated go-to-market built around a platform, you can increase revenue, AOV, and shift toward a strong customer lifetime value because you’ll be upleveling the buyer toward the C-suite, creating a coordinated positioning platform, and aligning sales, marketing, and product around a singular GTM approach.
The transformative impact of strategic product marketing on business growth
By harnessing the potential of product/market fit, strategic product marketers can transform their approach, positioning themselves as indispensable drivers of sustainable business growth. . Given product marketing’s understanding of the voiceof voice of customers, ideal customer, and target market, putting the product on the road to creating high margins, strong repeatable revenue, and longer lifetime value.