product growth strategies

A product progress technique may be useful in various methods. It could assist an organization to develop a product that’s extra interesting to prospects, to extend the market share for a product, and to generate extra income. Aligning the complete group round your product progress technique will assist all of the groups work collectively and meet a typical objective. This weblog talks about essentially the most highly effective product progress methods with examples. It’s also possible to upskill with Nice Studying’s PG Program in Product Administration and Analytics and study extra.

Let’s get began!

  1. What are product progress methods?
  2. Kinds of progress methods
  3. Examples of product progress methods
  4. Closing Ideas 

What are product progress methods?

A product progress technique is a plan for a way an organization will enhance gross sales and develop its enterprise. This will embody new product growth, advertising campaigns, and growth into new markets. It may be a long-term or a short-term plan. 

You may embody the next parts in your product progress plan:

  • Aim: What do you want to obtain? 
  • Individuals: How will the objective affect folks in your organization?
  • Product: Will the product make it easier to obtain your objective?
  • Ways: What’s the plan of motion to attain your objective?

As soon as you’re clear in regards to the product progress methods that you just want to use, your groups can work in a clearly outlined method to assist obtain success. Mailchimp has an estimated annual income of over $700 million, all as a result of they’d a transparent plan of motion in place.  

Kinds of progress methods

Every firm, product, or service would require a distinct technique relying on its finish objective or necessities. There are 4 primary kinds of progress methods which you can think about using. They’re as follows: 

1. Product growth technique

Because the identify suggests, this kind of technique is about the way you develop new merchandise to serve your prospects and develop your market share. A brand new product ought to work in the direction of fixing a brand new drawback or support in fixing an issue that your present product already solves. Growing or enhancing the present product at hand additionally comes underneath a product growth technique. 

2. Market growth technique

A market growth technique is a plan to establish new market segments and/or new geographic markets that the corporate can serve. To develop your small business, it is advisable to work on increasing your market share. To take action, you possibly can increase your product person base or develop a brand new buyer phase. The market growth technique is gross sales based mostly. 

3. Market penetration technique

A market penetration technique is a plan of motion designed to extend gross sales and develop market share for a specific services or products. The objective of market penetration is to attain a bigger share of the goal market than the competitors. There are a number of methods to execute a market penetration technique. The commonest is to decrease the worth of the services or products so as to make it extra inexpensive and interesting to potential prospects. This may be performed via reductions, coupons, or different promotional gives. Moreover, firms might supply free trials or samples of their product so as to generate curiosity. Different methods to penetrate a market embody growing advertising and promoting efforts, growing distribution channels, and bettering the services or products itself.

4. Diversification technique

A diversification technique is a strategic plan to enter new markets and merchandise with the objective of lowering enterprise threat. As an alternative of working in the direction of increasing the present services or products, you’re employed in the direction of getting into a brand new market. It may be dangerous however can reap nice advantages if profitable. 

Now that we have now seemed on the various kinds of product progress methods allow us to study with the assistance of some examples. You may apply these methods by understanding extra in regards to the buyer lifecycle, reminiscent of – acquisition, activation, advocacy, and retention. Relying on the stage within the buyer lifecycle, one can select to use a selected plan of motion. For instance, “How can we work in the direction of growing buyer acquisition so as to obtain market growth?”. 

Examples of Product Development Methods

Every firm has completely different necessities and targets, so whereas we are able to’t copy-paste successful story to our personal technique, we are able to at all times study from them and implement what we have now discovered from every. 

1. LinkedIn grew its person base via inviting connections

The idea of importing your contacts was pretty new on the time LinkedIn used this technique again in 2004. They constructed an Outlook plugin that may undergo a LinkedIn customers contact record and used e mail advertising to achieve out to those contacts. In case you have been an early adopter, you may need been on the receiving finish of this e mail advertising technique. This turned a cycle as in when a brand new person signed up and synced their contacts, this new set of contacts would obtain the e-mail. LinkedIn discovered that the variety of emails despatched earlier than a person signed up for the platform was 4. This technique labored effectively for LinkedIn, growing its person base from 500,000 in 2004 to 2 million in 2006. 

Key takeaways: In search of progressive methods to make use of your present person base and draw new customers to your product. 

2. Airbnb continued to scale by simplifying person critiques 

In one of the notorious progress hacking tales, Airbnb founders Brian Chesky and Joe Gebbia engineered their very own integration permitting hosts to double put up their adverts to Airbnb and Craigslist without delay. This allowed them to kick off, however now they needed to develop their model. That is the place person critiques got here into the image. The evaluate system turned a vital a part of attracting new prospects and rising their merchandise. Hosts that had greater than 10 critiques have been extra prone to obtain bookings. By simplifying the suggestions or evaluate course of, they inspired customers to offer suggestions, thereby rising its authenticity and authority.

Key takeaway: Determine areas of friction and work in the direction of constructing a reliable product.

3. GitHub grew its customers to 100,000 in a 12 months by nurturing community impact

GitHub, which started as Git, is a software program growth device designed to unravel an issue that coders have been dealing with by permitting a number of builders to work collaboratively on a single venture. The founders realized that the problem wasn’t about collaboration or a software program drawback however that the neighborhood was lacking a communal issue. This was after they determined to develop the neighborhood facet of the product, the place they launched an open-source repository. Right here, coders may brainstorm initiatives and clear up issues collectively. 

With the introduction of this characteristic, GitHub was a type of social community for coders and gained 100,000 customers in a bit of over one 12 months from its launch. Inside 4 years, they have been in a position to safe $100M in enterprise capital. The extra builders that joined, the higher the device turned. 

Key takeaway: Construct a neighborhood on your product and permit customers to come back collectively. 

4. How BuzzFeed grew guests with their golden guidelines of shareability

BuzzFeed is continually churning out content material and getting 2.4 billion content material views on a month-to-month foundation. Their key product progress technique was to pursue virality in every part they do. BuzzFeed CEO Jonah Peretti began listening to his readers. He realized that readers needed to have the ability to share content material with their neighborhood and have been disillusioned after they weren’t ready to take action. The important thing metrics utilized by BuzzFeed have been social shares and visitors on social media websites. Thus, they created the Golden Guidelines of Shareability and analyzed viral content material to construct content material that’s shareable.  

Key takeaway: Determine the factors that appeal to the viewers to your content material based mostly on suggestions or information and provides the folks what they need. 

5. StitchFix used algorithms to personalize the purchasing expertise

StitchFix needed to construct a web-based styling service that enables customers to have a extra customized purchasing expertise. They began asking customers to replenish a questionnaire in the course of the sign-up course of, the place they gathered information about physique kind, most needed gadgets, life-style, and extra. This information was then fed to the algorithms that helped perceive buyer preferences and thus supplied a extra customized suggestion. They delivered a product that was based mostly on information and information however felt private to the customers. Their energetic shoppers have been growing 17% year-on-year, thus reaching 3.5 million in 2020 Q2. 

Key takeaway: Present prospects with a personalised expertise. 

Concluding Ideas

As we have now seen within the above examples, every staff was capable of finding a small loophole or potential space the place they may enhance their course of and construct their technique. Whether or not you want to retain prospects or appeal to new ones, pinpoint one such space and construct a plan accordingly. Hearken to your customers and construct a plan that works for you. 

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