Product-Led Growth (PLG’23)

Growth Models, Acquisition, Activation, Retention, Pricing & Monetization

Karan Peri — Conversation optimization using User Intent

Growth involves understanding and implementing various models and frameworks.
Pirate Metrics (AARRR) is a framework for understanding growth.
User Intent is the motivation that drives people’s actions.
Different traffic channels have different conversion rates.
User intent can be managed by creating, acquiring, shaping, and serving intent.
There are several myths and pitfalls in conversion optimization.
Understanding the user flow and determining the conversion metric that aligns with your product’s goals is crucial.

Julie Zhuo — Essentials of Retention

Retention is a crucial metric for many companies.
Cohort Curves or J Curves are used to understand retention.
You need to segment your users based on actionable characteristics to improve retention.
Experimentation is crucial once you understand your retention and have segmented your users.
Some common pitfalls in retention include focusing on acquiring new users without considering their quality.

Brijesh Bhardwaj — Optimising Onboarding Experience

The job of onboarding is to get the user to experience the “aha moment.”
Onboarding starts at the first touch point.
An app can have many “aha moments,” depending on who the user is and what they came to the app to do.
The first step to finding all your “aha moments” in the app is to define personas.
The person building the onboarding experience should be tightly aligned with the marketing team.

Aquibur Rahman — B2B Onboarding and Activation

The goal of onboarding is to guide the user to an “aha moment” or the “point of not coming back.”
A common mistake in onboarding is trying to educate the user about every product function.
To improve onboarding and activation, it’s essential to measure your funnel.
Users can be segmented based on their source, intent, and activities.
Identifying the key activation point is crucial.
Asking questions at the beginning of the onboarding process can help personalize the user’s experience.
A fun and engaging welcome message can set the tone for the onboarding process.
It’s essential to let users know what they should expect from the product.
A clear path to the main goal can help guide users through onboarding.
Using GIFs and videos in the onboarding process can make it more engaging and easier to understand.
Gamification can make the onboarding process more engaging and fun.
Showing users what they can achieve with the product can be a powerful motivator.
Social proof can be a powerful tool in the onboarding process.

Ankur Gattani — Growth Strategies to Drive Higher Retention

Retention marketing is about keeping customers engaged and loyal to your product or service over the long term.
Retention should be considered from the very beginning of product development.
Understanding retention metrics such as D30 (Percentage of users retained on the 30th day after their first event.)
A good business should have a CLTV to CAC ratio above three.
The starting point for improving retention is segmentation.
RFM (Recency, Frequency, Monetary) Analysis is a helpful tool for understanding user behavior.
Different goals need to be achieved at different time scales.
Automation is necessary for managing hundreds or thousands of dynamic micro-segments.
Setting up journeys, which are combinations of multiple messages across multiple channels with a specific objective, is crucial for retention.

Sumant Subrahmanya — Role of Gamification in Driving Retention

Gamification uses game design elements to make the user experience more engaging and fun.
Gamification is not just about points, badges, and leaderboards. It’s about using game elements like progress meters, timers, and surprise rewards to motivate users.
Gamification can be applied to an e-commerce app by adding a scratch card layer that hides rewards, creating a sense of excitement and anticipation.
The Octalysis framework breaks down motivation into eight core elements: Epic Meaning & Calling, Development & Accomplishment, Empowerment of Creativity & Feedback, Ownership & Possession, Social Influence & Relatedness, Scarcity & Impatience, Curiosity & Unpredictability, and Loss & Avoidance.
Streaks are used to build habits. They involve completing a specific activity regularly over a certain interval.
Instant gratification is vital in gamification, especially for new users who may be overwhelmed by a new app.
A framework for developing a gamification strategy, choosing a metric to improve, defining the audience and goal, choosing a gamification construct, defining the budget and reward, defining the discovery points, launching the strategy, and iterating based on feedback and data.

Toshi Prakash — Essentials of Monetization

Monetization is converting a non-revenue-generating source of value into a source of revenue.
Pricing is a part of monetization, not the whole of it. Monetization has three parts: The offering, the mode of delivery, and the exchange.
Monetization Strategy involves defining the monetization strategy for a product or service, defining the pricing, and continuously optimizing the price as the company or individual grows.
Monetization Model has four components — how you charge for the product (ads, transactional service, subscription) when you charge (upfront, freemium, free trial), what you charge for (simple exchange, nuanced exchange), and the amount you charge.
Monetization introduces friction for the user as they have to pay for a product or service. This friction can be high or low depending on the how, when, what, and amount of the monetization model.
Monetization Strategy from a Company’s Perspective involves considering the product, the distribution channel, the targeted market, and the price that can be charged for the product.
Distribution Channel directly relates to user acquisition and the chosen pricing model. Two aspects of the channel are crucial — the cost of the channel and the influence the channel has on the user.
Different features of a product can be made available at different pricing tiers. This allows other channels to acquire different types of customers for each tier.
Different products can be targeted toward different audiences. For example, LinkedIn has B2C and B2B products with different pricing.
The need for the user to understand the core value proposition of a product and develop a habit for it can affect the pricing. High-friction products (difficult to understand or use) typically don’t work well with freemium or free trial models.
The natural frequency of product use can also affect pricing. If the product is used frequently, freemium and subscription models work well. The user can only understand the product’s value if the frequency is high.
The frequency and nature of product usage can influence its price. For example, a product used frequently but costs little peruse (like API calls) can still generate significant revenue.
The importance of understanding the market you are selling to, including the size of the market and the customers’ willingness to pay. The potential size of your company is dependent on the price you offer.
The importance of choosing the right pricing metric. This should be easy to understand, grow as the client grows, and align with the customer’s needs. Examples include charging per user, per API call, or feature.
Defining the pricing structure, which includes different price buckets and segments for your product, is essential. This structure should be easy to understand and align with the value the customer gets from the product.
The importance of deciding how much to charge. This should be based on the business model, the market, and the channel through which you reach your market.
The importance of running a Max Differential Survey to determine the pricing structure. This survey asks users to identify a product’s most and least valuable features. The results can then be segmented based on user personas to identify trends and preferences within specific cohorts.
Pricing is an iterative process. Businesses should continually gather feedback, learn, and adjust their pricing strategies accordingly.
The concept of perceived value is how a customer views the worth of a product. This can be influenced by emotional, functional, and longevity factors.
The concept of perceived price is how a customer views the cost of a product. Strategies to decrease perceived price include customization, offering multiple options, showing price relative to something else, and reducing friction in the buying process.
Price optimization involves increasing perceived value, decreasing perceived price, and decreasing friction. Increasing perceived value has the most impact but is also the most difficult to achieve. Reducing friction is the easiest but has less impact.

Deepak Abbot — How to price it right

The importance of pricing in various sectors, including financial services, e-commerce, gaming, and B2C, related to psychological pricing, seasonal pricing, decoy pricing, and discounting.
Unit economics is significant in the context of pricing decisions.
Direct costs (associated with each unit) vs indirect costs.
Calculate direct costs by working backward to determine to price.
It is essential to understand the target audience and their buying behavior.
Seasonal pricing highlights how companies adjust prices based on occasions, market conditions, and product goals.
Dynamic pricing is introduced as a strategy that adjusts prices based on demand, urgency, and supply factors.
Creative pricing strategies, such as bundling, subscription models, and premium offerings, are mentioned as ways to differentiate products and cater to specific customer needs.
Psychological pricing, decoy or economist pricing, involves creating other products or pricing options to influence customers’ purchasing decisions and guide them towards the desired outcome.
Freemium pricing is where companies offer free versions of their products with limited features or usage. This strategy aims to attract a large user base, with a small percentage of users converting to paid versions or making premium purchases within the free product.
Cashback and discounts are tactics to attract customers and influence their purchasing decisions.
Creative pricing strategies can make a sustainable business and maximize revenue. Pricing can be used as a growth mechanism by smartly pricing products and services.
Testing pricing strategies and being open to experimentation, as pricing is not a one-time decision but an ongoing process that can be adjusted based on market dynamics and customer response.
Refrain from believing in growth at any cost, and it is essential to grow sustainably by acquiring customers with a clear monetization strategy.