Product Marketing Strategy vs. Customer-Led Marketing Strategy


The SaaS industry is booming right now, that makes it more competitive than ever before. Having the right marketing strategy in place can make or break a new startup that’s trying to scale quickly. That’s where a strong product marketing strategy comes into place.

Product-focused marketing can be incredibly useful as a part of a larger marketing strategy, but it’s often not enough in the long run. Instead, our unique Customer Generation Methodology here at Directive Consulting prioritizes a data-driven, customer-centered approach to marketing, and we’ve found that it’s a game changer in the SaaS space. 

In this post, we’re going to go over everything you need to know about product marketing strategies, including what they are, how they work, and why we strongly recommend opting for a more customer-led marketing strategy instead. 


What is a Product Marketing Strategy?

So what is product marketing?

A product marketing strategy is the process of bringing a product to market and promoting it by understanding the market and explaining how your product fits within that market while simultaneously potentially shaping your product to match the market’s needs.

It’s focusing on the success of a particular product launch more than promoting the  brand as a whole. 

Your product marketing strategy can impact the price, audience targeted, and marketing messages for the products. It may even alter the products themselves in some cases, if you make changes to account for what’s needed in the market. 

As a result, the marketing team isn’t just looking at the product and running campaigns to drive sales. They’re working as part of a unified team with the sales and product development teams, too. It can impact the development of the product at every stage of its creation based on the market, like adding new features that users hae asked for. 

It essentially allows you to create a marketable product because you’re considering the marketing end goal during the entire development process, and thus can communicate its value effectively. 

It has become one of the most common go-to-market strategies for SaaS tools today. 


Why is a Product Marketing Strategy Important in the SaaS Industry?

Product marketing strategies can be so important for SaaS companies because the field is so competitive, meaning that it’s more crucial than ever before to be able to successfully market your tool correctly to the right audience and to be able to offer the unique features they need. 

It takes the 4 P’s marketing mix into consideration, which includes the following:


  • Place—how do customers access your product? 
  • Price— how much does it cost? 
  • Product—what is the product and how is it different and more valuable than what’s out there? 
  • Promotion—what’s the best way to promote this product to others?


Your messaging needs to be on point in order to get your target audience to see how they can benefit to the point where you can scale your growth and revenue. And sometimes, it even means making changes to the product itself so that you can have the features users want to see marketed to them. 

It ultimately allows you to help build a stronger product and a stronger marketing campaign simultaneously from the ground-up. In a hyper-competitive niche, it’s a solid strategy when you want to find ways to stand out and create tools that will actually sell and drive a profit. 


The Benefits of a SaaS Product Marketing Strategy

There are a number of core benefits that SaaS brands can receive from a strong product market agency. These include the following:


    1. You develop a better understanding of who your customers are and what they need. Your audience will be at the center of your product marketing strategies, even if the audience that you end up targeting is different than the one you first had in mind when creating the product. This leads to a more effective marketing campaign and a more targeted product.
    2. You can target potential customers more effectively. By having a product that’s been tailored to suit your specific audience’s needs, it’s easier to market directly to them with highly targeted messaging. You also know more about this audience, which you can use to further improve your campaigns.


  • Your marketing, sales, and product teams are connected and working together. This can work to your benefit even if you aren’t leading a product marketing strategy; having these three teams working together creates a stronger understanding of who the customer is, what they need, and why they’ll be using the tool.
    You can use the combined knowledge from these teams to develop a strong product launch and to adapt the product and its marketing after launch, too. 
  • It’s a good way to position your product in the market appropriately. You don’t want to invest an enormous amount of time and money into a product that can’t compete in today’s market.
    Imagine creating a social media scheduling tool that only allowed you to post to Facebook just to realize there were tools that offered custom posting to any social media site, plus analytics and social listening.
    You need to make sure that your product has the right features that your audience needs and wants, that it’s priced properly compared to the market, and that your product is able to stand out from the competition. 
  • There’s a solid chance it can boost revenue and improve sales. All of the benefits we’ve described above can give SaaS brands with solid tools and a good strategy a clear path towards more revenue, faster growth, and potentially longer retention rates.
    The ability to communicate to your audience why a tool is exactly perfect for them (after essentially creating a tool designed to be perfect for them) can lead to exponential growth and high customer satisfaction rates. 



What Are the Goals of a SaaS Product Marketing Strategy

The ultimate goal of an SaaS product marketing strategy, of course, is to drive sales and yield both immediate and long-term revenue growth. That’s always the ultimate goal of most marketing strategies.

There are, however, other goals that a SaaS product marketing strategy will focus on and other KPIs that brands watch to assess effectiveness. These include the following:


  • Product sign-ups. How many users are interested enough in the messaging that they sign up for either a demo, free trial, or free base plan? And how long does it take users to sign-up after first hearing about the product? 
  • Customer acquisition cost. How much does it cost to acquire new customers? Is the cost low enough that your product is either currently profitable or on the track to becoming so? 


    • Activation rate. When users end your free trial and decide to purchase (or decide to upgrade from a free base plan), that’s considered “activating.” Your activation rate is calculated by dividing the number of users who activate by  the number of users who reach that milestone (like the number of users whose free trial is completed). 
    • Average time to activation. How long does it take users to decide to activate? While it’s not uncommon for users to wait until a free trial ends, in many cases free trials only grant limited features. Users who see immediate value in the tool may upgrade faster to access higher-level features.
    • Active usage. How many paid users are engaging regularly with your product? While this will vary depending on the tool, you’ll ideally want to see at least weekly or monthly usage. Take a look at your Daily Active User rate and Monthly Active User Rate. 
    • Feature adoption rate. How many users are utilizing a specific feature? This can help tell how essential to is to your current users’ experience, and potentially how effective it is. This is a good way to learn more about what your audience needs from your tool, and gives you an opportunity to reach out and learn why they aren’t using specific features if necessary.
      Find this by dividing the number of users utilizing a specific feature by your number of active users. 
    • Churn rates / retention rates. How many users are you losing year-over-year or month-over-month? While some churn is natural, if you’re bleeding customers after just a month or so, it means that something isn’t working at some point in the customer journey. High retention rates, however, signal a strong customer experience. 


  • Customer lifetime value (LTV). How much is the average customer worth to your brand? This may vary depending on the audience segment. LTV calculation can be tricky, but you can learn more about how to do so here


Product Lifecycle and Product Marketing Strategy

(Note to Sean- I know this was originally H3 instead of bullets  but I do not believe this is most imperative to the post to make the argument and it would push us over word count. We can definitely expand though) 

Want to have a better understanding of what a product marketing strategy looks like throughout the product lifecycle? 

Here’s a quick recap: 


  • Phase 1— Pre-Launch and Introduction: Users are just learning about your product for the first time. At this point, your product strategy will focus on aggressively highlighting specific features and use cases, running campaigns at scale to attract target customers who are searching for products like yours, and collecting feedback from initial testers to improve the product. In many cases, brands price the product as high as they believe they can sell it for, and adjust based on initial feedback.
  • Phase 2— Growth: You’ve got initial users, and you’re working on improving the product and/or its positioning so you can get more users quickly.
    The product strategy may focus on improving product quality, increasing outreach through more distribution channels to connect to more users (or more market segments), and beginning to shift marketing messages from just product awareness to product preference.
  •  Phase 3— Maturity: The market may be saturated, and your marketing tactics may start to lose effectiveness. This may require what’s called “market modification,” meaning you shift to target new market segments, redefine use cases, or try aggressively marketing to known competitors’ customers (which may include bidding on branded keywords). Product modification and improvement is also common.  
  • Phase 4— Decline: This is a dreaded time for SaaS brands, when sales and profits start shifting downwards. It can be caused by a number of factors, including new tools on the market, shifts in consumer preferences, or new technology. Sometimes the product will be discontinued, but you can also try strategies like implementing price cuts, finding a new use for the product, or reducing overall overhead to maintain profitability as long as possible. 


How Product Marketing Strategies Fall Short of the Mark

So far, we’ve talked about how valuable product marketing strategies can be, particularly for the SaaS industry. It’s not all sunshine and roses, however; there are downsides to this marketing approach, too. 


Product Marketing Agency vs. Customer Led - product marketing missing the mark


It’s important to account for the following:


    • Markets evolve. Product-based marketing campaigns require brands to invest in their product and their marketing campaigns, creating the perfect solution based on the market right now. Markets change, however, and that’s never more true than in today’s world in the SaaS industry. New tools hit the market constantly, and that can mean near-instant upheaval. 


  • Your competition may come to the same conclusions you do. If you dive deep enough, you’re going to look at message boards and comments and feedback from users who are asking for specific features, different pricing plans, and more. You can adapt… but so can your competition.
  • You can end up alienating potential customers. When you’re focusing exclusively on fitting your product into a specific niche, you’re focused on the product… not the customers. If you’re so focused on creating a unique feature, for example, you may end up with a lower-quality interface that loses you customers. 


While product marketing strategies have their merit, I am and always will be an advocate of keeping the customer at the very center of what you do… not the product itself. 

Customer-led marketing strategies do not share the limitations of product marketing strategies, and they can yield much longer and consistent success for brands. 


What is a Customer-Led Strategy & How is It Different From a Product Marketing Strategy? 

At a first glance, it may seem hard to differentiate between a product-based marketing strategy and a customer-led marketing strategy, because they both take customers and the market into account in some way. 


Product Marketing 

Product marketing strategies are about effectively promoting a single product for a strong launch and aggressive growth. They do take the market’s needs into account, and it focuses specifically on a market-product fit. You’re looking for a highly sellable product. Everything is centered around the product. 


Customer-Led Marketing 

Customer-led marketing is focused on your audience, not the product itself. It’s diving incredibly deep into your audience segments. It prioritizes not just increasing the number of clients, but increasing the quality of customers by boosting the entire customer experience. 


introducing customer generation - the new way of handling SaaS marketing


This is a groundbreaking approach in the SaaS space, and it can help to increase long-term brand loyalty, product usage, and client retention rates. 

Our Customer Generation model, for example, is built on the principles of customer-led marketing. We use data to help you find your most high-value customers so that you can reach more of them with hyper-targeted campaigns. Your product won’t be for everyone, but the idea is to connect more powerfully with those you are a fit for. 


What are the Goals of a Customer-Led Marketing Strategy?

The goal of a customer-led marketing strategy is to utilize customer data and feedback to better understand who your target audience is, how they benefit from your product, and how you can reach them.

You’re not necessarily trying to find how to shape the product to the market, but instead how to make the customer experience and marketing funnel more impactful for what you have. 

While customer-led marketing strategies do look at most of the KPIs that product-led marketing strategies evaluate, they’re also going to be more heavily focused on types of engagement, retention, and expansion of usage overtime. 

Think long-term customer loyalty with high-value customers purchasing mid- and high-tiered plans as opposed to prioritizing a large number of sales at a low-cost plan. That’s where customer-led strategies can get you. 


6 Differences between a Product Marketing Strategy and Customer-Led Marketing Strategy Approaches 

Both marketing strategies seek to fill the market’s existing needs and to drive sales, and both do look at customer data. 

These similarities aside, these are a few core differences between the two:


  1. Product marketing prioritizes finding how a product fits in to the market, seeking to make it more marketable, while customer-led marketing focuses how to make a product more valuable for specific audiences
  2. Product marketing prioritizes initial paid conversions at scale, while customer-led marketing focuses on long-term retention and conversions of high-value customers 
  3. Product marketing looked at immediate ROI; customer-led marketing strategies are more likely to evaluate LTV 
  4. Customer-led marketing strategies focus more intensely on customer engagement and long-term retention  
  5. Product marketing addresses immediate customer needs with potentially specific features, while customer-led marketing works on improving the overall tool across the entire customer journey 
  6. Product marketing combines the sales, marketing, and product development team; customer-led approaches integrate sales, marketing, and customer success teams more heavily 


Both strategies have their place in the SaaS industry, and you can use elements of both to create a strong launch while still creating a strong customer-focused marketing strategy at all points. 


How To Plan a Product Marketing Strategy

The processes of how to execute a product marketing strategy and a customer-led marketing strategy naturally differ.

To plan a product marketing strategy, you’re likely to take the following steps:


    1. You look at your existing product prototype and all of its potential target audiences and use-cases. Understanding what you have on your hands is always a good place to start.
    2. Research the market, including your competition. What tools already exist? How is yours different? Are there features that you offer, or other benefits like better interfaces, lower monthly costs, or more integrations?


  • Understand who your target audience is. What are their known needs, pain points, and challenges? This will be important to ensuring that you’re highlighting the right aspects of your product when running marketing campaigns, and may help you determine additional features needed to make the product competitive.
  • Determine the positioning for your product. What sets you apart? What is your tool’s specifically value proposition, and how is that different from everything else already on the market?
    Pricing, features, and use cases will play a vital role here in helping shape the marketing messages that you’ll use to answer key questions users have about the product and why they should use it. der which platforms will be most effective at helping you connect with your 
  • Determine an outreach strategy. Consicustomers. Ads, email outreach, and sponsored post contributions are all popular choices for product-led marketing strategies, particularly for launch, because they can be wide-reaching and fast-acting. 


Once your strategy is ready, get your campaigns in order and you’re a go for launch! 


How To Develop a Customer-Led Marketing Strategy

Customer-led strategies can be used to take a product to market, but they’re also often used to improve marketing once the product is in the market already, too. 


Demand Gen Vs Customer Gen marketing methodologies


This is our approach to developing a customer-led marketing strategy: 


  • Dive deep into who your target audience is. Look at the existing data, and don’t just look at who might sign up and convert, but consider who is either converting at higher levels, or converting and retaining longer. 
  • Consider how your high-value audiences use the tool. What seems to be their activation point? Which features are they using, and how often? An appointment booking SaaS, for example, might realize that single-member businesses primarily use the free plan, but that businesses with more employees and revenue that use the paid plan take advantage of group-calling and automatic call assigning features, indicating that the collaborative features are crucial.
  • Get feedback directly from customers. What do they love about your product? What would they change? Which features do they use, and why? How do they feel about your pricing? You may find opportunities to offer additional value, but it also gives you an abundance of information you can use to create high-converting marketing campaigns. 
  • Create full-funnel campaigns. You don’t just want to focus on initial customer acquisition, you also want to have active outreach to keep users engaged so they retain longer. Consider how to keep existing users engaged through email marketing, private social media groups, and customer-centric resources like webinars. And always remember to market directly to those high-value audience segments that you’ve already identified. 


Final Thoughts: Customer-Led Marketing Strategy > Product Marketing Strategy

Both customer-led marketing strategies and product marketing strategies seek to drive sales by appealing to a user’s needs, but they go about it in two different ways.

Product marketing strategies can be valuable when you’re looking to launch a unique product with clear go-to-market strategy, and it can be helpful to even develop the specific product that will be competitive in the current market.

In order to stay competitive even as the market shifts, however, and to successfully drive retention of high-value customers and not just fast sales, a customer-led marketing strategy is hands-down the way to go. You can create more meaningful experiences and offer more value to select niches of the overall target audience, which increases your customer satisfaction, loyalty, retention rates, and LTV. 

We can help with that here at Directive Consulting. We’ve created a Customer Generation Methodology that takes a heavily customer-led and data-supported approach to helping your SaaS brand identify your core, high-value target audiences to drive alignment between your sales, customer success, and marketing teams to get you real results at scale.  

Want to learn more about our unique Customer Generation process for SaaS brands? Book your call with us today. 

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