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#23: Pitch a First Purchase Product

It’s been a week and I’m still thinking about brand loyalty.

This time, from a revenue perspective. Customer retention is more impactful on the bottom line than acquisition marketing. But, so is customer expansion.

We’ve heard the stats and we’ve seen it first hand as PMMs: it’s easier to sell to existing customers than it is acquire new ones. Research shows that companies have an up to 70% chance of selling to an existing customer. And, once you provide that initial value, you could retain them for life. In fact, 77% of consumers say they’ve used at least one brand for 10 years or more.

For me, that brand’s Apple. I still remember getting my first iPod in high school, which quickly led to my first iPad. Almost two decades later, and I still only purchase Apple products. Apple used an entry level product to hook me, and then sold me higher value products as I was ready for them. Today, my LTV is sky high.

Building brand affinity early is key. If I had bought a Microsoft Zune instead of an iPod, I might have a Surface in front of me right now instead of a MacBook.

How do you get in front of your customer before they’re ready to make that big purchase? Sell them something else first.

Brand Affinity in the Wild

We see this all the time with non-tech products.

Take retail, for example. Old Navy, Gap and Banana Republic are all owned by the same parent company. Banana is the premium brand - their clothes are the most expensive, but their customer acquisition costs are high too. They’re competing with other brands like Club Monaco and J Crew for young professionals who need office wear. How does the brand win? They acquire their customers years before they are ready by introducing them to their lower quality brands. If they can hook a customer when they’re in high school and shopping at Old Navy, they’re much more likely to stick with the brand as they grow up. They unlock incremental value and build brand affinity (and loyalty points) throughout the years.

Or, consider hotel brands. Marriott Bonvoy has a collection of hotels that span every budget and use case (from budget to business to luxury). Their high end brand The Ritz-Carlton competes for guests against big brands like the Four Seasons. Their secret to securing reservations? Build a relationship with guests through more entry level brands like Aloft and W Hotels first and then scale them up later.

Really, this concept is at the root of product-led growth as well. In his book Product-Led Growth, Wes Bush says product-led companies “focus on helping the buyer improve their life. Upgrading to a paid plan becomes a no-brainer.”

Whether you want them to move from freemium to paid, buy additional products or ascend into a more premium brand, the playbook is relatively similar: deliver an amazing initial experience that leaves them coming back for more and then reward them for engaging with your entire portfolio over and over again.

Building “First Purchase” Products

As a PMM, I love working on growth portfolios because you can unlock market opportunities like the ones above. It’s not always necessary to attach it to your core product, which provides a lot more freedom to play. I call these “first purchase” products.

Let me share a few examples for inspiration.

At Unbounce, our core product was landing pages. In order to reach customers before they were ready to buy, we started to build an entire ecosystem of free (or freemium) tools we knew they would need before they built a page. We launched a product called Brand Pin that allows marketers to pull brand themes from any webpage and get saveable style kits they can apply to marketing materials. With one click they can apply this brand kit to their Unbounce landing pages too. We’d use these first purchase tools to capture leads that we could nurture down the road.

Recently, we took a similar approach at Kajabi. In March, we launched the AI Creator Hub, which is a free AI copywriting tool for creators. This product gives creators access to the free tools they’ll need to create the inputs required to build a creator business (on Kajabi or elsewhere). The hope is that early stage creators will engage with our tool, and then remember our name when it’s time to build.

Clearbit nails this as well - they have a handful of first purchase products that help to build affinity with the brand. Personally, I’m a big fan of their TAM calculator (super helpful for product marketers).

Ready to pitch a “first purchase” product to your team? Here are some questions to consider:

  • What are the “jobs to be done” your customer is trying to complete one step ahead of when they will need your product?

  • What are the products your customer buys before they buy yours?

  • What tools does your customer want to connect or integrate into your product?

  • Are there features in your core product that you could break apart and offer for free or low cost?

  • Are there adjacent market segments that need a more unique solution in order to get introduced to your space?

The key with low cost, first purchase products is to take an experimental, growth-focused approach. I’ll rarely spend more than a few sprints testing, building and launching these solutions.

Hope this has sparked some inspiration ✨ Can’t wait to see where your brainstorming takes you.