The rise of product-led growth and experimentation
In the 21st century, the evolution of digital customer experiences has been pivotal for businesses, with experimentation emerging as a crucial element in developing competitive and growth-driving experiences from the outset.
At first, marketing and e-commerce teams were by far the biggest investors in experimentation which they used to enhance online campaigns, experiences, and ultimately business growth. However, the 2023: Experimentation and Growth Survey led by myself and sponsored by Kameleoon clearly shows a major shift in recent years.
In 2024, product leaders are well ahead of their marketing colleagues in both confidence regarding their business success and their ability to drive growth through experimentation.
The research found that:
- PLG vs MLG Confidence: In 2024, 58% of product leaders are confident about their organization's product-led growth strategies, outshining the 39% of marketing leaders who believe in their marketing-led growth efforts.
- Focus on critical experimentation capabilities: Over half (54%) of product leaders prioritize critical product optimization capabilities such as feature experimentation. In contrast, only 36% of marketing leaders focus on advancing feature experimentation, essential for optimizing digital marketing efforts.
- Anticipated growth in 2024: A significant 56% of product leaders expect substantial growth for their businesses in 2024, whereas just 33% of marketing leaders forecast similar growth levels for their teams.
Growth and experimentation lessons for marketing from the product realm
Product leaders exude an optimism that surpasses their marketing counterparts when it comes to growth and experimentation practices that fuel it. The question that arises is, what's their growth and experience secret sauce? What valuable insights from the 2023 Experimentation and Growth research can marketers glean about the approaches taken by their more upbeat and successful colleagues?
Cross-team collaboration is needed for experimentation-driven growth
An overwhelming desire for cross-team collaboration drives today's growth and experimentation initiatives. A striking 75% of industry leaders agree that their teams regularly collaborate with others to fuel growth. However, making this a reality is a formidable challenge. Less than half of the organizations – only 49% – boast an experimentation program mature enough to facilitate this kind of cross-team synergy.
High-growth companies tell a different story: a full three-quarters of them have robust experimentation programs that seamlessly support cross-team collaboration. This underscores a critical point for growth marketers: to truly drive progress, nurturing an environment that champions cross-team collaboration is essential. Let's explore the cross-team engagement strategies adopted by product teams when it comes to their experimentation programs, strategies that marketing teams would do well to mirror:
- Meet regularly with other teams to evaluate metrics of experimentation programs. Product teams are nearly twice as likely as marketing teams to do this. Marketing leaders must encourage their teams to work with others across the enterprise to agree on, monitor, and respond to metrics that impact business-wide initiatives including those for growth.
- Have testing technology facilitating cross-team collaboration. Product teams are twice as likely as marketing teams to implement technology allowing cross-team collaboration. Teams that collaborate not only meet more regularly, they rely on a unified source for goals, segments, and integrations, helping them align and report progress against joining up growth initiatives more easily.
- Work on experimentation platforms used by other teams. Again product teams are twice as likely as marketing teams to do this. A platform approach to experimentation allows for cross-team processes without restricting access to functionality specific to each team's needs. In addition to providing a range of statistical methods, today’s leading single full-stack platforms allows teams to collaborate while providing these specialist capabilities.
The right technology approach is key to joint-up growth initiatives
The 2023 Experimentation and Growth Survey reveals compelling insight regarding tech approaches:
This connection between growth and experimentation technology is well-recognized among industry leaders. In fact, over 80% of them acknowledge the importance, or even the criticality, of experimentation tech in driving their organization's success. Product leaders are not only recognizing this link, they're actively leading the charge, demonstrating to their marketing peers the strategic value of investing in this transformative technology by:
- Invest heavily in key experimentation features: Over half of product leaders are already channeling significant funds into features like feature experimentation to bolster product-led growth. Meanwhile, marketing teams lag, with just 36% investing in web experimentation for marketing-led growth. In 2024, marketing leaders must follow in the footsteps of their product counterparts, ramping up investment in experimentation features to fuel the specific needs of their growth strategies.
- Prioritize investment in well-proven off-the-shelf experimentation technology. A majority (70%) of product teams have invested mostly or entirely in off-the-shelf experimentation products. This figure drops to 42% for marketing teams. Marketers should know that experimentation products by leading vendors have matured into powerful platforms, in 2024 they must move away from in-house technologies that are not as good, more expensive, and difficult to maintain.
- Include developers when experimenting with sophisticated experiences. Product teams are almost twice as likely to engage with developers in their experimentation programs. Marketing leaders should know that when developers are involved with most or all of their experimentation programs, their marketing-growth approach has a 62% chance of being mature. This drops to 39% when developers have limited engagement.
It's hard for marketers to close the gap - but it’s worth it
The 2023 Experimentation and Growth research reveals a yawning gap between marketing and product teams in confidence for supporting business-wide growth through experimentation. But marketing leaders should take comfort in that this disparity is a recent development and not an inevitable future. To close the gap between marketing and product teams marketing leaders must:
- Embrace cross-team collaboration: Marketing leaders should foster regular interactions with other teams, mimicking the collaborative approach of product teams to enhance growth strategies.
- Adopt unified experimentation platforms: Learning from product teams, marketing should utilize shared platforms for better integration and streamlined cross-team processes.
- Prioritize investment in key features: Marketing should mirror product teams' investment in essential experimentation features. For instance, they should invest more in web experimentation to support the needs of their growth initiatives.
- Involve technical expertise: Similar to product teams, marketing can benefit from involving technical experts, like developers, to support their expanding experimentation and growth efforts.
Closing this gap requires focused effort and a commitment to incorporating proven strategies from successful product teams. An investment that will reward marketing teams with greater relevance to the business - including providing significant and validated contributions to growth.