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Join the next cohort of the PLG Certificate Program. Application closes Feb 1.

How acquisition and retention work together

Most businesses with a product-led growth (PLG) strategy think that once they acquire a customer, they will convert into a paying one shortly after. But that’s often not the case.

Users are often not fully aware of how a product will help them despite signing up. In this scenario, retention is a priority. Businesses need to understand the buyer’s journey and leverage that information to convert users into paying customers. 

That’s why it’s so important for both the acquisition and retention teams to work together. 

In this article, we’re going to explore how to do that by:

Let’s get into it. 

Understanding the Customer Intent

To convert a user into a customer, they need to have an outstanding user experience with the product. The first step toward this outcome starts with understanding the buyer’s intent. 

Simply put, buyer intent is the likelihood of a customer converting into a paying one within a certain period and can be split up into two types: 

  1. Low-intent buyers

A low-intent behavior is when the buyer has signed up to learn more about the product and how it will help them achieve their business goals. 

These buyers need more attention as they are still exploring the product and haven’t yet decided to become paid customers. In this stage, the retention department may need to take the following steps to move the customer along the sales process:

  • Offer them more product information and educate them on its functionalities.
  • Demonstrate the product value
  • Consistently touch base to help them become an expert.
  1. High-intent buyers

High-intent buyers are likely to convert quicker when given the right push. To move buyers along the sales pipeline, you may:

  • Connect with them to learn what is stopping them from becoming an actual customer
  • Offer them a customized plan to address their concerns

Once high-intent buyers turn into paying customers, they’re likely to open to premium product features, making them ideal customers for upselling and cross-selling. 

Once you have a solid understanding of the buyer’s intent from registration to the moment they become a paying customer, you can build multiple buyer journeys by segmenting them and tracking conversion rates across all platforms. This process helps you better connect and communicate the product’s value to buyers.  

Uncovering the strategies for smooth cross-departmental communication 

Customer experience is the most important element in a PLG strategy. 

Unless the customer is delighted with the product, they will never upgrade to a paid plan and may churn instead. 

On top of that, satisfied customers are more likely to become repeat customers. In fact, research shows 87 percent of happy customers will likely make another purchase from the company. 

To deliver an outstanding customer experience, it’s crucial for the acquisition and retention departments to work together. Once a user signs up for the basic plan, the acquisition department needs to pass on the buyer behavior history or context to the retention department to continue to meaningfully connect and engage with customers.

It’s easier said than done as most companies do not have a cross-department collaboration cadence, which increases the chances of miscommunication. However, the following strategies can easily help in avoiding these situations:

  • Weekly meetings

One of the best ways to remove the chances of miscommunication is to have a weekly meeting cadence. One-on-ones between the acquisition and retention departments are a great start to discuss what each of them is currently working on, the quality of leads the top-of-the-funnel cadence is generating, and what they’re planning to achieve. These activities ensure that both departments are aligned and have synchronized goals.

  • Knowledge sharing

Sharing knowledge and resources is critical for fostering collaborative efforts. Regularly sharing informative articles and helpful courses with each other is helpful. Observing industry developments and discussions around these changes with team members are highly beneficial to all the parties. 

  • Create a Joint Strategy

Acquisition of a customer is one initial step in the PLG model, as a company may barely make any profit if those users don’t convert into paying customers. As a result, both the acquisition and retention departments need to work together to ensure they’re attracting high-intent buyers and converting the low-intent ones to become high-intent. The first step in this collaboration is to set a joint strategy, which also makes achieving aggressive growth goals possible.

  • Measure Goals

Setting goals is one piece of the entire picture. Unless you measure the performance in relation to your goals, you would never know if your plans are working. This is where measurement metrics come into play. For product-led companies, metrics like average revenue per user, customer lifetime value, and net churn are strong indicators. 

When the acquisition and retention departments work together to offer exceptional customer experience, it’s critical to measure goals closely and to have different tiers of metrics. Build targeted programs to acquire new buyers, and share relevant data to each department so they can match top-of-the-funnel activities for a  consistent user experience. 

The acquisition and retention departments don’t work as silos because that leads to the disconnected sales funnel, making it difficult to bridge the gap between the two functions.

  • Hire a Marketing Advisor

There are several reasons why you should have a marketing advisor, but the most important one is that you need someone to oversee the collaboration between the departments and make sure they have aligned goals. A marketing advisor will also help when the acquisition and retention departments have trouble prioritizing goals and dealing with overlapping processes.

Communicating with additional departments

As mentioned above, If departments work in silos, it results in disjointed processes and a subpar user experience. 

Not only do acquisition and retention work together, but they also need to work closely with these additional departments:

  • The Customer Success Team: to discover the best qualitative feedback: what customers think, what they like, and what the roadblocks are.
  • The Product Team: it’s important to know what product changes are coming and what product features are and aren’t working.
  • The Analytics Team: they can look at the overall funnel and identify the variations from the goal and its reasons. 

With consistent communication and holistic reporting, you can gain a full perspective on what's happening in the funnel and what needs to be addressed.

Conclusion

In a product-led strategy, a holistic approach is critical to outstanding the user experience. When acquisition and retention departments collaborate effectively, it’s possible to achieve aggressive growth goals and improve customer retention rates. 

Fung-Lin Wu & Tatiana Morozova
Fung-Lin Wu & Tatiana Morozova
Fung-Lin Wu and Tatiana Morozova are powerful women handling important roles at MongoDB, an open-source document database used in many modern web applications. They are behind the successful acquisition and retention alignment.
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