Product Strategy — Part 5: Acquisition channels
How to shape your product to capture new users effectively
This article is a part of the Product Strategy series. (Paid subscribers can access the template at the end of the article)
How could an acquisition channel be useful?
The channel strategy is basically answering this: What is the best way for your product to acquire and convert new users?
Both design leaders and product leaders can benefit from understanding what’s the best channel to acquire and convert new users. This information can help you shape your product to ensure you effectively reach new users and convert them.
For example, Pinterest’s business model relies heavily on the amount of content. The more content is on Pinterest, the more people share the content. That’s how Pinterest can reach new users.
In that case, design leaders and product leaders must understand that the flow and experience of sharing should be as seamless as possible.
Let’s understand 3 common drivers for acquisition strategy.
1 - Viral
Some products rely heavily on the word of mouth.
The most iconic example would be Dropbox. Of course, people can find Dropbox through its landing pages, but the strongest acquisition channel is through word of mouth.
As a result, they designed a reward system for users who refer their friends. In exchange for referring to Dropbox, the users will get extra space. Dropbox grew 3900% with a referral program. It becomes a part of the onboarding process too.
If virality is the primary acquisition strategy, it’s important to reduce friction in the sharing experience to improve network effects.
2 - Content
Some products acquire new users through the amount of content generated by users. Pinterest and YouTube can be categorized under this acquisition strategy. The more content available, the more content can be shared.
If your primary acquisition strategy is content-driven. It’s important to reduce friction and increase motivation for people to create content.
3 - Premium
Some products rely heavily on advertising to gain new users. Candy crush or other games will be a good example of this. They will attract a few users to be premium players. The revenue generated from these premium players will be reinvested into advertising to attract more users.
If this is the business model for your product, it’s important to help people understand the benefit to convert more people to be a member.
Step-by-step and template
(Paid subscribers can access the template by the end of the article.)