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Product growth: what is growth product management?

If there’s one thing that tech powerhouses have in common, it’s an appetite for growth—and it was only a matter of time before companies like Facebook, Dropbox, Uber, and TikTok started shifting their product management initiatives to enable that growth.

Growth product management is taking hold throughout the software industry. But what does it mean, how does it work, and what value does it bring to your team and business? Find out in this guide to the increasingly vital role that growth plays in product management.

Best practices: marketers and product or website owners

Last updated

18 Nov 2022

This chapter will introduce growth product management. Following up, we’ll detail what it takes to be a growth PM, and the growth product management strategy they should follow. We’ll also help you get your first 1000 users, and teach you how to scale product growth sustainably with a full tech stack of growth management tools.

Insights to power growth product management

Hotjar's product experience insights guide product teams to prioritize brilliantly and get the data and feedback they need to successfully grow their product.

What is growth product management?

Growth product management is the process of optimizing a product by tracking and using data to make evidence-based improvements. In growth product management (GPM), the focus shifts from developing a product to increasing a product’s value and user base. 

While traditional product management focuses on managing all activities required to bring a profitable product to market, GPM aims to help an existing product become more successful. 

How does growth product management work?

Growth product management focuses on monitoring user behavior and making data-driven suggestions for improving products to meet core business initiatives and goals. These can range from reducing the average Customer Acquisition Cost (CAC) to growing revenue and profits in the long term.

And this isn’t just another growth hacking technique: GPM works across all stages of the user journey, using experiments and their results to make data-driven product improvements. Here’s what that can look like:

  • Early-stage growth product teams can experiment with customer segmentation to ensure they’re reaching the right audience for their product

  • As the company evolves, so does the need to increase user engagement with the product by improving customer acquisition strategies

  • GPM strategies can help make the user onboarding process seamless and help customers engage with the product easily and quickly

  • A growth-oriented product team can then focus on creating and optimizing a smooth customer journey through the funnelusing user experience research tools like A/B testing

  • Working closely with other teams, growth product teams can also optimize customer retention strategies to gain more loyal customers and drive more revenue

But wait, I’ve just read a bunch about product-led growth. Isn’t that the same thing?

The short answer is no, product-led growth and growth product management are not the same. One of our Growth PMs at Hotjar, Laura Wong, explains the differences like this:

They’re actually very different. Product-led growth is about how to structure a company and strategy (putting the product first, like in many SaaS companies), whereas product growth is more about growing a product (acquiring users + customers, revenue growth, etc.)

Laura Wong
Associate Growth PM at Hotjar

The long answer involves looking at how growth product management came about:

What does growth product management look like in the real world?

In recent years, there’s been more notable interest in the role that growth plays in product management—and how to optimize it.

This process is now taking hold throughout the software industry, particularly in organizations that have embraced a product-led growth strategy. In these companies, the product itself is a primary lever for growth, so it makes sense for the product team to take on growth responsibilities. 

As more companies start pursuing product-led growth, they realize that product managers have enough on their plates and shouldn’t have to be responsible for driving both development of and demand for their product.

Today, the world’s leading companies are using growth product management to drive growth by identifying opportunities and directing the product team's efforts to optimize them. These businesses have a mindset of continuous improvement. To keep up with the competition, their appetite for growth has extended beyond their wild initial success. 

Some companies have already defined the roles necessary for growth product management and how they function within the product team. Leading tech startups like Facebook, Uber, and Dropbox stress a growth mindset, and boast an infrastructure that prioritizes user data. They’ve successfully implemented their growth-oriented strategies with dedicated teams headed by a growth product manager (or growth PM).

#Dropbox is one of the companies that has recruited growth product managers within their organization
Dropbox is one of the companies that has recruited growth product managers within their organization

Why is growth product management important?

Growth product management allows product teams to get the most out of their market. Finding new ways to help customers get more out of a product they’re paying for will:

  • Bolster retention by improving the customer experience and enabling customers to get what they need from the product faster

  • Cultivate an increase in referrals by finding the moments of customer delight where they would be most likely to champion or recommend your product to someone else

  • Enable focus on the long-term product roadmap by freeing up more space for PMs to work on technical or supporting infrastructure and back-end architecture

  • Increase revenue by having growth PMs focus on growing the company by achieving short-term business goals and driving sales

Should growth sit within product teams?

Companies that have embraced the idea of product-led growth, a strategy in which the product 'sells itself' through experienced value, benefit most from growth product management.

These companies evolve by creating a great user experience—so customer satisfaction, engagement, and loyalty are a top priority for them.

Traditionally, growth has often been left to sales or marketing teams. However, the benefits of having growth sit within product teams are clear:

  • Having closer proximity to the product: growth PMs are well-equipped to set up the technical aspects of, for instance, self-serve sales processes typical to a PLG company

  • Being able to influence the product roadmap: based on insights gained from pursuing growth across the entire funnel—from new user acquisition all the way through customer retention and expansion

5 essential principles that make growth product management work

Here are five principles that allow businesses of all sizes and maturity levels to benefit from GPM.

1. Growth product management uses data to reduce barriers to value

Growth product management is most valuable for existing products that already solve user pain points but are not yet optimized. GPM helps product teams reduce barriers to value, which means they enable customers and users to quickly find value within the core product—it’s all about removing friction. 

Of course, you can’t improve what you can’t measure, so growth product managers are highly focused on data and specific metrics related to a product’s success, like:

  • Acquiring new users

  • Increasing retention rates

  • Finding new ways to monetize a product to boost revenue

  • Encouraging existing users to refer newcomers

The growth product team, rather than building and launching one product, finds ways to help get a product into more users' hands, and to identify friction points that may be holding a product back from reaching its potential.

Pro tip: quality data is the foundation of growth product management.

Growth product management revolves around using data andtracking metrics to identify opportunities for improvement, assess the outcomes of experiments, and make evidence-based decisions for products.

Use Hotjar to set up a system to continuously collect user and product experience (PX) insights. These will give a growth PM more awareness of where they should focus their energy. After all, you can’t improve what you don’t understand.

Hotjar's tool stack is designed to keep the user’s experience and perspective top of mind

2. Growth PMs don’t replace core PMs—they work with them

Introducing a growth mindset to the PM role can be a big shift for traditional (or core) product managers. It requires traditional PMs—who are used to focusing on long-term, customer-focused roadmaps—to wrap their heads around a product development strategy that also includes short-term, business-focused objectives.

That’s why a growth PM shouldn’t be viewed as a replacement for an existing PM—nor should a core PM take on more growth-oriented responsibilities. A growth PM should be viewed as different from, and a further specialization of, core product managers.

Growth product managers are peers to core product managers. But rather than owning a specific product, the growth PM is focused on improving a specific business metric or commercial goal. 

These mindsets can lead to different approaches to:

Solving customer problems

The core PM is thinking about delivering long-term value, while the growth PM is primarily focused on delivering more easily-quantifiable business outcomes.

Core product managers will be interested in key product activities, such as improving the in-product user experience or cleaning up code to make the product more sustainable. Growth PMs typically focus on specific tactics related to a product’s success with immediate results, such as:

  • New customer acquisition strategies to encourage more engagement with potential users 

  • Customer retention initiatives and upselling strategies to deepen relationships with customers and increase revenue

  • Discovering more 'aha! moments' to push customers more effectively along the funnel

  • Add-ons that help customers gain greater value from the product faster, and drive profit for the business

Product development and performance 

Through quick testing and optimization, a growth PM is constantly looking for ways to immediately impact revenue. They may splash out one day, but yield big sums the next day. That's part of their work. 

Core PMs, in contrast, tend to be more cautious. Since they’re more focused on fairly large deliverables, the constant shifts and iterations that come with product experimentation can create friction in the whole development process. Their pre-planned approach to delivering value means they would rather stay out of unpredictable situations.

It’s not hard to understand why a core PM could get protective or dismiss the short-term focus of a growth PM. This friction between growth and core PMs can become a real challenge in many organizations.

But with a strong focus on excellent communication and a relationship founded on trust, their combined efforts can lead to incredible results.

3. Growth product management requires a deep understanding of the customer

To prioritize initiatives that remove value barriers and deliver improvements with the greatest impact, growth product management requires a deep understanding of how users experience and interact with products—and the common problems they face.

It’s often said the core PM’s primary stakeholder is the customer, while the growth PM’s primary stakeholder is the business. However, this should be seen as a reflection of the goals for the individual roles, rather than the processes they'll build and implement.

GPM provides a vital link between user behavior and the ongoing product lifecycle. Even though growth product management focuses on business metrics and goals, teams often (and should) tie results to customers. At the end of the day, more customers will generally mean more growth.

This requires product growth teams to:

Have a good understanding of the product's customer base

Achieving business-specific growth metrics in a product-led company requires a fundamental understanding of:

  • Who is using the product

  • Why they're using the product, and 

  • What might encourage them to form a deeper relationship with the product

It also requires understanding potential users, why they aren’t already engaged, and what might motivate them to become engaged. This helps them align their efforts to customer needs.

Deal with customer-centric metrics related to acquisition, engagement, and retention

To achieve short-term, business-focused objectives, product growth teams will almost certainly look at growing or enriching engagement with customers across every stage of the funnel. For example, they may be charged with growing the customer base, or pushing customers towards more expensive subscription plans.

These metrics revolve around customers—the ones who judge whether the product is useful to them or not. Achieving growth means giving your main customers what they want, which means the product growth team needs to be customer-centric.

Pro tip: growth PMs are dialed in to what it takes to enable users to succeed. This requires familiarity with customer research and journey mapping.

Hotjar Session Recordings allow you to trace the full customer journey—from entry to exit, you can reliably map the user’s full experience. 

Then, you can measure the outcome of the customer journey with a Hotjar Feedback widget by asking users about their product experience.

Users can highlight parts of the page they like or hate to help you spot areas for improvement

4. Testing and experimentation are essential to growth product management

As part of an effective growth product management strategy, teams may discover that certain functions or features require revision to maximize value. To get this done, product growth teams rely on a series of short-term experiments to incrementally improve and increase efficiencies throughout the funnel.

Depending on the objective, they’ll home in on one specific problem, form hypotheses, run experiments, and move the needle until they’ve optimized the metric. This can mean:

  • Testing different onboarding experiences to improve activation 

  • Designing and defining pricing plans that utilize quantitative and qualitative data and methods of measuring the effectiveness of the monetization strategy

  • Running an A/B test with different variants of product launch experiences to boost new feature adoption

  • Analyzing the user lifecycle, including the activation, retention, dormancy, and resurrection phases, and deploying experiments to improve the lifetime value (LTV) and decrease product churn

  • Trying to upsell users at the right time by triggering offers based on in-app events 

Combined with data-driven decision-making, experimentation allows product growth teams to drive products to reach the next level of scale, impact, and profitability.

Pro tip: use Hotjar Heatmaps and Recordings to identify underutilized features and meet your product adoption goals. 

You can watch how users navigate your product and see what's working and where they're getting stuck. This helps you pinpoint which features and elements they’re ignoring, so you can prioritize making them findable and user-friendly.

Just released a change? Watch Session Recordings to check it’s working as expected

5. Growth product management involves cross-functional teams 

A product growth team's job is to identify the little things that might fall through the cracks and affect the customer experience. They may work on new ways to help customers discover new product features, or to identify unexpected use cases, which would open up new opportunities.

To get this done, a growth PM should work with a dedicated, cross-functional team to strategically run product prioritization initiatives, select experiments, and define measurements. Otherwise, putting ideas and strategies into action may be harder than it should be. Regular, transparent communication is vital to ensure a harmonious and productive growth process.

This cross-functional collaboration can include engineers, designers, marketers, and data scientists who work independently from other product teams. The team might focus on one particular phase of the funnel, such as acquisition or retention, or own the whole funnel and connect with various other company resources depending on the current initiative.

For example, if the goal is to increase the activation rate of a freemium model product, the core product manager of that product will be involved to some degree. The product growth team might also work closely with the sales and customer service/support teams to understand what speed bumps the customers are experiencing, and with product marketers to learn how to best reach and communicate with the target audience.

The product growth team will meet regularly to identify and decide on the highest impact initiatives—and then design experiments, ship improvements, and measure results. 

Next steps for growth product management

Growth product management initiatives can vary from organization to organization, depending on maturity and the type of product you’re trying to drive more value for.

If you’re interested in solving customer-facing challenges—like acquisition, onboarding, engagement, and retention—that enable users to get more value, and if you’re passionate about moving numbers upwards, then growth product management might be for you!

Insights to power growth product management

Hotjar's product experience insights guide product teams to prioritize brilliantly and get the data and feedback they need to successfully grow their product.

FAQs about growth product management