Product-led growth happens when the product and clear communication around the product takes center stage when it comes to growing the customer base. As customers discover the product, they sign up for more features and become more loyal customers. That sounds easy enough in theory, but let’s discuss some of the steps required to make product-led growth a success.
In this article, I discuss the following:
- What is product-led growth?
- The components that work in product-led growth
- How to design a product-led growth strategy
- Measuring success
What is product-led growth?
In short: Product-led growth is at times referred to as PLG.
Product-led growth happens essentially when user acquisition and growth happen because of the product. The product does the heavy lifting as users explore and find useful features that get them to become paying customers.
For example, the Voxpopme market research platform is available on a self-sign-up model. It allows customers to choose the right plan for them without ever talking to someone. Customers sign up based on what they know about the product and how easy it is to find the right plan that offers value to them specifically.
For existing customers, product-led growth happens through relevant updates, ease of use, and other ongoing strategies that cement the product’s value. PLG products often allow users limited access to a product or a free trial.
“I can make that purchasing decision without having to get approval,” said Wes Bush, author of “Product-Led Growth,” “It could still be a big purchase over time.”
What works in a product-led growth strategy?
Voxpopme CRO Jenn Vogel explained that the platform and supporting digital properties – like the website – do the selling.
“The website is your only salesperson,” she said. “It really has to be perfect and communicate the message effectively.”
That also means that it’s necessary to test everything. The buttons, the wording, and the layout. Everything.
“Forget what worked for you five years ago, two years ago, or two months ago,” she said. “You need to be in this constant test and learning phase.”
Great teams let go of their own opinions and see what works for the user, Jenn said.
“You don’t like that color? Well, maybe it converts better,” Jenn said. “Find what works and rely on the data.”
Wes said when he first started shifting his user acquisition strategies to PLG and started offering:
- free trials
- a freemium experience – i.e., all users can access the platform, but some features cost a fee to use.
“We’ve had like hundreds of thousands of users, and that was my ‘oh, I guess there’s a better way to market and actually sell products,'” Wes said.
How to design a product-led growth strategy
There are several steps to get a PLG strategy off the ground and running to help your company:
- entice people to look into the product
- delight them when they take a look
- convert interested people to paying customers
- expand customer relationships
“What has changed is that if you are going to jump from a sales-led business to a product-led business, you need to think about what we will prioritize first?” Wes said.
Understand your target accounts
Like anything in marketing and product development, we need to understand who we create the product for. Who actually has the problem that the product can solve? That’s also essential in a product-led approach. Changes and communication must be highly relevant to those users to make it a long-term success. After all, there are no follow-up questions from them to a salesperson. The product messaging is communication that should answer the questions.
Read next: Understand your customers’ Jobs to be Done
“It’s that skillset to communicate value and make that value really obvious,” said Gia Laudi, co-founder of Forget the Funnel, on “Reel Talk: The Customer Insights Show.”
Author April Dunford states that you can start understanding your customers by watching their actions in the buying and product cycle.
- Are they converting from the free trial to the paid trial?
- When are people dropping off?
- What messaging seems to work better than others?
“If we haven’t seen the patterns, then we haven’t sold enough yet,” she said.
“We just need more customers, more data, and those patterns will evolve,” added Jenn.
Deliver on your brand promise
For a product-led growth strategy to work, the product and the related experience must be clear on the brand promise and then deliver that promise.
“What is that big promise we are making to the user?” Wes said.
The brand promise can also be broken down into several stages, Wes explained, including:
- Beginner’s problem set
- Intermediate problem set
- Advanced problems
“You really just have to think through for somebody in each of these problem sets who will eventually experience the brand promise. So those beginner problems are really what we want to give away for free.”
To understand what should be given away for free, what’s worth an upcharge, and where the premium price comes in, customer research is so important, said Wes.
Getting everyone on the same page internally
Rowing together in the same direction matters here. Wes said that different teams need to be involved and in agreement regarding the strategy and how to implement it.
“You need to have every department be a part of this,” Wes said. “You need to find out who are the key leaders, and then you have to go in and build it out with those people.”
That also includes having the same definition of PLG and how it would look in the specific business, Wes said.
Also, keep in mind that salespeople might not be on board from the onset because why would they want a product that sells itself, as the subtitle of Wes’ book said?
“But what I really meant by that is that when people go into your product, we can give them an amazing experience and see the value of the product, and we make it really easy for them to upgrade,” said Wes. “In a way, the product has sold itself, but what happens for sales is that that a salesperson that would have to talk to everyone – small and medium-sized businesses – can now focus on the bigger enterprise prospects.”
Read next: The importance of genuine relationships to understand customers
Once the PLG strategy is off the ground, look at how many people reach the point of getting value from the product, Wes said. Some call this user success, beginner milestone, or even product-qualified lead.
Ask yourself: What would be that meaningful win for a user to get into your product?
“What I would recommend for a lot of companies who aren’t really clear on this; just start with what you think is best and start measuring,” Wes said. “See if it has an indicator: If more people do this in our product, do we actually see a big increase in people who are upgrading? If you do, you are most likely on the right track.”