What is product-led growth?
Product Led Growth (PLG) is a business development strategy that leverages product usage to drive customer acquisitions, conversions, and market expansion.
It places product on the focus of businesses, forcing them to improve the experience you offer and leverage your product experience in the competition.
Successfully implementing a PLG framework requires you to not only recognize that your product is the sole source of scalable and sustainable business growth for your company but creating company-wide alignment across all of your teams around the product, from engineering and development to sales and marketing.
If your users can gain value by interacting with your product, they will automatically weave it into their everyday routines. Excessive exposure to your product will convert users into promoters that will push friends and colleagues into trying your product out.
Though this growth strategy doesn’t include a well-built sales team, a number of important customers will still require the words of an expert on the subject. So, it will be better to adopt PLG and keep a sales team at the same time.
Why is product-led growth important?
Product-led growth is vital for any company nowadays due to three main reasons:
- It actually helps you improve what you offer. Other growth strategies consist of optimizing the product’s value proposition and audience, sometimes even exaggerating it. In a PLG company, the only thing that is aimed to be improved is the product itself, so after a while the product will inevitably be superior to its competitors.
- It is a superior strategy to the traditional ones. Traditional growth strategies are mainly focused on advertisements and outreach, which are even more competitive fields than ever. This means that no matter how beautiful your product is, if you don’t possess a budget for a large sales team and expensive advertisements, it’ll be hard to succeed.
- It will help you generate better leads. A Product Qualified Lead (PQL) is a term that has made its way into business with PLG, that refers to people that have tried your product already with unlimited expansion capabilities. The customers of a product-led business will stick more with the company, resulting in increased retentionWhat is retention? Retention refers to a customer continuing to use a business’ product or a service and to pay for the said product or service. It is a key… and improved churnWhat is churn? Churn refers to a customer cancelling their subscription to your products or services. It is a common metric among especially SaaS(service as a subscription) businesses. Churn exists… rates.
How can a business become product-led?
A business can easily become product-led, if the focus of every department shifts from their current focus to the product itself.
The development team is already focused on improving the product, so much change is not expected here.
The product team needs to focus on finding out who the users are, and focus on creating the product that these users need.
The customer support and success teams need to communicate more with users and the product team, establishing the bridge between these two parties for finding out possible improvements.
The marketing team has to change the value proposition they market to a more product-focused one. This means that instead of creating somewhat deceiving marketing campaigns, they will market use cases of the product.
The sales team will function as they normally function, answering the questions in the customers’ mind and closing deals. However, since there needs to be less intervention by the company in sales funnels, part of this department can act as a customer successWhat is Customer Success? Customer Success refers to the approach that has your company in a position where it ensures that each customer is successfully connected to their desired outcome…. team.
