What is product led growth (PLG)?

Definition of product led growth (PLG)

Product led growth (PLG) is a business strategy that focuses on driving growth and user acquisition through the product itself, rather than relying solely on traditional marketing efforts.

For marketers, this means leveraging the product's features, user experience, and value proposition to attract, engage, and retain customers. PLG strategies often involve creating a seamless onboarding process, offering freemium or trial versions, and incorporating in-product prompts and messaging to encourage users to explore and adopt new features. By prioritising customer satisfaction and organic word-of-mouth, PLG enables marketers to build a loyal user base and achieve sustainable growth. For a deeper dive into how PLG fits within broader go-to-market strategies, see From Strategy to Scale: Mastering GTM Motions for Sustainable Growth.

https://www.youtube.com/watch?v=RALGsXKOU8A

An example of product led growth (PLG)

Growth Method, a SaaS company specialising in marketing automation, offers a free version of their platform with basic features, allowing users to experience the benefits of their service. As users become more engaged and require advanced features, they can upgrade to a premium plan. This approach helps Growth Method acquire new customers through word-of-mouth referrals and positive reviews, as satisfied users share their experiences with their network. Additionally, the company collects valuable user data from the free version, which they use to improve their product and tailor their marketing efforts. This data-driven approach enables Growth Method to continuously refine their offering and attract more users, fueling their growth.

How does product led growth (PLG) work?

Product led growth (PLG) works by leveraging a company's product as the primary driver of customer acquisition, conversion, and expansion. For marketers, this means focusing on creating a user-friendly, valuable, and engaging product experience that encourages users to share and promote the product within their networks. By prioritising product quality and user satisfaction, PLG enables businesses to generate organic growth through word-of-mouth marketing, user referrals, and positive reviews. This approach reduces the reliance on traditional marketing channels and allows marketers to allocate resources towards enhancing the product and user experience, ultimately leading to increased customer retention and long-term success.

Expert opinions and perspectives

Here are how some of the world's best marketing and growth professionals think about product led growth (PLG).

• "Product led growth is about helping your customers experience the ongoing value your product provides... This is the most efficient way to grow a business in a world where customers have all the power." - Wes Bush, Founder of ProductLed

• "In a world of product-led growth, the product is the main vehicle for acquiring, activating, and retaining customers. It's not just about making a great product; it's about making a product that can sell itself." - Blake Bartlett, Partner at OpenView Venture Partners

• "Product-led growth is the future of go-to-market. It's about flipping the script on sales-led strategies and instead, putting the product at the center of your growth efforts." - Hiten Shah, Co-founder of FYI and Product Habits

Questions to ask yourself

As a modern growth marketing or agile marketing professional, ask yourself the following questions with regard to product led growth (PLG):

1. Is the product designed to provide immediate value to users, encouraging them to become advocates and drive organic growth?

2. How can I optimize the user onboarding experience to reduce friction and increase user engagement and retention?

3. What key performance indicators (KPIs) should I track to measure the success of product led growth initiatives and make data-driven decisions?

4. How can I leverage user feedback and analytics to continuously iterate and improve the product, ensuring it remains aligned with customer needs and expectations?

5. What strategies can I implement to effectively monetize the product while maintaining a strong focus on user experience and satisfaction?

Additional reading

Here are some related articles and further reading around product led growth (PLG) that you may find helpful.

1. Product-Led Growth: How to Build a Product That Sells Itself

2. The Ultimate Guide to Product-Led Growth

3. The Definitive Guide to Product-Led Growth

4. The 5 Pillars of Product-Led Growth

5. Product-Led Growth: A Winning Strategy for SaaS Companies

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