By: in Knowledge

What is Product Led Growth?

So you’ve heard of product led growth, but what does that really mean? And more importantly, how can you make it work for your business? In this post, we’ll break down what product led growth is and explore some tips for putting it into action. Stay tuned!

What is Product Led Growth?

Growth is essential for any business, but it can be difficult to achieve. Traditional marketing and sales techniques can be effective, but they can also be expensive and time-consuming.

Product led growth is a new approach that focuses on using the product itself to drive growth. The idea is to create a product that is so compelling that it sells itself. This can be done through word-of-mouth, virality, or other organic means.

Once a user is acquired, the product must also be sticky enough to keep them engaged and grow with the product.

A product-led company will often have a freemium business model, in which the product is available for free to all users, with premium features reserved for paying customers. This approach allows the company to virally acquire users through word-of-mouth and organic growth.

Product-led companies are typically SaaS businesses, as subscription models align well with virality and product-led growth.

How is PLG different from other growth models?

Product-led growth is a very different beast from other popular startup growth models. For one, it completely inverts the traditional sales process.

In a product-led company, the product itself is the primary driver of new users and customers. This is opposed to more traditional models, where the sales team is responsible for acquiring new customers.

Product-led growth also fosters a different kind of relationship between the product and the user. Rather than being a product that is purchased or subscribed to, the product becomes a tool that users rely on in their everyday lives.

As a result, product-led companies often have much higher customer retention rates than their traditional counterparts.

Finally, product-led growth requires a different mindset from the traditional model. Startups that are focused on product-led growth prioritize building a great product above all else. They worry less about generating short-term revenue and instead, focus on creating long-term value for their users. As a result, product-led companies often have very different cultures from traditional startups.

All of these factors make product-led growth a very different proposition from other popular startup growth models.

**The benefits of Product Led Growth for businesses **

Many product-led businesses have seen increased revenue, market share, and customer loyalty. They have also put their product at the forefront of their business model.

This approach has led to success for many businesses because it allows them to grow their customer base organically and efficiently.

Product-led growth also allows businesses to focus on creating a great product instead of wasting time and resources on marketing campaigns that may not be successful.

Furthermore, product-led businesses have been shown to have higher customer retention rates than traditional businesses. This is because customers are more likely to stick with a product that they love and use regularly. Therefore, product-led growth is a great way for businesses to increase their revenue, market share, and customer loyalty.

Companies that have successfully implemented a Product led growth strategy

Slack, the workplace messaging service, is one of the most well-known companies to have implemented a product-led strategy.

They have grown their user base organically by word of mouth and by piggybacking on existing platforms such as Twitter and GitHub. In the early days of Slack’s growth, they offered free accounts with limited features in order to get users hooked on the product.

Once users were invested in Slack and had integrated it into their workflow, they were more likely to upgrade to a paid subscription.

This product-led strategy has served Slack well, and they now have over 12 million daily active users.

Intercom is another company that follows a product-led growth strategy. They offer a suite of customer communication tools that helps businesses automate their customer support, sales, and marketing communications.

Similar to Slack, Intercom starts customers off with a free product and then upsells them to a paid subscription once they are invested in the product. This model has worked well for Intercom, and they now have over 25,000 global customers. Another company that has achieved success with product-led growth is Supercell, the maker of popular mobile games such as Clash of Clans and Hay Day. Supercell follows a “freemium” model, in which users can download and play the games for free, but are encouraged to make in-app purchases for extra features. This approach has been extremely successful, and Supercell is now one of the most valuable game companies in the world. These examples show that product-led growth can be an effective strategy for achieving significant business success.

How to achieve Product Led Growth?

A product-led growth strategy focuses on acquiring and retaining customers through the product itself. This can be achieved in a number of ways, but one of the most effective is through product-market fit.

Product-market fit is when a product meets the needs of a particular market. For example, a product that is designed to meet the needs of busy parents will have a better chance of being successful than a product that is designed for everyone.

Stormly is a tool that can help you achieve product-market fit by allowing you to test your product with potential customers and get insights on what they want and need. This feedback can then be used to improve the product so that it better meets the needs of your target market.

In addition to product-market fit, another important aspect of product-led growth is customer retention. This means keeping existing customers happy and engaged with your product. To measure retention, you can simply run a Retention insight at Stormly and clearly see all different types of this metric. Such as User Retention, but also Revenue Retention- suitable for subscription based products. Or Feature Retention to see what features are most popular in terms of recurring usage over time of a specific product feature.

Another way to start with the PLG approach, is through offering a free trial or discount for first-time users. This gives customers a chance to try out your product and see if it meets their needs before they make a purchase. By offering a free trial or discount, you can increase the chances of customers becoming repeat buyers.

Future of Product Led Growth

Product-led growth has become increasingly popular in recent years as companies have looked for alternative ways to acquire and retain customers.

While product-led growth can be successful, it is not without its challenges. For example, ensuring that the product is high quality and providing adequate customer support can be difficult.

Additionally, some product-led companies have been accused of being too focused on growth at the expense of profitability. Nevertheless, product-led growth remains a popular and viable option for many companies, particularly those in the tech industry.

Thanks to its flexibility and potential for success, product-led growth is likely to continue to be a major force in the future of product development and marketing.

If you’re looking for a way to increase your product’s market share, revenue, and customer loyalty, then you should definitely give product led growth a try.

It can be a bit challenging to get started on your own, but thankfully there are tools like Stormly that make it easy. Sign up for Stormly and see how product led growth can help take your business to the next level.