Product-led Growth is a business strategy that aims to transform the product into the main source of income generation for a company. To implement it, optimizations are made that provide the customer with a valuable experience with the product before they purchase it. Juan Andrés Corrales Jan 24, 20 | 15 min read what-means-product-led-growth The business world has entered a new dimension and in order for us to adapt to it we must understand the concept of Product-led Growth (PLG). Have you already heard about him? It is a valuable strategy (and philosophy) that allows us to meet the high levels of demands of today’s users, who demand real and sustainable solutions to their problems. In addition, it is an effective principle to follow when seeking to position a product, generate great credibility for the brand in the market and increasingly add more value to the customers obtained. In order for you to understand more about the PLG and its scope, in the following lines we will explain what it is, how to implement it, how it benefits companies and what its main metrics are, among other topics. Continue reading!
What is Product-led Growth? This emerging concept refers to the way in which companies develop customer acquisition, retention and expansion strategies that revolve around the product . If we do a free translation, we can say that this term means “product-oriented growth”, which reveals its essence. It is a paradigm shift, leaving behind the philosophy of growth based on marketing and sales and replacing it with one that is driven by the product itself. So, Saudi Arabia WhatsApp Number List in general terms, we can say that the PLG is a market launch strategy , which takes advantage of the value generated by the product to achieve a solid position in the near future. But it is not a simple and common strategy! And it is based on a kind of virtuous circle, in which as users interact with the platform or software in question, it begins to adapt to the characteristics of the user and offer an increasingly better and more personalized experience. How was this concept formed and what is its role today? OpenView Venture Partners, a venture capital company, was in charge of coining the term Product-led Growth , perhaps in order to give a concrete name to a growing trend in the market. Without a doubt, from now on, with the popularization of this term and the study of this modern philosophy by specialists, the growth strategies led by the product will have a greater impact on the market and will be refined . However, the truth is that digital transformation ,
Digital Marketing and the behavior of the market in general had already given certain signs that the product would become the central axis of the customer experience and the interaction between the actors of the ecosystem corporate. In recent years, experts have focused on developing processes and systems that allow us to better understand the customer in order to offer them increasingly personalized services and items that really solve their specific needs and problems. In fact, business models that are directly related to the concept of Product-led Growth have been consolidated. Among them we find:Freemium A freemium company is one that offers software, systems and services in general for free, but with the possibility of subscribing to paid plans to access more features and benefits. In this way, people can choose potentialities and tools that they really need and, as they use the product, it becomes more intuitive, practical and personalized. SaaS They are companies that develop and market software, which is why they are called Software as a Service (SaaS) companies, that is, software as a service. These organizations are in charge of carrying out maintenance and data security tasks on the digital platforms and systems that they make available to their clients, as well as advising them and offering them continuous support. In addition, in a Saas company, the contracts are long-term, so that the user acquires a long subscription of the software (which is always stored in the cloud in those cases) and can gradually advance their experience with the platform.
Those business models are in addition to tutorials, free demos and other resources that allow users to experience digital tools to identify the real value of the product before making purchases or subscribing to “premium” plans. This leads us to conclude that Product-led Growth emerges as the next level of an already existing trend of personalization and improvement of the customer experience , which places the product as the fundamental axis. And it is a response to the emergence of a much more demanding public, empowered thanks to the Internet, artificial intelligence and the many alternatives available to it. Organizations that have been studying the market in recent years, such as Forrester and Salesforce, have found solid data regarding the increasing level of demand from users and the marked inclination for digital. In that sense, some of the most striking statistics are: 75% of buyers prefer to do it through an application or website; 80% of people prefer to do business with companies that guarantee personalization ;52% of people would change their brand if the services and products they receive are not personalized;21% of users open a mobile application only once and, if it does not captivate them immediately, they do not take it into account again. You see, today the Product-led Growth assumes the responsibility and role to meet all these needs, putting the product in the center of acquisition strategies, customer loyalty and growth. Changes and key actions to implement the PLG The Product-led Growth applies perfectly in different corporate contexts .
Of course, it is especially useful and necessary in SaaS, Startups and various companies with an interactive nature and direct relationship with the digital world. These types of companies serve audiences with new consumer paradigms, which prioritize innovation , modernity and personalization, as well as users who require agile, intuitive and purely digital services. Taking this into account, any company that really wants to put the product as the protagonist and boost its growth through it has to prepare for these important and forceful changes:Eliminate intermediation For a product to really have value, it is key that the user does not have to deal with multiple intermediaries to reach it and discover its functionalities and potentialities. The traditional skillful verb marketer and outstanding soft skills may no longer be a long-awaited professional in the future. The trend that will drive the consolidation of the Product-led Growth concept is direct product testing, automatic customization of services through Machine Learning, and feedback between humans and software. In this way, both Marketing and Technology collaborators and salespeople will be able to focus on tasks oriented to planning, customer study and strategy. Apply Design Thinking One of the fundamental aspects of Product-Led Growth is to effectively solve customer problems, which presents us with a change in mentality. It is not about persuading and selling at all costs, but about experiencing a process of research, learning and conception that allows you to market a product that can really be a vehicle of attraction and growth. In that sense, Design Thinking is very useful.
This mentality, which was born in the world of graphic design, went beyond this area and became a business philosophy, based on solving problems for one or more people through the conception of a product . Saying it is very simple, but it is a complex process, consisting of different steps, such as: empathize (manage to put yourself in the customer’s shoes); define (identify the problems to be solved); create (design the idea to solve the problems); prototype (make a prototype of the product that will give life to the idea capable of solving the problem);evaluate (take into account all the information available to determine the real usefulness of the product). Of course, when conceptualizing a product or a digital platform for the company, you cannot forget to take into account the best design practices regarding the User Interface and its experience , since the intuitiveness and attractiveness of the tool that provides the service. Marketing paradigm shifts This is one of the key points for a correct implementation of Product-led Growth . It is useless to say that we will place the product as the main focus if we maintain the same paradigms of traditional marketing. Being a launch strategy, the PLG must answer the fundamental questions of the marketing world when presenting a product to the market, but from a different and novel approach. Let’s see!
Who will buy the product? Here you must be clear that you will not sell to simple consumers or buyers, but to users who demand a good experience, satisfaction and resolution of their problems. Where will the product be disseminated? Mass media advertisements are not critical to the PLG at this point. The really important thing is to make users happy so that they promote “word of mouth” and organically. Remember that in this age of the Internet, “word of mouth” can be as viral as the most expensive paid advertising campaign. Why will the product be purchased? At this point, the price of the product or its quality should not be given first place from a generic point of view. The focus is that our target user will acquire the product because it is reliable, offers value and, above all, because it is capable of solving their problem . Remember: people do not want the best product on the market, but the one that best suits their interests and meets their needs. How will they buy the product? Although this answer depends on the type of company and its audience, among other things, the approach when implementing Product-led Growth is that the user has the possibility of buying within the same product or, at least, after previously experiencing it .
Integration between departments If you accompanied us here, you will have noticed that the PLG is a new and challenging methodology, which changes the order in which many companies traditionally do things. For this reason, the integration of practically all members of the organization is essential. In some way, PLG is a value that must be instilled in the organizational culture and in the mindset of managers and collaborators. It is especially important that the Marketing, Sales, Technology and Customer Success teams interact , since all of them together cover the areas of interest of the Product-Led Growth philosophy . Los equipos de Marketing y Ventas tienen un sólido conocimiento sobre el usuario, sus dolores, necesidades y problemas, así como acerca de los resultados que se necesitan para hacer rentable el producto. En tanto, la tecnología garantiza que se cumplan aspectos imprescindibles que mencionamos anteriormente, como la desintermediación, por ejemplo. Al mismo tiempo, el Customer Success sigue las acciones de todas las otras áreas y el comportamiento del cliente para garantizar la satisfacción y eliminar puntos de fricción. Métricas del Product-led Growth Como sucede con todas las estrategias de atracción y crecimiento, para que la implementación del PLG sea efectiva es necesario seguirla de cerca y analizar a través de diferentes tipos de métricas. A continuación mencionaremos algunas.