hat is product-led growth? It's a question that more and more business owners are asking as they look to scale their companies. In short, product-led growth is the process of using your own products to grow your business. This can be done in a number of ways, but the most common tactic is to use your products to attract new customers. In this blog post, we will discuss everything you need to know about product-led growth!
What is product-led growth?
Product-led Growth (PLG) isn't a new idea and was coined by Openview Partners. The term "product-led growth" refers to situations in which consumers' use of goods drives their acquisition, retention, and expansion. Product-led growth is a SaaS term that has been around for a few years now. In simple terms, product-led growth means using your product to drive growth. Many firms have used the phrase "growth" as a strategy to expand their operations. A product-led growth strategy is one where the business allows users to try out a service before purchasing it. This is also known as 'freemium,' 'try-before-you-buy,' 'SaaS 2.0,' and 'free trial.'
The most important aspect of product-led growth is to have a great product. If you don't have a great product, no amount of marketing or selling will help you grow. The best way to create a great product is to start with a small group of customers and get feedback from them early and often. With this feedback, you can iterate quickly and make sure that your product is solving the right problems for your customers.
What's unique about product-led growth?
Product-led firms, unlike sales-led ones, have a different way of thinking about the sale. The product-led firm accomplishes this by making the "keys" available to the client and assisting them in obtaining a good outcome by using the product. For many customers, upgrading to a paid plan at this point is a no-brainer.
You've seen the real impact of product development. If you've ever used Slack or Dropbox, you know that reading a long whitepaper about the advantages of internal connection and cloud-based file sharing is not required. You wanted to see proof that the product was progressing.
At the end of this article, you'll discover why businesses choose to be product-led, what it takes to become product-led, and what the benefits are of product development. You'll also learn more about working for a firm that is product-driven and how to get involved in the process.
Why PLG matters now more than ever?
Customers want to test products before they buy them, according to a tech firm. Customers are picky. They want to try out the product first. Their attention spans are limited. Rather of reading a whitepaper on the issue it solves, they'd prefer to see the product itself.
What is the difference between a SaaS product and other products?
SaaS products are software as a service. They are hosted online and can be accessed from any device with an internet connection. SaaS products are subscription-based, so customers pay a monthly or yearly fee to use the software. Other products include things like physical goods, books, and movies.
Product-led growth has become one of the most effective methods for SaaS firms to expand in recent years. This has become standard practice, and the most successful SAAS firm has been utilizing it for years to come.
What are the typical characteristics of a PLG product?
Simple and seamless sign-up process
PLG companies, in order to supply easy access to the goods and encourage sign-ups, only require minimal data from their clients.
Provide value as soon as possible
Because it predominantly relies on social sharing and word of mouth, a PLG product must be valuable to be discussed and viral.
A PLG marketing plan postulates that consumers must understand and value your product before you ask them to pay.
The objective is focused entirely on the user, with the intention that the product may assist him in resolving his problem.
10 Product-led Growth Examples:
Airtable is a flexible, intuitive platform that links data from numerous sources and people together to create an organizational source of truth. Anyone can make and automate apps that precisely match their demands on Airtable.
To date, 80% of Fortune 100 uses Airtable. It supports 300,00+ organizations as well with a total funding at $1.36B.
Slack is a software that brings the appropriate individuals, information, and resources together to get jobs done. Slack has millions of users from Fortune 100 businesses to small businesses all over the world who use it to connect their teams, unify their operations, and propel their business forward. In just five years, they went from nothing to a $7 billion valuation using a freemium, bottom-up go-to-market approach. They're also an innovator in this area because of their early product success (PLG).
Figma is a vector graphics editor and prototyping tool. Figma has experienced over a rocket-like rise in recent years, reaching a $10 billion valuation in less than 5 years. According to Okta's Businesses at Work poll, Figma was the third-fastest-growing software in 2020, and it is expecting revenue to double this year. By giving the program away for free until the end of 2021, Figma is able to reach out to as many people as possible while also providing early feedback that appears promising, allowing them to reap significant earnings when they do charge in 2022.
Examples of B2C companies that are product-led:
Pinterest is a visual exploration engine for finding ideas such as recipes, home and design inspiration, and more. Pinterest net worth as of April 13, 2022, was $14.93 billion. Promoted pins are the primary source of income for Pinterest.
Typeform is a Spanish online platform that allows you to build anything from questionnaires to apps without having to write a single line of code. This makes information gathering and sharing more enjoyable, simple, and interactive. They claimed in 2021 that Typeform will have earned $70 million ARR thanks to 120,000+ users.
Through its website, Warby Parker sells high-quality prescription glasses and contact lenses. It also offers low-cost eye examinations. They stand out from the competition because they are able to offer their items at a lower price as a result of producing their own goods, which eliminates the middleman. Revenue rose by 37% in 2021.
Twilio is the industry leader in terms of communications. It's an engagement platform used by many developers across the world that offers tools for enabling seamless, valuable interactions with its customers via APIs in their preferred medium, such as voice calls, text messaging, video chats, and email. In 2022, Jeff Lawson, Twilio's CEO and Co-Founder, stated that the company had grossed $2.8 billion in revenue during the fourth quarter of 2021 and increased its size by 61% year over year.
The goal management tool Koan is an organizational platform that makes it easy to track team goals and performance, as well as OKRs. Prior to the pandemic, they used a sales-driven approach, but now that they are responding to current worldwide issues, they have switched to a product-led strategy. Despite the fact that there are several alignment softwares on the market, they were able to game up and find their place by utilizing their strengths as a crucial weapon. When they added a free tier in 2020, Koan was able to raise $1 million more.
Calendly is a popular scheduling program that has appreciated in use thanks to its simplicity of use in arranging meetings, appointments, and events for people and businesses. It's being called the fastest-growing company in the scheduling industry, with 12.13% market share. The firm was able to raise $350 million in 2021.
Canva is a graphic design program that allows novices to customize photos, develop schemes and layouts, and even publish their own designs without having any prior graphic-designing knowledge. Its objective is to allow everyone in the world to create. It has 60 million monthly active users as of 2021, making it Australia's most successful technology firm ever as it garnered 10 million users in 5 years.
Product-led growth is the future of business.
The product-led growth strategy challenges you to reconsider your product, consumers, and the connection between the two. It's a different way of viewing what sets you apart from your competition.
Modern product development emphasizes the organizations, not the executives, of a firm. Modern business buyers want their teams to buy the software. You may show (not tell) them that your solution is best by using product-led growth.
It's not hard to understand why product-oriented firms are priced 30% more than the general market index fund.
The production of new goods or services is a crucial component in expanding one's business. Product-Led Growth is a strategy for growing accounts that includes three distinct phases: acquire, retain, and expand. The product at the heart of any decision should always take precedence over everything else for a firm.
Product-led growth should not be confused with product-market fit. Product-market fit is about whether people want what you're selling— it's a prerequisite for growth, but it's not enough on its own. Product-led growth is about how you sell it.
The global market is saturated with lots of software apps for all kinds of needs, and acquiring product-led growth strategy may be a way to go. SaaS companies have been quick to realize this and are riding the wave of success.
In order to product-led growth, SaaS companies need to focus on three things:
-The quality of their product
-How easy it is to use
-Providing value through features or integrations
These are the three main pillars that will help SaaS companies succeed in product-led growth. If you're able to provide a great product that's easy to use and provides value, you'll be well on your way to success. Thanks for reading!