Putting product-led growth (PLG) into practice is no small undertaking. The strategy uses the product to drive business and represents a fundamental shift in how products are built, marketed, and sold. (Indeed, the subject is so vast, we released a two-volume PLG guide).
But PLG is worth the effort. The strategy keeps customer acquisition costs (CAC) low, primarily by cutting back on sales and marketing spending (but not replacing them entirely). And it’s perfectly suited for this climate where end users have more purchasing power and a try-before-you-buy mentality.
To learn more about what it means to implement PLG, we surveyed Amplitude customers who have employed the strategy, including:
- Abhinay Jain, Director of PLG, CleverTap
- Alicia Cressall, Growth Designer, Parabol
- Bartłomiej Leszczyńśk, Growth Director, Canal+ Poland
- Braxton Bragg, VP of Growth, Revel.xyz
- Tej Pandya, Associate Director, Product and Growth, INDMoney
- Usman Ibrahim, Head of Growth, FlexiSAF
- Varsha Nagele, Senior Growth Marketer, Confluent
We learned their approach to PLG tactics (including incentivized referrals, product integrations, push notifications, in-product messages, and free trials), how they measure success (metrics such as new signups, activation scores, and retention rates), and what advice they have for other businesses interested in PLG.
Do you use PLG tactics to drive acquisition, activation, engagement, retention, or monetization? If so, can you share an example?
Alicia Cressall: We began offering AI summaries of user-generated content as part of our free trial. We found that including the AI summary feature in our free trial prompted more users to convert to paid plans.
Tej Pandya: We created our IND Learn program, which helps users learn finance skills and get certified in five minutes. The initiative lifted our activation rates and boosted acquisition as users shared their certifications online.
Abhinay Jain: We have applied PLG tactics mainly to give small-to-medium-sized businesses the experience of CleverTap by making it very simple for them to sign up without any external touchpoint. We landed on providing a 30-day free trial by iterating on the time-to-value. It’s enough time for users to discover how valuable the platform can be, but it still comes with a sense of urgency.
What metrics do you use to measure the success of your PLG tactics, and why?
Alicia: For our free trial, we tracked the number of upgrades related to AI summaries, requests for AI summaries after they were announced, and customer feedback. This was an experimental feature and we didn't know how users would feel about AI reading their content, so we wanted to be sure to keep lines of communication open, making sure they were receiving value from the feature. The primary goal was to create user value (to drive retention), and the secondary byproduct was conversion to paid plans when value was created.
Usman Ibrahim: We use several metrics depending on the user journey. For one, we look at the number of freemium users who become paying users. We use this to measure monetization and how our acquisition is attracting the right audience. We also measure the number of unique active customers per month and per every eight weeks. This helps us to track how our users are engaging with our product over time. Another metric is what we call the “habit moment,” the number of customers that return and repeat some action at least three days per week over a period of eight weeks.
What advice would you give to companies looking to implement PLG or specific PLG tactics?
Bartłomiej Leszczyńśki: Start with creating a dedicated growth team, allowing it to work together with different teams to incorporate new methodologies and ways of working in the organization.
Braxton Bragg: Paid acquisition is extremely difficult and expensive right now. Investment in "free" activities to communicate with your user base and encourage them to promote your product has proven to be a more effective, and more cost effective, channel for us.
Varsha Nagele: PLG is all about rapid experimentation across all funnel stages. Your experiments will fail more than they will succeed, but every learning will pay dividends to help you unlock your growth model. Your model may never be perfect, but you'll continue evolving it to make it better than it was yesterday.
Alicia: It's okay to start small. Small experiments and learning how to track success are great ways to build confidence in the levers for product growth, allowing you to make bigger bets later on.
Tej: The best way to solve for activation is to educate the user. It builds trust, and an educated user is always more likely to activate.
Abhinay: You can apply PLG tactics to many stages of the customer lifecycle—acquisition, retention, monetization, and so on. Start with one stage and do as many iterations as possible for that stage alone.
How have your PLG investments paid off?
Braxton: We're early in our journey, but have already substantially scaled back the limited ad spend that was supporting our early growth in favor of new PLG channels that are beginning to pick up steam.
Alicia: At Parabol, we've spent the last few months running experiments towards monetization. It's been exciting to see our revenue grow, and incredibly valuable to see which tactics are riskier. Our PLG experiments are helping us find the balance between risk and benefit.
Usman: We have invested a lot in the transition from sales-led to product-led. Within a short period, we experimented with PLG pricing and saw a reduced payback period—six months compared to 10-12 months with a sales-led approach.
To learn more about driving product-led acquisition, retention, and monetization, read Product-Led Growth Guide Volume 2: How to Get Started with PLG, which collects tactics and metrics from over 30 experts.