Note: This blog post highlights key themes from Product-Led Growth Guide Volume 1: What Is PLG? Download the full guide to see the advice, best practices, and insights shared by 25 industry experts.
Do more with less. The words no one wants to hear but are a reality for most businesses. With “growth at all costs” no longer an option, businesses are looking for ways to reduce sales and marketing spending, particularly as customer acquisition costs (CAC) have increased.
For many companies, product-led growth (PLG) is the answer.
In simplest terms, PLG leverages the product rather than marketing or sales to drive acquisition, retention, and monetization. We’ve seen exceptional success from companies like Slack, Atlassian, and Zoom, all of whom leverage PLG to deliver outstanding value to their users and then equip them directly with the purchasing power.
But the real magic happens when you combine the power of PLG with marketing and sales efforts. This, more than anything, is where companies can unlock transformational growth. Whether you’re a traditional product-led business or enterprise sales-driven business, PLG is for everyone—and the best businesses in the world have already figured that out. So where do you start?
In Amplitude’s newest release, Product-Led Growth Guide Volume 1: What Is PLG?, you’ll hear from 25 industry experts on how to understand and leverage PLG to transform your business, no matter your go-to-market model.
- Product-led growth must be rooted in every stage of your customer journey, from acquisition to monetization.
- A data-driven environment and a modern data stack for growth are prerequisites for PLG.
- Successful adoption of PLG means integrating it at every level of your organization—sales, customer success, marketing, and product.
Root PLG in the customer journey
As Amplitude’s VP of Product Ibrahim Bashir says, you need to “put the product front and center of every moment in the customer journey.”
For product-led growth to be effective, it should be ingrained in the customer journey:
- Acquisition: PLG tactics like virality and user-generated content drive new users to sign up.
- Retention: Product usage triggers help boost activation and engagement to drive retention.
- Monetization: Help your users see the value of your product to get them to make a self-service purchase, or give your sales team product usage data that signals a readiness to buy or expand. (This is the one most companies miss!)
The prerequisites for PLG
Several things need to be in place for any business interested in PLG. These prerequisites fall under two areas: your environment and your team.
Environment: You need a data-driven, experiment-first culture
According to Elena Verna, Amplitude’s former Head of Growth, “You need to have a data-driven environment, so you’re not just working from intuition or the opinions of the highest-paid person in the organization.”
You need behavioral data that gives you insights into the customer journey. This data should also be democratized—available and accessible across your organization, allowing everyone to work with it comfortably.
Finally, a company must embrace a culture of experimentation. This allows you to continuously refine your customer and product knowledge without relying on assumptions and make growth decisions with meaningful business impacts.
But, a data-driven culture is useless without the right technology or a modern growth stack. Technology drives growth across the customer journey by:
- Making it easy for prospects to sign up and try your product
- Providing a useful user onboarding experience
- Promoting engagement and retention with the help of great customer relationship management (CRM)
- Identifying users with the highest customer lifetime value through lead scoring
- Delivering quick and accessible user support that prevents churn
Businesses also need a modern data stack for growth that includes collection, warehouse, analytics, and activation tools that collect, store, analyze, and activate your data. Digital analytics platforms like Amplitude are especially critical for your growth stack.
Team: You need the right skills and organizational structure
Taking on PLG means you need a team with a diverse set of skills and capabilities around:
- Digital interfaces
- Consumer psychology
- Content creation
- Customer modeling
- Data analysis
- Experimentation and testing
You need a team that can maintain a holistic view of growth across the company, which requires cultivating a constant curiosity about all of your growth levers and what you could do to improve them.
This means you need an organizational structure that works around PLG, allowing it to live within the very essence of the organization. There are three ways to approach this:
- The growth team reports to the product team. This positions PLG as core to the product team’s strategy.
- Make growth its own department. This department, led by a VP of growth, will oversee a vast team that includes growth marketing, product growth, and analytics.
- Several teams co-own growth across marketing and product. This is the approach we take at Amplitude because it reinforces alignment through collaboration and shared product metrics.
Adopting PLG across your organization
Product-led growth requires a shift in mindset because it’s fundamentally different from the traditional, human-led sales cycles many organizations are used to. PLG requires revisiting your approach to sales, customer success, and marketing.
Adopt long-term sales strategies
Shift your sales strategy from a “top-down” approach that focuses purely on closing enterprise deals to longer-term strategies that let you enter accounts early and then expand. This means increasing your user base through tactics like low-cost or trial plans. As users continue to see your product’s value, you can turn them into expansion opportunities or enterprise plays.
Partner with your sales team to cultivate product champions who could evangelize your product’s usage at their organizations. Your sales team could also offer upgrades to help these core customers unlock more premium features.
Expand customer success capabilities
When casting a wide net with product-led growth, your customer success team will need to support a larger volume of customers. As you begin to offer low-cost or even free versions of your product, you should consider implementing a one-to-many communication system for your account managers and customer sales representatives to engage with the influx of new users.
Focus marketing on acquisition and retention
With a PLG motion, marketing teams are crucial to source new personas. They need content across the customer journey that will drive acquisition and retention. This could be anything from onboarding emails and product notifications to relationship-building programs and community.
This content helps build stickier experiences and better relationships with users.
Get started with PLG
Take a closer look at how your organization can get started with product-led growth by downloading Product-Led Growth Guide Volume 1: What Is PLG?
In this guide, you’ll learn:
- What you need to adopt PLG
- Whether PLG is right for your business
- How to pinpoint your PLG maturity
- How to get started on your PLG journey
Download the PLG Guide today.