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Product led growth (PLG)
The success of a product or service largely depends on how well it is marketed and promoted. As competition in the market grows tougher, businesses must adopt winning strategies to stand out and attain sustainable growth.
Product led growth (PLG) is a strategy that has gained immense popularity in recent years. If you're a marketer or product manager, you probably have heard of PLG or even considered using it for your business. However, to leverage PLG, it is essential to understand what it is and how it works clearly.
Below, we'll define PLG, explore its benefits, and provide a guide for successfully implementing the strategy.
What is product led growth (PLG)?
Product led growth is a go to market strategy that puts the product front and center of the business's growth efforts. The approach focuses on creating a product that can sell itself instead of relying solely on traditional marketing and sales tactics.
PLG is user-centric, and its primary objective is to provide value to customers while driving customer acquisition, retention, and revenue growth.
Businesses can catalyze their organic growth through word-of-mouth referrals, reviews, and user retention by creating a product that satisfies the users' needs and desires. The outcome of this approach is happy and engaged users, who tend to become the business's evangelists, promoting the product even further.
How can PLG benefit businesses?
One significant advantage of a product led growth approach is its cost-effectiveness compared to traditional marketing and sales strategies. Instead of spending a lot of cash on ads, PLG works by delivering a superior customer experience and garnering organic growth through customer referrals, repeat purchases, and positive reviews. These organic growth drivers bring in new customers and improve retention rates, creating a steady revenue stream.
Additionally, PLG propels innovation, forcing businesses to improve their products to meet customer needs and expectations constantly. By prioritizing the user experience, companies are motivated to identify new ways of delivering value that keeps users engaged and happy. This creates a virtuous circle where customer feedback leads to product innovation, customer satisfaction, and further growth.
5 Step-by-step guide for how to implement PLG
Here’s five steps that can help you get started with product led growth (and a complete guide linked below):
- Define your ideal user: To build a successful product led business, firms need to know the specific user persona they are trying to target. By understanding the customer's needs and behaviors, companies can tailor their product to meet their needs better. Identifying the ideal customer helps businesses target their efforts to satisfy the customer's needs and leverage user experience to drive growth.
- Build a great product: The product led growth approach's success depends heavily on the product's ability to deliver value to users. Companies should invest time and resources in building a user-focused and satisfying product. To achieve this, product teams should conduct user research to understand what's essential to their target users, incorporate user feedback, and improve the user experience continually.
- Incorporate viral features: One of the crucial aspects of product led growth is making the product more shareable and easily referring. Viral features, such as in-app invites, prompts, and social integrations, can quickly help increase the customer base exponentially. Moreover, these viral features allow businesses to leverage their satisfied customers' advocacy by encouraging referrals and word-of-mouth.
- Simplify user onboarding: User onboarding is essential to getting people excited about the product they have signed up for. Onboarding is the users' initial interaction with the product, and it can make or break first impressions. By simplifying the onboarding process and delivering value immediately, users are likely to stay engaged with the product, increasing the chances of continued use and user retention.
- Leverage analytics: Businesses should continuously monitor their product's analytics to track product led growth and to understand customer engagement and retention rates. With analytics data, companies can identify issues and opportunities to optimize their product lifecycle for growth. Businesses can make data-driven decisions that help the product led growth approach achieve measurable results by leveraging analytics data.
Product led growth is a winning strategy for businesses seeking sustainable growth while reducing marketing and sales costs. Companies can drive organic growth through customer referral, retention, and engagement by building a great product that delivers customer value.
PLG requires discipline and focus on user experience and data-driven decision-making, but the rewards are significant! If you're considering trying product led growth, remember to identify your ideal customer, build a great product, incorporate viral features, simplify customer onboarding, and leverage analytics. With these five steps in place, you will be on your way to product led growth success!