Posted in Product Development

What Is the Product Led Growth Strategy? The Ultimate PLG Playbook

If there is one thing I’ve learned about product led growth strategy is how a company adopts a certain software. In my experience, I have seen companies rely on skype for communication internally. It was the most go-to product I saw on the market until I used Slack.

Slack is everything bundled into one. Those of you who use it know that it’s easy. Skype is alright but when you’re working in large teams, slack’s the way. Now, this article is not about the benefits of Slack. Rather it tells how a product led growth strategy enables companies to adopt a particular software/service.

Today software companies aren’t reaching out to CTOs and CEOs to test their product. The trial is available to every user – individual or otherwise. I have tested Asana and Airtable in an individual capacity and they are simple to use.

Setting up tasks, creating reminders, marking them as complete, generating lists, etc. is at your disposal. Coupled with their android apps these freemium tools help you adapt. You can suggest it to your team or bring it to HR’s notice, and if they see it fit, it can be translated at an organizational level.

That’s a product led growth strategy at play.

How do you build a software product with the end-user in mind?

The answer is simple. Build a product to address user pain points. Although design matters, it’s the pain which it solves which leads to the purchase of the software. Until, 2011-12, well-designed products used to be the driving force. As the years passed there is a shift towards solution-driven platforms.

Product led growth strategy
Source: OpenViewPartners

Good design has its place, but the solution triumphs any day. Earlier it was:

“I need ROI” - Executive level pain

Today it’s:

“I am annoyed” - end user level pain

That’s not to say executive pain isn’t worthy. In 2021, it’s not just that.

Consider the following:

  • “I hate internal emails. So annoying!” = Slack
  • “We need to manage our entire digital marketing outlay (Email, social media, digital ads) = Marketing Cloud (by Salesforce)
  • “I hate file-sharing, so annoying!” = Dropbox
  • “I hate post-it notes” = Trello
  • “I hate web conferencing” = Zoom

And so on so forth.

How to get end-users to convert from the freemium model to premium

Your product is in their hands. How do you get them to pay you? The trick is to avoid selling an executive with how valuable your product benefits are. It’s “sales-y” and you know we all avoid that. Therefore, distribution begins by thinking like a consumer.

Make the product available where users “live” ⇨ Keep it simple enough to get started with trial ⇨ Deliver value before the paywall ⇨ Restrict hiring sales team in the last

By living means in a virtual space. For example, with work from home practices, many employees are practically living on Zoom for online meetings. Now if you’re a Zoom company, you’d make it available to those looking for work online such as Upwork. 

As of late, Zoom partnered with Upwork to provide both job seekers and employers the ease of collaborating within the same workspace. Before they had to navigate to other platforms for follow-ups and work-related discussions such as Skype, Telegram, or WhatsApp. This is what I’ve seen.

When this happens users get annoyed about having to conduct meetings elsewhere. Bam! In comes Zoom to sweep the largest chunk of the market where freelancers “live”. 

Naturally when one of these employees go back to their office, if not already practiced, would suggest the management the need for Zoom premium that offers 1,000 participants, call recording, unlimited phone calls, and much more.

(The above is only to illustrate my point. I’m not aligned with Zoom in any way).

Now that we know where to distribute, the next step is to keep it simple. Simple to get your potential customers acquainted. If there is a paywall right after they sign up, chances are they aren’t returning. 

The best thing here is to let them try out the software. Test it and map it to their needs. If they find it of use, they’d likely sign up for the premium version. This part is referred to as onboarding. It is where the user becomes familiar with what you have to offer and learns to navigate the environment.

The process ought to be self-serve and must not involve getting in touch with your team (not at this time). Let the user explore and see if it addresses his or her pain point. Usually, the friction occurs when you try to act too friendly. Consider the following:

  1. Request demo
  2. Order form
  3. Talk to sales
  4. Support tickets
  5. Training

And the likes thereof. A user is aware that it is a setup, a trap (for lack of a better word) to get that sales pitch rolling. He tells himself: “No”, “Uh-huh”, “I’m out”. Instead, consider these:

  1. Sign up/SSO
  2. Automated onboarding
  3. Documentation
  4. Knowledge Base
  5. Community

The above gives the self serve vibe which is easy going and only asks you to follow steps to become equipped. If you think like a consumer, you don’t want Amazon sales rep contacting you rather you want one-click access where you can complete your purchase.

Similarly, you don’t need a DocuSign to accept Instagram T&Cs to create an account, nor do you prefer a call from CSM at Uber when you’re ready to take your first ride. It is this pain which a product led growth strategy eliminates.

Paywall discourages your user. As stated, it’s best kept at bay unless the user has had the flavor of the basic functionalities of your app. For instance, a customer would never start by subscribing to Spotify’s premium plan before experiencing the “aha moment!”. When he or she is satisfied that they can find any song of their choice and can listen by searching for it, they’re satisfied. But when he chooses to play without shuffle, a paywall is seen to bypass the “limitation”.

Here a customer would be willing to get past the “silly” roadblock to his streaming experience by subscribing. So it goes like this:

“Aha” ⇨ Paywall ⇨ Conversion

At this point, a sales team is needed to further drive the experience. You ought to have it in place, but best leave it to show in the end. There was a time where you couldn’t get customers without the salespeople at play, but since those times a lot has changed. 

The team would support your users as they begin to use your product. Especially when they have paid, they want to be treated like royalty. And it’s not a bad thing. Anyone who’s paid for a service would want the best value for their money. So, a sales/support team would assist them with troubleshooting, etc. Their main job is to make your user stay.

Users may stop using your product after a while for whatever reason increasing your churn rate. As a company, you must strive to keep it at 0%, but businesses are hardly ideal. This is where a support team shines by reaching out to customers who stopped using your product and help them address their concerns.

For example, at the start of a quarter, you have 400 conversions but by the end, you have 380 customers remaining, meaning your churn is 5% and your customer acquisition cost just increased. It is said, retention is easier than bringing in a new customer. Hence why the sales team, though comes last in the product led growth strategy landscape, is still relevant.

Examples of product led growth strategy companies

Software companies (SaaS) are largely based on the product led growth model. Some successful include:

  1. Shopify: merchants are provided with an intuitive user experience without any upfront training. You can get started within 15 minutes.
  2. Dropbox: individuals are choosing more and more tools on their own at work. This decentralization of purchasing power has led Dropbox to be a classic case of a product led growth strategy.
  3. Slack: Love for Slack has grown by leaps and bounds. People have become advocates for having it implemented at a wide-scale (in their organizations).
  4. Zoom: Free hosts are enjoying the ability to set up and schedule meetings. The benefits are visible and thus, people opt for a premium plan to bask in additional functionality.
  5. Atlassian: Organizations everywhere are involved in creating tickets for swift collaboration and working between teams/individuals. This has led to viral integration of other software such as G Suite products to get tasks done.

What do you think? Is product led growth strategy the future?

Let me know in the comments.


Information Developer | B2B | SaaS | SEO | Copywriting | Freelance Writer | Digital Marketing

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