what is product led growth

what is product led growth

1 year ago 61
Nature

Product-led growth (PLG) is a business methodology that relies on using the product itself as the primary driver of customer acquisition, activation, satisfaction, retention, and scalable expansion. It creates company-wide alignment across teams, from engineering to sales and marketing, around the product as the largest source of sustainable, scalable business growth. In a product-led growth strategy, the product is the primary driver of customer acquisition, engagement, monetization, and retention, instead of a sales team. Key features of PLG include:

  • Sophisticated, personalized product experiences: PLG demands sophisticated, personalized product experiences that ultimately help users become better versions of themselves.

  • Inbound interest and word-of-mouth promotion: Momentum is maintained and exponentially grown by the increased inbound interest and word-of-mouth promotion that comes from having a well-designed product.

  • Self-service: PLG models focus on getting customers to discover the value of a product themselves, often by letting them use the product before committing to a purchase.

  • Investment in operating expenses: Product-led companies spend more on both R&D and sales and marketing as a percentage of revenue.

PLG is a direct reaction to the more traditional models of the past, where salespeople or marketing materials were used to convince customers of the value of a product. With PLG, companies are able to reallocate or save huge sums that would traditionally be spent on scaling sales, marketing, and service efforts. Companies typically employ one or a combination of the following growth models: sales-led, marketing-led, or product-led.

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