Introduction

Every company wants a way to stand out from the pack and outpace their competitors. Enter product-led growth (PLG), a go-to-market motion that relies on the product itself to drive the acquisition of new customers, as well as retention and expansion.

There are plenty of resources out there already that can give you a rundown on PLG, like ProductLed Institute and Product Led Growth Collective. We’re not trying to reinvent the wheel here, just help you build up a baseline for understanding what a product-led strategy entails.

Here’s what you need to know about PLG.

A Brief History of PLG

The product-led approach isn’t exactly new — product-led strategies have been used in one form or another for years.

PLG strategies are how companies like Slack went from just an idea to a thriving company with a worth of $3 billion. They have also helped power the popularity of big names like Zoom and Dropbox. While not every new software product can expect to mimic their runaway success, there are important lessons you can glean from their use of PLG.

PLG as Go-To-Market Motion

There are several approaches you might take to monitor your PQLs. Each of these tactics serve to provide initial value to potential customers that will convince them to interact further, pushing you ahead.

The three commonly used PLG models are:

  • Freemium: Users experience a pared-down version of the product for free, but have to pay to unlock additional functionality as they go.
  • Free Trial: You offer users a time and feature-limited version of the product to enjoy, after which they must pay to unlock the full version.
  • Self-Service: Users choose what features they want and pay according to what they use.

Key Players for PLG Success

Contrary to popular belief, PLG requires more than just a great product and competent product team. While the product might be front and center, other parts of your organization are just as critical for your strategy to bear fruit. Specifically, your sales and marketing teams should be stepping up and working in tandem to help guide you to success.

Marketing

Your marketing team will be taking on the role of educator, and using their talents to showcase the value of your product throughout the customer’s journey.

Their job starts by enticing people to start using your product. As the product gains traction, marketing then looks for ways to ease the user’s experience and generate excitement about your product. By encouraging all that love for your product, marketing can help increase word-of-mouth and get even more users on board.

Sales

Instead of pushing the product, as they might in a traditional sales approach, or constantly reaching out to potential clients with information, your salespeople have the task of organically guiding customer success.

Your sales team are now your product experts, helping customers discover how your product addresses their needs while also listening to their likes and dislikes. By mastering the ins-and-outs of your product and learning from customer feedback, your sales team becomes attuned to user behavior, transitioning to a consultative role within your product-led strategy.

Product

Then there’s your product, the leader of this trio. The product has to draw in customers and keep them hooked as you grow.

To do this, your product needs to address a user pain point and deliver value right off the bat. What’s more, the pricing model for your product needs to eliminate barriers for customers to start engaging, and reduce potential buyer’s remorse that might come with paid features and upgrades.

Remember that while the product leads the customer experience at the outset, all three key PLG players should work together to prioritize customer success and help promote growth.

The Product-Led Flywheel

These PLG models and key players are all part of the product-led growth flywheel.

This is the cycle that allows your business to attract, engage, and satisfy customers while keeping the momentum going to continuously drive revenue. Put simply, you deliver superior value to your users, they tell others about your brand, new users buy into your product, and the process begins anew, enhancing your bottom line.

What Is a PQL?

At the heart of a product-led growth strategy are product-qualified leads, or PQLs. Unlike marketing qualified leads (MQL), who are website visitors you suspect might become customers based upon their level of engagement, PQLs are actual users of your trial product.

To identify an MQL, a visitor first has to come to your website and then interact with some content. They might fill out a form or download an eBook. You’ll use every one of these interactions to assess a lead score and try to figure out how close they are to making a purchase.

You won’t be using content metrics to identify your PQLs. Instead, you’ll determine PQLs by monitoring their in-app behavior. Just signing up for a free trial or upgrading a plan does not make a PQL. PQLs are users who exhibit specific behaviors that put them near the bottom of your funnel and indicate buying intent.


For example, maybe the prospect has added a specific number of friends within your app, or reached the limit on the number of messages they can send. Maybe they’re making use of specific features or adopting your product at a speed that indicates they might buy. The criteria for a PQL is a moving target, and one that you’ll have to set based on your own research.

Once you have, you’ll be able to more precisely target users who are ready to convert. Since they’ve shown an interest in what you have to offer, all that’s left is for you to add value to something they’re already enjoying.

When to Use PLG

Before taking the plunge with PLG, you’ll need to understand if it’s the right fit for your company. As we delve deeper, you’ll learn what challenges to expect along the path to product-led growth and how some of the best in the business have tackled them.

Next Challenge →

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