Overview
The Product-Led Growth methodology can help businesses grow their customer base and boost their revenues, while reducing costs, by focusing on one core principle, ‘Delighting Users.’ Whether a brand is launching a new product or pivoting an existing business strategy, it’s always the data that drives tangible results and achievable return-on-investment (ROI).
What is Product-Led Growth (PLG)?
Product-Led growth (PLG) is a go-to-market (GTM) strategy that prioritizes the product in the customer journey and uses it as a key vehicle to acquire, convert, retain, and expand customers.
Furthermore, PLG Strategy helps in scaling organizational growth by capitalizing on the consumarization of business-to-business (B2B) or business-to-comsumer (B2C) products.
Who can use Product-Led Growth (PLG)?
Most product-led growth strategies are implemented in the digital and Software-as-a-Service (SaaS) space, based on this criteria:
- Market: In case your product needs to serve a large market.
- Product: If you work on a product with a broad value proposition and a short time-to-value, e.g. low product complexity.
- Channel: If you focus on low-cost marketing channels.
- Model: The pricing model must be accessible, not expensive, and transparent, in order to provide customers with an easy way to try your product for free.
Why Product-Led Growth (PLG)?
Products are created to provide customer outcomes. They are designed to solve problems by adding value to the customer’s experience.
When a product provides value, customers are more likely to adopt it, resulting to become ‘Happy Customers‘ and continue using the product, as well as accomplishing good outcomes and attainable return-on-investment (ROI) for the business.
Stages of PLG — How it works?
The product is the primary vehicle behind the customer journey in a product-led growth strategy.
This means that the product is involved in all stages of the customer journey, from acquisition to expansion, and that the journey begins the moment a customer engages with the product.
- Acquire: The first stage consists of getting users to your product, usually through free trials or freemium experiences.
- Adopt: During this stage, your product is converting trial users or prospects into paying, long-term customers. This means promoting effective adoption through sticky features and encouraging frequent usage. This means converting casual visitors into loyal customers.
- Retain: During this stage, your product encourages customers to renew their subscriptions or packages. Retaining customers means that they continue to see value in your product, re-engage if they have been inactive, and have an easy and seamless user experience rather than a difficult or complex one.
- Expand: In the last phase, your product is at the heart of your revenue growth strategy, either by encouraging users to upgrade subscription packages to a higher tier, engaging with paywall features, or generating additional revenue in other ways.
Market Funnel vs. Product-Led Growth (PLG) Flywheel
Traditional customer journeys have been mapped with more of a funnel mentality — where marketing → sales → the product engages with a customer.
Benefits of product-led growth
Product-Led businesses are known for creating high-quality products that provide value to customers quickly and consistently. Aside from producing better products and satisfying customers, there are other benefits.
In Summary
- The Product-Led Growth (PLG) methodology improves user experiences and product adoption, which leads to higher ROI and business metrics.
- The Product-Led Growth (PLG) methodology aligns products to the customer’s business needs, resulting in product adoption, renewal, and expansion.
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About Tactful AI
Tactful is a leading and private technology company based in the UK, with a presence in EMEA. Tactful offers omnichannel and AI-powered customer experience software to help businesses thrive by enabling meaningful and effective engagement with their customers across touchpoints. Tactful UCX is a comprehensive customer experience platform that incorporates all technologies and tools businesses need to deliver the best customer experience, reduce costs, and boost customer loyalty and sales.
