<Product-Led Growth Playbook> Quotes

The defining characteristics: is your product right for product-led growth?

1. The product market conditions are right for the strategy.

• Margin cost of serving each user are low
• The user plays the additional role of being the buyers, or one of the buyers, of the product, or the users have reasonable influence over the buyer(s)
• The known solutions in the market are inadequate for user needs

2. The value of the product is perceived by the user as being a unique “highest-value-product” that they want to user regularly.

• The product allows the user to achieve their daily tasks with more efficiency
• The experience can be personalized for the individual user

3. The user realizes significant ongoing value quickly and easily with little-to-no help from company personnel.

• The product integrates easily into other products in the user’s product ecosystem
• It is very clear what the product does and requires little explanation
• Users can use the product without creating an account
• The initial value is real, not a “demo account” with “dummy data”

4. The product “paywalls”follow, rather than lead, the actual value that the user receives and pricing scales as usage increases and more value is delivered.

• A free product is offered to show value and build credibility as part of the sales process
• As user needs become more sophisticated, customer success and direct sales are deployed to complement the sales process

5. The product has features that allow the product to market, sell and onboard new users.

• Users have a strong incentive to invite others to use the product and the user of the product can easily invite other users to use the product(viral potential)
• The product automatically communicates through non-product communication channels(for example email, push notifications, text, etc.)to deliver additional value and bring the user back into the product.
• The product monitors user behavior and makes ongoing recommendations to the user to provide additional value
• Users can connect with other users to exchange ideas from within the product

6. Marketing aims to engage users with the product rather than engaging buyers with a sales team.

• Users often discover the product when looking to solve a problem
• Users have great places to learn and exchange ideas with other users and potential users(for example through content marketing, online forums, Meetups, online training and so forth)

7. The product has a built-in network effect.

• The more people using the product in a network or company, the more valuable it becomes
• If it’s a platform, the more services you connect to it, the stronger the value

8. There is a strong product champion within companies using the product to drive greater adoption.

How to optimize your product with product-led growth

Strip out anything that isn’t critical

That means cutting out any excess complexity that doesn’t directly deliver on solving pain for your users.

Deliver value immediately

The goal is to make it extremely fast for users to get started and see results, which will make the user want to come back over and over again.

Make the product stick

How to market your product with product-led growth

Target your users, not buyers

The backbone of any marketing strategy should be a streamlined messsage explaining exactly what your product does.

You must construct your branding messaging and voice to resonate with end users — those whose daily life will be improved because of your product. Your goal should be to build an army of champions that will drive change in their organizations.

But this is no easy feat. To accomplish this, keep in mind winning over users isn’t just about a building a killer product, but also a killer brand to go along with it. The voice of your brand should be relatable and trustworthy — One that’s focused on making the working lives of users better.

The metrics that matter most

The most common marketing metrics revolve around lead volume, lead conversion and engagement. What set PLG companies apart is that they aren’t just focused on the top of the funnel, but the end to end customer experience. The best PLG companies realize that paying customers are an extension of the marketing and sales team. Keeping these customers happy will in turn fuel your growth.

More importantly, though, is the need to define and communicate your gold standard — whether that’s net promoter score or another metric. Your team needs to be aligned on the primary metric for which they should be optimizing. Doing so will not only guide your marketing experiments, but also your product development.

Your product is a type of marketing

Your product must incentivize users to invite others to use the product by ensuring their experience only becomes more valuable and enjoyable as more of their peers sign on.

Prioritizing your marketing channels

Users search daily for ways to alleviate their pain points. And you want to be there when they do. To do this, you need a strong content marketing strategy. Your content should educate prospects, free users and existing customers on both direct and complementary topics. Quality over quantity! Don’t necessarily gate your content. Your brand should be a trusted advisor, not a gatekeeper of information. Take this idea of knowledge sharing beyond just content marketing via SEO and social. Look to create communities, both online and off.

In the end, your marketing strategy should have a user-first mentality. This means relaying a clear message of exactly what your product does and the pains it can solve. Speak directly to the end user in a relatable, knowledgeable and trustworthy way. Hold your marketing efforts to the highest bar of customer satisfaction — net promoter score. Cultivate communities and provide valuable insights and content.

How to price your product using product-led growth

By removing any barriers in the way of initial usage, you’re giving users he chance to truly experience your product free from marketing, sales or any other disruptions.

The freemium approach

Freemium works particularly well for companies operating in markets with millions of potential users, when there’s virality and network effects built into the product, or when you have the capital to worry about monetization later.

But contrary to popular belief, a freemium model isn’t a necessary component of product-led growth. Conversion rates on freemium plans are notoriously low, typically hovering between 3 and 5%, and can attract users who aren’t in your target market.

The free trail

An alternative to a freemium offering is a free trial that doesn’t require the user to enter credit card information in order to sign up. Alternatively, you might offer a free feature that ties back to the value of your core product offering.

Monetizing your user base

Now that you’ve got your product in the hands of as many users as possible, and they’ve fallen in love, it’s time to monetize that value you’ve fallen in love, it’s time to monetize that value you’ve created for your users. Successful product-led businesses set up scalable monetization models that make it easy to land-and-expand their customer base.

PLG companies land paying customers by being strategic about the features they place in paid plans and when they attempt to convert free users into paying customers. But they don’t stop there. PLG companies then use value metrics and different product tiers to increase ARPU.

In summary, start by making it incredibly easy for people to user your product. The value should come before the paywall sets in. After they’ve fallen in love with your product, include key features in paid plans that users are willing to pay for and communicate with your customers when their usage indicates that they’re ready to pay up. Finally, grow accounts over time with value metrics and packages that naturally scale as customers get more and more hooked on the product. With these tips, you’ll be able to implement a well-oiled PLG approach to pricing in no time.

Sales & product-led growth

Remind yourself of this: a sales team, by any other name, is still a group of individuals focused on acquiring and accelerating new revenue for the company. In product-led businesses, this often takes the form of customer experience, customer support and / or customer success. When approached in the right way, layering in a human sales effort into your product-led business can accelerate growth while maintaining envy-worthy unit economics.

Who

1. Target market segment is as important as ever. Do you understand your ideal buyer? It’s important to understand how your stack up against your competition, relative deal size, speed of adoption and the value your deliver to the end user. Any sales and marketing tactics you do employ should be targeted at this segment.
2. Your product is a lead gen tool. A free product is offered to show value and build credibility as part of the sales process, but every lead is not created equal; neither is every customer. Leverage your knowledge of your ideal customer profile to point your resources at the right trial and / or free product leads and use your product to help identify those people.
3. Let them come to you. Steer clear of traditional high-activity, dial for dollars, inside sales plays. You have users in your product who will naturally hand raise — they will want help, to have a question answered, or request a new feature. Align your resources to supporting these engaged users and moving them further through your funnel.

When

You don’t have infinite resources, you need to make every interaction count. There are three places to focus the time of your ‘sales’ team:

1. Support: Provide an exceptional customer experience from the first time they touch your product.Put SLAs in place for response time, ensure that every question is answered quickly and issues are resolved to offer a frictionless product experience. These are not quota-hungry salespeople, but helpers and product evangelists who are educating your users and the market.
2. Conversion: The fastest way to move the needle is to get more out of the leads you’re already generating. Review your entire funnel for opportunities for 1:1 or 1:many touch points and opportunities to remove drop off points. Examples include, but are not limited to, live chat, public training, FAQs, minimizing setup time, mobile experience and more.
3. Retention: This is really about adoption. Don’t wait until you see signs of churn, spend time in the first few days / weeks / months monitoring usage. A product that is core to an employee’s or company’s daily life is hard to replace. There are many creative ideas to increase adoption. These might include prompting users with in-app messaging, offering services support in initial setup, extending a referral bonus to enhance your network effect, sharing tips & tricks via automated email touch points and more.

How

Less is more. resist the urge to over-engineer or over-complicate interactions.

1. Employ a bottoms up sale. It’s about arming power users with a business case to take to the decision maker. Show value to your end user and make your product core to their everyday activities. By focusing on the end user experience and encouraging them to invite their coworkers in, you extend the network effect and build a base of users that can grow to department and / or company-wide adoption
2. Get your compensation plan right. Don’t pay our sales / customer success people on metrics that encourage traditional sales behavior. If you track dials or talk time, that is what they will focus on. Tie them to what really matters: CSAT, NPS and net churn.

At some point, you may start to move up market. Do not fall into the trap of assuming the same style of selling will scale with you. Be flexible, be nimble and be ready to adapt. What works for an SMB market may not work as deal size grows. If the day comes where you need an experienced enterprise sales team to close 6-figure deals, my advice is this: embrace it, but don’t let that style creep into your core segment or detract from the success you’ve had in a product led model.