Product led-growth (PLG) is a enterprise mannequin that depends on the product as the principle driver for buyer acquisition, engagement, retention, and growth. A PLG enterprise focuses extra on creating nice in-product experiences for its customers versus relying closely on advertising and marketing and gross sales to earn paying prospects.

[Map out your own PLG strategy with Amplitude’s free worksheet]

Historically, manufacturers attempt to present shoppers that their product is effective earlier than giving them entry to it. However giving extra individuals entry to your product by means of free trials and freemium plans lets the product communicate for itself by giving speedy worth to your customers. That’s a core aspect of product-led companies.

You’re bettering your product expertise relatively than utilizing gross sales and advertising and marketing to persuade customers that they’ll see worth from one thing they haven’t seen firsthand.

Being product-led means:

PLG firms don’t dispose of their advertising and marketing and gross sales groups utterly. They nonetheless work in tandem with the product—and you should use their energy extra successfully.

With PLG, gross sales can deal with growth offers that neeed a extra personal touch to scale up from freemium to paid, cross-departmental utilization. And advertising and marketing can work on consciousness efforts that deliver new eyes to your product. By main together with your product’s worth, although, a lot of the conventional gross sales and advertising and marketing course of turns into automated. It is because:

With a PLG technique, each crew wins. Your buyer journey turns into extra dependable and scalable.

The advantages of product-led progress are already clear, however what does that seem like in observe? Use these 5 diagrams to visualise the way it might work for your small business.

Diagram 1: Product-led progress means a greater payoff in much less time

Gross sales-led progress relies on a variety of upfront investments: constructing the gross sales crew, growing gross sales collateral, investing time in lead qualification, and so forth. And after you’ve made these preliminary investments, it takes time to see a return.

On this diagram by product coach John Cutler, the trade-offs between investing and receiving worth from these investments over time are clear. In each a product-led and sales-led mannequin, you will need to make investments. Inside PLG although, you see extra speedy outcomes. It’s not a straight line in the direction of progress—you will need to nonetheless work out how you can drive activation, engagement, and loyalty together with your product. However within the time spent doing this work to enhance the product, you’ll already be seeing the advantages of buyer acquisition. Whereas in a sales-led movement, chances are you’ll solely simply be about to receives a commission customers ramped up on the product in the identical period of time that they’d probably already turn into loyal advocates by means of PLG.

In a PLG mannequin, the product is doing the work that your gross sales crew would possibly usually do by means of freemium merchandise or free trials. In giving freely a part of the product without spending a dime, you let prospects fall in love with it by means of firsthand expertise.

Product-led progress requires minimal funding originally—organising the free or freemium plan and activating new customers. You see it repay straight away as individuals begin to use your product. As soon as customers are arrange, you’ll need to spend money on product enhancements that maintain customers engaged and construct buyer loyalty.

With every of those small investments, you see speedy payoff as a result of customers’ experiences enhance straight away. This additionally means you can also make investments and enhancements extra incessantly than a sales-led crew.

Diagram 2: The B2B SaaS buyer journey for product-led progress

It’s useful to begin by inspecting a typical B2B SaaS buyer journey to realize an understanding of how product-led progress works.

First, a consumer indicators up on your free plan. They use it solo initially. The extra they use it, the extra they combine it with their workflows.

The extra they combine it, the extra comfy and reliant in your product that consumer turns into, so that they’re extra more likely to share it with their colleagues to collaborate. For instance, a Canva consumer would possibly create a design for a social media marketing campaign and share it with their crew for suggestions and additional edits.

Then your customers invite fellow crew members to make use of the product. Now, extra essential work is occurring throughout the product. As use expands, the corporate wants extra choices or extra entry to get their work carried out—so that they’ll pay for extra options, consumer seats, information storage, or integrations. The connection you’ve with this buyer is cyclical and compounding.

Even in the event you’re a SaaS firm with multimillion-dollar offers and years’ lengthy gross sales cycles, PLG has huge advantages:

Atlassian is well-known for cracking the code on PLG for the B2B SaaS trade. The corporate doesn’t cost groups for his or her first 10 seats—a suggestion that goes a great distance in attracting prospects. Then, if free customers need to turn into paying prospects, they’ll do this self-serve with out gross sales involvement.

Atlassian’s former president, Jay Simons, tells Intercom, “If we add 5,000 new prospects 1 / 4, and add that to the bottom of 120,000 current prospects, it could be very, very tough to do this if we needed to contact of all of these prospects alongside the best way.”

However the place a human contact is required, the crew is able to assist—notably for these enterprise prospects which have extra advanced questions and use circumstances.

Diagram 3: Amplitude’s progress mannequin

To make this buyer journey simpler to grasp, right here’s what product-led progress seems to be like at Amplitude.

There are two key cycles represented right here. The left aspect exhibits growth by means of word-of-mouth. The precise aspect exhibits growth by means of a consumer’s continued use. Each occur on the similar time.

First, somebody joins Amplitude’s free starter plan. As an event-based analytics platform, utilizing Amplitude requires instrumenting a couple of occasions on their web site or app to trace how their finish customers are utilizing their product.

As free Amplitude customers proceed to make use of Amplitude Analytics to grasp in-product buyer habits, they share new insights with colleagues—which piques their colleagues’ curiosity and encourages them to make use of Amplitude, too.

In the meantime, as these free customers proceed to make use of Amplitude, the generated insights inform the product enhancements these customers make. They’ll ship these updates after which instrument extra occasions with Amplitude to trace the efficiency of these modifications. This then results in additional insights that make the product higher; it’s a compounding worth trade.

As Amplitude free customers share extra insights and instrument extra occasions, increasingly more colleagues—even complete departments—come to depend on Ampiltude for self-service product analytics. With further options and merchandise (like Amplitude Advocate for personalization and Amplitude Experiment for A/B testing) obtainable on increased paid tiers, these free customers usually tend to improve Amplitude plans to help their evolving wants.

Diagram 4: Product-led progress is cyclical

You may condense this progress mannequin right into a five-part steady loop that might map onto most companies, no matter whether or not they’re B2B or B2C.

It begins with somebody changing into inquisitive about your product—both by means of word-of-mouth or some type of advertising and marketing—after which changing into a free consumer.

In utilizing the product, they see the worth your product offers them (their “Aha! Second”) and turn into a paying buyer.

You keep these prospects by means of triggers that maintain them engaged and maintain them coming again to the product.

As these prospects have interaction with and turn into extra invested within the product, they share it with different individuals—actually because they created one thing within the product that they need to share with colleagues or pals.

Sharing will get extra individuals within the product, reinforcing the cycle.

Diagram 5: A hypothetical PLG mannequin for Spotify

Spotify is a well-liked B2C product that may assist illustrate this five-part cycle to make it extra tangible. And Spotify nails it in the case of in-product experiences.

That is hypothetical, however you’ll be able to see how product-led progress would possibly develop in these phases for a B2C model like Spotify:

• Curiosity: Advertising sparks curiosity with, say, an advert selling Lil Nas X. A consumer makes a free Spotify account with extra restricted options and advertisements that play whereas streaming.
• Aha! second: The shopper begins to make use of Spotify and discovers distinctive worth—like user-created playlists and Spotify’s customized mixes.
• Worth trade: The consumer finds Spotify worthwhile sufficient to turn into a daily listener. They don’t need the advertisements, so that they buy a subscription.
• Set off: Spotify retains customers engaged by suggesting beneficial music. At this level, the consumer doesn’t must work together with advertising and marketing in any respect. It’s all product-led.
• Virality: Spotify customers need to share a playlist with their pals or begin a group-listening session.
• Curiosity: When Spotify customers share with their pals, that sparks curiosity for them to hitch too, which begins the cycle once more.

On this cycle, nice experiences make music listeners return. And social-sharing options deliver in additional customers, decreasing reliance on advertising and marketing initiatives.

Worksheet: Map your product-led progress technique

Now that you simply’ve realized the fundamentals of product-led progress, it’s time to determine your organization’s PLG technique. Obtain this free template—primarily based on Diagram 2 above—to map out the freemium or free trial buyer journey.

You too can use this worksheet as a team-wide PLG train to:

• establish potential dangers and limitations
• brainstorm methods to extend monetization
• diagram the “virtuous loops” inside your product that strengthen engagement and retention

Product analytics platforms make product-led progress possible

Reorienting your small business round your product is not any straightforward process, nevertheless it’s value it to scale your small business and improve profitability. Begin by defining your North Star Metric and learn to establish and amplify the expansion loops—or flywheels—that exist already in your product.

Product insights provide you with an edge for product-led progress—and Amplitude is right here to take your progress technique to the subsequent degree. As you embark in your PLG journey, strive the Amplitude starter plan to:

• Discover product insights
• Improve consumer expertise
• Monitor consumer habits
• A/B check product options
• Personalize advertising and marketing messages
• And handle strong information

No must swipe your bank card. If you happen to want extra options, we’ll be right here to assist take your product analytics to the subsequent degree. That’s product-led progress in motion.