Many startups and digital marketing agencies talk about growth hacking, but many are shy about sharing specifics. This causes the philosophy behind growth to be spread across a vast ocean of fuzzy concepts. In this guide, I’ll teach you what product-led growth is, why it’s so powerful and how you can implement it in your own business. What is Product-Led Growth?
What is Product Led Growth?
In simple words, it is the use of your product to make sales and grow. You can do this through marketing campaigns such as email marketing, paid advertising, affiliate programs, or embedding targeted links in your product.
A popular misconception about the product-led approach to growth is that it’s about optimizing your funnel or conversion rate. If you focus on improving your funnel, you’ll see results, of course. But if your focus is on building a product that fulfills an actual need, then you’re already leaps and bounds ahead of just optimizing for a better conversion rate or revenue per customer.
The benefits of Product Led Growth include improving the customer experience, growing revenue, developing a stronger work culture, and delivering consistent results. All of these are crucial to companies in today’s competitive market.
How can Product Led Growth help businesses?
PLG enables you to create a business growth engine that is more effective and less expensive than traditional growth, marketing, and sales strategies. You’ll save money on client acquisition while also capturing more leads and boosting your return on investment.
Savings on customer acquisition costs
Companies that implement a PLG approach save money on client acquisition because the product experience drives the purchasing process. Therefore, rising income does not need hiring additional people or increasing advertising spending.
The product, on the other hand, sells and advertises itself. Users may check it out for free, and they frequently tell others about it, such as by inviting a coworker or acquaintance via—you guessed it—a feature within the product.
Leads captured faster
The benefit of having this structure to your business development is that you can capture more customer interest, and thus leads faster. The Product-Led Growth framework also allows you to sell to your customers with a much smaller investment since you have significantly less cost. therefore enabling you to quickly test whether or not an idea has a market or not.
Awesome Return on Capital
A Product Led Growth business allows the product to manage as many business tasks as feasible, not only client acquisition. This method of thinking allows you to produce more money with fewer resources. You may reinvest such savings in R&D, recruiting the greatest talents, or profit-sharing to increase employee retention.
Is Product Led Growth for you?
For companies looking to grow, product-led growth is a very viable option. Whether you’re starting from scratch or trying to scale an existing start-up, building a great product can take your company places. It’s important, however, to remember the basics. If your product is the center of gravity for your company, you need to make sure that it stays on track along with any other supporting elements like marketing and customer satisfaction. Remember that focus and growth will only come naturally and effectively if you focus on getting one thing right first: creating and maintaining a great product.
However, Product Led Growth is not for everyone. It cannot access or sell to decision-makers who prefer to engage with a representative or sales team, for instance, many government organizations or high-level executives. Furthermore, products that require extensive, hands-on assistance during onboarding and setup cannot rely on Product Led Growth to teach new users.
If your company is based on a subscription model, adding a free tier to your product should be done with caution. Before you do so, make sure to quantify and thoroughly test how many of your current paying consumers will likely drop to the free plan.
Radix is designed taking into account the Product Led Growth model.
Register for free here