What is Product-Led Growth?

Product-Led Growth and Product Management

What is Product-Led Growth?

Product-Led Growth (PLG) is a self-sustaining growth engine in which companies go to market relying on their products to attract, retain and grow revenue. Companies choose this strategy by aligning resources to deliver the best in-product experiences possible; they put the products they develop at the center of all they do, making sure they address user problems and deliver a magical user experience, driving ongoing engagement. Teams at companies that are product led align on success metrics and leverage data and user feedback to continuously improve their products. 

Rather than relying solely on traditional sales and marketing tactics, companies with PLG mindsets aim to create products so valuable and user-friendly that they drive organic growth through freemium offerings, upgrades to higher-cost features for paying subscribers, and user referrals.

Main Benefits of Product-Led Growth

• Cost-effective

• User-focused

• Results in high-quality products

• Iterative

Why Product-Led Growth Matters

Product-Led Growth exists because traditional sales and marketing tactics are becoming less effective in today's digital landscape. Consumers are becoming more skeptical of traditional advertising, and many are turning to their peers for recommendations and reviews. 

PLG capitalizes on this trend by creating a product that users love and want to share with others, making users the primary ambassador for your product. If applied well, businesses can use PLG to create an organic growth cycle:

A great product → Loyal users → User feedback → Feedback implementation → An even better product → More loyal users

When to Use Product-Led Growth

Product-Led Growth works best when the entire company is Product-Led, meaning all functions are aligned on prioritizing customer needs. If a company is not Product-Led, Product Managers are well-positioned to introduce this transformation across the organization through team training and Product skill building.

PLG is particularly well-suited for SaaS companies and other Product-Led businesses, but can also be effective for other types of companies.

PLG is a good strategy in times of resource scarcity because it is highly efficient in its use of resources. 

In times of resource surplus, companies can use PLG in combination with sales and marketing-led growth strategies to supercharge growth.

Product-Led Growth in Action

“We found success through PLG because we were really listening to users. We're not just selling a product - we're creating an experience that users love and want to share with others.”