Product-Led Growth : The Expert take
“Emulate drug dealers”: This is an interesting chapter from the best-selling book “Rework” by Jason Fried and David Hansson.
This is how it goes,
Drug dealers are astute business people. They know their product is so good, they’re willing to give a little away for free upfront. They know you’ll be back for more – with money.
Emulate drug dealers. Make your product so good, so addictive, so “can’t miss” that giving customers a small, free taste makes them come back for more.
This applies to software products as well, where you offer your customers with free-trials or limited free use versions before onboarding them. If they find value, they will come back for more.
Freemium model is one of the important aspects of Product-Led Growth, let’s talk about more product-led Growth in the article.
Though the term “Product-led growth” has been in the industry for quite a while, it is only in the past couple of years that it is making noise. Everybody is talking about Product-Led growth on almost all channels, from LinkedIn to Twitter and whatnot?
Well, we are attempting to do the same. But the only difference is, you get to draw actionable insights from the experts who have done it themselves by the time you finish reading this.
First, in the series, we have Rishi Jha, the Chief Growth Officer (Product & Marketing) at Hubbler, a DIY, no-code platform, that helps you build custom applications in no time.
Before diving deeper into the niceties of Product-Led growth, let’s get some basic things sorted. (You can skip to the next section if you want to).
What is Product-Led Growth?
I asked Rishi, that there are a lot of definitions (and misconceptions) around Product-Led Growth. What according to you is Product-Led Growth?
In a Product-Led Growth strategy, the Product acts as the driver to acquire new users, retain the existing users and expand its user base.
For anyone to be able to provide that, you need to have a product that adds immense value to your target audience. Well, read it again. If you have an incredible product, but that doesn’t really solve your audience’s problem, you just can’t sell it.
So, understand the pain points, be clear on what you are solving for, and build on top of that (of course, keeping your audience in your mind), you are good to go.
PLG taking off
Why do you think Product-Led Growth is taking off recently?
I feel it’s the pandemic that has triggered the importance of digital transformation. And when that happened, people got more exposed to the Internet, they got exposed to more reading, started exploring more digital products. I feel this generated the demand in itself.
The road to Product-Led growth
How can a start-up or an organization transitioning from a sales-led to product-led can think about Product-Led Growth?
For a Product-Led Growth strategy to be successful, all the marketing, sales, design, and customer success teams need to align and work together. This is what is needed at an organizational level.
Now, let’s talk about the product.
Product-Led Growth generally bypasses the longer sales cycle of leads being passed to the sales team from the marketing team, scheduling a demo call, following up with them, etc by having users (not buyers) signing up for a free trial and trying out the product.
Here, the word of mouth plays a very important role. If they truly like the product, they tend to recommend it to their friends and colleagues.
Here comes the next case.
To me, initially, sales-led has to be there because when you go to sell someone, you will get questions like “How many users do you have right now”? “What is your customer base”? Etc.,
To be able to answer those questions, you have to acquire the first set of customers. I’ll take the example of Swiggy. When they started out, they targeted very limited societies. Then, people didn’t know them as a brand. They were not willing to try it out. When they did, they recognized it with faces and promises they delivered. People started to trust Swiggy as a brand.
I believe this applies to almost all industries where initially it has to be sales driven where you go to your audience with a strong pitch. You don’t sell products, but you sell promises.
With the freemium or free versions you offer, if they see the value, feel that you are delivering the promises, the sales happen.
Initially, that is why your Customer Acquisition Cost is very high. You burn a lot to acquire the first set of customers. When you have customers coming in, trying out your product, you build on top of your success stories.
Especially for startups, I’d say, give it free of cost to everybody. Build a standard version that is free of cost. Exactly like the model of LinkedIn right now. LinkedIn, with its free version, helps you connect and network with thousands of people. To use advanced search filters, expanded networking, or hiring opportunities, you’ll have to upgrade to the premium version.
All of this happens without any physical interaction. The product keeps interacting with you and sells itself whenever possible. So, the product in itself selling the value, and they have created the base (the free users) right. The base has become their asset for the company. They keep building their premium users on top of that.
Product-Led Growth Companies Examples
Is there any product/company you think is doing a phenomenal job when it comes to implementing product-led strategy?
Recently, I tried out ServiceNow and have been using Canva for a while. They are doing great. Canva especially is a good example of Product-Led growth because their vision of helping people create beautiful designs without friction perfectly aligns with what the crowd is looking for. They have made it super easy and straightforward for users to sign-up for Canva as well.
Best Practices for Product-Led Growth
Any key best practices you’d want to convey to people when it comes to Product-Led Growth?
I see people talking only about their products all the time. Product-Led Growth doesn’t mean you have to keep talking about it. Instead, you need to convey clearly the benefits and the value your users can drive with your product.
When Apple first launched iPod, they never mentioned the space, the model, or anything else. Steve Jobs on the launch said you can carry 1000 songs in your pocket. This way, people were able to relate to the product.
(Check out the launch video here → Apple iPod launch)
So, benefit-driven marketing is something that can amplify your Product-Led Growth. Make sure, your messaging is to the point with what you can deliver. When they relate to it and come to you with how that is when you talk about the product and the features.
The Future of Product-Led Growth
The future is going to be Product-Led. All the KPIs will be driven based on the product.
When the product is great, it sells itself. If it’s not, there is no way you can sell it.
Even if you end up acquiring customers, (with budget-heavy campaigns), you will never be able to retain them.
Don’t just run behind the acquisition. Are you sure you are acquiring the right users?
So, as much as you work on the acquisition ground, make sure you have the right retention strategy in place.
We will see a lot of new tools coming in to bridge the gap between the user and the product.
Say, analytics and consumer behavior tools that answer the questions like are they the right customers, why are they dropping off, and much more.
To conclude, Product-Led is here to stay. To build a successful product-led strategy, understand what customers are looking for, what do you want your customers to achieve with the product, communicate that to the customers clearly, and finally, deliver what you promised.
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