post

B2B product management

Artificial Intelligence (AI) & Machine Learning (ML)

Building Product Teams

Business Strategy

Data Driven Product Management

Digital Transformation

Diversity and Inclusion

Minimum Viable Product

OKRs

Prioritisation

Product Design

Product Research

Product Development Process

Product Ethics

Product Discovery

Product Leadership

Product Management Career

Product Strategy

Stakeholder Management

🌎 <a href="https://www.mindtheproduct.com/world-product-day/" style="color:#FFFFFF;text-decoration:underline;">Happy World Product Day!</a> Be sure to celebrate product, yourself, and your peers today! 🎉

Successful product management in companies where it’s least understood

Measuring critical user journeys – Javier Andrés Bargas-Avila (UX Director, Google)

A new way to look at applied experiments

Product survey findings: Only 15% of users are embracing AI features 

Building high-performing product teams: The PDLC approach

Footer About

Footer Contribute

Footer Get Involved

Footer Links

Mind the Product

Guest Post

Overcoming the 20% feature usage challenge

Product Management

Three product leaders to learn from at #mtpcon inside Pendomonium

Nick Chasinov is the founder and CEO of Teknicks, a product growth marketing agency that drives sustainable compounding growth by helping more people discover and find value in web apps and SaaS products.

Nick Chasinov

<p>Is the traditional SaaS marketing and sales model a thing of the past? Regarding SaaS-based businesses, a product-led growth (PLG) strategy is proving to be a better option. This strategy turns the product into the focal point of the entire customer lifecycle, making it a key driver of acquisition, retention, and monetization—which can lead to more sustainable growth.</p>
<p>Companies like Airtable and Figma have already chosen product-led growth strategies over the typical sales funnel approach, making it the secret to their success. Meanwhile, <span style="text-decoration: underline;"><a href="https://info.gainsight.com/product-led-growth-index-2022-report.html" target="_blank" rel="noopener">according to a survey from Gainsight</a></span>, more than half of businesses have already implemented a product-led growth strategy. In fact, 91% say they&#8217;re either adopting this strategy or increasing their current investment.</p>
<p>In other words, there&#8217;s no question that PLG strategies are here to stay. The question instead is: Where do they go from here? In the years to come, the user (whether free or paid) will take center stage, and their response to your products will determine your ability to grow. However, the success or failure of this strategy will depend on which areas your company prioritizes when coming up with its product-led growth plan.</p>
<h2>Five essential priorities when building a product-led growth strategy</h2>
<p>Here are the priorities that will be most important for early-stage startup founders looking to incorporate <a href="https://www.mindtheproduct.com/how-canva-uses-ai-powered-features-to-drive-plg/" target="_blank" rel="noopener">PLG</a> into their go-to-market strategy.</p>
<h3>A PLG culture</h3>
<p>As product-led growth plays a bigger role, we&#8217;ll see a transformation in how teams are formed and interact with one another. For a successful product-centric strategy, a PLG culture must be formed that touches everyone in the company. It should foster growth, champion flexibility, and promote processes that can scale quickly.</p>
<p>To unify team members, make sure to establish a <span style="text-decoration: underline;"><a href="https://www.mindtheproduct.com/how-to-identify-your-north-star-metric/" target="_blank" rel="noopener">North Star metric</a></span>—a measurement that best reflects your product&#8217;s core value—and a way to keep track of it. For example, if you wanted to grow a mobile commerce product, a good North Star metric might be &#8220;mobile orders delivered.&#8221; If you owned a ride-share service, your North Star might be &#8220;number of trips&#8221; or &#8220;number of five-star ratings.&#8221; North Star metrics keep everyone focused and aligned, providing excellent insight into your progress.</p>
<h3>Freemium</h3>
<p>Early-stage startup founders should not focus on pushing as many customers as possible onto a paid plan. Instead, there should be a greater focus on free and freemium models, with engagement and adoption becoming a key metric for success.</p>
<p>It may seem counterintuitive, but a free product can be an excellent acquisition and monetization lever. A free trial or freemium model makes it easier to engage potential buyers, giving them first-hand experience in what makes your product compelling. These delighted users acquire new customers directly through <span style="text-decoration: underline;"><a href="https://www.mindtheproduct.com/when-it-comes-to-product-growth-the-traditional-funnel-model-is-no-longer-enough/" target="_blank" rel="noopener">growth loops</a></span> and usage of the product, especially when sharing or collaboration is a key product feature.</p>
<p>Showing new or potential users what they could get from a paid version makes it easier to entice them. A freemium option also reduces friction in customer resurrection, allowing lapsed users to experience everything new in your product without forking over more money.</p>
<h3>A thorough plan for product discovery</h3>
<p>You need more than just brand advertising and a user-friendly website for a product-led strategy. You have to ensure that your audience can find your product, access it easily, and realize the value it provides. Realign your SEO and paid marketing strategy toward product usage, then adjust your creative content to reflect the same shift. Dedicate your user and marketing research to figuring out where your product&#8217;s audience is and what they want, then do the work to deliver it to the right platforms.</p>
<p>It will be important to rely on solutions and platforms that improve product engagement while enhancing the quality of customer interactions between sales teams and leads to help push company growth forward.</p>
<p>Building marketing automation guardrails to keep prospective customers on course during their buyers&#8217; journey can also be immensely useful. These keep users interested and more likely to buy. Automation tools make creating these guardrails possible, tracking and analyzing each user&#8217;s journey and offering ways to keep them engaged.</p>
<h3>A simple user experience and product support</h3>
<p>Simplicity is a critical element of customer acquisition and retention. A simple, intuitive interface makes it easier to engage new users and removes obstacles to customer retention. While a product can be feature-rich without being overly complicated, early-stage startup founders should scale back in the name of simplicity and then add desired features incrementally, depending on user behavior and usage metrics.</p>
<p>While simplicity will hopefully reduce adoption friction, support will still be crucial to providing a top-notch experience. Provide thorough and easily understandable documentation, as well as multiple points of contact, so people can get the help they need quickly and efficiently.</p>
<h3>A focus on retention and user analytics</h3>
<p>A product-led strategy is, in essence, a user-led strategy. To have a successful product, you need to ensure your users are activated and engaged, then learn what they need to stay happy long-term.</p>
<p>Both predictive and prescriptive analytics can be of value when <span style="text-decoration: underline;"><a href="https://www.teknicks.com/blog/is-retention-silently-killing-your-product/" target="_blank" rel="noopener">evaluating your product&#8217;s retention</a></span>, offering insights on next steps and churn risk. Predictive analytics forecast potential future performance, while prescriptive analytics give you specific recommendations for those predictions. GPS navigation relies on these analytics to find you the fastest route when you take an Uber, for example. Outcome analytics also shouldn&#8217;t be ignored; use them to understand your customers and how they use your products.</p>
<h3>Becoming product-led</h3>
<p>Product-led growth is a more modern approach for SaaS companies to grow faster and more efficiently. The growth model relies on product usage to drive acquisition, retention, and monetization, which aligns perfectly with the core value of software.</p>
<p>Over the next year, product-first strategies will play a more prominent role in various sectors, especially in tech and SaaS. Creating an environment that favors product-led growth is an important step forward for early-stage startup founders that want to stay competitive and drive sustainable growth in the years to come.</p>
<h2>Discover more content on PLG</h2>
<ul>
<li><a href="https://www.mindtheproduct.com/how-canva-uses-ai-powered-features-to-drive-plg/" target="_blank" rel="noopener">How Canva uses AI-powered features to drive PLG</a></li>
<li><a href="https://www.mindtheproduct.com/survey-insights-economic-downturn-is-driving-companies-to-embrace-product-led-growth/" target="_blank" rel="noopener">Survey insights: Economic downturn is driving companies to embrace product-led growth</a></li>
<li><a href="https://www.mindtheproduct.com/how-to-thrive-as-a-product-manager-in-a-product-led-growth-organization/" target="_blank" rel="noopener">How to thrive as a product manager in a product-led growth organization<br />
</a></li>
</ul>
<p>&nbsp;</p>
<div class="g g-21"><div class="g-single a-170"><a class="gofollow" data-track="MTcwLDIxLDEsNjA=" href="https://www.pendo.io/pendomonium/"><img decoding="async" src="https://www.mindtheproduct.com/wp-content/uploads/2024/06/MTP-Footer_ad.png" /></a></div></div>

How product-led growth strategies will change business

Nick Chasinov

Comments

Read next