In this post, Yann Sarfati, Co-founder and CEO at startup Userled, offers some advice on succeeding as a product manager in a product-led growth business
What’s in a name? When it comes to product managers, quite a lot is up for debate. Product management job descriptions have been a moving target for some years, but never more so than now as more companies adopt a product-led growth (PLG) business model.
Gone are the days of traditional sales and marketing efforts. We’re now in an era where the product serves as the core growth engine, and freemium tiers and trials drive customer acquisition. Thriving in this new era requires product managers to recalibrate their mindset and focus on a suite of new responsibilities.
Understanding the product-led growth model
Product-led growth is more than a buzzword. It’s an innovative approach to scaling businesses and growing revenue. Even the term “growth” has come under scrutiny, as more and more companies look to shift from allocating such a critical business function to a specific team (like “growth marketing”) to making it the core responsibility of every team in the business. In a PLG company, leaders expect all teams to deliver, test, and optimize for growth impact.
Instead of relying on investment in marketing and sales, PLG takes a more organic approach and users become the main source of growth. Specifically, this means that sales teams rely on a low-touch or zero-touch approach to securing new customers.
Let’s explore how this plays out. A company following a PLG model will typically introduce users to a product through free trials or a freemium version. But what really gets users through the door is a well-crafted user experience and thoughtful onboarding that guides them through all the features the product offers. Once a customer starts to use the product frequently, they’re given an opportunity to unlock its value, and their willingness to invest in the product increases.
At this point, leading PLG companies create new in-product experiences that nudge users to convert to paid plans to keep existing access or expand the feature set. Think Evernote’s freemium model, prompting you to explore the best of what the platform has to offer, or Figma encouraging you to add team members to promote more effective cross-team collaboration. All help to acquire the kinds of users that will one day turn into loyal brand advocates.
Building and managing products in a PLG organization
As the product takes center stage in a PLG organization, so do product managers.
Product managers are ultimately responsible for ensuring that a product both meets user needs and exceeds their expectations. Successful product managers work to understand and identify which improvements and new features may be additional value levers, and eliminate those that add unnecessary clutter to the user experience. A great product manager can pinpoint when less is exponentially more.
In a PLG organization, product managers can leverage their tried-and-true skills of understanding and listening to their target market and translate user needs and preferences into a product designed to delight them. From discoverability features to intuitive drop-and-drag tools or brand-forward gamification, the goal is to identify ways to make the product more user-friendly, relevant, and valuable to each user.
What sets product managers at PLG companies apart
While the baseline of product manager responsibilities remains the same—to own and develop the strategy behind a product—there are several important differences between the traditional product manager role and one at a PLG organization.
First, while the most important tenet of product management is to create a frictionless experience, product managers in a PLG organization must consider how to strategically incorporate friction points that gently nudge users toward conversion. These friction points must guide users toward a desired action, such as purchasing a subscription or signing up for a service, and must be deployed without disrupting the overall user experience.
A great example of good friction that nudges users to convert is Notion, a productivity and note-taking application. Notion offers a freemium version to its users but unlocks additional features and capabilities for those who upgrade to a paid plan. The free version of Notion allows users to create an unlimited number of pages but limits the number of integrations. This creates a strategic friction point for users who may want to use more advanced features or integrate with other tools and ever-so-gently nudges them towards upgrading to a paid plan.
Moreover, in a product-led growth organization, every product manager is also essentially a growth manager, responsible for creating and maintaining a high-quality product and for identifying and testing opportunities for growth within it. It’s incumbent on product managers to lead growth experiments to understand how different feature combinations or user journey designs affect user engagement and conversion, and precision-test the best place and timing to insert in-product friction points like a payment nudge.
Increasingly, product managers at PLG organizations in the B2B space are taking inspiration from consumer product strategies to drive sign-ups and conversions to paid plans. One way this shakes out is with referral programs which incentivize current users to refer their colleagues or business partners to the product. Given referrals tend to have a high conversion rate, this can be an effective approach. Another strategy that infuses fun into the mix is to create gamified leaderboards. For example, a B2B project management tool might create a leaderboard that ranks teams based on their productivity and offer rewards or incentives for the top performers. By offering these types of incentives and promotions, B2B product managers can effectively drive conversions and drive growth for their products.
4 tips for thriving as a PLG product manager
What unifies all product managers is their ability to solve some of the toughest problems in tech. They’re born innovators, listeners, and tinkerers—capable of thinking cross-functionally, socializing their strategy to leadership, and pulling disparate wings of the organization along with them to see their vision through. While thriving as a product manager in a PLG organization has its challenges, it offers innovative operators a chance to grow businesses in unprecedented ways. Here are a few tips to set yourself up for success.
1. Core product management skills are as transferable as they are valuable
The skills that propel a product manager into their first role remain the same skills that will enable them to thrive in a PLG organization. Product managers must have a deep understanding of their target market: that includes their needs, preferences, and pain points. You should be able to leverage that understanding to strategize and build the seamless experiences that drive user engagement, and strive to continuously gather and analyze customer feedback to drive product decisions.
2. Prepare to make conversions and upsell your mandate
Understand that your role as a product manager in a PLG organization comes with a strong mandate to drive conversions and upsell. This means you may be expected to work with expedience, not always easy when data is your north star. To get ahead and sustain performance, experiment and iterate on different approaches to drive revenue growth: Conduct A/B tests, reroute the user flow, and design strategic friction points to nudge users toward conversion. When designing new features or products, consider adopting a demo-driven development approach, getting feedback early and often and iterating accordingly.
3. Stay on top of trends and be aware of the competition
Remember that product management in PLG organizations is a rapidly evolving field. Pay attention to what competitors are doing, which means keeping an eye on trends and developing an awareness of the latest developments gives you an edge in the field.
4. Creativity will always give you the upper hand
Don’t be afraid to get creative! Why can’t a referral program that worked in e-commerce translate to a field like B2B SaaS? Best practices perfected in the B2C industry, like gamification, could be translated to a B2B product with some ingenuity, and often these outside-the-box approaches will help your business to stand out.
The future of product management at product-led growth organizations
Product management is still a relatively nascent career, but this also spells a unique opportunity for product people atPLG companies to make their mark. As more companies shift to the PLG model, we can anticipate that what feels differentiated today will shift to what we consider best-in-class product management: working across the functions of marketing and product, driving strategic growth targets, and overseeing the product developments that help businesses reach greater heights.
More information
Why product operations is set to be the backbone of product-led growth
The key to product-led growth – Noa Ganot on The Product Experience
Product-led growth – Ashley Smith on The Product Experience
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