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Accelerate Your Growth Strategy With Product-Led Growth

by Yasir Asif

When companies use their product as their primary go-to-market tool, it allows them to grow without spending tens of thousands on marketing and sales. Instead, the product becomes the driving force behind acquisition, monetization, and retention.

You can spot these companies by their freemium offerings, laser-focus on UX, and strong communities. Examples include Warby Parker, Datadog, Expensify, and Trello.

1. Invest in your product

Unlike traditional sales models, which require a finely tuned machine that relies on an intricate system of funneling leads to the right people, Product-Led Growth is driven by users and revenue comes from the product itself. This approach can result in a faster, more sustainable path to expansion and command higher valuations.

Companies that use a product-led growth strategy encourage potential customers to try their software for free or at least for an extended period before committing to paying. This helps them to experience the ongoing value of the product and makes it easier for them to convert to paid plans.

This shift in focus requires internal alignment and a commitment to creating a world-class product experience for customers. This means that all digital-facing teams, including marketing, engineering, customer success, and analysis, must rally around a single goal to be successful in becoming product-led. This is a challenge, but it can be done with the right tools and team.

2. Focus on the customer

Companies need a sales team to help generate leads and drive growth, but hiring, training, and managing a large sales team is expensive. Product-led growth focuses on lowering the customer acquisition cost by making it easier for users to engage with the product.

Software development giant Atlassian, for example, prioritizes the user experience and focuses on building a frictionless onboarding process that allows customers to easily discover the value of continuing use and upgrading to a paid plan. This approach is a proven way to drive retention and user loyalty.

Ultimately, the key to becoming a product-led growth company is internal alignment around the metrics that drive sustainable success. This means aligning every digital-facing team on a common goal and focusing on providing a world-class product experience. Learn how Atlassian does this by downloading our free Product-Led Growth Guide Volume 1. You can also read more about the benefits of a product-led growth strategy from industry experts in our blog.

3. Keep it simple

Developing an effective product-led growth strategy is no easy feat. It requires a radical shift in go-to-market strategies for sales, marketing, and engineering teams that puts the product front and center.

This means reducing or eliminating ad spend and relying on the product to drive new users. It also reduces customer acquisition costs, as companies are no longer limited by the number of leads they can convert through webinars, demos, and other marketing channels.

To be successful, product-led growth needs to prioritize user experience (UX) and rely on behavioral analytics. This helps marketers and sales teams make data-driven decisions about product features, personalization, and onboarding flows. Users have become less tolerant of clunky initial experiences and are quick to move on to competitor offerings if they don’t see value right away. Using product analytics to steer trial users toward valuable features increases conversion rates and makes it easier for customers to justify paying for the full suite of tools.

4. Don’t be afraid to fail

Product-led growth is a go-to-market strategy that places the product front and center of all go-to-market efforts. This allows the product itself to become a marketing flywheel that drives new users without relying on expensive and time-consuming ad campaigns or additional sales hires.

For example, Slack, the instant messaging app used by millions, didn’t have a sales team until they hit $4 billion in revenue and needed to recruit one to manage demand. By then, they had already built a robust product that attracted a huge user base and generated positive social proof on its own.

However, a PLG strategy doesn’t mean companies should ditch traditional sales and marketing strategies completely. Instead, it can be an effective complement to existing go-to-market tactics by improving their effectiveness and efficiency. This approach also provides a faster ROI by lowering customer acquisition costs and increasing annual contract value.

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