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Product-led growth (2016)

The basics

The three ways principles and the DevOps movement leverage ownership to eliminate hostilities between technology disciplines. Product-led growth (PLG) aligns the development, marketing, and sales teams by focusing on creating a product that is the driving force behind customer acquisition, retention, and revenue growth, which creates a shared objective and a common goal for all teams to work towards rather than relying on traditional, siloed sales and marketing tactics.

The following list contains some of the main principles of PLG:

  • Focus on UX and delivering value: This principle emphasises the importance of user experience and ensuring that the product provides tangible value to the user. The goal is to create a product that is easy to use, intuitive, and solves a real problem for the user.

  • Product-led customer acquisition: This principle focuses on using the product itself as the primary driver for acquiring new customers by creating a product that is so valuable that users naturally tell their friends and colleagues about it.

  • Focus on customer retention: This principle emphasises the importance of retaining customers over acquiring new ones. Companies can reduce customer churn and increase customer lifetime value by creating a product that provides real value.

  • Data-driven decisions: This principle stresses the importance of making data-driven decisions regarding product development and marketing. By analysing data and user feedback, companies can make informed decisions that lead to better products and more successful outcomes.

  • Continuous experimentation: This principle emphasises the importance of continuous experimentation and improvement. Companies should continuously test new ideas, gather data, and iterate on their products to stay ahead of the curve and remain relevant to their customers.

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You can learn more about PLG by reading the book Product-Led Growth: How to Build a Product That Sells Itself by Wes Bush. The book is available for free on the Product-Led Growth website.

Pros and cons

The best thing about PLG is that it aligns the sales, marketing and customer success departments with the development team. When all groups focus on delivering a high-quality user experience and adding value to the product, the marketing and sales teams can use the product as a selling point and reference for customer acquisition and retention. Ultimately leading to a virtuous cycle where the product drives customer acquisition, and the customer acquisition drives product development and improvement. By aligning the development, marketing, and sales teams around a product-led growth strategy, companies can create a more cohesive and efficient growth engine that drives long-term success.

The bad thing about PLG is that, once more is not a methodology and is not very prescript, making it hard to gain widespread adoption. Like Lean UX, PLG is hard to predict and requires a significant upfront research investment.