What is Product-Led Growth?
Product-led growth is a business methodology built around a simple human idea: the product’s reason for being is to make your user’s life better. It demands empathy and curiosity, at an individual and an organisational level, and a deep understanding of the problems your user wishes to solve.
How is it different?
With a traditional sales-led model, marketers generate leads, and salespeople work to convert them to paying clients. But with a product-led approach, the user experiences the value of the product at the earliest possible point in their customer journey, without any requirement to ‘close a sale’ first.
Users may get access to the full product for a limited time period – a free trial or the ‘Freemium’ approach may be used, where users have access to a free (consumer grade) tier for an indefinite period, but with restrictions, e.g. a reduced number of features, reduced capacity, or restricted access to support. Or a combination of the two may be used.
In this way, the product is opened up to a larger pool of users/potential customers who can explore it for themselves. Instead of users being directed to a sales team, the product itself will contain calls to action – e.g. to sign up after the free trial ends, or to upgrade to the paid tier.
The product itself does much of the sales and marketing because it is allowed to demonstrate its own value. Growth is generated through word-of-mouth, user-to-user recommendations and virality. Sales teams can be freed up to focus their efforts on high value customers.
What is needed to make it work?
Investment is front-loaded into the product itself, to ensure it can demonstrate its value quickly and effectively. The product needs to be:
· Intuitive - users can easily learn what it can do for them, without being ‘taught’ to use it.
· Friction-free – the user experience must be seamless and immersive, so their focus isn’t pulled away.
· It should include ‘sticky’ features that will delight your user and make their life easier. Your product must offer something they won’t want to do without, and so would be happy to pay for.
A business can only achieve this by listening to its users – by gathering the right data and qualitative feedback. Where pain points are reported by users, the product must be adapted quickly to address these. A product-led business will prioritise its resources for this purpose.
The different teams in the business – product, sales, marketing, engineering, customer service – must all be aligned, with shared business-wide objectives and a common language.
How could my business benefit?
Product-led businesses will end up with better products, more quickly. They will typically benefit from shorter sales cycles, lower customer acquisition costs and lower customer churn. This can help accelerate growth, leading to market share gains and higher valuations.
If you’d like to talk in more detail about how a product-led approach could help transform your business, contact Matt Little at Blue Ocean Insight.