What actually IS product-led growth?

Season 9, Issue 4: 🥳 it depends! 🥳

📬In this issue:

• Understanding product-led growth (PLG) from the perspectives of different functions

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Hiiiii Mehketeers,

Both on the internet and in real life, I’ve come across people who have confidently given their personal definition of product-led growth, and all they have really done is told me they don’t understand PLG at all.

It’s become a real buzzword that people think signals they’re smarter than everyone else.

Without further ado on that statement, here’s my definition of PLG!

🤩It depends🤩

A marketer’s favourite phrase. So, it depends on which perspective you’re looking at PLG from:

• Product

• Marketing

• Sales

• Customer Success

(AKA the product marketing core four teams)

And even then, a business could only integrate some, one, or all of these perspectives to form their PLG motion (and by “PLG motion” I mean go to market strategy.) Let’s see what PLG looks like for the core four.

PLG from Sales’ perspective

This one, in my mind, is the easiest to explain, because it’s quite binary. For businesses who have a free trial or freemium product and have really good product metrics tracking, this data can be turned into product qualified leads.

A PQL is the product version of a marketing or sales qualified lead. It’ll be an active user who performed an action (or series of actions) inside your product that indicates they’re ready to upgrade to the paid version. This could be:

• Adding three teammates, when your product’s free tier only allows for two extra seats

• Clicking on a gated or premium feature

• Maxing out the free usage amount (i.e. you get five free forms a month and they want to make a sixth)

• How many times they login within a set time period

With the right tracking and automations in place, a user could self-signup, trigger themselves into being a PQL, and your sales team gets a task or alert of some kind saying “please contact this user to initiate sales conversation, here’s the reason why they’ve been allocated to you.”

Done.

PLG from Customer Success’ perspective

Pretty much the same as sales, but in an upsell/cross sell capacity, and perhaps at the larger end of the scale: Not for one user who’s making five forms a month, but a team that’s producing high volumes of work and could benefit from the pro-level analytics or something like that.

PLG from Product’s perspective

Ahhh, the people who build the product. PLG for Product means what’s on the roadmap, what gets prioritised, and whether or not there are even sales targets for the Product team.

I’m a big believer in KPIs driving what gets done. If your product team is measured against product usage, customer engagement, and yes even revenue from in-product sales, then you've got yourself a PLG product team.

However, the other teams in the core four also need a product team that's building features and capabilities that enable them to implement PLG. I.e., if you don't have usage tracking, you can't trigger PQLs, can't flag who to upsell, and can't run in-product campaigns.

This is often where I see PLG fall through — the underlying infrastructure of the product doesn't have the essentials that make it all possible in place.

I have been asked quite a lot “do you know any PLG marketers?” and my answer is usually no, because I struggle to identify any truly PLG businesses in Australia, and the ones that are, are usually run by technical founders who don't even really do strategic marketing.

One of my clients is like this. They've been around for maybe around 10 years, I'm their only marketing resource and in all honesty I don't do a lot for them, mostly monitoring ads (the best performing ads are screen recordings of the product with no real caption/hard sell 💀) and hygiene tasks.

Their product has:

• 100% self sign up flow

• Freemium model that doesn't require a credit card

• Gated “premium” features

• Really extensive feature flagging, usage insights, and that kind of thing

This is what has enabled them to get so far. They're also super involved in their industry's communities but they didn't build their own or do anything like that. They just… listen to what their customers want, have built a reputation for building requests quickly, being good to work with, and now their customers recommend them all over the internet. They were just recently voted as the preferred software for their category, and had almost twice as many votes as the competitor that came second.

THAT is PLG by Product teams 🤝

PLG from Marketing’s perspective

Perhaps the hardest one, because if it’s truly PLG, you don’t need a lot of marketing. Distribution and channel management is probably the biggest job to be done for marketers working in a PLG organisation. What distinguishes PLG marketing (in my mind) is that the product itself is seen as a distribution channel.

If people can self-serve, they can self-upgrade too. Running in-product campaigns can be as simple as a chat that pops up with an offer in it, or in-product banners, messaging and the like.

What this will be in practice is dependent on what your product actually is. These campaigns might be focused on increasing usage of a feature, upgrading to a more expensive tier, or cross-selling a different product.

Off-product, PLG for marketing is focused on brand management, paid media, and getting the basics right. A solid website that people can easily navigate, clear copy across all assets, testimonials and reviews, really just making sure everything is in place to support the customer making a decision. It’s not pushy, it’s not flashy, it’s not anything we don’t know — importantly, it’s consistent with what happens in-product!

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Product-led growth is actually the friends we made along the way

In reality, PLG is all of these things working together in tandem. And that’s why it’s so hard to implement!

It is impossible for it to be standalone as well, it has to be accompanied by the regular sales, marketing, and customer success commercial activity. The client I mentioned above still does demos, still does calls, still walks people through upgrading. You can’t replace that human element — people will always have questions they want a human to answer. Business is still human to human.

What’s your take on PLG? Let me know!

Kayla