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What is Product-Led Growth (PLG)? A Beginner's Guide

Category : Growth Marketing Author : Team Amura Date : 07 Sep 2020

Gone are the times when consumers talked to salespersons and explained their needs to them, who, in turn, would convince the consumer into buying the product or service. Often, we have come across a salesman who is not properly informed about the product or not emphatic enough to understand the customer’s demand. They merely focus on closing the sales deal by hook or by crook.

Buying and selling a product or service is majorly dependent on consumer experience and not on the persuasive ability of the salespersons, and marketing and advertising campaigns. Consumers have started to enjoy the process of self-educating themselves about a product and service. This is where product-led growth comes into the picture. Consumers rely on the experience of using a product more than any marketing and sales strategy.

What is Product-Led Growth?

Product-Led Growth
Product-Led Growth

Product-led growth is a marketing strategy where the product of a company becomes the key to success. Under this strategy, a customer is first attracted to a company's product, after which his/her experience of using the product will determine whether he/she retains as a customer of the company. The key factor is that the company allows the consumer to experience the product in action.

This model reverses the traditional sales cycle, wherein the objective of the company was to take the consumer from Point A to Point B. Under this strategy, a consumer is driven to Point B solely by the product experience. A consumer, using a free-trial, is likely to convert into a paid member as soon as he/she understands the value your product can add to their lives.

How does the Product-Led Growth model work?

Product-Led Growth
Product-Led Growth

In this strategy, understanding the need and value a customer assigns to a product, informing them about how your product can provide that value and then, delivering that value is of utmost importance.

  • Understanding the Value:

    A company needs to understand the requirements of its customers before designing a product. Understanding the emotions that a consumer wants to derive from a product is of utmost importance.

  • Communicating the Value:

    Communication is the crux behind the success of every business. It is important to minimize friction among business and potential customers. Under the product led-growth model, the revenue model and the customer acquisition model go hand in hand. They should not be separated at any cost. It is effective to communicate your value through up-front pricing.

    Interesting: Growth Marketing Experiments: An Innovative Strategy for Better Growth

  • Delivering the Value:

    As the saying goes, "Customer is the King." No one can stress enough about this fact. Meeting the expectations of your customer is of keen importance. No business can compromise on this. Delivering what you promise will enhance your business's credibility and ensure that the customer becomes loyal and sticks to your business.

What are the advantages of a product-led growth model?

Product-Led Growth
Product-Led Growth
  • Competitive Edge in Growth

    A free trial of any product or service enables a wider reach of the said product or service compared to a sales-led model. Sales-led businesses hire salespersons for different regions and train them to close a sales deal. This is not required in the case of a product-led model because customers themselves get to try the product; they do not require a third person to explain the value that they can derive from it.

    Also read: What Is A Growth Agency And How Do You Choose The Best One?

    Not only this, but a freemium also has the potential to enhance the subscriber base of a firm rapidly. Customers generally sign up for free trials without much thought and prior research so, it is purely your product that will make or break the deal. If the product is worth it, you retain the customer who will also recommend the same to his/her acquaintances.

  • Lower Customer Acquisition Costs

    Sales based businesses require marketing and advertising campaigns to attract customers. This is not the case with product-based businesses because a “free trial” is sufficient in most cases to attract a huge pool of consumers. Companies following this model require much lesser staff members than other businesses, and this translates into higher profit margins for owners.

It is the independent working of these growth strategies that have become less effective in the current market. Businesses need to synchronize their sales and marketing efforts with consumer groups and their product to create a larger impact on the target audience.

Communicating the value that your product can offer is of utmost importance, there is no alternative for that. So, marketing and branding do play a role under the product-led growth model as well. But ultimately, it is your product that can change the game for you. If the product is not worth the hype generated by marketing strategies, certainly, you will not be able to retain your customers.

Experts suggest that the product-led growth model will be the future norm. So, it is high time that organizations start adapting to this model; otherwise, they might lose the race.

Amura with over 10 years of experience as a growth marketing agency has helped over 250 businesses grow to their potential. Get in touch with us for your product-led growth related queries at vikram@amuratech.com

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Comments (32)

  Sylvia posted about 2 months ago

Wow, I have learnt so much from this short piece on Product Led Growth. I think every company should adopt the model!

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  Storm posted about 2 months ago

Lower Customer Acquisition Costs is a huge advantage of Product Led Growth. Any business would be happy with that.

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  Anderson posted about 2 months ago

What I like about Product led growth is that it pushes a company to produce superior quality products. That's very good for the consumer.

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  Shantel posted about 2 months ago

A lot of research must have gone into writing this article. I really like the idea of a product-led growth.

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  Louis posted about 2 months ago

I think Product Led Growth is much better than traditional growth methods. It keeps a company on toes.

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  Manuela posted about 2 months ago

Makes sense to me. Any time there is a free trial for something that catches my attention, then I always try it. After all, hey, what do I have to lose?

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  Maverick Kelowski posted about 2 months ago

Really impressive philosophy from Amura and clearly it's been well received considering they've helped over 250 businesses. Understanding, communicating and delivering the value breakdowns are what all successful businesses thrive on. Thanks for the excellent piece.

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  Jakes posted about 2 months ago

Every beginner that choose to grow with this post has really made the right choice. Thanks for this exposure post

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  David Tjoe posted about 2 months ago

This guide has gained my knowledge about Product-Led Growth. How is it necessary to have the right strategy in facing today's competition.

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  Akpan ibok posted about 2 months ago

This is very important. A company needs to understand the requirements of its customers before designing a product. Understanding

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  David Mureithi posted about 2 months ago

The main thing is to understand the need of a consumer. When you fully understand their need, it is easier to draw them nigh to your products. Nice strategy.

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  Elsa posted about 2 months ago

A positive consumer experience increases the chances of success for a product, I'm not surprised that here the product looks for becoming a star.

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  Susy R posted about 2 months ago

It seems that I have got a lot of information about this Product-Led Growth. We really need to quickly adapt to any strategic changes that are needed for business continuity.

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  enem posted about 2 months ago

This is a well written and detailed article on product led-growrhth which will be valuable to beginners

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  Tila woke posted about 2 months ago

Consumers now rely on the experience of using a product more than any marketing and sales strategy. So business should know this.

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  Mozer Torancher posted about 2 months ago

Outstanding guide for product development. Clear communication of what you're selling and taking ownership for your delivery are huge selling points.

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  Rose posted about 2 months ago

Product Led growth is very convenient for both parts, clients and business owners. A good prodcut will help you keep the clients happy, and a happy client will continue buying your products.

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  Alma posted about 2 months ago

In any businesses, the costumers advantage must always be the first priority. The marketing strategies in this service seem to be great for it values the importance of the costumers.

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  love edet posted about 2 months ago

I like the strategy put in place here, because it is all about the customers and how to add value to what they buy.

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  AJ posted about 2 months ago

This sounds really awesome. I really would rather get the product experience myself too before actually deciding on sticking with a new product. It feels more natural in choosing that new product myself rather than salespersons telling me that it is.

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  Maury Cheskes posted about 2 months ago

I love the "customer is king mantra"and product base approach. Giving good incentives and testing out your product, shows you care about your company's end result and service expectations. Thanks for the great piece.

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  Wilson Jake posted about 2 months ago

This is really great to know as a beginner. It's really an eye opener and I hope this will go a long way. It can also help companies make better strategies.

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  RexLex posted about 2 months ago

With such a guide, PLG is awesome. In terms of value and communication, I give you kudos.

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  Jerry Jeff posted about 2 months ago

Consumers have started to enjoy the process of self-educating themselves about a product and service. This is where product-led growth comes into the picture

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  Peace Abang posted about 2 months ago

A factor like Communicating the Value is a good one as it foster success of every business. It is important to minimize friction among business and potential customers.

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  Amika posted about 2 months ago

I like what product led-growth is all abouta marketing strategy where the product of a company becomes the key to success.

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  Oyeyipo Oladele posted about 2 months ago

Whaooo, I love this for real. This beginners guide will surely do a lot of interested fellow good in their individual researches.

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  Meldred Judith posted about 2 months ago

This write up is very helpful especially for new start up business. It will educate them the essence of having a great business.

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  Amanda Putri posted 2 months ago

Nice article. Easy to understand for beginner like me.

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  Karl posted 2 months ago

Product led value can be very challenging but at same time a good opportunity for comapanies to improve the quality of their products as a marketing strategy.

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  Karl posted 2 months ago

Product led value can be very challenging but at same time a good opportunity for comapanies to improve the quality of their products as a marketing strategy.

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  Alex posted 2 months ago

I prefer this as suppose to a sale base one. At least you will know that clients prefer quality over price and that is a good thing. Let the product do the talking not the price.

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