5 Commons Misconceptions of PLG

Lately I have been asked multiple times, by multiple people about product led growth, especially around the misconceptions around it.

There is a lot being written nowadays about product led growth being the silver bullet in these times where companies large and small are struggling to find their beat in market or the other argument is how it has failed to deliver on its promise. In my humble opinion is neither.

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Product-led growth (PLG) is a business methodology in which user acquisition, expansion, conversion, and retention are all driven primarily by the product itself.?It creates company-wide alignment across teams—from engineering to sales and marketing—around the product as the largest source of sustainable, scalable business growth. This is just the standard definition found on multiple platforms.

Here are 5 common misconceptions about product led growth in my view:

1.???Product-led growth is not a growth hack; it’s a powerful framework that explains how the most user-focused SaaS businesses have grown by optimizing for adoption, time-to-value, and referrals instead of chasing bigger license fees, higher ACV, and impressive logos.

2.???Product-led growth is not a product strategy in itself; it’s a growth strategy driven by customer interaction with your product. It requires collaboration and alignment across all functions, not just product.

3.???Product-led growth is not only suitable for small-ticket deals to consumers and SMBs; it can also work for enterprise sales, as long as you provide value, trust, and support to your customers throughout their journey.

4.???Product-led growth is not the same as offering a free trial or freemium model; it’s about designing your product to deliver value as quickly and easily as possible, and to encourage users to upgrade, share, and stay loyal.

5.???Product-led growth is not incompatible with sales-led growth; it’s about finding the right balance and synergy between the two approaches, depending on your market, product, and customer needs.

Using data and analytics is one way for firms to promote product-led growth. Businesses can learn a lot about what is propelling growth for their products and where there may be room for improvement by measuring important indicators like customer retention rates, average order value, and customer lifetime value. While the indicators are essential to evaluating performance and ensuring strong product-led growth, real usage data and customer journey tracking are more crucial metrics to watch. Understanding where the user experiences product friction or delight and which components or features are used more frequently than others is crucial for ensuring that development is focused on meeting customer demands/needs rather than focusing on versions without understanding the why behind it.

Open to hearing your thoughts/ feedback on the same as well as learnings. #growth #strategy #business