Be Product-led, be ahead

Lets start with this, "Product-led growth means that every team in your business influences the product. Your marketing team will ask, “how can our product generate a demand flywheel.” Your sales team will ask, “how can we use the product to qualify our prospects for us?.”?Your customer success team asks, “how can we create a product that helps customers become successful beyond our dreams?.” By having every team focused on the product, you create a culture that is built around enduring customer value.”

What Allan Wille, Co-Founder & CEO of Klipfolio, says with the above is that, in a world of escalating customer expectations, the smartest companies are changing the way they build products and support users. They involve every department across the business and put the product at the center of their strategy. They’re evolving the way they do marketing, revolutionizing the way they onboard and engage with new users, elevating the way they do customer service, streamlining the way they communicate, and transforming the way they train their employees.

In other words, they’re becoming product-led.

To make product-led growth a reality, the whole company must come together to rethink which metrics and tactics drive sustainable growth. In practice, this means that the way a company sells, markets, and retains customers goes through a transformation.

So what does it mean to be product-led?

Rather than constantly shipping, marketing, and selling new features or offerings, product-led companies put their products to work for them by maximizing their fullest potential and using them to anchor the entire brand experience.

1. Align around the product

Product-led organizations make the product experience the driving force behind every function throughout their business. They align their strategy with how customers engage with the product and empower their people to leverage it as a vehicle for connecting with users and customers.?

2. Make decisions with data over gut feel

Product-led organizations use data to understand exactly what’s happening inside their product, where their users are struggling, which features are getting the most traction, and which feedback trends will have the farthest-reaching impact—so they can continually improve and iterate.

3. Use product as a marketing channel

Product-led organizations communicate with users within the product—targeting and tailoring their messaging for the?right?audience, not necessarily?every?audience. They also use the product to sell itself through free trials, self-guided tours, and freemium experiences to drive expansion.

4. Create an amazing onboarding process

Product-led organizations prioritize first impressions by building incredible onboarding experiences for their users. They create scalable in-product training and enablement programs that help users learn the ropes within the context of the product itself.?

5. Help users help themselves

Product-led organizations make support resources readily available within the product—so users never have to leave to get the help they need. They allow users to find solutions to problems on their own, whenever they need them, without needing to rely on external customer support.

6.?Collect feedback and communicate back

Product-led organizations understand that user feedback is critical for building the best product possible. They create scalable, two-way feedback processes that capture the voice of the customer and help inform their roadmap and innovation strategies.

Why should you consider becoming product-led?

Product-led companies are known for creating high-quality products that deliver value to the end-user quickly and consistently. But there are more benefits outside of creating better products and making customers happy.

A product-led growth strategy should produce:

• Higher median enterprise value (EV): According to?OpenView, “the median enterprise value (EV) of PLG companies is 2X higher than the public SaaS index as a whole.” This is because product-led companies design tools that alleviate the end-users’ problems. When done well, users stick around and even refer the product to others.
• Accelerated growth:?OpenView?also reports that PLG companies grow faster. The moment a PLG company achieves $10M in annual recurring revenue (ARR), they tend to expand and scale at a faster rate.
• Lower customer acquisition cost (CAC): Because most resources are funneled into the product, PLG companies aren’t limited by high marketing or sales costs. This enables them to stay in a healthy growth pattern with less time to see a return on the cost of acquisition.

Organizations interested in shifting to a product-led model face the task of rethinking their business orientation around product. Luckily, there are resources to help you get started. You can start by reading up on strategies and additional material mentioned in references.

References:

• What Is Product-Led Growth? Strategy, Metrics, & Examples (Mar. 2022) Amplitude
• 5 Diagrams That Explain Product-led Growth
• Product-led growth?OpenView
• Expansion SaaS Benchmarks?(2020) OpenView
• The future of business is product-lead Pendo
• Product-lead growth strategy definition ProductLed