PLG (Product Led Growth) is a recent SaaS trend where user acquisition, product usage & expansion, sales & marketing conversion, and customer retention are all driven by the core product experience. Put simply, you build a good product, make it really easy for users to start using it & discover new features, and lean on your product’s value to keep your customers happy.
Easy, right? – not really. A successful Product Led Growth model requires product rigor and an organizational mindset around excellence in customer experiences. In this post we look at 8 key principles to a successful PLG model.
1. Default experiences are open & collaboration focused
Enabling collaboration & a culture of sharing is more critical to PLG focused companies than any specific product feature. Facilitating an open product where users can easily invite other users, share best practices, and discover content breaks down barriers to entry and adoption. It also enables word of mouth advertising – often the quickest and cheapest way to reach exponential growth.
2. Simple onboarding aligned to the right metrics
Product led onboarding prioritize free trials or freemium models over typical sales kick-off meetings, product walkthroughs, and post sales onboarding. Success means minimizing a Time to Value metric. This typically entails users getting to some action within the product that demonstrates the product value. Marketing funnels, product documentation, landing experiences, and all CTAs optimize for this metric. Sophisticated PLG companies also measure a Time to Expansion metric focused on increasing usage and value once users get familiar with the initial set of features.
3. Incentivize value focused product life cycles
Product discoverability & adoption is only useful in the long run if the product constantly demonstrates value. Otherwise companies risk high churn rates. PLG focused companies not only build really good products, but also implement incentives that ensure every shipped feature has customer value. This involves building in the right pricing and packaging strategies so internal product teams can quickly determine whether features have real customer value, incentivizing sales teams on expansion & stickiness vs just a sell and forget short term revenue model, and measuring success based on PQLs (product qualified leads) vs just MQLs (marketing qualified leads).
4. Simple does not equal Simplistic
Users love PLG products for their simplicity. Under the covers, there is often a completely different story. Datadog’s philosophy around keeping their interface human but underlying tech next gen articulates this philosophy. Making this happen isn’t easy – PLG companies have a manic focus on design, fast iterative improvements, and customer obsession to translate complex technology into extremely intuitive user experiences.
5. Standardization, delegation, & automation for Administrators
Companies that embark on PLG journeys can inadvertently ignore administrators in their customer organizations. An administrator is someone tasked with ensuring consistency of experience and data governance across all application teams – typically across multiple SaaS vendors. They are critical to scaling products and processes as companies grow. The most successful PLG companies recognize that happy administrators make a product exponentially sticky within an organization and build the appropriate API based automation, templating flows, and governance capabilities to make the life of these admins much easier.
6. Security by obscurity isn’t a proxy for convenience
Comprehensive security controls are a P0 capability in any SaaS product buying cycle. Security by obscurity is a traditional engineering practice that relies on secrecy as a method to protect a system or endpoint. However sometimes it can inadvertently be used as a workaround to designing robust security controls or a convenient response to customer requests around increased governance capabilities. This is counter intuitive to PLG related goals – unnecessary secrecy prevents sharing and collaboration. Successful PLG companies deeply understand security governance models important to their customers, enable extremely fine grained identity, access, and other security controls, and ensure these controls complement vs hurt collaboration.
7. Dogfood everything
PLG companies are recognized for building thoughtful nuanced user flows and yet maintaining extremely high release velocities. Their secret sauce? – using their own employees as an organic testing ground. Consistently using your own products just as your end users ensures more product excellence & innovation compared to any other method.
8. Be what you aspire your product to be
Finally, PLG driven products strive to make work feel like a source of joy – simple, collaborative, and empowering experiences, engaging conversational tones, and efficiency are prominent in product interactions. Part of this comes from a deep emphasis on design & brand. However an equally critical aspect is an intentional company culture. Everyday company values, processes, and organizational structures within PLG companies are carved out such that these product interaction values are just as embodied in overall organizational values.8 Principles to a successful Product Led Growth model Click To Tweet