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The Ultimate Guide to Product-Led Growth


 No matter what product or service you offer in the software industry, the principles that led to product-led growth as a growth strategy can help you increase your customer base and grow your business. It’s a vital component of a SaaS business’s overall growth strategy and one that every business should consider.

Product-led growth (PLG) is a powerful tool that can be used in conjunction with other marketing and sales initiatives to help you reach your target market, build customer loyalty, and boost your bottom line.

This guide is designed to give you a deep understanding of PLG and the viral growth that can come from product adoption and customer success. So keep reading to learn more about PLG and how you can use it to grow your business.

An individual looks at parameters on a laptop


What Is Product-Led Growth (PLG)?

Let’s start with what PLG means. The product-led growth model is a strategy that relies on using your product to drive new user acquisition and expansion. The focus is on using your product as a marketing and sales tool, rather than relying on traditional methods such as advertising or word-of-mouth.

With the product-led growth methodology, your product is the primary driver of growth. You use your product to reach and engage your target market, build customer loyalty, overcome pain points, and drive revenue.

PLG companies perform via a data-driven approach that relies on using your product data to inform marketing and sales decisions.

Two men discuss product led growth on a paper between two laptops


A History of SaaS Development and Growth Benefits of Product-Led Growth

SaaS development has been growing in popularity for the past decade. The rise of the cloud and the ubiquity of mobile devices has made it easier than ever for businesses to develop and deploy software products.

SaaS products are typically subscription-based, which means that they generate recurring revenue. This recurring revenue stream is a key driver of growth for SaaS businesses.

PLG is a natural fit for SaaS companies. As a product-led company, your product is the primary driver of growth. You use your product to reach and engage your target market, build customer loyalty, and drive revenue. The goal is to grow your business by using your product as a marketing and sales channel.

A product led growth graph plotted on paper



Product-led growth has a number of benefits for SaaS businesses, including:

Increased Customer Acquisition: Product-led growth strategies enable companies to increase their customer base by acquiring new users through organic means. With a PQL (Product Qualified Lead) approach, you can advance to retention.

Improved Customer Retention: Adhering to PLG principles also helps companies keep their customers longer, as consumers are more likely to stick with a product they love.

Higher Customer Lifetime Value: The clients of product-led growth companies also tend to have higher lifetime values, as they’re more likely to continue using a product they love and recommend it to others.

Increased Revenue: All of these factors lead to increased revenue for PLG companies.

Improved Profitability: In addition to increased revenue, PLG companies also tend to be more profitable than their traditional counterparts.

Increased Efficiency: A product-led growth strategy enables you to focus on building the features that matter most to your clients rather than those that generate the most revenue.

Reduced Costs: By eliminating the need for traditional sales reps, a SaaS company can reduce its overall costs and reinvest those savings into product development.

With so many benefits, it’s no wonder adopting a PLG strategy is becoming the preferred method for SaaS organizations. If you’re looking for SaaS growth, consider making the switch to a PLG model.

A woman works on product led growth on a laptop by a bunch of sticky notes


How Does PLG Work? Building a Product for End Users

When you’re building a product, it’s important to keep the end user in mind. After all, they’re the ones who will be using your product on a daily basis. This means that you need to focus on creating a product that is easy to use and provides value.

To do this, you’ll need to invest in user research. This will help you understand the needs of your target market and build a product that meets their needs.

Once you have a clear understanding of your target market, you can start building your product. When it comes to PLG, there are a few key things you need to keep in mind:

1. Simplicity Is Key

When you’re building a product, you need to focus on simplicity. This means creating a product that is easy to use and understand. The last thing you want is for your users to get frustrated with your product.

According to a 2019 study by Localogy, 76% of small business owners stated that their customer engagement would increase if they offered simpler products. Bottom line; overwhelming consumers with features only serves to make a product or service too challenging to use.

2. Horizontal Use Cases

PLG works best when you build for horizontal use cases across a number of personas—for example: creating meetings, managing expenses, web conferencing, collaboration, project management etc. This allows for your product to naturally grow to a large number of users. 

3. Build for Scale

As your product grows, so will your user base. This means that you need to build your product with scalability in mind. This way, you can easily accommodate more users as your product grows.

It’s easy to get in to a mindset of bigger is better. But it’s important to set boundaries as you scale. These boundaries should be established in an effort to address the complexities that come with scalability.

Any time a business sets out to produce more, challenges arise. But if you have an actionable plan in place to address these challenges, you won’t get tripped up by your growth.

4. Focus on the User Experience

The user experience is key when it comes to PLG. You need to focus on creating a product that is intuitive and easy to use. This way, your users will be able to get the most out of your product.

What does that mean? Basically, you might be tempted to design a product that you know you and advanced users will enjoy. But what about new users who aren’t familiar with your tech or design?

So instead, design your product or service to allow for better accessibility by all audiences. In doing so, you will achieve greater customer growth, and ideally, sales.

5. Always Be Testing

When you’re launching a new product, it’s important to always be testing. This way, you can make sure that your product is delivering the best possible experience for your users.

A great way to test is to conduct user tests to ensure your product is user-friendly and accessible. According to Brenden Keegan from Merchants Fleet, products need to be designed to increase adoption rates.

6. Iterate and Improve

Once your product is live, you need to continue iterating and improving. This way, you can ensure that your product is always meeting the needs of your users. A few ways you can achieve this are through A/B testing, user feedback, and analytics.

A man explains to a room the benefits of product growth


Building a product is only half the battle. The other half is making sure that people actually use it. This is where marketing comes in. When you’re ready to market your product, try to keep the following points in mind for marketing-led growth.

1. Create a Strong Value Proposition

Your value proposition should be clear, concise, and easy to understand. It should be able to communicate what your product does, why it’s important, and how it benefits the user. It should be specific enough to give people a good idea of what your product does, but not so specific that it sounds like a sales pitch.

2. Build an Audience

Before you launch your product, you need to build an audience. This way, you’ll have people to sell your product to when it’s finally ready. Here’s how to do it:

1. Figure out where your target market hangs out online. Do they spend time on social media? What kind of blogs do they read? Once you know where they are, you can start to engage with them.

2. Create content that appeals to your target market. This could be blog posts, infographics, videos, or anything else that would be interesting to them.

3. Share your content on social media and in other places your target market is likely to see it. Make sure to use relevant hashtags so people can find them.

4. Engage with people who see your content. If they leave a comment, reply to it. If they share your content, thank them. This will help to build a relationship with your potential customers.

5. Keep creating new and interesting content. The more you engage with your target market, the more likely they are to buy your product when it launches.

3. Get Press and Word-of-Mouth

Both points are key in reaching a wider audience. Once you build an audience, you never want to rest on your existing users. Always strive for more value. This will turn existing users into additional users.

4. Focus on Retention

Once people start using your product, you need to focus on retention. This means keeping them engaged with your product and ensuring that they continue to use it. There are a few key ways to do this:

First, you need to make sure that your product is easy to use and provides value to your users. If it’s not, they’re not going to stick around.

Second, you need to keep your users engaged with your product by providing new and interesting content. This could be in the form of blog posts, videos, or even just updates to your product.

Finally, you need to make sure that you’re constantly communicating with your users. This could be through email, social media, or in-app messaging.


The Success of PLG by the Numbers: How to Become a Product-Led Organization


PLG is one of the hottest topics in the tech world today. Many startups and established companies are rethinking their marketing strategy and making the switch to a product-led approach with a large investment in revenue operations to make it happen.

So, how can your organization become one of the many successful product-led businesses? Let’s look at it by the numbers.

1. PLG Leaders Have Shorter Sales Cycles

PLG businesses also have shorter sales cycles than traditional companies. This is because their products are designed to be intuitive and easy to use from the get-go.

Customers can get started immediately without having to go through a lengthy onboarding process or receive training from a sales rep. As a result, they’re more likely to make a purchase sooner.

In fact, many PLG leaders have reported that their paying customers require less hand-holding and education than those of other companies.

2. High Customer Retention Rates = More Revenue

Higher customer retention rates translate into more revenue. In fact, a study from Bain & Company found that raising customer retention rates by just 5% can increase profits anywhere from 25% to 95%.

3. Cater to the User Journey with Self-Serve

As product-led companies grow, they often face the challenge of how to scale their operations. Self-serve can be a powerful solution to this problem. By allowing users to automate many of their processes, self-serve makes it possible to reach more customers with less effort.

A black and white graph of product led growth leads


Using Product-Led Growth as Your Go-to-Market Strategy

PLG is a powerful go-to-market strategy that can help your company achieve remarkable results. By focusing on the product and making it the center of your PLG strategy, you can drive client acquisition, shorten sales cycles, increase customer retention, and more.

If you’re looking to take your company to the next level, consider switching to a product-led approach. It just might be the best decision you ever make.

A computer screen with multiple graphs around product led growth



Product-led growth is one of the most effective ways to grow a business. By focusing on your product first and foremost, you can drive exponential growth for your company.

When you finally employ this critical component, you’ll likely have an aha moment that propels your firm even further.

While you shouldn’t expect growth to happen overnight, you’ll have taken a critical step in taking your whole company in the right direction.

Looking to accelerate revenue with product led growth? Book a free demo of Immersa today.