“The key to leveraging a Product Led Growth strategy, is being able to experiment and iterate without developer involvement so you can quickly implement and learn from experiments."
Audrey Melnik is a 2x startup founder and co-founder of Unlocking Growth, a growth consultancy helping startups scale through Product-Led Growth. Based in Melbourne, her experience spans startup hubs including San Francisco, New York and Tel Aviv. She is the creator of the Customer Journey Optimisation methodology, empowering non-technical team members to experiment and iterate on the Customer Journey without developer involvement.
For this reason she has some great tips and insights to share with businesses of all sizes, which is why we're so excited to hear from her speak about leveraging online marketing and using data-driven strategies for customer acquisition.
These topics will surely benefit entrepreneurs and business owners looking for ways to accelerate their growth potential. Whether you are just getting started or scaling up your operations, this podcast is packed full of strategies that could make a real difference in 2023. Let's dive deeper and discuss some insights on product-led growth!
What is Product-Led Growth?
Product-led growth (PLG) is a business model that uses a product or service to drive customer acquisition and engagement. It's an approach that puts the product first, with the customer experience as the primary driver of growth. By leveraging technology and data-driven strategies, product-led companies can create and deliver value to their customers quickly, effectively, and at scale.
Although it looks different for every organization, there are three key components that all PLG companies share in common. Here's a look at them:
- PLG companies place their products front and center in their marketing efforts. They understand that their products are the most effective way to engage with potential customers from the start of the buyer journey. This means investing more time and money into product features than traditional marketing channels like email campaigns.
- They focus on delivering customer value rather than onboarding them as quickly as possible. These companies understand that offering great experiences will build loyalty and trust, leading to better long-term results than just chasing short-term gains. As such, they prioritize user education and feedback loops, which help them continuously improve their products.
- Product-led businesses use data to decide what new features or improvements should be made next. They have systems that collect customer usage data to test hypotheses about what changes would benefit users the most.
How Offering Free Trials as Your PLG Strategy is Never Enough
Audrey said that the main issue her company, Unlocking Growth, identified is how companies think offering free trials is enough. Most businesses call freebies the core of product-led growth and miss out on its potential. To maximize user acquisition and retention, you must address four key areas: onboarding, pricing models, customer support, and data collection.
Let's look at each in turn.
The goal of onboarding is to ensure that users understand how your product works and why they should use it over other solutions on the market. This requires more than just a few videos or tutorials; it requires a comprehensive plan that includes an interactive demo, guided tours, and personalized support from your team members. Additionally, if you want users to stick around after their free trial has ended, you need to ensure that onboarding is an enjoyable experience for them.
It's important to remember that pricing models are not one-size-fits-all solutions; instead, they should be tailored to meet the needs of your users. To determine the best pricing model for your business, consider user demographics and usage patterns. For example, if most of your customers are small businesses with limited budgets, offering tiered plans with discounts for annual subscriptions might be a better option than charging per usage or offering a flat fee for unlimited access.
Providing prompt customer service is crucial in product-led growth strategies because they rely heavily on customer feedback. Make sure you have ample staff available during peak hours and respond quickly and courteously whenever possible; this will go a long way towards building trust with your users and increasing user retention rates over time.
- Data Collection & Insights
Last but not least is data collection & insights – collecting data about how users interact with your product allows you to measure its success (or lack thereof). Analyzing this data will give you valuable insight into what areas need improvement and trends among different customer segments. These details can reshape your future strategies, like promotions or pricing changes. This is also what Audrey emphasized because, according to her experience, businesses don't focus on data while running PLG campaigns.
How the Changing Market (Gen Z and Millennials) Is The Reason PLG is Taking Over
As with much of modern business, generation Z (born 1996-2010) and millennials (born 1981-1995) represent a major influence on product-led growth strategies. With these age groups taking up the largest portion of the consumer market, businesses have had to shift their strategy to stay relevant.
Let's look at some factors that are contributing to PLG's rise in popularity:
- The Power of Social Media
Social media has changed the way we interact with brands and products. It has given consumers unprecedented access to information about products, allowing them to make more informed decisions about what they buy. When done correctly, social media can be a powerful tool for sharing product information with customers —something that gen Z and millennials respond particularly well to.
- The Need for Personalization
Gen Z and millennials expect personalized experiences when engaging with brands online. They want to see content that is tailored specifically for them rather than generic ads or messages that don't take into account their individual preferences or needs. Personalized offers can be created quickly using PLG, allowing companies to adjust their messaging based on customer behavior.
- AI Technology
Artificial intelligence (AI) technology is becoming increasingly important for understanding customer behavior and delivering personalized experiences. We can use AI-powered tools with PLG solutions to help companies understand customer preferences and create customized product experiences based on those preferences. AI also lets companies track customer interactions across different channels, allowing them to better anticipate future behaviors and deliver tailored experiences accordingly.
- The Emergence of Omnichannel Experiences
Omnichannel experiences are becoming increasingly necessary to meet growing customer expectations around convenience, consistency, and personalization. These experiences allow customers to engage with brands across multiple channels, such as websites, mobile apps, physical stores, etc., while still providing a consistent experience regardless of how they interact with the brand. PLG strategies provide data-driven insights into customer behavior across multiple touchpoints so B2B companies can alter their strategy.
How Will Product-Led Growth Look in 2023?
The future of product-led growth (PLG) is already taking shape, and it is set to have a huge impact on how companies do business in the years ahead. From changing consumer expectations to the growing influence of generation Z and millennials, product-led companies that can adapt quickly and capitalize on new opportunities are poised to succeed. Here are some new changes we expect in this horizon:
- Data-Driven Strategies
In 2023, data will be central to every aspect of PLG, from customer acquisition and retention to pricing strategies and customer service. Companies will now leverage data analytics for insights into customer behavior that enable them to tailor their products, services, and experiences. They will also use data to better understand their target markets to create marketing messages that resonate with customers.
- Product Experiences
Creating engaging product experiences is key for any successful PLG strategy—especially as we move into 2023 and beyond. Companies should strive to create experiences that go beyond mere functionality; here are some suggestions from the gurus of go-to-market strategies:
- Firms should focus on providing educational content, such as tutorials or webinars.
- They should develop relationships with customers by offering rewards programs.
- They should ensure that their products have a strong visual identity.
- Businesses must be aware of current trends in the industry, and they should tailor their offerings based on customer feedback.
All these elements contribute to creating an engaging product experience that will keep customers coming back for more.
- Integrated Payment Solutions
Product-led growth relies heavily on subscription models where customers pay monthly or annually for a product or service. As such, integrated payment solutions will become increasingly important as companies strive to make it easier for customers to sign up and manage their subscriptions with minimal effort. Companies will also offer various incentives like discount codes or referral programs that incentivize customers to become paying subscribers or refer others interested in signing up for their services.
Chatting with Audrey surely strengthened our view about product-led growth and helped us understand how it can help any business. With the right strategies and tactics in place, it can be a powerful way to drive organic growth, create a better customer experience, and ultimately increase the value of your products.
When the time comes to make that move toward product-led growth, there's no doubt that Unlocking Growth should be your go-to option! With their team of experts dedicated to helping software companies reach their full potential, it's an easy decision you won't regret making!