Imagine not having to employ any sales or customer success people or adopt any of the tactics they use – because the product sells itself or gets utilised by users without any help. I’m being facetious, but in a nutshell that is the promise of product led growth.
From this article: “Product-led growth (PLG) is an end user-focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion, and expansion”.
Okay, as you will read in that article and in many others, the assumption is not that sales or customer success teams can be dispensed with entirely if you get PLG right. But not far from it and wouldn’t it be nice if you could – so isn’t it a strategy worth pursuing?
I think so. I dug in a little more to read the views of others as well as take a stab at a DanelDoodle for some sensemaking support. Additional comments follow.
This graph is not entirely accurate in terms of its phases. I mean there are some purpose laid traps in there (the kinds of things that can hinder conversion) and also some dependencies I have not specified. On the latter, things like product costs and also average size of customer. But let me unpack each in turn below:
Acquisition
This is pretty straightforward. You’d expect that if the conditions I labelled within that first section are met, that growth (in usage) will pretty much follow the shape shown. I think the conditions are pretty straightforward and don’t need more elaboration so onto the next crucial stage.
Conversion
This is crunch time. When it comes to the end of the trial period or if freemium features are no longer sufficient, the question is whether the user will pay. Assuming this is for a small company and there are not many users and none of the negative conditions I mentioned in the section are true, no problem. The user, whether someone senior with a budget or someone who needs to convince that budget holder, shouldn’t have too much trouble doing this.
But as soon as the company gets bigger and decisions need to be made on behalf of many users, some of who may be using other products already, well then it gets complicated.
Also, depending on the time it has taken to get through a trial or set of premium features, some of the conditions I mentioned may have set in, e.g. competitors have landed with an innovative new feature.
Assuming some of the conditions do exist and you do nothing about it, you will see usage decrease and chances of conversion disappear. Which is where some human intervention may be needed.
Expansion
Data driven growth is based on a deep understanding of what features are being used and why in the run up to the conversion call and especially if you see usage dropping off.
This is where you may need to bring in some customer success teams and sales peeps to help make the case for continued use and even expansion.
Having an innovative product feature to talk about (even if it is still on the roadmap) might help.
I’m not saying you will have to wait until this stage for this level of human centred intervention. Especially when it comes to outcomes, this will have to have been established upfront. Ideally this is self evident or built into the product somehow but very few products I know achieve that. Most often it requires someone to establish the clear outcomes expected from use of the product upfront and for evidence to be collected and aligned to those as you go.
In Conclusion
This is all pretty simplistic in a topic and strategy (PLG) that has gained widespread use in recent years. But then that is often what makes the best strategies work. So maybe what I am concluding is in line with the headline of the post. That even in an end user lead era, you cannot rely solely on a PLG strategy and at some point you need the right (human) touch.
This area requires more digging in and where I had omitted it in my trend watching efforts here, I know may now need to include it.