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Product Strategies
6 Minute Read
Product-Led Growth
Business Approaches

Table of Content

  1. What is product-led growth?
  2. What does product-led growth look like?
  3. A successful product-centric growth strategy requires three steps that build on each other
  4. The Advantage of Product-led Growth
  5. A product-led growth strategy should produce
  6. How can you implement a product-led growth approach into the company?
  7. Product-Led Growth Metrics
  8. Conclusion

Cloud and SaaS companies have emerged and applied different business approaches in the last decade. One of the approaches on everyone’s lips these days is Product-led growth. But what does it mean to be product-centric? These examples provide an overview of PLG and show what product-led growth looks like for B2B and B2C companies.                              

What is product-led growth?                 

Product-led growth, or PLG, is about developing a product so that it, with its features and properties, acquires, activates, and retains customers.  The goal is to create a viral product without extensive marketing. When all digital-focused teams within a company – marketing, product, and customer success – come together for product-led growth, companies can deliver innovative, personalized product experiences that drive customer engagement and create customer loyalty. In companies that are not product-centric, the sales team is the primary revenue driver, and sales and customer success are critical to improving customer retention. This is still important for product-centric companies. But the main difference for product-centric companies, products are their source of revenue and loyalty, and they are more connected to customers who see massive value in world-class products for developing deep connections. Customer relationships grow stronger and stronger over time. This is because digital product experiences naturally generate customer loyalty without human intervention.



                        Image Source: ProductLed.

What does product-led growth look like?

Achieving product-led growth requires the entire organization to come together to rethink the metrics and tactics that drive sustainable growth. In practice, this means that the way businesses sell, market, and retain customers is changing.

As an organization or executive, you must build the PLG as machinery around your product and make your team aligned with strategy. For example, one of the ways to drive product-led growth is to give a chance to users to experience the value of a product before they eventually purchase it. This strategy gives you more flexibility in using your resources to invest in your product instead of pouring money into all new marketing and sales strategies. Prioritizing a fantastic product experience is more than just keeping customers coming back. Build a pipeline for new customer growth.

A successful product-centric growth strategy requires three steps that build on each other

  • First, organizations need to understand the value they provide to their users.
  • Then the value must be effectively communicated by the organization.
  • Ultimately, an organization must deliver that value.

The Advantage of Product-Led Growth

Companies adopting a Product-centric approach are known for developing quality products that deliver value to end users quickly and consistently. But there are more benefits than making better products and satisfying customers.

A product-led growth strategy should produce:

Accelerating growth: OpenView also reports that PLG companies are growing faster. PLG companies tend to grow and expand more quickly once they hit $10 million in annual recurring revenue (ARR).

Lower Customer Acquisition Costs (CAC): PLG companies are not constrained by high marketing or sales costs as most resources are devoted to products. This reduces the time it takes to recover initial costs and helps maintain healthy growth patterns.

Increased customer loyalty: Product-led growth benefits from strong customer relationships. Product development and improvements are the results of customer retention data and feedback. 

How can you implement a product-led growth approach into the company?

You can't be a product-centric company if each team has different goals. Resources and time must be focused and dedicated to delivering a great product experience. It's not just about building the best products. It's about designing your customer's entire journey around a seamless experience. This involves all digital-focused teams, including marketing, customer success, and analysts. Product-led growth isn't just for product teams.


Identify the north star metrics of your product

You can't create the best product experience without understanding your end users' needs and desires. Identifying the north star metrics of your product shows the intersection of customer value and the business value your product provides. And by focusing on the North Star, product and marketing teams can deliver product improvements that make a difference, rather than feature factories.


Measure and improve using behavioral analytics

Making data-driven decisions based on user behavior is pivotal to product-led growth. Behavioral analytics can track all interactions and relationships between your product and its users. Digital actions and events, like abandoning a shopping cart or skipping a page, show what users value and what they don't. Behavior-based product and marketing analytics then pinpoint how to develop users' journeys, personalize product experiences, and introduce features users need. Marketing and Customer Success teams can also send messages considering specific user cohorts. Investing in an event-based analytics platform is essential if your business is serious about product-led growth.

Product-Led Growth Metrics

Product-led companies adapt their teams to the same metrics and success metrics. It is often a standard metric used in sales and marketing-oriented environments. 

  • Acquisition

Monitoring the number of potential customers who discover and become users of your product is essential in any growth model. During the acquisition phase of the funnel, tracking metrics such as sign-ups and qualified leads help to identify opportunities and lead generation challenges. Customer acquisition cost (CAC) reduction is a significant part of the PLG model. The ultimate goal of any product-led company is to have CAC as close to zero as possible. Sales and marketing-oriented companies also go to great lengths to minimize acquisition costs, while product-oriented companies find more success through design.

  • Time to Value (TTV)

Getting 1 million free trial leads is unbelievable. It wouldn't be so incredible if only ten became paying subscribers. The PLG model values ​​creating experiences that help customers discover product value quickly. 

The time between signing up and discovering the product's benefits is called Time to Value (TTV). TTV is calculated using product data to determine the average time it takes for a customer to reach a key activation event. Product-led companies aim significantly to reduce the TTV rate to the lowest possible interval.


For an early-stage company, choosing between sales-centric and product-led approaches is challenging. For the flywheel to kick off, we need to analyze the conditions mentioned carefully and, until then, find the ideal combination of product, sales, and marketing to get the ball rolling. Also, a new-age SaaS company has had fantastic success with the PLG approach.


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