Product led growth examples to inspire you

When it comes to great marketing, iconic adverts and viral stunts usually spring to mind. But there’s another method that is just as effective, and it does it with a whisper rather than a shout. It’s favored by some of the biggest household names around, including Netflix, Dropbox, and Zoom. Any ideas what the common link is?

We’re talking about product led growth (or PLG for short). It’s a marketing strategy that makes the product the star of the show, negating the need for pushy sales tactics or expensive viral campaign efforts. Here’s everything you need to know.

What is product led growth (PLG)?

Product led growth (PLG) shifts the focus from traditional sales and marketing to a more user-centric approach. So rather than relying heavily on traditional sales and marketing tactics, PLG focuses on using the product itself as the primary driver for getting, keeping, and growing customers. 

Features like free trials, self-service, and easy onboarding tend to feature heavily because they allow users to see the benefits and make informed decisions without the pressure of salespeople.

In a nutshell: PLG is not about pushing a product on people. It’s about letting the product sell itself through its merits.

What PLG is not

One myth about product-led growth (PLG) is that it eliminates the need for a sales team entirely. Not true! While PLG does reduce dependency on conventional sales methods, sales professionals still hold an essential, albeit evolved, role in the organization. They often adopt a more consultative approach, offering valuable assistance to potential customers who need additional guidance in understanding the product’s benefits. 

Another misunderstanding is that PLG is just for SaaS companies. In reality, the principles of PLG work across a range of business models. By putting the product experience at the forefront, businesses of all stripes can harness PLG strategies to organically draw in customers.

The core characteristics of product-led growth

Product-led growth (PLG) revolutionizes how businesses attract, retain, and expand their customer base, placing the product at the heart of all strategies.

The key features of PLG

• Lower entry barrier: Offers a basic version for free, driving adoption. 
• Value demonstration: Allows users to experience product benefits without financial risk.
• Encouraging upgrades: Users often transition to paid tiers once they recognize the product’s full utility.
• Product-centric focus: Lets the product ‘speak for itself’, rather than going with the hard sell. 
• Good onboarding: Well-structured onboarding helps users understand key product functionalities. Tutorials and walkthroughs keep users engaged and informed.
• Strong customer feedback loops: Continuous feedback means the product evolves with user needs. Aligning the product with user expectations fosters loyal, satisfied customers.

What does freemium mean?

The freemium model is a popular PLG approach that offers a basic version of the product at no cost. The goal is to entice users into trying and adopting the product with minimal barriers. This model helps businesses build a large user base quickly, as users get to experience the product’s benefits firsthand. 

Over time, as users grow to recognize the value of advanced features or require additional capabilities, the transition to paid tiers becomes a natural progression. Companies leveraging the freemium model focus on optimizing conversion rates by enhancing premium offerings that deliver clear and compelling value. 

In a nutshell: The benefits of product-led growth

By centering the growth strategy around the product itself, companies can tap into efficiencies and broader opportunities that traditional models may overlook. Here are some of the key benefits.

• Rapid scalability: With the product effectively serving as its own marketing vehicle, PLG facilitates quick expansion and viral growth through satisfied user referrals and network effects.
• Increased Customer Lifetime Value (CLV): Users experience immediate value, leading to long-term engagement and loyalty. This increases the potential for upselling and cross-selling as customers explore more features.
• Better cost efficiency: As the product markets itself, businesses can achieve exponential growth without a proportional increase in operational expenses, resulting in efficient resource allocation.
• Enhanced user experience: By reducing traditional sales friction, users can engage deeply with the product from the outset, fostering satisfaction and retention.
• Culture of experimentation and innovation: Focusing on user feedback and data analytics, PLG encourages continuous product improvement, ensuring alignment with market needs and maintaining a competitive edge.

Product-led growth examples in B2B

Let’s take a look at some of the biggest names in the B2B sphere who use product-led growth. 

1. Dropbox 

Initially launched as a cloud storage solution for people, Dropbox shifted into the B2B space by offering file-sharing capabilities for teams. With a focus on user-friendly design and smooth workflow integrations, Dropbox reported an impressive 700 million registered users worldwide in 2021. 

2. Zoom 

Now a byword for video conferencing, Zoom’s product-led approach helped its rapid growth, especially amid the global pivot to remote work. It saw a stunning rise in daily meeting participants and revenue during the pandemic — in the twelve months ended January 31, 2021, its revenue amounted to $2.65 billion, up more than 300 percent from the previous year. And while its growth has since plateaued, its story is a testament to offering a good product at the right time.

Examples of product-led B2C companies 

Here are some examples of B2C companies that used PLG so successfully they became household names.

1. Spotify 

As one of the biggest names in music streaming, Spotify’s PLG strategy places the user experience at its heart. Personalized playlists, algorithm-driven music recommendations, and smooth integration across devices are all part of its success. Meanwhile, its freemium model encourages users to explore with paid ads and basic features, eventually converting them to paying subscribers who want ad-free streaming.

2. Netflix 

Remember Blockbuster? RIP, thanks to Netflix. By fundamentally changing how people access and enjoy movies and TV, Netflix epitomizes a product-led growth success story. From personalized content to original programming, it remains one of the brightest lights in the streaming service line-up, attracting and holding onto subscribers with its huge and ever-evolving content library.

3. Duolingo 

Known for gamifying language learning via cute characters and a points-based leaderboard, Duolingo’s approach appeals to a wide audience. Its freemium model lets users start learning immediately, while the app’s interactive features and regular (and some might say passive-aggressive) notifications encourage consistent engagement. Duolingo effectively transforms the traditionally daunting process of learning a new language into a fun daily habit, driving growth through consistent user enjoyment.

Types of go-to-market strategies

A go-to market (GTM) strategy is a must for any company looking to launch and promote its products or services. 

Different approaches cater to various business models, target audiences, and market conditions. Here, we explore several types of GTM strategies, highlighting their objectives and characteristics:

Sales-led growth

• Focuses on building a strong sales force to drive customer acquisition.
• Relies on relationships and interactions between sales representatives and potential clients.
• Aims to deliver value through tailored solutions and personalized service, often necessary for enterprise-level or complex products.
• Typically involves direct outreach methods like calls, demos, and meetings.
• Success is measured by the effectiveness of the sales team and closing deals.

Marketing-led growth

• It’s about creating awareness and leads through marketing channels.
• Relies on content marketing, social media, email campaigns, and events to reach more people.
• Aims to educate potential customers about the product’s benefits. This drives interest and engagement.
• Involves nurturing leads until they’re ready to convert.
• Emphasizes brand positioning and reaching market segments effectively.

Channel-led growth

• Involves partnering with third-party entities to distribute and sell products.
• Uses established networks and the know-how of partners to reach new markets.
• The goal is to expand a company’s reach without needing a massive internal sales or marketing team.
• Success depends on strong partnerships and smart collaboration with channel partners.

Product-led Growth (PLG)

• Centers on the product itself as the primary driver for customer acquisition, conversion, and expansion.
• Focuses on delivering immediate value to users, encouraging them to adopt and champion the product through free trials, freemium models, or self-serve experiences.
• Aims to create a frictionless user experience that demonstrates product value before a customer makes a purchasing decision.
• Relies on organic growth via customer referrals, word of mouth, and product virality.
• Success is measured by product usage, customer satisfaction, and growth in user base with minimal direct sales intervention.

Why product led growth works as a go-to-market strategy

PLG shifts focus to the product, transforming go-to-market strategies. Prioritizing user experience and seamless onboarding reduces friction, helping users quickly see value, which boosts conversion rates from trials to subscriptions. 

It also empowers customers to explore the product independently, leading to loyal, satisfied users. When done well, PLG creates a cycle of engagement where happy users become brand advocates, driving sustainable growth.

How to become product-led

You’ll need to focus on embedding the product at the heart of every strategic decision, making sure it not only meets but exceeds user expectations. Here are the steps to follow.

1. Embrace a customer-centric mindset 

At the heart of product led growth is a laser focus on delivering value right through the product itself. Every decision is aimed at solving customer pain points and boosting user satisfaction. Start by diving deep into customer behavior, needs, and feedback, using this data to steer product development and prioritize impactful features.

2. Develop a solid onboarding experience 

First impressions matter, and for product-led companies, the onboarding process is key when it comes to showing off the value of your product. An intuitive, guided onboarding experience that helps users quickly reach that “aha” moment — where they recognize the product’s value — boosts retention and fuels positive word-of-mouth marketing.

3. Create a culture of continuous improvement 

Encourage a culture where experimentation is the norm, and failure is seen as a stepping stone to success. You’ll want to use Agile methodologies to flex to customer feedback and market changes, making sure the product evolves in ways that answer their needs. Oh, and make sure you use analytics to make data-driven decisions. Data helps you measure how you’re doing and lays the foundations for iterative improvements, a la Netflix and its regularly evolving offering. 

4. Streamline product navigation and usability 

Having a great product but a bad interface is like using a bucket with a hole in it. Make your product easy and fun to use, and you’ll keep your users engaged. You’ll want clear navigational paths, minimal friction points, and good support features that help users extract value without needing extensive guidance or getting frustrated. Simplification should be a guiding principle — keep complexities to a minimum and empower your users. 

5. Align teams and departments

Breaking down silos is essential for good PLG. Sales, marketing, customer support, and dev teams should collaborate closely, with the product serving as the focal point for joint efforts. Doing this helps teams work towards unified goals, making sure every customer interaction is consistent and value-driven.

How to measure product led growth

Tracking metrics gives you good insight into product performance and user engagement. Here is a list of key metrics to consider.

1. User activation rate: Tracks how quickly users ‘get’ the product and extract value. 
2. Churn rate: How fast users stop using the product over a given period. It’s an important metric for helping you spot satisfaction and retention challenges.
3. Expansion revenue: Monitors extra revenue from existing customers, showing you the product’s capacity for upselling and scalability. 
4. Product usage frequency: Captures how often users engage with the product. It shows you how much it features in their daily lives. 
5. Retention rate: Measures the percentage of users who continue to use the product over time, highlighting its ‘stickiness’. 
6. Net Promoter Score (NPS): Shows you user satisfaction by how likely they are to recommend your product. 
7. Customer Lifetime Value (CLV): Estimates the total revenue expected from a user throughout their relationship with the product. 
8. Customer Acquisition Cost (CAC): Reflects the cost associated with acquiring a new user. Knowing this helps you fine-tune your marketing efforts. 
9. Daily/Monthly Active Users (DAU/MAU): Tracks the number of users actively engaging with the product on a daily or monthly basis. It’s vital engagement info. 
10. Feature adoption rate: Measures how often users engage with new features. You’ll want this to measure how well those updates are performing. 
11. Time to Value (TTV): The time it takes for a user to get real use out of the product, post-sign-up. 
12. Customer Satisfaction Score (CSAT): Direct feedback from users about how happy they are with your product. 
13. Monthly Recurring Revenue (MRR): Tracks predictable revenue streams from subscriptions. Crucial for revenue forecasting and strategy.
14. Conversion rate: The percentage of trial users converting into paying customers.
15. Bounce rate: Measures the % of users who leave after a single session, potentially highlighting issues in user experience.
16. Engagement score: A composite metric that shows various aspects of user interaction, helping you identify the most engaged user segments.

Use project management software to make the PLG journey smoother

Project management tools help product teams easily track progress, prioritize tasks, and manage resources, all while keeping strategic goals in sight. By simplifying communication and offering visibility into project milestones, teams can quickly respond to user feedback and market changes. With Backlog, our own tool, analytics features help you keep an eye on all-important KPIs related to user engagement and product adoption. This empowers you to make smart, data-driven decisions, which in turn can help you improve your product offerings and ultimately speed up growth and stay competitive. Ready to give it a try?