The advantages of Product-led Growth

• Sukanya Bharati
• August 21, 2024
• Blog
• #gtmstrategy, #productmanagement
• 0 Comments

Do you remember the first time you used Zoom?

Probably a friend or colleague messaged you something like “I’ll send you the link to a Zoom meeting.”

That’s how you started using it and before you knew it you had created your own meeting and sent a Zoom link to someone else.

This is how Zoom spread like wildfire.

Zoom is an example of Product-led Growth (PLG) GTM strategy.

Product-led Growth is an approach to building and growth where your product takes the lead in acquiring, activating and retaining your users.

One of the success stories of PLG is Hubspot whose CEO Brian Halligan has mentioned that half of their new customers use their free products before they buy.

PLG has played a transformative role in the growth of many of the biggest names in software enterprise such as Slack, Zendesk, Dropbox, Pluralsight, and Survey Monkey.

In 2009, Grammarly, which started by targeting students as their audience and only offering spelling and grammar, later expanded this to include features such as clarity, consistency, conciseness, and tone.

All of Grammarly’s suggestions empower users to help them achieve their writing goals.

In the early days, using the Grammarly Editor required a user entering their credit card information, which wasn’t really feasible. This led the company to introduce a freemium business model in 2015.

In 2019, Grammarly had reached 20 million daily active users – and just a year later this figure reached 30 million. Word of mouth really helped it take off – like a rocket ship (as they say …)

Here are some of the advantages of PLG:

– Significantly lower Customer Acquisition Cost (CAC): By having prospects onboard themselves they can significantly reduce their time to value

– Wider top of funnel: A free trial or freemium model opens up your funnel to people earlier in the customer journey. This helps because instead of prospects filling out your competitor’s demo requests they are actively evaluating your product.

– Faster sales cycles: Prospects who self onboard can help reduce sales cycles.

Word of caution: Your product must have a faster time to value, a superior onboarding experience and the ability for customers to self-serve.

Have you explored PLG for your business? Learn more about how we can help you.