Product-led growth (PLG) is a business strategy that leverages the product itself as the main driver of growth. This approach prioritizes product experience and user engagement over traditional marketing and sales methods, intending to create a self-sustaining growth engine.

The basic concept of "product-led growth" is to create a product that is so compelling and valuable to users that it generates its own demand, leading to increased user acquisition, engagement, and retention. This, in turn, fuels the growth of the business.

Why is product-led growth important?

PLG is important because it allows businesses to create a sustainable growth engine that is driven by the product itself. This approach reduces dependence on expensive and often unreliable marketing and sales methods while also helping businesses build a loyal and engaged user base.

Additionally, PLG helps businesses create a more user-centric product, which can lead to increased user satisfaction and loyalty. This, in turn, helps to reduce churn and increase customer lifetime value.

Product-led growth channels

Product onboarding is the process of introducing new users to a product and helping them understand how to use it effectively. By providing a smooth and enjoyable onboarding experience, businesses can increase the chances of users becoming long-term, engaged customers.
User Engagement: User engagement refers to the interaction and involvement users have with the product. By continuously improving the product experience and making it more engaging and enjoyable, businesses can increase user engagement and retention.
Referral Marketing: Referral marketing leverages the power of word of mouth to drive user acquisition. By creating a product that users love and are eager to share with others, businesses can tap into the power of referrals to move growth.
User Acquisition: "User acquisition" refers to the process of acquiring new users for the product. PLG prioritizes product-driven user acquisition, where the product itself is the primary driver of the user
acquisition, over traditional marketing and sales methods.

Product-Led Growth Metrics

To measure the success of a PLG strategy, businesses should track key metrics, including:

User Acquisition Cost (UAC): UAC measures the cost of acquiring each new user. By reducing UAC and improving the efficiency of user acquisition, businesses can increase the profitability of their PLG strategy.
Lifetime Value (LTV): LTV measures the estimated value a user will generate over their lifetime as a customer. By improving user engagement and retention, businesses can increase LTV, which will help drive the growth of the business.
Net Promoter Score (NPS): NPS measures the level of customer satisfaction and loyalty. By continuously improving the product experience and making it more enjoyable and engaging for users, businesses can increase NPS, which will help to reduce churn and increase customer lifetime value.

In conclusion, "product-led growth" is a powerful business strategy that leverages the product itself as the main driver of growth. By prioritizing product experience and user engagement over traditional marketing and sales methods, businesses can create a self-sustaining growth engine and build a loyal and engaged user base.

Product Led Growth