Product-led growth is a go-to-market strategy that has emerged in the SaaS industry

The term "product-led growth" has been thrown around a lot recently.

And while it's easy to get caught up in the hype, there are some important distinctions that need to be made — especially if your company is trying to decide whether or not to invest in this strategy.

Let’s start with the basics: Product-led growth (PLG) is different from other types of growth because it focuses on building an audience, instead of selling directly to customers.

In fact, one study found that leading companies have 2x more engaged users than their competitors do and generate 60% more revenue per user than non-leading companies do.

The 2 strategies for selling things

Sales-led growth: This is the approach that most people are familiar with. It's what we think of when we think of traditional marketing—you build awareness, create demand, and then drive sales through your sales team.

Product-led growth: In this model, you focus on building the best possible product for your customers by putting their needs at the center of everything you do.

You do this by gathering customer feedback on an ongoing basis to identify improvements or new features that can be added to your product.

These can be big changes like launching an entirely new version or smaller ones like adding a single feature request from one customer into a future update.

Main goal of a PLG strategy

The main goal of a pure PLG strategy is to get “the product into the hands of as many users as possible, and then let them become customers on their own terms.”

In other words, you want to get your product into the hands of as many people as possible, but you don't force them to use it if they don't want to.

At least not right away.

Your goal is just to make sure that people who like what they see are aware that they can access more features under certain circumstances—and then cross your fingers that some of those users will decide "yes" when given an opportunity (or two).

In essence, product-led growth is marketing that helps people learn how to use the product itself.

Puts the product at the center

Product-led growth is a strategy that puts the product at the center of everything you do.

It's about investing in your product so that users can learn how to get the most out of it.

It involves deploying some kind of user education in a few different ways — using tooltips, videos, or other materials within the app to teach users about new features or best practices.

Product-led vs Sales-led

Product-led growth is different from sales-led growth because it's not focused on pushing more products into people's hands.

Instead, it focuses on helping people become better customers by improving what they already have.

PLG takes advantage of software’s natural sales cycle, which includes the following steps:

• Discovery— customers search for solutions to problems that they’re experiencing.
• Trial — customers try out your product and decide whether or not it solves their problem. If so, you move on to step three; if not, you lose them forever! We call this churn (and it sucks).

PLG differs from traditional customer acquisition strategies in several key ways:

• You spend more time on product development, rather than building out a sales team and customer support infrastructure
• You focus your marketing efforts on creating an outstanding customer experience through well-designed products, instead of buying ads or sponsorships

Conclusion

Your product is your sales department.

As long as you are genuinely making something that people want, you can use PLG to grow a business without hiring any new salespeople.

The key here is to make sure that your customers know what they need when they talk to you — and if they don't yet know what they need, then help them find it!

Ultimately, product-led growth is a long-term investment. It’s not going to happen overnight and it might not even happen in your first year or two.

But if you keep learning and making small improvements along the way, you can see some really great results that will pay off over time.

You can read more on product-led growth here