Product-led growth (PLG) is an approach that helps entrepreneurs grow their businesses by focusing on products rather than services. As we’ve stated before, this method has been used successfully in many SaaS verticals, including retail, e-health, Edtech, cybersecurity, and fintech. But what does it take to become a product-led business?
Since we live in the start-up world we often see like-minded entrepreneurs overwhelmed by the process of scaling their businesses under a product-led mindset. With that in mind, we put together a little guide that will hopefully help you start the conversation or build the framework for following a PLG model. And yes, like every self-help book out there, we’re certain that you sort of know this by now, but still need to see it. As we said, we live in the start-up world too!
1. You Need To Know Why Your Business Should Become Product-led
PLG is based on the idea that people buy products because they believe they will solve a problem or make their company and employees more efficient. If you can help people solve a problem with your product, then you can sell more of it. Simple, right? Yet, growth is where most companies start to fail. They expand too fast or go from doing one thing really well, to doing 10 things not so well. It’s when you have your proof of concept that things can go sideways fast.
2. You Need A Clear Vision Of Where You Want To Go
You can avoid those pitfalls if you have a clear vision of your company’s growth. So how do you go about creating a vision for your company? Start by asking yourself some questions. What does success look like? How much money do you want to earn? What kind of lifestyle do you want to live? Do you want to work for yourself or do you want to own your own business? And yes, there’s a difference between working for yourself and owning a business.
Once you have an answer to these questions, write down what you think success looks like. Then ask yourself what steps you need to take to achieve that goal. Think of it as a customer journey, but one for your business.
3. The Action Plan For Product-led Growth
Action Plans really do work, trust us. This is where the Product-led Growth formula comes into play. In order to make sure you stay focused on achieving your goals, you need to set up a plan with milestones along the way. These milestones should be measurable so you can see whether or not you’re making progress towards your ultimate goal. If you aren’t able to measure your progress, then you won’t be able to tell when you’ve reached your destination.
This is the time to get detailed about your plans and progress. You’ll want to set up a product roadmap alongside your customer journey map too. Yes, lot’s of maps, but maps are fun. You always find something interesting to see on a map, to explore without losing sight of the final destination.
If you’re not sure how to build an action plan, start with the book Product-Led Growth, by Wes Bush. It’s a quick read and informative. And there’s a little bonus, you can get some frameworks for building your onboarding plan too!
4. You Need To Be Able To Measure And Monitor Your Business Success
Once you’ve identified what you want to achieve, you need to figure out how you will measure your success. There are two main methods of measuring success: qualitative and quantitative. Qualitative measures focus on the end result, while quantitative focus on the process.
While data isn’t new, how we consume it is changing every day. Be sure that you understand what is critical for your business and its growth. This means you need to identify and define where and how conversion takes place with your product. While you might be shaking your head and saying “duh, it’s when they pay.” That’s not exactly the entire story, is it? If you are a SaaS business you have many points of contact, which means many points of data. At FROGED for instance, we have a freemium model, so we monitor free, upsell, and paid conversions and we monitor each touch point within those segments. See where we are going here?
Metrics are going to be part of your core day-to-day growth as well as how investors will evaluate and value your business as it grows. If you need a starting point, don’t worry we’ve got some great articles about different measurements and tools that can help you monitor your success.
5. PLG Is Not A One-Time Process
If you want to grow your business using the product-led growth formula, then you need to understand that this is not a one-time process. You need to continually work at growing your business by creating new product features that meet the needs of your customers while nurturing the core of your business.
And that’s the point, PLG companies understand that a sustainable business evolves. For B2B it’s even more important, because your clients’ businesses are growing alongside your company. What does that mean? It means this formula, these five steps we’ve shared with you are going to change. And change is good, because it means you’re in the proverbial game.
Plus, with this model in action, you have multiple ways to continue to grow your business whether it is onboarding techniques or retention and engagement strategies, your foundation and company culture is in place and it’s driven by your customers relationship with your product.
If you want the full guide on how a product-led business can ultimately lead to success, download our Product Success E-book here