Skip to main content

Evolving to Product Led Growth in 5 Steps

product led growth

Starting a new company and building it around a product led growth model is much different than transforming a mature company that was built for direct sales and evolving it to a product led growth model.

First of all, you don’t have the baggage of a product portfolio that was built for direct sales. Second, you don’t have to go through the culture change and infrastructure makeover.

It can be done though. 

What is Product Led Growth (PLG) in B2B?

Product led growth is a bottom-up revenue model for B2B cloud/SaaS applications in which users drive adoption and revenue with few if any barriers to entry.

Users typically get to use an application for free but the key is making sure the free version has significant value (zoom and Calendly). Think of the free version as something that gets users started on their journey for a specific a workflow.

Although users are limited in the free version, there’s strong incentive to use a paid version by making it easier to complete their journey, i.e., complete the workflow in the simplest possible manner with the fewest obstacles.

If you’re a legacy company using a traditional direct sales model, here are five steps that will get you on your way to a product led growth model.

5 Steps to Product Led Growth for Mature Companies

1. Define the Hook

This is the most fundamental question to answer. “What can we give away that has measurable value to users while also creating a powerful hook that gets the majority of them to pay?”

Start here: consider a high-value outcome that users receive from your product today. Determine WHY that outcome so valuable. Now, look at where it resides in the workflow of their job and think about what happens before, during and after. You might find your best hook there.

In addition to value, product usability and quality are paramount in a product-led growth model. Without superiority in both, you’ll never get off the ground. And it’s highly unlikely that you’d get a second chance to make a first impression.

2. Define Your Approach for Gaining Market Share

The next question you have to answer is, how are we going to gain market/user share? You can take the Calendly approach whereby your product is being promoted virally to everyone who gets a meeting invite from a Calendly user.

The other approach is something like Slack where you land inside the organization with a few users and then expand because the benefit to everyone grows as more people use the platform.

3. Your On-Boarding & Support Model

Product usability and quality are also your best friends here. The other bigger consideration is the cost and scale of on-boarding and supporting non-paying users, especially early on when you might have to support free pilots and trials until the product catches up.

This is where the user journey becomes top priority. Beyond the quality and usability of product features themselves, consider how to make the user journey (signing up and using your product) an unexpected pleasure.

The same goes when users make the move from free to paid. For example, if you’re going to interrupt a critical workflow where needed functionality requires payment, make sure users can pay and go right to the next step in their workflow without any additional effort.

4. In-App Marketing & Selling

Artificial intelligence has a strong play here and would be extremely valuable. Let’s say a user is performing a job task with a free feature. What if the outcome could be significantly better when using a paid feature in conjunction with the freebie?

Present the user with the use case that best reflects what they’re doing and explain the additional value/outcome they could have by paying for additional capabilities. Then make it a no-brainer to pay right there.

This is where everything changes for product marketing!

5. Culture and Change Management

For a company that didn’t grow up doing these things, evolving to a product led growth model and the culture change that goes with it is the most difficult part.

Pretty much everything changes. Your approach on the four considerations above will drive your change management to-do list.

Just be sure to take a holistic approach to making decisions by considering the collective impact across products, marketing, sales, services, support and back office admin.

If you’re a SaaS company or one that sells services through a technology platform, this is the future for most of you. As difficult as the transition might be, it’ll be much easier if you get there before your competition. As former Chrysler President Bob Lutz once said, “it’s better to make dust than eat dust!”

The first step in evolving to product led growth is to up-level your product management and product marketing skills from a customer problem focus to a customer outcome focus.

Click here if you want to experience the easiest way to learn product management, product marketing, pre-sales demos and customer success with our unique hands-on learning format. Be sure to check out our Product Management Framework that simplifies everything by making customer outcomes the starting point for building, marketing, selling and delivering strategic value.

You might also like:

by John Mansour on November 16, 2022.