10 Product-Led Growth principles

Product-led growth (PLG) has become a huge trend in the tech industry. With sky-rocketing demand for top-notch user experience, it’s not surprising at all. Many new digital products use the PLG model because it’s user-focused. How does it work? Well, it takes a pretty obvious idea – that a good product is going to sell simply because it’s good – to a new level. Companies exploiting this model know that more customers are unwilling to pay for something just because a marketing campaign tells them it’s great. Users are becoming more aware of all the tricks your marketing manager has up their sleeve. It’s time to develop a great product and let it speak for itself. That’s what, in short, the product-led growth model is all about. And today, we’re going to show you 10 crucial principles governing it.

When designing a digital product that the PLG model will support, you should keep in mind some fundamental principles. Product-led growth companies aren’t successful by chance but because they know those rules and play by them.

Design for the masses, and the masses shall come

When designing a product, it’s easy to fall into the trap of creating it for very specific users. After all, you didn’t spend all that time bringing your personas to life not to use them now. Be careful – it’s logical to target a specific group when launching, but you need to think beyond the beginning. Make it work for the most basic user.

When making all those choices in the first stages, keep asking yourself, “is it possible to provide it when we have 1 million users? What about 10 million? How about 100 million?” Such questions are necessary. You might need to grow rapidly! That’s why simpler choices are usually better.

Canva is one of the products that prove this is right. It was a big success right from the launch. They acquired more than 50 thousand users within the first month of launching back in 2013. Now, the Australian start-up has more than 600 million active users that have made over 3 billion projects! Canva is easy-to-use graphic design software that offers plenty of templates and tools even in its free version. To get even more of them, you can upgrade to Canva Pro. The project was made scalable from the beginning, which allowed Canva’s rapid growth.

source: Canva

Freemium or free trial?

How is the customer supposed to know they are going to like your product?  Nobody wants to pay for a year or even a month for something unknown. You need to give your customer the taste of your product. In general, you have two options:

  • Provide time-limited free access
  • Offer a freemium product that can be used for free but works better with premium access.

There are plenty of products that exploit both these approaches.

Duolingo, a language teaching app, does both. It’s perfectly usable in its free version. And yet, losing all the hearts quickly or being passed in the leaderboard by premium users can get annoying. To make you want it more, Duolingo offers two weeks of the premium version for free, as well as several days of it as an award from time to time. It’s not easy to go back to the free one after that experience!

source: Duolingo

Easy signing-up procedure

Most users don’t want to give away too much information when they first meet your product. Filling out the forms takes a lot of time. People are also more aware of their information and don’t want to give it away unnecessarily. One of the biggest turn-offs is asking for a credit card number, even though the product is supposed to be free. It can make users feel suspicious.

Ideally, the user should need just an email address to be able to start using your product. Another great solution is the ability to log in with a social media account they’re already using. That makes the sign-up and log-in process mindless and gets you more returning customers.

Slack lets users in just by clicking on a link invitation sent by someone else. One click, and there you have it. Making an account later is just as easy – you need nothing more but an email.

source: Slack

Easy onboarding and progressive discoverability

Easy onboarding is another rule that a good PLG product can’t go without. The product needs to be simple from the UX point of view. It’s also helpful to offer an onboarding process. Here, we mean those text bubbles guiding on where to click next. They can make users feel like they know the app inside out.

HubSpot does that perfectly, nudging you to complete specific tasks. While doing it, you will run into some features marked “premium”. That is called progressive discoverability, and it makes you want to check them out!

source: HubSpot

Quick time to value

Obviously, you want to deliver value to new users as quickly as possible. They are not going to pay for a product they don’t know. You need to give something before getting something in return. Another reason is that PLG products rely heavily on social sharing to grow their user base. You want the user to get value before they need to pay. This way, even if they don’t spend any money, a friend they told about your product might buy the full version. All three companies mentioned earlier offer quick time to value.

Value first, money later

You need to focus on true value and true value only. Getting money by tricking users into paying is not the way to go. You will get paid for a month but lose a customer forever. And possibly their friends as well. Customers will gladly pay to expand the experience if your product has real value.

One of the products doing it right is Spotify. Many users choose to pay for a premium version because the experience is noticeably better. No ads, shuffling on mobile, and the song downloading feature add great value. But Spotify itself has a true value and doesn’t need to trick anyone into upgrading, which is key here.

source: Spotify

Transparent features

Transparency is the key to PLG companies. You don’t want anyone to feel led into something. Don’t make users go through many stages, only to tell them they need to pay in the end. It needs to be clear from the start: what is premium, how much it costs, and how to withdraw from the service.

Balance, the meditation app, decided to give new users free access for a year. They promised to email them before it ends, so they won’t be charged for the next year if they don’t want to. Balance wants its users to stay with them willingly, and that’s the right thinking.

source: Balans

Personalization

Customers are used to personalization. Who doesn’t love to jump right back into an experience? The system should remember if the user wants to enable sounds, for example, and other personable features.

Airbnb uses machine learning to collect data on what types of places users like and what screens they spend the most time on. Thanks to that, planning every trip is made easier. Airbnb recommends places and activities the user would like. Of course, it also raises their revenue.

source: Airbnb

Connectivity

When it comes to PLG companies, their focus is on offering a networked experience, where users create communities around a particular digital product. Next, members of these communities interact with each other, help each other, and discuss diverse product-related issues. 

Here, a perfect example is Slack. This online collaboration platform has recently launched a new connect feature. With it, people from different companies can interact with one another and discuss vital questions. To some extent, such interactions can lead to closing new deals or, at least, more companies using a particular platform. Another platform called SafetyCulture has gone a similar path and allowed users to give access to their templates to external companies. 

Viral

Product-led growth companies often grow by word of mouth. You want your users to tell their friends and colleagues about the product, correct? It’s good to include something that will encourage the product to go viral.

Take Calendly, for example. It lets you book meetings without the need for back-and-forth emailing. You share your availability with the other person, and they book the meeting that works for them. It solves the pain point many users used to have. But not only that. It takes two to use Calendly. Thanks to that, anytime the user sends their availability, they let the other person know about the app. That creates a viral loop and makes Calendly grow.

That’s all you need to know about product-led growth companies and their ways of growing user bases. Stick to those principles, and you have a great chance of succeeding.

12.04.2022

Monika Konarzewska

Strategist and Head UX Designer

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