Product-led growth is a strategy that focuses on the attributes and user experience of a product to help drive growth, compared with simply telling prospects about a product via marketing or advertising. Often based on a freemium model, where users can access the product with some restrictions with respect to functionality, duration of use, or other factors (such as the ability to integrate with other products or services), a product-led growth approach can be used to organically convert prospects into customers, as well as create evangelists simply by ensuring the product meets the needs of customers.
A great example of a product-led growth strategy is Zoom, the videoconferencing software that is used by businesses and consumers alike. Zoom is widely available for download, and allows users to access most of the core features of the product for free, allowing them to learn about the product, test out features, and encourage others to use it. However, the free version limits certain functional elements, and imposes time limits, which encourages users to bump up to the paid version.
By allowing users to experience the product in real-world scenarios, prospects for the paid version essentially receive an extended trial period, where they can receive something of value from the product, while also determining if it meets their needs. This strategy essentially minimizes or eliminates purchase risk, which creates goodwill between the user and the company.
That said, providers of these products still need to deploy specific CX techniques and tactics to ensure that this approach will be effective in the long term. It is foolhardy to launch a product, and expect that it will meet the needs of customers, without any intervention by the company. That is why several steps should be taken to ensure prospects and customers are properly serviced.
Provide product tips and education
To ensure that prospects are having a seamless experience, it is important for success teams to reach out to users (either directly or by making content available) to ensure they understand the features and benefits of the product, and can put them into use. If prospects are not aware of the full functionality of a product or service, they may migrate to other products that they believe can better meet their needs.
Capture feedback
Product innovations do not occur in a vacuum, so it is important to capture feedback from both prospects and customers about points of friction, desired feature sets, errors, or other issues they may have, and then quickly respond to let them know the feedback has been received and is being evaluated. This feedback can not only help improve conversions from the free to the paid version of the product, but can also provide greater insight into the needs of customers that could be met through add-ons, upsells, or adjacent products offered by partners. Beyond direct feedback, teams should consider using social listening techniques to capture feedback outside of the product.
Make it easy to evangelize
If customers are deriving value from the product or service, make it easy for them to spread the word. Word of mouth can drive new customer acquisition, both within organizations and across external organizations. Providing incentives to spread the word can also help drive incremental engagement and revenue over time.
Involve multiple teams
In many cases, the purchaser of the product may be different than the end user. In these cases, it is particularly important to ensure that the value of the product can be demonstrated to each audience, each of which may have very different criteria. End-users care about the day-to-day experience with the product, and usually focus on ease-of-use, and the ability to meet a specific need, whereas purchasers are most often concerned about cost, administrative issues, and, in the case of enterprises, scalability, security, and integration issues.
That is why it is imperative to involve all teams to ensure success. All customer touchpoints – from marketing, to sales, to onboarding, to support – should be aligned to ensure a consistent voice and message. For example, a product that promises a specific number of free sessions before being charged should not allow salespeople to contact prospects or purchasers before the trial period expires, as it may appear too aggressive, and could turn off prospects who may need the full evaluation period to see if the product meets their needs.
Marketers and salespeople should be able to help translate the user features and experiences into concrete benefits to purchasers, relating specific metrics that matter to them, including efficiency, cost savings, reduced administration, and other KPIs that ensure a win-win scenario for both buyers and users.
Author Information
Keith Kirkpatrick is VP & Research Director, Enterprise Software & Digital Workflows for The Futurum Group. Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
