Have you ever tried a product and gotten instantly hooked by the experience? Maybe you signed up for a free trial for a business app before shortly converting to a paid subscriber.
Instead of following traditional marketing and sales tactics, wouldn’t it be nice if your product could do most of the heavy lifting?
Maybe you aren’t familiar with the product-led growth (PLG) approach. This guide explains PLG marketing and how it builds your brand community.
Understanding PLG marketing
Product-led marketing acquires customers directly from their interactions with your products. Users interact with your product, become convinced, and eventually become loyal, paying customers.
PLG forgoes massive marketing campaigns and traditional lead generation for sales teams. Instead, you enable potential customers to test the waters for themselves. You spend less time looking through top Zoominfo competitors, and more time on your actual potential customers.
Understanding how PLG marketing works
At its core, PLG marketing is a simple concept. You do everything to empower your app or tool to attract, acquire, and retain customers. You connect with potential customers through low-cost marketing channels.
A product-led approach is founded on a user-centric design:
- Customers interact with your app and its user interface (UI).
- You collect data usage data and identify your users’ jobs-to-be-done (JTBD).
- The product teams deliver experiences that create a moment of magic. It’s these epiphanies that turn prospects into long-term users and paying customers.
- Users convert to paying customers and become brand advocates, building social proof.
It’s a viral loop that drives continuous development and improvement. Over time, freemium users become paying customers as they are convinced by the increasing value you deliver.
Benefits of product-led growth marketing
A recent report found that 47 percent of companies plan to at least double their product-led growth investment. In total, 92 percent of survey respondents are expecting to spend more on PLG marketing tactics.
So, why are more than nine out of ten companies chasing product-led growth?
- Lower customer acquisition costs (CAC): use low-cost free marketing channels to acquire new customers.
- Engaged users: interacting with your product instantly engage potential customers with your app and brand.
- Shorter sales cycle: there’s little to no barrier to entry, so prospects move at a faster pace.
- Better customer experience: a user-centric approach leads to a seamless app with tailored features.
- Founds a community: empowers loyal and satisfied users to organically advocate for your brand and its products.
- Increased retention rates: naturally from freemium users to paying subscribers. Your customers are loyal and more likely to stick with your brand, increasing customer lifetime value (LTV).
- Scalable marketing: your product and its in-app messaging are your primary marketing channels. You don’t need to focus on a KPI for demand planning such as working capital.
The importance of community in marketing
Online communities shape how potential customers view your brand. Social proof communities like review sites drive engagement with your target audience. Word of mouth sways buying decisions.
For example, Hubspot reports that 59 percent of businesses made more sales through social media in 2023 than the previous year.
Building a community helps you stay connected and meet user expectations.
How product-led growth strategy builds community
PLG marketing helps you reach customers who need your app. It enables your product to speak for itself and nudge users from freemium to premium app versions.
A product-led strategy also leads to community-led growth.
Encourages user feedback
It may seem obvious, but you can’t get feedback if no one is using your product. Giving prospects the chance to engage with your business tool with little risk means more people will try what you’re offering.
PLG-minded companies use data analytics tools to monitor user behavior and the overall experience. In-app messaging and feedback surveys track customer satisfaction (CSAT) and other metrics.
Users are prompted through multiple channels to submit suggestions and give constructive feedback. Even casual users are still giving you feedback through their product usage.
For instance, you can use a heat map solution. This gives you a visual depiction of where in the app users are spending their most time, and what they are trying to do. You’ll also be able to laser in on the JTBD of individual users by watching session recordings.
Creates and engages a network
Giving immediate access to interested prospects helps you accelerate the customer journey. Tearing down barriers like cost raises interest levels for prospects. Users enjoy a hands-on customer journey where the product can wow them and create “a-ha!” moments that would otherwise never happen.
Provides direct customer interaction
With a PLG approach, you hand your customers the keys to the car. Like a car salesperson, you too go along for the ride. However, there are no slimy, high-pressure sales tactics required. It’s more like you’re a passenger on their journey.
Of course, you’ll gently prompt them to see how everything is going once in a while. You can do this with in-app tooltips and onboarding materials.
Promotes sharing and social proof
Regular users are likely to advocate for your brand. They’ll interact in online communities such as Reddit, LinkedIn, and Trustpilot. Their information sharing widens your reach and pulls in new audience segments.
Some of these prospects will also become advocate users, growing your online community of users. Product-led companies use social listening platforms like Agility to engage these users and promote sharable content.
It’s a positive feedback loop, reinforcing itself as your reach and customer base grow.
Identify and amplify power users
Recording and analyzing app data helps you identify your power users. These are the users who love your product and use it the most. Their heavy usage helps you discover which JTBD are the most critical, highlighting features to add or upgrade.
Power users aren’t just typically early adopters of new app capabilities. They are also more likely to share their experiences with others, increasing the likelihood of viral growth.
Tailors the user experience
In a 2024 report, 89% of business leader stated that personalization is valuable to their future success. Product-led companies made data-driven decisions to improve design and the user experience (UX). You create more personalized experiences in a similar way to any account-based marketing strategy.
The only obstacles for prospects are the usability and functionality of your product. This is in contrast to traditional marketing where you craft the right messages to reach your audience.
PLG marketing tactics ensure you tailor your products for your target audience, converting them to paying customers. They’ll be more likely to become long-term users and participants in your brand community.
Strengthens brand loyalty with users
People appreciate it when you give them something for free. They’ll see for themselves that you’re offering something of value. In return, users reward you with loyalty. The longer they use your product, the more they can experience your product-led culture.
When you meet the expectations of your best fans, they’ll become your most loyal customers.
PLG marketing best practices
All product-led companies should follow the best practices for success:
Monitor key metrics
You can’t tell if your product is solving user pain points if you don’t focus on the right data.
Track PLG-related metrics such as the following:
- Product qualified leads (PQLs): users who try out your product as a free trial or freemium offering
- Time to value: how it takes users to sign up, create an account, and use the product to accomplish something
- Activation rate: the percentage of users that reach a defined activation point such as creating an account
- Conversion rate: how many free users become premium uses
- Retention rate: what proportion of your users do you retain over a given period of time
- Feature adoption rate: helps identify if new features are useful or how effective you are at marketing new features
- Customer lifetime value: how much your average customer spends during their relationship with your brand.
Use a freemium model
Demos and free trials are basic ways to let users test out your product. You’ll widen your reach if you can put out a freemium version of your product. Popular apps such as Zoom and Slack offer free apps that are used by customers all over the world.
Incentivize sharing
You can increase your viral growth by offering a reward for those who share your products. Offer an upgrade from freemium to premium, account credit, and other incentives.
Dropbox has had huge success with incentivized sharing. Freemium users are rewarded with additional cloud storage space for every user they refer to the service.
Provide excellent onboarding
Onboarding is the easiest channel for PLG marketing teams to interact with users. Send a welcome/onboarding email to new users as soon as they sign up. Include answers to FAQs and direct links to tutorials to help them get up and running as quickly as possible.
You’re offering a free product. However, that means you likely can’t afford to offer 24/7 live support for users. Leverage in-app messaging with tooltips that highlight features. You can use contextual triggers so that users only get prompted with relevant information.
In-app messaging also helps you update users with new features or product announcements. You can prompt users for feedback at milestones such as the first time using the app or using a feature.
Product-led growth is the future
Giving your marketing reins to your product is an effective way to achieve your business goals. Your product does most of the work for you. Users sign up for free trials and discover the value of your app from their own volition.
PLG marketing means you spend less time and resources on traditional tactics. Instead, you focus on delivering the best product with a tailored user experience. You give potential customers something for free, and they reward you with data-driven insights.
Soon after, they’ll be advocating for your product and the cycle repeats. What more could you ask for?
