[Product-Led Growth] Key elements of this strategy and 4 examples of businesses that use it

Imagine you’re considering downloading a paid yoga app, but you’re not sure whether it’ll be worth downloading.

So what do you do?

You go on Google Play Store (or App Store, for iPhone users) and download the free version to check it out. It turns out the app is so great that as soon as the free trial period is over, you buy its paid version.

Surely, you’ve gone through this process at some point, right?

Well, this strategy to sell digital products has a name of its own: Product-Led Growth.

And it’s a strategy we know first-hand in Doofinder because we’ve been using it since we first came out in order to make our product (a smart search engine for eCommerce) known.

So in this post, we’ll use our experience to tell you about:

  • Product-Led Growth: what it is.
  • Key elements to successfully implement this strategy.
  • Real examples of businesses that use it (and that you most likely know)

Are you ready?

Let’s get to it! 😉

👉 What Product-Led Growth consists in (or what it means for a product to fly off the shelves)

Product-Led Growth (PLG) is a growing trend.

Although it first gained popularity in the USA, little by little it’s expanded to Europe too.

With Product-Led Growth, the very product you sell becomes the central axis of your sales strategy.

The goal is to develop such an exceptional product that, only by trying it out, the user can test its benefits and later decide whether to acquire it or not.

In fact, in a PLG-driven sales strategy, it’s the very product what’s in charge of:

Careful now, we’re not saying you should put marketing and sales aside (they’re also very important). The thing is that with this strategy your product becomes your best asset. 😉

👉 Two main business models based on PLG

When we talk about PLG, there are two business models that come to mind immediately.

  • Freemium: it refers to products that have a free version and a paid version. A clear example of this is Spotify, which allows you to listen to music for free, but if you want to avoid commercials and change songs limitlessly, you have to pay for the premium subscription.
  • SaaS (Software As a Service): this model is based on software creation and commercialization. Doofinder, for instance, is a kind of SaaS, and the product we offer is a smart engine for eCommerce. When it comes to SaaS, the user does not pay for additional premium features but buys the full software (even if customers are usually offered a trial version first).

In both cases, if your product is not strong enough, hardly anyone will be willing to buy it or pay for the premium version.

That’s why it’s so important to develop a high-quality and successful product. So let’s see some guidelines for it.

👉 The 3 pillars of Product-Led Growth: how to successfully set in motion this strategy

We know that building a strong product is at the base of PLG. But how do you actually make this happen?

We’re about to explain.

✅ 1. Deeply knowing your ideal customer (and the problem they must fix)

When it comes to developing and optimizing your product, think of the problems and needs of your ideal customer. Get to know them as if they were a long-time friend. That’s how you’ll be able to create the perfect product for that person.

In order to do that, you need to ask yourself these questions:

  • Who is my customer? (Age, gender, occupation, lifestyle, hobbies, interests, etc.)
  • What is their main goal?
  • What obstacles are getting in their way?
  • How can my product help them solve such a problem?

If you’d like to learn more, in this post we explain how to design an ideal customer profile or buyer persona (it focuses on eCommerce, but the advice we give is valid for any company).

✅ 2. Fewer middlepersons = less friction = more user comfort

Imagine you had to ask the salesperson of a clothing store for a pair of pants every time you wanted to try one out.

And not only that, but also having to sit through a speech about how good the brand is, fabric texture, matching items… All of that just to try some pants on which you might not even end up buying.

That’d be absurd, right?

Well, that happens with a lot of products you can only access by speaking to a salesperson.

Such a process builds a wall in between the customer and the product, and there might be cases in which the person is not even willing to call and ask for information as long as they don’t have to deal with a salesperson.

That’s why one of the pillars of PLG is cutting down the middleperson.

The customer should be able to freely access your product (either its free version or a trial) and to try it out with no pressure so they can decide whether they like it or not.

✅ 3. Offering value to the user from the beginning

The last basic pillar of PLG (which is closely intertwined with the previous one) is making the customer perceive the product’s value from the very beginning.

So how do we achieve this?

Here’s an example for you: let’s say you’re selling a video editing software for beginners.

Instead of “forcing” the user to pay for the software at once, you offer them a free trial. This way, they can try it out and see that:

  • The software is user-friendly.
  • It is very practical and includes attractive and useful features.
  • It has guides and tutorials to make the best of it.

If your product adds value to the user from the trial (or free version) itself, the chances of them paying for it increase. 

👉 Real examples of Product-Led Growth that will serve as inspiration

We’ve prepared some successful cases of businesses using this strategy for you to better understand how Product-Led Growth works.

Let’s see them.

✅ 1. Zoom

product led-growth

Zoom is a good example of a PLG application.

We all know this video conferencing platform. Surely, you must have used it more than once for smart-working purposes or to get in touch with your family.

What can we highlight of its success from a PLG-implementation standpoint?

Two basic aspects:

  1. A frictionless system: Zoom is really user-friendly for newcomers. Super easy sign-up, and a quick user-friendly installation. It makes clear from the beginning that you can make 40-minute calls.
  2. It fixes a real need: the founder of Zoom created this service because he himself felt frustrated due to the inefficiency of video conferencing systems that were available on the market. He saw an opportunity and he took it. He improved what already existed and added new features. For example, Zoom offers more advanced features such as the possibility of hooking up with other software like Slack. This is a bonus for companies that work with this platform, which we’ll speak about next.

As you can see, Zoom meets the 3 pillars we mentioned above (it solves a need of the target audience, there are no middlepersons, and it adds value even on its free version).

✅ 2. Slack

product led growth-marketing

Slack is one of the best-known companies worldwide working under a freemium model.

About Slack, we highlight:

  • It offers something new which its audience needed; Slack provides an online space where workers can communicate with one another easily, almost as if they were in the same office, one desk away.
  • Its free version is thorough: without paying for anything, the user can get the full picture of all the benefits Slack offers.

Most likely, you knew this tool already. Now you know the secret to its success too.

Feel free to use it. 😉

✅ 3. Dropbox

product led growth-model

Dropbox is famous for having reached $1bn in only 10 years.

We all know it as one of the most popular online cloud storage systems. But what can we learn from its PLG strategy?

  • It meets a need in the market: same as Zoom and Slack. Dropbox solved the problem of storing files online. When we weren’t able to send a given file via email because it was too large, Dropbox came along to fix that.
  • Simple and user-friendly interface: every single thing in Dropbox is designed to make things easier for the end user. Even if you have zero experience in cloud storage systems, the platform is so intuitive you will have no trouble figuring it out. 

In addition, part of its success lies in social proof. Every time you brought in a new friend along, Dropbox would give you a few extra megabytes of storage.

A full-blown success story.

✅ 4. Doofinder

product led growht que es

And we couldn’t finish this post without telling our own experience incorporating Product-Led Growth.

In our case, the product we sell is a smart search engine for eCommerces. 

Here are some of the tips we haven’t mentioned before and that proved useful for succeeding with this strategy:

  • We keep on growing thanks to our customers’ feedback: we keep in touch with them to know their opinion. That’s how we can keep on developing our product, addressing their needs. 
  • We offer a 30-day free trial: so that online store owners can explore on their own the benefits of our search engine (such as the possibility of increasing their sales between 10% and 20%).
  • We analyze the way customers use the search engine: in this case, we get data from the customers of our customers. In other words, the end users that utilize the search engine when buying. That’s where we can detect improvement opportunities.

Ultimately, a large part of our efforts go into creating an advanced product that helps our customers improve conversion in their stores.

👉 Are you ready to see your product fly off the shelves?

You’ve already seen Product-Led Growth is the future and you’ve learnt about its applications.

So if your business is based on a really powerful product, now you know what’s next: make the best of this advantage to start implementing PLG before everyone else.