Luckily, plotting out a kick-ass product-led growth strategy is just a matter of honing your processes, attitudes, and vision. Want to know how? No problem; let\u2019s look at how to drum up a product-led growth strategy that will guide your product portfolio to the top of the table\u2026<\/p>\n\n\n\n
In this article, we\u2019ll be looking at:<\/strong><\/h5>\n\n\n\n\n- What is a product-led growth strategy?<\/li>\n\n\n\n
- What are the benefits of product-led growth?<\/li>\n\n\n\n
- How to write a product-led growth strategy<\/li>\n\n\n\n
- One key thing to remember…<\/li>\n<\/ul>\n\n\n\n
What is a product-led growth strategy?<\/h2>\n\n\n\n
A \u2018product-led growth strategy\u2019 is essentially the go-to-market strategy for a company whose product is the star of the show, and for whom the majority of sales come from the product\u2019s strength, rather than on the ability of your sales team to chase qualified leads down the funnel.\u00a0In other words, a product-led strategy is one where the business grows by providing a version of the product that people can consume without needing to be handheld by a sales team. They can just jump in, try it, make use of it, and experience the product for themselves.
A lot of companies start out being product-led, but over time, realize that a sales-led strategy<\/a> also does help \u2013\u00a0and so they end up with a blended approach. But having a product-led approach is a really great way of breaking into a market and building something that you can test in a fast way without having to commit to lots and lots of resources.\u00a0
As such, the core tenets of product-led growth are out-of-the-box value, agility and scalability, and word-of-mouth virality \u2013\u00a0shooting for these things is what we mean when we use the word \u2018strategy\u2019.<\/p>\n\n\n\nWhat are the benefits of product-led growth?<\/h2>\n\n\n\n
Product-led growth is all about having a sticky product that ensnares people through its quality and ability to solve an existing customer issue. That means these companies enjoy an innate sense of retention that doesn\u2019t really need to be expounded upon with hardline sales tactics.
Users are drawn to a software product like this thanks to what it does for them. By the time they\u2019ve used it for a little while \u2013\u00a0perhaps to the end of a free trial period \u2013\u00a0they\u2019re usually loathed to give it up. You can wow them further with your future updates and add-ons that make the product better, but, if the product is good enough, to begin with, they\u2019d probably stick around naturally anyway.
That baked-in retention also helps fuel the other major benefit of being product-led: word-of-mouth. Happy users often want to tell their friends, colleagues, or IT stakeholders about great products, which helps push for wider adoption on your behalf. There\u2019s a virality to being product-led that can really work in your favor.\u00a0<\/p>\n\n\n\n![\"shouting](\"https:\/\/www.prodpad.com\/wp-content\/uploads\/2023\/02\/community-roundup-1-300x211.png\")
<\/figure>\n\n\n\n\n- How and why some of the world\u2019s biggest companies are making it work<\/a>.<\/li>\n<\/ul>\n\n\n\n
How to write a product-led growth strategy<\/h2>\n\n\n\n
Ok, we know what being product-led means, but how do you build that ethos into your business, align teams, and ensure that your go-to-market strategy is rock solid? Here\u2019s how to design a strategy that sings:<\/p>\n\n\n\n
1. Understand the competitive landscape<\/h3>\n\n\n\n
Your strategy should start from a point of confidence. Confidence that your product fills a gap in the market, solves a unique customer problem, or maybe that it just does everything better than your closest rival. But you can\u2019t know any of that for sure without understanding the lay of the land.\u00a0
Competitor analysis is kind of a continual thing. Sure, it\u2019s important when you\u2019re first designing what your product is and does, but it\u2019s just as relevant a practice in year ten of your product\u2019s life as in year 0. You\u2019ll often find that competitor analysis can help you pinpoint a niche or a way of pitching your product that you might not otherwise have thought about.<\/p>\n\n\n\n
2. Run SWOT analysis<\/h3>\n\n\n\n
Competitor research can also help you fill out a SWOT analysis. Identifying and writing out all of your product\u2019s strengths, weaknesses, opportunities and threats may sound like homework, but really, the act of going through the process will funnel you toward a clearer strategy.\u00a0
At the end of a SWOT process, you\u2019ll emerge with a firm understanding of what makes your product special, what you need to do to make it even more so, and how to present all that to customers. That\u2019s strategy,<\/em> in a nutshell.<\/p>\n\n\n\n\n- We have a full guide to running a SWOT analysis here<\/a>. <\/li>\n<\/ul>\n\n\n\n
3. Nail your product vision statement<\/h3>\n\n\n\n
Your vision statement is another solid bedrock on which to base your product\u2019s strategy. Identifying who your offering is for, what it offers them, and why it stands out is a powerful way to align teams and define a direction of travel. But if you take it beyond that somewhat templated basis, a vision statement can also cement where you want to end up.\u00a0
Think about what you ultimately want your product to achieve. What\u2019s the main goal? The big dream? What is your ideal outcome for the future? That\u2019s what a vision statement explores.<\/p>\n\n\n\n
\n- Check out some vision statement examples<\/a>.<\/li>\n\n\n\n
- Create your own product vision with our free template<\/a>.<\/li>\n<\/ul>\n\n\n\n
5. Figure out what success looks like to you<\/h3>\n\n\n\n
Your strategy should include a set of defined OKRs<\/a> (objectives and key results). OKRs are like maps to the market position you want to have, and outlines for how to get there. What\u2019s especially important from a strategy point of view is that you keep your OKRs in mind at all times when planning your product\u2019s roadmap, so you don\u2019t lose focus.
In ProdPad, for example, you track OKRs and their respective initiatives right in your product roadmap. And then, underneath those initiatives, you can also plot the ideas or experiments you want to run in order to solve those particular problems.\u00a0<\/p>\n\n\n\n6. Be easy to pick up, hard to put down<\/h3>\n\n\n\n
Great product-led growth comes from being indispensable. That means building into your strategy an onboarding flow that makes the barrier to entry as low as humanly possible. That\u2019ll let people get comfy, after which you can raise the price gently enough that users see paying (and staying) as a no-brainer.\u00a0
That means thinking carefully about pricing. Often, a free tier, or free trial, can provide that frictionless first experience, while being totally transparent about pricing will help negate any nasty surprises down the line.\u00a0
Ultimately, if you\u2019re confident enough that your product\u2019s paid features are truly special, you won\u2019t be worried about giving a little something away for free \u2013\u00a0either for a short while or to a small percentage of your user base.<\/p>\n\n\n\n
7. Incentivize word-of-mouth<\/h3>\n\n\n\n
We\u2019ve mentioned how a certain virality is an inherent benefit in a product-led growth model, but that process can be massively expedited if you wrap your offering up in a presentable bow and encourage users to tell people about how great it is. So think about how you can incentivize that journey through rewards programs and referral schemes.\u00a0
A great example of this in the B2C space is recipe box companies like Hello Fresh and Blue Apron. They\u2019re famous for offering refer-a-friend schemes that provide heavy discounts to both onboarding customers and the person who made the referral. The customers win here, but so do the brands themselves; for every 100 customers using a referral code, a big enough percentage will become long-term customers to negate the customer acquisition cost (CAC).<\/p>\n\n\n\n
8. Think about \u2018Now-Next-Later\u2019<\/h3>\n\n\n\n
Think back to that chess analogy I made right at the start of this article. In chess, a winning strategy can normally be divided into three parts: understanding what\u2019s happening now, knowing what your next couple of moves will be, and having a rough end goal in mind.
In the product world, that\u2019s called roadmapping.
At ProdPad, we\u2019re huge fans of creating product roadmaps using a Now-Next-Later<\/a> framework.\u00a0
It\u2019s an approach that takes the focus off of when various new features or improvements need to delivered, and instead gets you thinking about what problems need to be solved \u2013\u00a0and in what order.\u00a0
In other words, it\u2019s about making the most of the resources you have in the leanest and most effective way, as opposed to spending the beginning of the year making assumptions, and then wasting a bunch of time trying to come up with the exact dates on when everything’s going to get done.
What’s key about Now-Next-Later is that it removes time<\/em> from the timeline, and instead gets you thinking about the order in which things are going to be tackled. That means you’re prioritizing at the problem level; you’re asking: \u2018is this problem more important than any other?\u2019<\/em>\u00a0
Building a strategic roadmap this way helps you make more impactful product decisions, with each one tied back to the objectives that you’re looking to tackle. And, importantly, it lets you make changes to the flow of things without having to unpick a million made-up deadlines.<\/p>\n\n\n\n
What is a product-led growth strategy?<\/h2>\n\n\n\n
A \u2018product-led growth strategy\u2019 is essentially the go-to-market strategy for a company whose product is the star of the show, and for whom the majority of sales come from the product\u2019s strength, rather than on the ability of your sales team to chase qualified leads down the funnel.\u00a0In other words, a product-led strategy is one where the business grows by providing a version of the product that people can consume without needing to be handheld by a sales team. They can just jump in, try it, make use of it, and experience the product for themselves. Product-led growth is all about having a sticky product that ensnares people through its quality and ability to solve an existing customer issue. That means these companies enjoy an innate sense of retention that doesn\u2019t really need to be expounded upon with hardline sales tactics. Ok, we know what being product-led means, but how do you build that ethos into your business, align teams, and ensure that your go-to-market strategy is rock solid? Here\u2019s how to design a strategy that sings:<\/p>\n\n\n\n Your strategy should start from a point of confidence. Confidence that your product fills a gap in the market, solves a unique customer problem, or maybe that it just does everything better than your closest rival. But you can\u2019t know any of that for sure without understanding the lay of the land.\u00a0 Competitor research can also help you fill out a SWOT analysis. Identifying and writing out all of your product\u2019s strengths, weaknesses, opportunities and threats may sound like homework, but really, the act of going through the process will funnel you toward a clearer strategy.\u00a0 Your vision statement is another solid bedrock on which to base your product\u2019s strategy. Identifying who your offering is for, what it offers them, and why it stands out is a powerful way to align teams and define a direction of travel. But if you take it beyond that somewhat templated basis, a vision statement can also cement where you want to end up.\u00a0 Your strategy should include a set of defined OKRs<\/a> (objectives and key results). OKRs are like maps to the market position you want to have, and outlines for how to get there. What\u2019s especially important from a strategy point of view is that you keep your OKRs in mind at all times when planning your product\u2019s roadmap, so you don\u2019t lose focus. Great product-led growth comes from being indispensable. That means building into your strategy an onboarding flow that makes the barrier to entry as low as humanly possible. That\u2019ll let people get comfy, after which you can raise the price gently enough that users see paying (and staying) as a no-brainer.\u00a0 We\u2019ve mentioned how a certain virality is an inherent benefit in a product-led growth model, but that process can be massively expedited if you wrap your offering up in a presentable bow and encourage users to tell people about how great it is. So think about how you can incentivize that journey through rewards programs and referral schemes.\u00a0 Think back to that chess analogy I made right at the start of this article. In chess, a winning strategy can normally be divided into three parts: understanding what\u2019s happening now, knowing what your next couple of moves will be, and having a rough end goal in mind.
A lot of companies start out being product-led, but over time, realize that a sales-led strategy<\/a> also does help \u2013\u00a0and so they end up with a blended approach. But having a product-led approach is a really great way of breaking into a market and building something that you can test in a fast way without having to commit to lots and lots of resources.\u00a0
As such, the core tenets of product-led growth are out-of-the-box value, agility and scalability, and word-of-mouth virality \u2013\u00a0shooting for these things is what we mean when we use the word \u2018strategy\u2019.<\/p>\n\n\n\nWhat are the benefits of product-led growth?<\/h2>\n\n\n\n
Users are drawn to a software product like this thanks to what it does for them. By the time they\u2019ve used it for a little while \u2013\u00a0perhaps to the end of a free trial period \u2013\u00a0they\u2019re usually loathed to give it up. You can wow them further with your future updates and add-ons that make the product better, but, if the product is good enough, to begin with, they\u2019d probably stick around naturally anyway.
That baked-in retention also helps fuel the other major benefit of being product-led: word-of-mouth. Happy users often want to tell their friends, colleagues, or IT stakeholders about great products, which helps push for wider adoption on your behalf. There\u2019s a virality to being product-led that can really work in your favor.\u00a0<\/p>\n\n\n\n<\/figure>\n\n\n\n\n
How to write a product-led growth strategy<\/h2>\n\n\n\n
1. Understand the competitive landscape<\/h3>\n\n\n\n
Competitor analysis is kind of a continual thing. Sure, it\u2019s important when you\u2019re first designing what your product is and does, but it\u2019s just as relevant a practice in year ten of your product\u2019s life as in year 0. You\u2019ll often find that competitor analysis can help you pinpoint a niche or a way of pitching your product that you might not otherwise have thought about.<\/p>\n\n\n\n2. Run SWOT analysis<\/h3>\n\n\n\n
At the end of a SWOT process, you\u2019ll emerge with a firm understanding of what makes your product special, what you need to do to make it even more so, and how to present all that to customers. That\u2019s strategy,<\/em> in a nutshell.<\/p>\n\n\n\n\n
3. Nail your product vision statement<\/h3>\n\n\n\n
Think about what you ultimately want your product to achieve. What\u2019s the main goal? The big dream? What is your ideal outcome for the future? That\u2019s what a vision statement explores.<\/p>\n\n\n\n\n
5. Figure out what success looks like to you<\/h3>\n\n\n\n
In ProdPad, for example, you track OKRs and their respective initiatives right in your product roadmap. And then, underneath those initiatives, you can also plot the ideas or experiments you want to run in order to solve those particular problems.\u00a0<\/p>\n\n\n\n6. Be easy to pick up, hard to put down<\/h3>\n\n\n\n
That means thinking carefully about pricing. Often, a free tier, or free trial, can provide that frictionless first experience, while being totally transparent about pricing will help negate any nasty surprises down the line.\u00a0
Ultimately, if you\u2019re confident enough that your product\u2019s paid features are truly special, you won\u2019t be worried about giving a little something away for free \u2013\u00a0either for a short while or to a small percentage of your user base.<\/p>\n\n\n\n7. Incentivize word-of-mouth<\/h3>\n\n\n\n
A great example of this in the B2C space is recipe box companies like Hello Fresh and Blue Apron. They\u2019re famous for offering refer-a-friend schemes that provide heavy discounts to both onboarding customers and the person who made the referral. The customers win here, but so do the brands themselves; for every 100 customers using a referral code, a big enough percentage will become long-term customers to negate the customer acquisition cost (CAC).<\/p>\n\n\n\n8. Think about \u2018Now-Next-Later\u2019<\/h3>\n\n\n\n
In the product world, that\u2019s called roadmapping.
At ProdPad, we\u2019re huge fans of creating product roadmaps using a Now-Next-Later<\/a> framework.\u00a0
It\u2019s an approach that takes the focus off of when various new features or improvements need to delivered, and instead gets you thinking about what problems need to be solved \u2013\u00a0and in what order.\u00a0
In other words, it\u2019s about making the most of the resources you have in the leanest and most effective way, as opposed to spending the beginning of the year making assumptions, and then wasting a bunch of time trying to come up with the exact dates on when everything’s going to get done.
What’s key about Now-Next-Later is that it removes time<\/em> from the timeline, and instead gets you thinking about the order in which things are going to be tackled. That means you’re prioritizing at the problem level; you’re asking: \u2018is this problem more important than any other?\u2019<\/em>\u00a0
Building a strategic roadmap this way helps you make more impactful product decisions, with each one tied back to the objectives that you’re looking to tackle. And, importantly, it lets you make changes to the flow of things without having to unpick a million made-up deadlines.<\/p>\n\n\n\n