Editor’s note: the following was written by a guest blogger. If you have Product Management/tech industry experience, and would like to contribute to the blog, please contact [email protected]
Shifts in the market tend to add fear and uncertainty to the lives of executives. They feel pressure to predict and prepare for how the changes might impact their customer base, their product, and the future of the company. This will require Product Teams to not only lead in Product Development but to attain new skills and develop a new way of thinking in driving Product roadmaps towards business outcomes that put the Product at the center of the customer experience, from acquisition to expansion.
However, for Product Management, this is business every day. Not only do you have to consider the input of your board and executives, but you also have to consider what your customers want, what your team has time to deliver, and what will prove to be valuable in the future, whatever the market trends may be.
This is why I believe Product Managers (PMs) are in a prime position to lead companies toward a durable growth model. Building deep understanding of the user journey and focusing on core Product experiences that drives business metrics.
The state of Product-Led Growth in 2022
Gainsight recently released the Product-Led Growth Index 2022, a survey of over 600 companies about the state of their PLG strategies. The majority of companies (58%) reported using or adopting PLG strategies. The primary reason (42%) for companies that did not adopt any PLG strategy was due to product readiness.
To dive deeper, check out this free PLG Micro-Certification!
What the data reveals is that most companies realize that the priority needs to shift towards sustainable growth and the optimal way to achieve it is by leveraging the product as a primary vehicle to drive growth by investing in self-serve acquisition and low friction expansion.
Get alignment on PLG models in 3 simple steps
Successful PLG depends on a foundation of data-driven experimentation and continuous innovation across the entire customer lifecycle. As such, alignment is critical. Here are three simple steps to lead your company toward successful PLG models.
Step 1: Expand the definition of PLG
As I mentioned, most companies understand PLG as free trials or freemium experiences. That might be true for companies that were born Product-Led but for more mature companies with a large enough install base, Product-Led means driving more efficient retention and expansion at scale. To get your team aligned on Product-Led Growth strategies, highlight the impact you can make on your customer base right now.
When implemented correctly, PLG becomes a holistic, end-to-end strategy that drives predictable, durable growth across the entire customer lifecycle. Start by identifying opportunities to automate the user onboarding experience for your new customers with a personalized checklist. Then focus on optimizing the adoption of core features that drive intrinsic value to your customers by using tactics like measuring usage baseline, running user research and driving experiments leveraging contextual messaging.
Step 2: Identify the most important metrics to track
The key to successful PLG strategies is to track business KPIs and Core Product Metrics that are impacted by the product. Sales, Customer Success, Marketing, and even leadership, should be invested in the success of your PLG initiatives as they will be part of that strategy. As such, the KPIs and metrics you track should be shared, so each team gains visibility and feels a sense of ownership.
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Business KPIs include conversion rates and net revenue retention (NRR) rates, which are lagging indicators for a successful PLG strategy. Measuring Core Product Metrics should cover frequency, core features adoption ratio (aka value drivers) user sentiment such as CES, and outcomes.
Step 3: Optimize your customer journey
Finally, once you agree on the PLG strategies your company will prioritize first, and the metrics you will track to guarantee progress, identify the opportunities in your current customer journey to improve using your product.
Growth requires a growth mindset. It’s an iterative process that requires running research and measurable experiments that impact your core metrics you can iterate and innovate to stay aligned with users’ evolving needs and continue to deliver value.
Find the tipping point that shifts your users from active to advocates. The tipping point represents the key features and threshold of usage that lead certain users to realize the true value of your product and increases the likelihood of renewal and expansion.
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Once finding the Key Product Value drivers your team can focus on optimizing the journey, usability, and discoverability of these features and continually monitor the impact on Core Product Metrics.
However you go about it, you want to communicate to your team that rather than reinvent the wheel, PLG works by focusing on improving what already exists and making it better so you can accelerate time to value. The best way to get started with PLG is to map your user journeys and optimize the friction points surfaced by the data. Product Managers are the right people to show your team the ROI of PLG models and the ways they can help your company grow in 2022 and beyond.
About the Author
Mickey Alon is the founder and CTO of Gainsight PX, the Product Experience Platform. He is a serial entrepreneur focused on designing, building and launching innovative products that help drive business outcomes. Mickey co-authored Mastering Product-Led Growth, a book on building Product-Led Growth strategy. Before joining Gainsight through the acquisition of Aptrinsic, Mickey was Global VP of product development at Marketo. He was also the CEO and Co-Founder of Insightera, a personalization and predictive analytics software, which was acquired by Marketo (Adobe) in 2013.