How to Drive Product-Led Growth

How to Drive Product-Led Growth

By KATHRYN SHEPHERD-KING

If you’ve been in the product management world for any length of time, you’ll have probably heard about product-led growth. But what is it exactly, and how do we make it happen?

Product-led growth is a go-to-market strategy that relies on using your product as the primary vehicle to acquire, activate, and retain customers.

It’s a strategy that puts the product at the forefront of your growth efforts, leveraging its value to acquire, activate, and retain customers. But being product-led goes beyond revenue; it’s about creating a product-led organisation.

A product-led organisation means that every aspect of your business is driven by the product and its value proposition. All parts of the business are aligned on balancing the needs of both customers and the business and creating value for both.

You can be a product-led organisation without implementing a product-led growth strategy, but it is hard, if not impossible, to implement the other way around.

It’s also essential to understand how product-led growth differs from growth driven by marketing or sales functions.

Marketing-led growth relies on advertising for acquisition, email nurturing programs for retention and supports monetisation through bottom-of-the-funnel content and ROI calculators. Sales-led growth depends on the sales team doing outbound and product demos to acquire customers, business reviews and customer-success outreach for retention and sales deals to convert.

Marketing and sales both have a more traditional funnel approach and generally a higher cost of acquisition. In contrast, product-led growth leverages the product’s value to drive conversions – with an emphasis on getting users to experience and adopt the product as quickly as possible through such methods as self-serve product demos, trials, freemium, self-serve onboarding, gamification and notifications, product education and certifications.

Product-led sales take this to another level, with the product-led growth activities and the data it delivers helping to determine where and when to use your sales team to have the best chance of converting or optimising revenue.

Companies that implement a product-led sales strategy report a 30% increase in conversion rates compared to traditional sales-led approaches (as stated in the State of Sales Report by Salesforce), but even companies that are synonymous with product-led growth leverage other growth motions.

In reality, it’s not one or the other – but the right mix to drive growth based on your company, product, market and customers.

Is Product-Led Growth Right for Every Company or Product?

According to a recent survey by ProductLed Institute, 70% of SaaS companies believe that a product-led strategy is crucial for their growth in the next 12 months.

However, in complex industries, or if you have a complex product, customers often seek personalised interactions.

So how do you know if it’s right for you?

Ask yourself these questions:

  • Do you understand your current growth motions and how predictable they are?
  • Who has influence / decision-making power? Would users have influence?
  • Is the product easy to explain?
  • Can a customer self-serve activation?
  • Is there a recurring need?
  • Is the value of the product immediately apparent?

Trying to move to product-led growth if you don’t have the right environment can be detrimental, so you are best to hold off implementing or not implement at all.

So, assuming you’re in the proper position to implement product-led growth, what key ingredients will you need to be successful?

Key Ingredients to Product-Led Growth

  1. Intentional Strategy

You can’t just create a free trial or freemium offering and say you’re doing product-led growth. This is not a strategy and will likely not help you achieve your objectives.

You need to create a growth strategy that aligns with your business goals and your customers’ needs. The product strategy must then outline how the product will deliver on the growth.

Understanding how you will achieve it, like any strategy, is critical.

 

  1. Cross-functional Alignment and Commitment

Ensure all departments align and commit to your approach. This can be through direct organisational structure change, cross-functional teaming or commitment to shared metrics.

For example, Amplitude has several teams co-own growth across marketing and product. They have a dual model where teams report to the VP of Marketing and VP of Product, respectively. Shared product metrics help reinforce alignment.

 

  1. Product That Customers Love

Like any good product, your product needs to meet your customers’ needs and they need to love using it. However, it’s even more critical when using product-led growth.

You need a sustainable market with a recurring need to leverage product-led growth.

 

  1. The Right Metrics for Success and the Data to Back it Up

You need to understand what will equate to successful outcomes, and then you need to track, analyse and reassess continuously.

Importantly, you then need to communicate it!

Sharing data and insights with your partners and stakeholders across the organisation is just as important as you having the data. It helps to create alignment across teams and keep everyone on track.

The North Star Framework is a great tool to help you achieve this, as it will drive you to ask what leading indicator will drive sustainable business results and customer value, and to find the key inputs that will impact this metric. Once you know these answers, you can align the work to be done and the teams to deliver on it.

For this to be successful, you need a deep understanding of how your users interact with your product, and the behaviours that will ultimately lead to effective monetisation. You need to identify what users find helpful, what keeps them coming back, and the best way to take them on a successful journey to becoming loyal paying customers.

But don’t forget you should be using both quantitive and qualitative data to inform your decision-making.

In a Qualtrics survey, 68% of customers said they’re more loyal to brands that ask for and act on their feedback. According to the State of Product Leadership Report, companies that consistently analyse user behaviour achieve a 2.5x higher user engagement rate.

 

  1. Show Value Fast

Demonstrating value is always important; otherwise why would a customer use your product? But the time it takes to show – and not just tell – your customers the value of your product is critical.

And this is not just about acquisition.

Yes, free trials and the like are a great way to get users using your product, and onboarding is an important step to ensure speed to use – but ensuring you can continuously show value across the entire lifecycle is what really drives monetisation.

Salesforce is an excellent example of this, introducing trailhead, certifications, and their Dreamforce conference. They have not only created value (and fun) for the individual user, but for the B2B buyer as well – ensuring they have ongoing self-serve product support, learning, and a way to hire and retain the best talent.

Miro is another – both in product and through the Miroverse – reducing friction through templates (their own and from the community) reduces the cognitive load and adoption and helps create virality – where word of mouth and referrals help to drive growth.

Integration to other complementary tools (i.e. Jira) helps users operate and collaborate cross-functionally more effectively and efficiently.

 

  1. Curiosity & Experimentation

While more process than tactic, experimentation plays an important role when putting product-led growth into practice.

Product-led growth represents an opportunity for product and growth teams to directly impact their organisations and bottom lines. But with that opportunity comes increased accountability.

Product decisions count more than ever, but it’s not just about optimisation. Be curious. Be bold in your hypotheses. Use experimentation to find the right balance between risk and benefit.

Gartner’s study found that organisations fostering a culture of experimentation are 1.7 times more likely to be industry leaders.

Bridging The Gap

So, what are some of the considerations when going from theory to implementation?

First, you’ll need to understand where you are at. If you don’t assess your current state, you risk failing before you even start.

Ask yourself these questions:

  • How product-led is your organisation?
  • Is that culture already in place?
  • How are you structured? What capabilities do you already have?
  • How are your teams measured and incentivised?
  • How do you currently do growth? Is it working? Is it predictable?
  • What is your product readiness – strategy, roadmap, current product?
  • What data do you have access to?
  • Are you measuring the right things?

Based on these questions, should you be using product-led growth? If not, don’t do it. If yes, find out if you’re ready to implement and what your next move will be.

Once you’re ready, you must identify what changes will make the biggest impact.

This could be to improve your internal organisational readiness or identify what growth initiative you implement first. You don’t need to put all your eggs in one basket (if you have existing growth motions), but if you don’t have any existing growth, start defining your strategy.

Do you need to review your organisation’s culture or structure? Start with a cross-functional growth team (rather than reporting lines) with clear success measures, and empower them with decision-making rights. Build confidence in the model before restructuring and disrupting the current state.

Ensure there is enough investment – including resources and learning – to get the data and reports you need to make informed decisions.

Consider which bets might make an impact, map out a new customer journey, test out your hypothesis, and then create and execute your plan to achieve product-led growth.

Always keep in mind that product-led growth is about putting the product’s value front and centre. You can unlock remarkable growth opportunities by aligning your strategy, fostering a product-led culture, and leveraging data to optimise the user experience.

Do you need any help becoming product-led? Brainmates can help you bridge the gap. We’ve created a Product-Led Growth Assessment Checklist that covers the ingredients needed to deliver product-led growth successfully, and can be used to help bridge any gaps when moving from theory to implementation.

The 6 Key Ingredients for Good Product Collaboration

The 6 Key Ingredients for Good Product Collaboration

By KATHRYN SHEPHERD-KING

At Brainmates, we’ve taken the time to learn and understand what is required for product teams to collaborate effectively to create awesome products.

Every organisation wants to ensure they’re creating value for both their customers and their business, and the way a product team can do that is by finding the right balance of efficiency, efficacy and effectiveness.

Here are the six key ingredients for finding a balance that creates the conditions for good product collaboration.

1. A Shared Vision and Strategy

The most important thing about your vision and strategy is that you’re collaborating with more than just ‘product people’. If you’re just working within your own silo, you’re not doing it right. You can’t have an effective strategy if you don’t have company-wide alignment.

For effective cross-functional collaboration, all parties need to know the answers to the following questions:

  • What are we focused on?
  • Where are we going?
  • How will we reach that destination?
  • What guardrails are in place?
  • How do we align our teams around the objectives?

Your vision and strategy should provide the answers to these questions – setting out what you are going to do, while also clarifying what you’re not doing and what you have to stop doing.

How you will get people to stop what they’re doing and change their projects requires just as much planning as the rest of your strategy. You can’t just slam on the breaks. You will need to plan the way you will stop, and the key to that is getting everyone to understand the ‘why’.

If you can surface the rationale of ‘why’ – whether that be revenue objectives, customer feedback, or other business drivers – more people will get on board, making alignment much easier.

An effective strategy should also include details on the key actions you need to take, what the impact of those actions is likely to be, and the timeliness of those actions.

Once you have a plan with actions, dates and milestones, it’s also important to report your progress to your organisation. Celebrate achieving your milestones the same way you would celebrate delivering something new.

2. The Right Capabilities and Structures

What does success look like to your organisation?

How will you measure that and then align your teams around it?

Aligning your organisation around those key areas you want to focus on, empowering them within that and allowing them to drive within those different areas.

By understanding what you require and structuring your capabilities into fit-for-purpose teams, you’ll set yourself up to achieve your desired outcomes.

Aligning your organisation around those key areas you want to focus on might mean you’ll need to take another look at your investment profile, how you move resources around, and how you group people together to get the highest-performing team.

Getting the right team together isn’t as simple as naming a role and going straight to market, as different people will bring different skills and experiences to the table.

You need to look at individual and team performance holistically and avoid a situation where you might have a massive concentration of one set of skills but have very little of another.

3. Systems and Tools for Scaling

When your organisation starts to scale and is looking at multiple products – or multiple teams contributing to the one product – you really can’t do it without some process or systemisation.

You’ll need some level of consistency – both from a way of operating so you can move your capability around as necessary, and so you can align your whole organisation.

Consider how many versions of just one planning document your team might go through in a week. Without a system to keep track of the latest version, quality control and consistency goes out the window.

The more you can use tools that help you do that, the better.

If you can take all the different data sources like customer feedback, analytics and business results, and then pull them in and attach them to your core product work, you’ll have a powerful system.

4. An Operating Calendar and Cadence

While we can get lost in daily stand-ups and showcases, we need to ensure we have a broader operating cadence – where the product work fits into the business context and planning cycle. Think budgeting, board meetings, and investor days.

Can you communicate what you’re trying to achieve from your product? Have you expressed the key outcomes you’re trying to accomplish throughout the year, and what return on investment you’re delivering?

If you’re unable to have those conversations at the right time, you’re missing the boat.

With a clear cadence with a clear purpose, you won’t have to constantly think about the fifty different people you need to talk to as you’ll engage with the rest of your organisation at the right time, take them on the journey with you, and get the key inputs to deliver what the business needs from product.

An operating calendar also helps you know the ‘what’ and ‘when’ that you’ll need to prepare for. You’ll think ahead and set yourself up for success instead of constantly firefighting.

5. Great Leadership

Leadership can be tiring. It’s an ongoing practice, something you can’t stop and start, or you will seriously disrupt your teams.

But leaders ultimately need to serve as the north star for their team – knowing where they are heading and what culture they want to drive through the team.

Leaders need to know the answers to the following questions:

  • What are your practices and systems?
  • How do you want your people to operate?
  • How are you empowering them?
  • What guardrails have you got in place?

Having these answers will enable you to lead by example and support your team in their work. Without these answers, you’ll have people going in all different directions.

Leadership is also about balance.

A product leader needs to know how to get their hands dirty and make product, and know when they should lean in to demonstrate the core practices and good behaviours required. But a product leader should also know when to lean back to provide the long-term direction towards Horizon 2 or 3 of your product, and navigate the relationships with the executive level of your organisation and your stakeholders.

6. Explicit Values and Behaviours

If you’re not showing the right values and modelling the right behaviours – and actually looking at how you collaborate with and support others – then your team will follow that same behaviour.

Your values underpin everything else, and leaders need to be clear about what’s acceptable behaviour by demonstrating the values of the team and the business. This applies to your work as well.

Also, be clear about what amazing looks like. Push your teams to be amazing and work out how to support them to do that.

If you can lead by example and bring others along the journey, then drive that through cross-functional teams, that’s when you really have the recipe for success.

If you want to improve the quality of product collaboration within your organisation, Brainmates can help you find the right balance of these six ingredients. We’ve partnered with hundreds of organisations to solve their product challenges, and can help you drive business value with products customers love.

Talk to Brainmates today.

Get a Quote

We’ll get in touch with you to discuss how we can help your team.