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What Makes Product-Led Growth a Differentiator?

Many B2B brands tend to overlook the importance of seeing their customer through the lens of how their product and the experience it delivers will dictate how they will engage, acquire and retain that customer. By adapting a B2C point of view, B2B brands can tap into the psyche of their customers, dictated by a product-led growth strategy that intertwines sales, marketing, product and customer success teams around the product and customer.

Through our hands-on experience with platforms like Zoom, Slack, Netflix, Spotify and Warby Parker, the majority of us should be very well-versed in the influence of product-led growth, whereby customers are given the ability to try, test and explore the product’s value firsthand. A product-led growth strategy positions a B2B brand as a cost-effective, self-service, lead-generating experience for increasing customer acquisition and reducing churn, creating a frictionless entry point that provides easy adoption and the opportunity to upsell based on enhanced features.

Consider the success of Zoom: “In 2013, 3 million people participated in a Zoom meeting. So far in 2022, the software has registered over 3.3 trillion annual meeting minutes and the market cap of the publicly-traded company exceeds $75 billion.”

“Warby Parker’s goal was not to compete on price; it was to create enthusiastic promoters by delivering wows throughout the customer experience.”

Similarly, “Warby Parker’s goal was not to compete on price; it was to create enthusiastic promoters by delivering wows throughout the customer experience. To do this, the company completely reimagined every step in the customer journey. Treat customers the way they’d like to be treated—with warmth, helpfulness, empathy and incredible service.”

PLG as a Growth Driver

Whether you’re building a SaaS business or launching a consumer platform, product experiences are indispensable in driving early adoption and reducing friction during the buying process. A product-led growth strategy also provides sales, marketing, customer support and the product teams with deeper insights at every point of the customer journey in order to widen adoption and iterate faster based on customer feedback.

“Whether you’re building a SaaS business or launching a consumer platform, product experiences are indispensable in driving early adoption and reducing friction during the buying process.

645 Ventures identified these three product-led growth (PLG) drivers:

Unparalleled scalability: PLG models are designed to unlock viral growth by maximizing their potential market exposure by removing barriers to adoption. Low, user-based prices invite individuals to buy for themselves, minimizing the sales cycle and inviting bottom-up adoption through word-of-mouth.

Less fixed and more variable expenses: PLG products do not require full-fledged enterprise sales teams to kick off growth. Cloud communications platform-as-a-service company Twilio went public with ~$250MM average annual return and only 12 full-time salespeople. Freed of the cost of investing in large sales teams, PLG companies can reallocate go-to-market expenditures towards marketing experimentation or product development.

Accelerated time-to-value: PLG models minimize the barriers to product engagement. They leverage self-service distribution and focus on immediate value creation. A new customer can start using Zoom within five minutes and a credit card. By speeding client activation, PLG products invite users to “self-qualify,” weeding out unfit customers and empowering the rest.

However, it is also said that “the PLG model is not fit for every product nor every market.” Finding the right growth model for your product is heavily dependent on your product’s attributes and customer behavior, among other factors.

Five ways PLG can:

Encourage Real-time Feedback: Which features do customers value most? What are their pain points? How can you translate this to shorten the sales cycle and conversion rates?

Grow Word-of-Mouth Adoption: Establish a strong user base that will advocate and intensify product demand by serving as a magnet in attracting prospects.

Bypass Marketing Efficiencies: Especially in early stage companies, marketing budgets can be challenging. Your product should speak for itself, allowing it to serve as your primary awareness and acquisition driver.

Capture Product Feedback: Capturing product feedback brings together all teams to further understand customer pain points and insights to expand product market fit and to discern what they are willing to pay more for.

Using PLG as Guardrails: This will keep sales, marketing, customer support and product teams focused on maximizing growth and retaining customers, triggering upsell opportunities and ongoing value creation throughout the customer lifecycle.

As mentioned earlier, PLG strategies aren’t right for every business or sector. However, as new technologies and platforms find their place in legacy industries, it will be critical to develop the right solution that is personalized around needs of the buyer and that can distance your brand from the competition.

Questions? Please email us here As always, thank you for reading.

Photo by Julian Myles on Unsplash