Applying an Effective Product-Led Growth Strategy to a Website
Product-led growth is a business strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers, without the involvement of the sales team. If you’ve used Slack or Clickup, you’ve witnessed this first-hand.
What is PLG and is it relevant in today’s digital landscape?
Product-led growth (PLG) is a business strategy that uses your product as the main vehicle to acquire, activate and retain customers. The product is the hero here, as opposed to relying on a sales team to connect with, nurture and sell to prospects.
When following this strategy, product teams prioritise the user experience above all, to create products that customers love, filled with features, use cases and benefits that are easy to understand, and most importantly easy to imagine using.
Product-led growth is the future of SaaS!!
“Product-led growth means that every team in your business influences the product. Your marketing team will ask, “how can our product generate a demand flywheel.” Your sales team will ask, “how can we use the product to qualify our prospects for us?.” Your customer success team asks, “how can we create a product that helps customers become successful beyond our dreams?.” By having every team focused on the product, you create a culture that is built around enduring customer value.”
Allan Wille, Co-Founder & CEO, Klipfolio
Benefits of an organisation that leads product-first
- Shorter Sales Cycle : Users onboard themselves (granted your onboarding process is thoughtful and well designed), significantly reducing your prospects time-to-value and sales cycle. The quicker they can accomplish a key outcome in your product, the quicker they will convert from free users to paying customers.
- Better User Experience : Since the product is built for users to onboard themselves, people can experience real and meaningful without any external hand holding.
- Lower Customer Acquisition Costs (CAC) : The self-serve model lowers cost of acquiring customers since users can upgrade on their own without having to interact with the sales team.
- Higher Revenue Per Employee (RPE) : Software was always built to scale well. But with a product led approach, you’re able to do more with fewer people on your team.
How is PLG different from traditional growth model like sales-led or marketing-led approaches?
Market-led approach
This approach places strong emphasis on market research, customer insights and a deep understanding of industry trends. This strategy aligns the product/service with the needs and preferences of the target market. Market-led companies prioritise customer feedback, conduct thorough market analyses and tailor their offerings to meet specific market demands.
Challenges
- Resource demands: Continuos market research and adaptation can be resource-intensive
- Balancing innovation and stability : Striking the right balance between meeting market demands and innovating can be challenging.
Use Case
Ideal for companies in crowded markets where differentiation amongst competitors through the usage of branding is critical. A good example is Coca-Cola. Also suitable for companies launching new products or entering new markets.
Sales-led approach
This approach places the sales team at the forefront of the business strategy. The primary focus is on building relationships, engaging prospects and driving revenue through direct sales efforts. This approach is common in B2B, where personlaised interactioons and persuasive selling are crucial. A well informed sales team, effective, compelling and clear communication and a deep understanding of cutomer’s pain points and needs are essential components of this approach.
Challenges
- Resource intensive: Maintaining a skills sales team requires significant investment in recruitment, training and ongoing development.
- Limited scalability : Due to the resource-intensive nature of personal interactions, scaling this strategy is challenging.
Use Case
Suitable for industries with complex, high-value offerings such as enterprise software, industrial machinery or real estate. Particularly effective where the buying decision requires strong trust and personal interaction.
What is the role of a website in PLG strategy?
Websites play a critical role in a Product-Led Growth (PLG) strategy, serving as the primary touchpoint where potential users interact with the product, experience its value, and ultimately convert into paying customers.
1. Primary Platform for User Interaction
Self-Serve Acquisition:
In a PLG model, the website is often the first point of contact between the user and the product. It provides a singular platform for users to discover, sign up, and start using the product without needing direct sales intervention. This lowers the barrier to entry and enables users to engage with the product at their own pace.
2. Facilitating Onboarding and Activation
User Onboarding:
The website plays a key role in onboarding new users by offering guided tours, tutorials, animated product features and more that help them understand and derive value from the product quickly. A well-designed onboarding experience can significantly reduce Time-to-Value (TTV), making users more likely to continue using the product.
Activation:
By carefully structuring the website’s content flow, businesses can guide users through key actions that demonstrate the product’s value, helping to convert trial users into long-term customers. This involves designing intuitive interfaces and clear calls-to-action that align with the user’s goals.
3. Data Collection and Optimization
User Behavior Analytics:
Websites are essential for collecting data on user behavior, which is crucial for a PLG strategy. Tools integrated into the website can track how users interact with the product, which features they use most, and where they drop off. This data informs product improvements and helps optimize the user experience.
Continuous Improvement:
The website enables A/B testing and iterative enhancements based on real user feedback and behavior data. This continuous loop of improvement ensures that the product remains aligned with user needs and preferences.
4. Conversion and Retention
Conversion Optimization:
Websites are pivotal in converting free or trial users into paying customers. By optimizing landing pages, CTAs, and providing clear value propositions, companies can effectively increase conversion rates.
Retention and Engagement:
Websites also help in retaining users by providing easy access to support, community forums, and resources that keep users engaged and help them get the most out of the product. Regular updates and content delivered through the website can keep the product fresh and relevant to users.
5. Scalability and Cost Efficiency
Scalable Growth:
A website enables scalable growth by allowing businesses to reach a large audience without the need for a proportionally large sales team. This is particularly important in a PLG strategy, where the product itself drives growth through word-of-mouth and network effects.
Cost Efficiency:
By leveraging the website as the primary tool for acquisition, onboarding, and support, businesses can reduce costs associated with traditional sales and marketing efforts. This efficiency is a cornerstone of the PLG model, allowing for sustainable growth even with limited resources.
In summary, the website is central to executing a successful PLG strategy, functioning as the primary tool for user acquisition, engagement, and retention. Its design, functionality, and content directly impact how effectively the product can sell itself and grow organically, making it an indispensable component of PLG
Understanding Product-Led Growth
Mohannad Ali, Hotjar’s CEO, says a product-led growth strategy is “about bringing your customer acquisition cost as close to zero as possible.” And to do that, he shares four pillars of product-led growth (PLG) that companies need to embody: market, model, channel, and product.
Market
Your industry and target audience need to be large enough to support PLG since you’ll invest time and energy in lowering activation barriers. If you’re only selling to a few buyers, there’s no use in trying to create a scalable operation.
Model
Once your target audience is locked in, you need a business model suitable for PLG. "You need to sell primarily online and self-serve to go after a very large market. This means accessible pricing (not very expensive), transparent pricing (prices are there for people to see), and paying online with credit cards/PayPal/etc. You also need an easy way for people to try your product for free, so you need a freemium and/or free trial," Mohannad says.
There’s data to back this up, since 87% of tech buyers want a self-service option.
Channel
Since successful product-led growth requires low acquisition costs, you need to choose scalable channels. “If you're selling for relatively low prices, you need to have low-cost channels like word-of-mouth, content marketing, or low-cost CPC advertising,” says Mohannad.
Product
“To use low-cost marketing channels and go after a large market, you need a product with a broad enough value proposition and very quick time-to-value,” Mohannad notes. And how do you do that? Constant research and improvement.
Continuous discovery and user empathy help you identify opportunities to make the product more aligned and easier to use. Then, you can leverage design thinking to put your information into action.
For example, SaaS company CCV Shop used Hotjar Heatmaps to make landing page improvements that increased conversion rates by 38%. The Heatmaps revealed where customers lingered on a page, and after reviewing Recordings, the CCV team found issues they could A/B test and improve.
13 benefits of product-led growth
1. Faster and More Efficient Growth:
PLG enables quicker and more efficient scaling by allowing users to access the product for free, which encourages them to become paying customers through self-onboarding and positive word-of-mouth.
Companies like Slack, Calendly, and Dropbox give their users the keys to using the product (freemium or free trial) and enable customers to upgrade when they want (self-onboarding). This helps users experience a more meaningful outcome and encourages them to distribute the product over and over again (positive word-of-mouth).
2. Wider Reach:
The freemium model attracts a broader user base by offering immediate value without cost, streamlining the user experience and reducing the need for extensive lead generation.
3. Lower Customer Acquisition Cost (CAC):
PLG reduces CAC by generating more qualified leads, increasing revenue from existing customers, and relying on organic growth through word-of-mouth.
4. Better user value:
PLG reduces CAC by generating more qualified leads, increasing revenue from existing customers, and relying on organic growth through word-of-mouth.
5. Focused Product Development:
With PLG, product teams can concentrate on improving the product itself rather than on marketing tactics, leading to a product that users find valuable and are willing to pay for.
6. Powerful Feedback for Better Products:
PLG facilitates the collection of direct user feedback, which helps in refining features, improving user experience, and aligning the product more closely with customer needs.
7. Shorter Sales Cycle:
PLG accelerates the sales process by simplifying user onboarding and providing a larger funnel of product-qualified leads (PQLs) who are already familiar with the product's value.
8. Scalability:
PLG supports rapid scaling by minimizing the need for labor-intensive processes and allowing more users to access the product early in their journey.
9. Better Budgeting:
PLG saves money by reducing reliance on traditional marketing and sales strategies, focusing instead on enhancing the product and leveraging customer success for growth.
10. Higher Retention and Lower Churn Rates:
PLG improves retention by ensuring that users quickly understand the product’s value, leading to better alignment of expectations and lower churn rates.
11. Higher Revenue Per Employee (RPE):
PLG increases RPE by enabling self-service sales and support, which reduces the need for a large team while maintaining high recurring revenue.
12. Higher Customer Satisfaction (CSAT) and Net Promoter Scores (NPS):
By focusing on user experience and continuous improvement, PLG leads to higher CSAT and NPS scores, which drive further growth through customer advocacy.
13. Optimized User Experience:
PLG ensures that the product is user-friendly, addresses pain points effectively, and delivers meaningful value, contributing to a superior overall user experience.
Implementing PLG on a Website
Self-serve acquisition
A cornerstone of Product-Led Growth (PLG) is enabling users to experience value from the product with minimal friction, and your website plays a pivotal role in this process. The goal is to create a self-serve acquisition model that allows users to discover, explore, and engage with your product independently. Here’s how you can achieve that:
1. Free Trials and Freemium Models:
Offering free trials or a freemium version of your product removes barriers to entry and invites users to try your product without commitment. This approach is particularly effective in reducing customer acquisition costs (CAC) while expanding your user base. A well-structured free trial gives users access to essential features, allowing them to understand the product's value before deciding to upgrade.
Example: Companies like Dropbox and Slack have effectively utilized freemium models to scale their user base by allowing users to experience key features without upfront payment.
The free plan gives a good experience of the product and its capabilities withou having to commit to a paid subscription model. This allows users to test first, then upgrade if needed.
2. Self-guided product tours:
Implementing self-guided tours within your website can help users navigate and understand the core functionalities of your product. These tours can be interactive, providing step-by-step guidance that allows users to see the value firsthand. This approach reduces the learning curve and speeds up the time-to-value (TTV), making it more likely that users will convert into paying customers.
Best Practice: Ensure that these tours are concise and focused on demonstrating how the product solves specific user pain points
Example : Slack’s interactive product tour
Optimizing User Experience (UX)
User Experience (UX) is a critical component of PLG, as it directly influences how users perceive and interact with your product. A seamless UX on your website can drive product adoption by making it easier for users to engage with and derive value from the product.
1. Simplifying Navigation
Your website should be designed with intuitive navigation that guides users effortlessly to the product’s key features. This includes clear and consistent menu structures, prominent calls-to-action (CTAs), and logical flow paths that lead users to important sections like the pricing page or product demo.
Tip #1: Use breadcrumb trails and sticky navigation bars to keep users oriented as they explore different parts of your website.
2. Optimizing Landing Pages
Landing pages are often the first touchpoint for potential users, so they must be optimized to communicate the product’s value proposition quickly and clearly. Focus on clean, compelling design with concise messaging that highlights the benefits of your product. Additionally, include social proof such as testimonials, case studies, or user reviews to build credibility.
Example: Figma Design's Landing Page demonstrates this point the best
3. Utilizing Data Analytics
Tools like heatmaps and session recordings can provide insights into how users interact with your website. By analyzing where users click, how far they scroll, and which sections they spend the most time on, you can identify areas of friction and optimize the user journey. This data-driven approach ensures that your website continually evolves to meet user needs, enhancing overall engagement and satisfaction
At Everything Design, we use Microsoft Clarity to gauge where users have trouble navigating or which portion of the page is receiving maximum engagement.
Designing the Website for PLG
User-Centric Design
In a Product-Led Growth (PLG) strategy, the website must be designed with a laser focus on the user’s journey, ensuring that every interaction delivers clear value. The user-centric design is essential for guiding potential customers from their initial visit through to becoming active, loyal users.
1. Understanding the User Journey:
The design should map out and anticipate the various paths users might take as they interact with your website. This includes everything from discovering your product to engaging with key features and making a purchase decision. By understanding these touchpoints, you can design each interaction to deliver maximum value.
Tip: Write a tentative script of what a user would think of when navigating the website
2. Clear Communication of Value:
Every element on your website should communicate the value of your product. This involves crafting clear, concise messaging that highlights how your product solves the user’s pain points. Use headers, subheaders, and concise paragraphs to make this information easily digestible.
Social Proof and CTAs: Integrating social proof, such as testimonials, case studies, and user reviews, helps build credibility and trust. Place these elements strategically alongside clear calls-to-action (CTAs) to guide users toward the next step, whether that’s signing up for a trial, downloading a whitepaper, or contacting sales
ClickUp uses plenty of testimonials, user reviews that builds credibility. The product's validity is also communicated effectively through social proofs such as these.
Onboarding & Activation
Onboarding and activation are critical stages in a PLG strategy because they represent the first impression users get of your product. A well-executed onboarding process not only educates new users but also engages them, encouraging continued use and leading to quicker activation.
1. Intuitive Onboarding Process:
The onboarding process should be designed to be as simple and intuitive as possible. This means providing clear instructions, interactive tutorials, and immediate access to key features that demonstrate your product’s value. The goal is to minimize friction and ensure users can quickly understand and start benefiting from your product.
Personalization: Tailor the onboarding experience to different user personas. For example, you might offer different onboarding paths based on the user’s role, industry, or the specific problems they are trying to solve. Personalization ensures that each user receives relevant information and guidance, increasing the likelihood of successful activation
Example : Intercom customizes the onboarding process based on the user’s specific needs and roles. When new users sign up for Intercom, they are guided through a personalized onboarding flow that asks questions about their role (e.g., marketer, product manager, support team member), industry, and the primary challenges they are facing. Based on the responses, Intercom provides relevant tutorials, feature recommendations, and setup guidance tailored to those specific needs.
2. Engaging Users Early:
Early engagement is crucial for activation. This can be achieved through personalized messages, quick wins (such as completing a simple task within the product), and celebrating milestones. These strategies help users feel a sense of accomplishment early on, reinforcing the value of the product and encouraging further exploration.
Example : Whenever you complete a task within Asana, one of five celebration creatures might just pay you a visit by rapidly flying from the bottom-left to the top-right of your screen. Even though they're only there for a fleeting moment, this explosion of color gives users an immediate lift.
Retention & Engagement Features
Retaining users and keeping them engaged over time is vital for the long-term success of a PLG strategy. Your website should incorporate features that continuously deliver value and keep users coming back.
1. In-App Messaging and Tutorials:
In-app messaging is a powerful tool for engagement. Use it to provide real-time assistance, offer tips on using new features, or guide users through complex processes. Tutorials and help centers should be easily accessible, offering users the support they need without leaving the product environment.
Tip: Implement interactive tutorials that adapt based on user actions, providing a more personalized and effective learning experience
2. Progress Tracking:
Integrating progress tracking features can motivate users by showing them how much they’ve accomplished and what steps remain. This is particularly effective in complex products where users need to complete multiple tasks to fully set up or use the product. Progress bars, checklists, and dashboards can visually represent this journey, making it easier for users to stay on track and feel a sense of achievement.
3. Continuous Feedback Loop
Incorporating mechanisms for ongoing user feedback is essential for continuous improvement. Feedback can be gathered through in-app surveys, user forums, and direct communication channels. This input should be used to refine features, address pain points, and introduce new functionalities that meet evolving user needs.
Iterative Development: Use the feedback to make iterative improvements to your website and product. Regular updates that address user feedback not only enhance the product but also show users that their input is valued, fostering loyalty and long-term engagement.
By focusing on user-centric design, intuitive onboarding, and robust retention features, your website can become a powerful driver of Product-Led Growth. These elements work together to attract, engage, and retain users, ultimately leading to sustainable business growth.
Common Mistakes Product-Led Companies Make On Their Websites
Pricing Mistakes
Pricing as a tertiary priority
Several companies build their product, define their ideal customer and then think about pricing but Instead, these should go hand in hand. Google Meet and Zoom both offer video conferencing, however, Google offers Meet as part of its suite, making it effectively free for its small and medium-sized business market whereas Zoom focuses mostly on video conferencing for enterprises and concentrates on scale and control with a upgraded paid plan. This means that Google focuses on their products working well together while Zoom homes in on quality.
Singular Model for everyone
Although pricing with three to four good-better-best options is very common, people often miss segments that are willing to pay more for a part of your product. For example, Hulu has ESPN+ as a separate add-on, as avid sports fans would willingly pay for it, and it keeps the base Hulu subscription cheap for everyone else.
Not understanding the factors behind retention and upsell
Most customers need time to experience the "aha moment" with your product—the moment when they fully realize its value. For example, Facebook identified its "aha moment" as when a user connected with "seven friends within 10 days." Rather than offering a short, time-based trial or a free plan that doesn’t allow users to truly appreciate your product, it’s crucial to understand the typical timeline it takes for your customers to reach that breakthrough moment.
For instance, in a product like Slack, where value is derived from team conversations and collaboration, the "aha moment" occurs when users start actively communicating with each other. To encourage upgrades, Slack limits its free plan to 90 days of message history, compelling users to upgrade as they grow more dependent on accessing past conversations. This approach aligns the trial or free plan duration with the time it takes for users to realize the product's full value.
Website Navigation Menu
Wix recommends no more than 5-7 options in your main navigation and, if you’re mobile-first, potentially even fewer than that.
Thoughtful CTA's
Options like ‘Schedule a Demo’ are very straightforward, but you can be more specific and engaging. Instead, why not test something like, ‘Help your HR professionals do more remotely. Schedule a demo today.’
Putting the benefits first and embracing the context of the product make for a more compelling CTA.
Don't overdo pop-ups
When it comes to website popups, ask yourself if you’re giving your website visitors the opportunity to even figure out what’s going on before you bombard them and interrupt them with pop-ups. Use time-based triggers on your site. For example, if someone is on the pricing page, trigger a pop-up 10 secoonds after they reach the page, give them some time to go over the plans.
Follow 'form' best-practises
The best forms become the benchmark against which we measure other experiences.
There are a few best practice tips to remember with forms:
- Use a single column layout
- Consider the type of information you require (if it can be gathered further down the line, remove it and make this more streamlined)
- Ask the easy questions first
- Use inline validation
- Use smart forms to complete the form for them
Top Examples of Websites that apply PLG Strategy
1. Calendly
Calendly is a software company that develops a business communication platform used for teams to schedule, prepare and follow up on external meetings.
Clear Communication of Value
- Highlighting Benefits: Calendly's website clearly communicates the value of its product through concise messaging and visuals. The site emphasizes how Calendly simplifies scheduling, saves time, and eliminates back-and-forth emails. By focusing on these benefits, the website effectively appeals to users who are looking for a solution to streamline their scheduling process.
- Use of Social Proof: The website prominently features testimonials and case studies from satisfied customers, which builds trust and credibility. This social proof reinforces the product’s value and encourages new users to sign up and try it for themselves.
Encouraging Product Adoption
- Help centre : Calendly provides helpful tutorials that guide new users through the platform’s key features. The tutorials cover everything from the very basics all the way to specific use cases.
- Automated Tips and In-App Messages: The website and app use in-app messaging to provide tips and suggestions as users interact with the platform. These messages help users discover new features, optimize their use of the product, and reach their “aha moment” more quickly.
Data-Driven Upsell Opportunities
- Free Plan Limitations: Calendly strategically limits certain features in its free plan, such as integration options, advanced reporting, and customization capabilities. These limitations are designed to show users the additional value that could be unlocked with a premium subscription. As users grow more dependent on the product and need these advanced features, they are naturally encouraged to upgrade.
2. Slack
Frictionless Onboarding and Self-Serve
- Slack’s homepage immediately emphasizes the ease of starting with a large, prominent “Get Started” button. This button takes users directly to a sign-up flow that requires minimal information—just an email address to begin. This simplicity reduces friction and encourages users to try Slack without any barriers.
- No Credit Card Required: During sign-up, Slack does not require a credit card for its free plan, which further lowers the barrier to entry. Users can explore the product and experience its value before considering any financial commitment.
- Clear Navigation for Different Use Cases: Slack’s website is designed to quickly guide users based on their needs. The homepage and product pages offer clear navigation options like “For Small Teams” and “For Enterprise,” ensuring users quickly find the most relevant information and setup instructions tailored to their use case.
Freemium Model
Slack’s website is built around its freemium model, which allows users to start using the platform for free with no upfront commitment. This model is prominently showcased on their website, where potential users can sign up without a credit card and begin using Slack immediately. The free plan includes enough features to allow small teams to communicate effectively, but with limitations (e.g., limited message history, fewer integrations). These constraints gently push users to upgrade as their needs grow, making the transition to a paid plan feel natural and value-driven.
Clear Value Proposition
Slack’s website clearly communicates its value proposition from the moment a visitor lands on the homepage. The messaging focuses on how Slack simplifies workplace communication and boosts productivity, which is a compelling draw for teams looking to improve their workflows. This clear articulation of benefits is supported by customer testimonials, case studies, and use cases that illustrate the tangible impact Slack can have on business operations.
Interactive Onboarding and Product Tours
Slack’s website includes interactive elements such as product tours and demos that allow users to explore the platform's features before committing to a sign-up. This hands-on approach helps potential users understand how Slack works and how it can be tailored to meet their specific needs. Additionally, when users do sign up, Slack’s onboarding process is personalized based on their responses to initial questions, making the setup process relevant and user-friendly.
Conclusion
A well-executed Product-Led Growth (PLG) strategy has the power to transform a business’s trajectory by making the product itself the primary driver of customer acquisition, engagement, and retention. As demonstrated by companies like Slack, a PLG strategy can significantly lower customer acquisition costs by leveraging freemium models and self-serve onboarding processes that allow users to experience value without friction. By focusing on delivering an exceptional user experience, continually engaging customers through in-app messaging, and strategically using data to drive conversions, businesses can build a sustainable growth engine that scales organically.
The potential of PLG is evident: it not only attracts a broader user base through accessible, value-driven offerings but also fosters long-term loyalty and advocacy by keeping users deeply engaged. As users naturally transition from free to paid plans, driven by the increasing value they derive from the product, revenue growth follows suit, often with lower overheads than traditional sales-led approaches.
Other Noteworthy Websites that apply PLG Strategy
References
- https://www.productledalliance.com/product-led-vs-sale-led-vs-market-led/
- https://www.hotjar.com/product-led-growth/strategy/
- https://www.smartlook.com/blog/product-led-growth/
- https://productled.com/blog/product-led-growth-strategy-playbook
- https://www.hotjar.com/product-led-growth/saas/
- https://productled.com/blog/five-common-mistakes-plg-companies-make-on-their-websites/
