Uncertainty is expensive.
In a volatile market, your product can suffer from buyer fears and stalled investments in innovation. Relying on landing pages and SEO to capture leads and convert to paying customers is not the effective strategy it once was. With rising customer acquisition and retention costs, companies can take a more sustainable approach to scaling their business by focusing on building a product that delights customers and drives organic growth.
Throughout the industry, we’ve been hearing a lot about the benefits of leading with your product, which prompted me to read Wes Bush’s highly acclaimed Product-Led Growth to glean insights for our firm and clients alike. “Truly great software companies are built to be product-led. You don’t have to be a genius to come to this conclusion,” writes Bush. “In our day-to-day lives, we expect to try products before we buy them. Companies that embrace product-led growth align their business model with an undeniable consumer trend that is not going anywhere.”
So let’s get to it! In this article, I’ll explain what product-led growth is and detail three ways our teams have leveraged its insights for better project outcomes.
What Is Product-Led Growth?
Heralding the rise of the end user, product-led growth (PLG) is a model where product usage drives customer acquisition, retention, and expansion. Simply put: these are products that sell themselves. Well-known examples include workplace communication platform Slack, scheduling tool Calendly, and audio streaming subscription service Spotify, which today boasts a boggling 456 million users. You might have first heard about one of these services from a friend or colleague, downloaded a free trial, and were effortlessly hooked.
"Your existing users, by virtue of just using the product, are inherently promoting the product and getting additional adoption, getting new signups,” says venture capital firm OpenView Partner Blake Bartlett, who coined the term PLG in 2016. “You don’t have to pay for that. It’s just being done every single day by people using your product."
With power shifting to the end user, it makes sense that consumers have high expectations for the technology and tools they use. Accordingly, companies must thoughtfully seek to meet — or better yet, exceed — the demands of an increasingly discerning market. Any company — even those selling to large enterprises or operating in niche vertical markets — can adopt PLG principles to improve user experiences and increase go-to-market efficiency.
Catching the Wave
First, I’ll share three core elements for building a solid foundation for product-led growth. I’ve also included tried-and-true ways our team at 8th Light incorporates some of these strategies to help our clients build industry-leading products that people love.
Step 1: Design for Humans
Because the goal is to make end users happy, designing requires a deep understanding of who your users are, as well as their actions and associated needs. Are you speaking with your customers regularly to continually assess their needs? Beyond initial research and interviews, an effective solution to their problem requires an open, ongoing dialogue.
At 8th Light, human-centered design is at the core of everything we build. We have extensive product experience and pride ourselves on crafting uniquely designed and engineered solutions that engage, inform, and enable users, and ultimately drive adoption through useful and transformative experiences.
To address the needs of our clients’ audience, we follow this three-step process, which focuses on continuous learning and improvement and results in long-term, scalable solutions.
Step #2 Demonstrate Value
Costco knows what they are doing with their free samples. If shoppers like what they try, chances are they’ll toss it in their carts. As Bush points out, “Product experiences have become an essential part of the buying process. When it comes to software, consumers demand the same experience.”
With consumers accustomed to “try before they buy,” a software product might offer a free trial, freemium (access to part of a software product), or a demo. Making it easy for people to experience a product’s value firsthand becomes an acquisition model on its own accord. For some tailored service offerings, this isn’t always possible. For 8th Light’s custom software design and development, we get as close as we can to this concept in a number of ways:
Offering select services free of charge to help demonstrate our value and build relationships.
Sharing detailed case studies to showcase how we engineered a relevant solution and built a winning product.
Highlighting our role in the success of peer or aspirant peer companies.
Garnering client referrals and testimonials that relate their firsthand success stories with our firm.
Step #3: Invest for Success
When a user tries out your product, you should be concerned with how it works, not whether it works at all. A high degree of confidence and certainty in your tech is critical, as users have little tolerance for glitches and bugs. Frequency of data breaches also are warranting continued investments in security infrastructure to maintain buyer confidence.
With brand loyalty on the decline, consumers are looking for reliability and cutting-edge tools that solve their problems above all else. Because there are more options, they will switch to a new product if yours doesn’t meet their needs — so it’s not the time to put off making necessary updates or launching new features. Amidst an unpredictable market where tough staffing decisions are being made, investing in innovation and product growth remains necessary for maintaining a competitive edge in the long-term market. If your company is limited on bandwidth, a contracting partner can help continue to release features that excite and engage your user base.
Volatility isn’t static. Even unwelcome change and disruptions can herald an exciting new dawn for businesses and consumers alike. But product-led growth is one constant that can engage and reward your teams and businesses and delight consumers for the long-term with the right strategies in place.