Disclaimer: This blog is not about what PLG is and how you should do it. But it is about whether you should even do PLG at all. Read about how to do PLG in detail here.
If you have noticed those companies that seem to grow like wildfire, almost magically? Chances are they've cracked the code of Product-Led Growth (PLG).
The idea is simple: let your product do the talking. You give folks a taste of what you offer – a free trial or a limited version – and let them see for themselves how awesome it is. If they love it, they'll stick around, tell their friends, and boom – you've got growth.
Actually, there is no “if”. It’s your job to make them love it.
But the thing is, PLG isn't some magic wand you can wave at any product and expect instant success.
It's gotta be the right fit. Jumping on the PLG train without thinking it through is when you wear a tuxedo to a pool party – it's just not gonna work.
That's where this article post comes in.
I’m gonna walk you through a step-by-step assessment to help you figure out if PLG is the right move for your startup.
We'll look at:
who your customers are,
what your product's like, and
how you charge for it.
By the end, you'll have a much better idea of whether PLG is your golden ticket or if you need a different game plan.
So, get comfy, and let's dive in!
Who Are You Selling To? It Matters... A Lot.
First things first: PLG is really only a good fit for product-based companies.
If you're selling services or consulting, this whole thing isn't really for you. PLG is where your product shines, and that's hard to do if you don't have a tangible product.
Now, let's talk about who your customers are. Are you selling to everyday folks (B2C), or are you targeting businesses (B2B)? This is a big deal when it comes to PLG.
B2C: The Land of Easy Trials and Quick Decisions
If you're selling to regular people, PLG can feel like a match made in heaven. Think about it: we're all used to downloading apps, trying out new software, and signing up for streaming services. We don't need a salesperson to convince us – we just want to see if the product is cool and if it solves our problem.
That's why PLG works so well in the B2C world. You can offer a free trial or a limited version of your product, and let people take it for a spin. If they like it, they'll happily pull out their credit card and become a paying customer.
B2B: Where Things Get a Bit More Complicated
Selling to businesses is a different ballgame, so Buckle up. You're not just dealing with one person anymore – you've got multiple decision-makers, longer sales cycles, and often a whole lot more complexity.
Imagine trying to get a company to switch their entire project management software to your product. That's not a decision someone makes after a 15-minute free trial. You'll need to prove your product's value, show how it integrates with their existing systems, and maybe even convince the IT department.
That doesn't mean PLG is impossible for B2B, but it's definitely more challenging. You'll need to think carefully about how to demonstrate your product's value quickly and easily.
Maybe you offer a demo environment, or create super-detailed case studies that show how other businesses have benefited.
The bottom line is this: who your customers are is a major factor in whether or not you go all-in on PLG.
How Easy is Your Product to Use? (Hint: This is Important!)
If you walk into a store and see two different gadgets. One is a sleek, shiny smartphone. The other is a massive, industrial-looking 3D printer. Which one are you more likely to pick up and start playing with?
The smartphone, right? It's just easier to figure out. And that's exactly why product complexity matters when it comes to PLG.
The simpler your product is to understand and use, the easier it is for your ideal users to try it out on their own. That's the whole point of PLG, remember?
Let's Break Down Product Complexity
We can roughly divide products into three categories based on how complex they are:
Intuitive Products: These are the no-brainers. Apps like Instagram or tools like Google Docs. You pretty much know what to do as soon as you open them up. These are perfect for PLG because people can jump right in and get value without any hand-holding.
Moderately Complex Products: These require a bit more effort to get the hang of. There are more features, or the user interface isn't as obvious. Products like project management tools or accounting software fall into this category. PLG can still work here, but you'll need to invest in things like onboarding tutorials or help guides to get people up to speed.
Highly Complex Products: These are the big guns – enterprise software, specialized tools, and anything that requires a lot of training or technical knowledge to use. PLG might not be the best strategy here because you'll likely need a sales team to explain the product and its value.
How to Figure Out Where Your Product Fits?
if you are not sure how complex your product is? Here are a few tricks:
Watch User Recordings: Use tools like Hotjar to see how new users interact with your product. Do they get stuck? Do they seem confused? This can give you clues about where things might be too complicated. Is there something that seems very obvious to you on the app but first-time users get confused the hell out of it.
Survey Your Users: Ask your existing customers for feedback. Were they able to get started easily? Did they need help figuring things out? Which part were confusing? Don’t ask positive questions like “How easy it was?” but ask questions like “Which part frustrated them the most?”.
Use a Complexity Scale: I've even created a handy-dandy scale for you to rate your product's complexity.
It's totally free – just make a copy and give it a go! (link to the template)
Once you know where your product falls on the complexity spectrum, you'll be in a much better position to decide if PLG is the right path for you.
Show Me the Money: Pricing for PLG Success
Price is a HUGE deal when it comes to PLG. It's the gatekeeper to your product – too high, and nobody gets in; too low, and you might not make enough to keep the lights on.
Free Trials and Freemium: The PLG Staples
PLG goes hand-in-hand with free trials or freemium models.
Why? Because they give potential customers a chance to experience your product's value firsthand without any risk. Exactly like offering free samples at the grocery store – if people like what they taste, they're more likely to buy the whole package.
But remember, free trials and freemium models aren't just about giving stuff away. They're strategic tools. Your goal is to hook users during the free period and get them so excited that they're willing to pay for more features or a full-fledged subscription.
Pricing Models That Don't Play Nice with PLG
Now, not all pricing models are created equal when it comes to PLG. Some are just better suited for a more traditional, sales-led approach. Here are a few examples:
Enterprise Licensing: This involves custom pricing and negotiations, which doesn't really fit the self-service vibe of PLG.
Custom Quotes: Similar to enterprise licensing, this requires a lot of back-and-forth with sales reps, which will slow down the whole process.
Tiered Pricing with Hidden Costs: If your pricing isn't transparent and upfront, people will hesitate to sign up, even for a free trial.
Self-Serve vs. Sales-Assisted: Choose Your Own Adventure
PLG empowers users to make decisions on their own. That means self-serve pricing models are your best bet. Focus on online checkouts, clear pricing pages, and the ability to upgrade or downgrade with a click of a button.
Sales-assisted models, on the other hand, involve talking to a salesperson to get a quote or discuss pricing options. While this might be necessary for complex products or enterprise deals, it's not ideal for PLG. It creates friction and slows down the user's journey.
The Price is Right (Or Is It?)
Finally, comes the actual price tag. This can be tricky, especially for startups. You need to find a balance between making your product affordable enough that people are willing to try it, but not so cheap that you can't make a profit.
The sweet spot will vary depending on your product, target market, and competition. But here are a few things to keep in mind:
Perceived Value: Does your pricing reflect the value your product provides? If it's too low, people might think it's not worth their time.
Competitor Pricing: Take a look at what your competitors are charging. You don't want to be way out of line, either too high or too low.
Customer Feedback: Ask your users for feedback on your pricing. Do they think it's fair? Would they be willing to pay more for certain features? Don’t ask direct questions though, ask subtle, subjective, and open-ended questions.
Pricing is an ongoing experiment. Don't be afraid to test different models and price points to see what works best for your product and your customers.
The Bottom Line: Is PLG Right for You?
We've talked about who your customers are, how easy your product is to use, and how you charge for it. All of these things play a big part in whether or not Product-Led Growth (PLG) is the right path for your startup.
PLG isn't some magic formula that works for everyone. It's a strategy, and like any strategy, it's gotta be the right fit.
If you're selling a simple, intuitive product to everyday consumers, and you've got a free trial or freemium model in place, then PLG will be your golden ticket. But if your product is more complex, or you're targeting businesses with a high-touch sales model, PLG is not the best way to go.
Don't get discouraged if PLG isn't a perfect match for you right now. There are plenty of other ways to grow your startup. You could try a hybrid approach, combining PLG with some sales efforts, or you could go full-on sales-led growth.
The most important thing is to be honest with yourself about where your product and your business are at. Don't force PLG just because it's trendy. Choose the strategy that makes the most sense for you.
If you're still curious about PLG and want to learn more, there are tons of great resources out there. Do some Googling, check out this step-by-step article on PLG, or even talk to other startups who have had success with PLG.
No matter what path you choose, the key is to focus on building a great product that people love. Do that, and growth will follow!