A complete guide to product-led growth marketing strategies!

Product-led growth marketing is a true form of storytelling marketing. In this article, we will explain how to drive this marketing implementation from the perspective of a growth officer or product marketer.

What is Product-Led Growth (PLG) Marketing?

An easy-to-understand definition is that product-led growth marketing (PLG) means that you will use the product as the primary marketing tool to drive user acquisition, user retention, and business expansion.

Usually this means that the product offers "free to use, with additional features" or "free trial". This is a disruptive, bottom-up sales model. It's like a company's employees can choose the products they want to use to assist their work, rather than being forced to use a certain product by the IT or operations department.

Key points of product-led strategy

• The product itself is the primary channel for marketing;
• The product has a viral effect, encouraging users to share it with others;
• Marketers are not only responsible for the number of user registrations, but also actively participate in the sales process, user activation and retention;
• Prioritize user experience;
• Prioritize improving product self-service over adding customer-facing customer service positions;
• Conduct growth experiments regularly;
• Analyze product usage behavior and promote personalized user activation and upgrade experience;
• Segment your users;
• Trigger payment only after users see the true value of the product.

Successful examples of product-led growth include Slack/Dropbox/Typeform/Mailchimp/InVision/Loom, etc., some of which will be mentioned in the following examples.

Why is PLG important?

Because user demand is very high. They want to try before they buy. Their attention span is short, and they would rather see and experience the product itself than read some text promoting its features.

But PLG means more than just “try before you buy.” It involves making a great product and continually investing in its self-marketing. From a marketing perspective, we need to ask “how does a product generate demand” rather than “how do we create demand for this product”.

PLG can help avoid the following marketing death traps:

• rising advertising costs;
• Difficult to make a profit;
• The sales cycle is long and the average revenue generated by employees is low;
• Low retention and low customer lifetime value.

How can marketers create the greatest impact?

In the increasingly fierce market competition, PLG marketing can reduce user acquisition costs and increase profit margins, which is also consistent with the company's business goals. Bill Macaitis, former CMO of Slack, said:

“I told the team that our gold standard is not whether users buy the product, but whether users recommend it. This is a higher and more difficult standard. We are not satisfied with just waving hands to get users in the door. Marketing is about product recommendations, so we spend a lot of time on Slack’s user manual. We hope to promote Slack’s usage skills to the extreme.”

To help companies achieve all the benefits of PLG, marketers must first be fascinated by the product, continue to learn, and continue to experiment. At the same time, it usually takes a certain period of time for users to realize the value of a product. Marketers should think about how to shorten this cycle as much as possible.

Subsequent value-added or free trial?

What are the criteria for marketers to make this important decision?

Decisions about subsequent value-added or free trials are not usually made by marketers. But the wrong pricing structure can hurt business. If the market is not big enough, it will be difficult to make a profit by adopting subsequent value-added. If your product already has unicorn potential, offering a free trial will hinder growth and make room for competitors.

Subsequent value-added is suitable for:

• The product is relatively simple, and users can quickly gain product value;
• The market is large enough that any user or enterprise can use it;
• The product has few features;
• The market is mature and saturated.

Free trial is suitable for:

• The trial process allows users to experience surprise moments;
• The annual contract value (ACV) is high enough to complete the sales task;
• The market is medium or small, such as in a certain vertical market;
• The market is underserved and unsaturated.

As a PLG marketer, you need to adapt to the overall business model and pricing system of the product and market. If this is not the case, then you need to communicate clearly with the management team before officially starting.

How to carry out PLG marketing?

PLG marketing takes advantage of the close contact between products and users. We can go through all product communication channels first to see which channel is most effective and quickly discover growth opportunities. Below, this article explains the strategies for all the communication channels that a product may go through.

1. Viral Sharing

Viral transmission occurs because users gain value from sharing. Users share products on a voluntary basis. Products need to incentivize users to share, rather than achieving this through affiliate marketing and sales commissions. Products can remind users to share and help them generate the desire to share.

For example, InVision has a built-in viral feature. When a user (regardless of whether he is a free user or not) completes a modeling, he generally needs to share it with his boss, colleagues, subordinates, clients, etc. The product provides a one-click sharing function here, as follows:

InVision One-Click Sharing

Subsequent value-added vs free trial:

If you want to do product-driven sharing-based viral communication, subsequent value-added services can help growth better than free trials. When a product offers a free trial, user sharing means that their recipients can only see the pictures or videos shared to them, and they can’t create similar things for free (note: what this means is that free trials cannot make new users actually use the product), which cannot lead to large-scale growth.

If you are developing a product that can be shared by multiple people, you should give it a subsequent value-added model. You can encourage existing users to use your product and bring in more new users who fit your product positioning.

2. Home page optimization

When designing a product, PLG marketing will place product function description in an important position. Here are some key takeaways:

1. Simple and fast registration process (the registration email box only appears on the main picture and first picture of the homepage);
2. Don’t introduce your product through a demo video, but show an immediate explanation of the product’s features on the homepage.
3. Make extensive use of the product’s visual elements, and avoid using portraits or creative illustrations.

Let’s look at some examples:

Freshbooks’ concise value presentation

Freshbooks is a product that provides invoicing solutions for small businesses. This is exactly the message that the first picture on the website’s homepage tells people. There is no confusion, unnecessary creativity or cleverness here. This piece of content contains everything a user needs to know so they can sign up and start their trial right away.

So the user path is: “This is what Freshbooks does” “Start your trial”.

The PLG approach is well suited for simplifying product priorities. A salesperson who is used to marketing with demonstration videos may first clarify the customer's problem, then educate them, tell them how good their solution is, and then share the product with them. But if he decides to use PLG, what he needs is to simplify the homepage and quickly inspire users to place orders.

Product Marketing at Slack

Similar to Freshbooks, users can easily get started with Slack by adding an email address. They just fill in the most prominent box on the homepage.

Soon, in the folded position below, Slack provides a virtual product module for users to click and explore on their own. It’s like the user started using Slack before signing up. The product interaction is very realistic and the data is also real.

They made “organizing conversations” a top priority and let users complete it (right side of the second picture). Because organizing conversations is the core value of Slack for new users.

Subsequent value-added vs free trial:

Freemium or free trial has little impact on the homepage design; the market and product determine the content of the homepage.

3. Price page optimization

Another key element of your website is the pricing page.

Invision's Clear Price Package

Every company using a PLG strategy must have a very simple pricing structure. InVision’s pricing page is a great example of this. There are no complex feature differences here; the factors that influence pricing are the model and the number of team members.

Please keep your product price rating as simple as possible. Sometimes pricing tiers are too complex and too reliant on feature differences. Whatever criteria you choose to base your pricing on, keep it as simple as possible.

Buffer downgrades free trial

Buffer is a popular social media scheduling tool, and they recently updated their pricing page and downgraded their free trial plan. The free trial isn’t hidden, but it’s also less visible. They still offer trials, but now that Buffer has achieved some growth, they don’t need a lot of free users. Instead, Buffer wants to push users to try some less expensive, affordable paid plans.

Subsequent value-added vs free trial:

When a company uses a PLG strategy in the early stages, it is likely to put the free version front and center; as the business develops, the company needs to find more paying users. When the focus shifts from growth to profitability, a shift in pricing strategy is quite natural.

4. User registration page optimization

For self-service SaaS products, the registration page is very important. This is the first page users see after clicking on a button like "Sign Up", "Start Now", or "Start Trial".

The page should contain several main points:

1. Minimum registration requirements (usually an email address);
2. Use content that reiterates the value of your product (e.g. user testimonials).
3. Remind users that they don’t need to link a credit card at this time (if the product doesn’t intend to guide users to pay).

Free Signup for InVision

In order to speed up user registration, InVision made the registration page extremely simple and reminded users to immediately experience this product that "even Uber's Molly Mix has used." It removes all other unnecessary content, and users only see copy such as "Free for Life, No Credit Card Required".

MailChimp App puts the price list on the sign-up page

MailChimp uses a “non-mainstream” sign-up process. When the user clicks to register, he will be directed to the pricing page within the App.

The advantage of this is that all users are aware of the paid service options when they register, and they are introduced to the product before making a payment decision. This approach may not be suitable for all products, but for email marketing tools like MailChimp, it makes sense.

Subsequent value-added vs free trial:

Subsequent value-added products are similar to InVision, which only simplifies the process and reminds users that it is “free for life”. For free trial products, you need to say more on the registration page - not only user recommendations, but also about 3-4 key points on the page to tell users what the product can achieve. Of course, if we don't need credit card information when registering, you can also emphasize it.

5. In-App User Activation

A smooth and excellent activation process is very important for PLG marketing. Remember, not only new customer acquisition, but also the activation step requires PLG strategy.

SproutSocial Activation Questionnaire

SproutSocial asked a few questions to personalize the onboarding process and get to know their new users better.

Freshbooks activation progress bar

Activating a progress bar is very common. If a product requires a number of activation steps to deliver value, it should help users complete those steps in sequence faster and better. As shown in the figure below, some very enticing copywriting can also make activation faster.

Freshbooks illustration of the activation process

Subsequent value-added vs free trial:

In the activation step, whether to adopt subsequent value-added services or free use also depends on the product itself.

If the product is complex and offers a free trial version, it is useful to design an activation progress bar to complete some tasks or provide some in-depth usage options (such as online courses, etc.). If the product adopts subsequent value-added services and users can use the product for free anyway, then users should complete the activation as soon as possible. The product should simplify the steps so that users can get started quickly.

6. User Activation Email & Guide

User activation is a multi-channel task. We put emails and guides together because the best activation emails can point users to additional resources and encourage them to revisit the product.

Screenshot of Monday.Com user activation email

This welcome email from Monday.Com very clearly lays out what the product can achieve, inviting users to come back for more.

Screenshot of Freshbooks user activation email

Switching to a new invoicing tool is not easy. So Freshbooks mentions these options for getting tutorials and help in the welcome email to help users get started.

Now that we have these two examples, let’s take a look at Slack. This screenshot is the dream state of a PLG activation email. See how it boots up:

Step 1: Enter your organization name;

Step 2: Become your first project (become a channel under the organization);

Step 3: Invite colleagues.

Screenshot of Slack's user activation email

At each step, when the user fills in the content, the simulated interface of this product will change. It looks just like the real thing! This means that the user has already performed the operation before he or she has even started using the product! It brings the product into the user's real life and rewards the user every step of the way.

As you can guess, this activation email has a high completion rate, and higher activations mean more revenue in the future.

Screenshot of Slack’s welcome email

Take a look back at Slack’s welcome email. Slack’s welcome email is very simple. It told me what my account number was and sent me instructions. Did you notice? Slack’s guides are all about use cases. This is PLG marketing. Don’t show users a bunch of “stuff”; just tell them how to use it.

User guide page accessed via Slack user activation email

Another key point is to locate the user’s specific behavior stage based on product analysis and send them the correct activation email at the right time.

Slack also does a good job. They know that I have set up the organization name and project name, but I haven't invited my colleagues yet. This is where I stop in the activation process. So it wasn’t long before I received an email from Slack reminding me to invite my colleagues. (The link is a bit ugly)

Screenshot of Slack activation reminder email

Subsequent value-added vs free trial:

Regardless of the promotion measures adopted, the core of PLG is to provide self-service product guides as much as possible, rather than hiring sales or training staff to help users use the product.

7. In-App Upgrade

The core of subsequent value-added products is user upgrades.

Loom

This is the Loom we all know and love. In the PLG world, this software for recording and sharing screens is new and popular. They didn't spend any money on advertising and gained millions of users in a very short period of time.

But now, they need to find a way to get users to upgrade and monetize. In product design, Loom puts other functions that need to be upgraded together with basic editing functions, and directly directs traffic to upgrades.

Basic operation interface of Loom free version

Subsequent value-added vs free trial:

There is no doubt that subsequent value-added products like Loom need In-App upgrade reminders more than free trial products like Freshbooks. For a free trial product, when the trial expires, you can use content marketing strategies such as blogs, pictures, or online videos to remind users to place an order. However, for subsequent value-added products, the design of reminders to upgrade or pay must be reflected in the App.

8. PPC Advertising

What about PPC (pay-per-click) advertising? Take a look at the effects of Google SEM. When we search for “social media marketing scheduling tools” on Google, ads for three well-known products pop up:

in:

• Hootsuite - has a free version
• Loom - No free version
• CoSchedule – No free version

Subsequent value-added vs free trial:

When considering redirecting traffic from PPC ads to subsequent value-added products, please be particularly careful. Ads should deprioritize “free trials,” like Buffer did on its pricing page. Hootsuite also emphasizes paid plans and downplays free trials in its PPC ads.

Otherwise, you may end up bearing excessive traffic costs for users who don’t pay at all. Compared to spending money on advertising, optimizing products is a more urgent matter. However, if you can offer a product with a free trial (and there is no free version at all), advertising is also possible (like Loom).

8. Content Marketing

PLG marketing always hopes that the customer acquisition cost is as low as possible. Content marketing helps with this. For example, Buffer is a subsequent value-added product that is good at using content marketing to acquire customers.

Content Marketing at Buffer

Their experience is nothing more than:

1. Increase SEO priority;
2. Compile informative and practical teaching articles;
3. Do a good job of content classification and archiving;
4. Closely grasp the needs of new users;
5. Introduce cases and influence new customers from the successful experiences of existing customers.

Subsequent value-added vs free trial:

Whether it is subsequent value-added or free trial, content marketing is extremely important. Of course, for a subsequent value-added product, content marketing is more important, because it is not cost-effective to attract new customers with paid advertising. Subsequent value-added products should always make organic growth the top priority.

The Future of PLG Marketing

The PGL marketing strategy actually brings marketing talents into many functional departments of the company to collaborate, such as sales, activation, retention, expansion, business strategy, pricing, etc.

Because of PLG, marketers will not only be responsible for the number of new customers, but they will also be involved in the overall user cycle.

So the current situation is that content marketers are no longer just responsible for launching some brand concepts, but have to participate in the content production of sales presentations, social media marketers have to be able to make product GIFs, growth managers have to focus on pricing and product upgrade experiments, and so on.

If you’re excited about PLG marketing after reading this article, then start taking action.

Author: Growth Hacker's Refining Diary

Source: Growth Hacker Training Notes