How To Write A Kick-Ass Product-Led Growth Strategy
Imagine we’re playing a game of chess and, after a few opening moves, you realize that you’re just placing things around at random. You start losing key pieces, you’re suddenly being pushed back, and you don’t know how you’re ever going to force me into a corner.
You’ve entered into this without any kind of strategy so pretty soon I’ve taken your queen… And then it’s all over. But that shouldn’t come as a surprise, right? And not because I’m great at chess (I am), but because you can’t expect to win such a tactical game without a clear strategy.
Well, wouldn’t you know it, the world of product management is exactly the same; you won’t win in your market without a rock-solid strategy either.
But how do you actually turn intentions into tactics when it comes to the product-led sector?
Yours for the taking
As a product-led growth company, you’ve got a lot going for you: success is yours for the taking if you can only build something that’s inherently useful, share-worthy, and fairly priced. But that doesn’t mean you don’t need to continually audit and redefine your strategy to stay relevant.
Luckily, plotting out a kick-ass product-led growth strategy is just a matter of honing your processes, attitudes, and vision. Want to know how? No problem; let’s look at how to drum up a product-led growth strategy that will guide your product portfolio to the top of the table…
In this article, we’ll be looking at:
- What is a product-led growth strategy?
- What are the benefits of product-led growth?
- How to write a product-led growth strategy
- One key thing to remember…
What is a product-led growth strategy?
A ‘product-led growth strategy’ is essentially the go-to-market strategy for a company whose product is the star of the show, and for whom the majority of sales come from the product’s strength, rather than on the ability of your sales team to chase qualified leads down the funnel. In other words, a product-led strategy is one where the business grows by providing a version of the product that people can consume without needing to be handheld by a sales team. They can just jump in, try it, make use of it, and experience the product for themselves.
A lot of companies start out being product-led, but over time, realize that a sales-led strategy also does help – and so they end up with a blended approach. But having a product-led approach is a really great way of breaking into a market and building something that you can test in a fast way without having to commit to lots and lots of resources.
As such, the core tenets of product-led growth are out-of-the-box value, agility and scalability, and word-of-mouth virality – shooting for these things is what we mean when we use the word ‘strategy’.
What are the benefits of product-led growth?
Product-led growth is all about having a sticky product that ensnares people through its quality and ability to solve an existing customer issue. That means these companies enjoy an innate sense of retention that doesn’t really need to be expounded upon with hardline sales tactics.
Users are drawn to a software product like this thanks to what it does for them. By the time they’ve used it for a little while – perhaps to the end of a free trial period – they’re usually loathed to give it up. You can wow them further with your future updates and add-ons that make the product better, but, if the product is good enough, to begin with, they’d probably stick around naturally anyway.
That baked-in retention also helps fuel the other major benefit of being product-led: word-of-mouth. Happy users often want to tell their friends, colleagues, or IT stakeholders about great products, which helps push for wider adoption on your behalf. There’s a virality to being product-led that can really work in your favor.
- How and why some of the world’s biggest companies are making it work.
How to write a product-led growth strategy
Ok, we know what being product-led means, but how do you build that ethos into your business, align teams, and ensure that your go-to-market strategy is rock solid? Here’s how to design a strategy that sings:
1. Understand the competitive landscape
Your strategy should start from a point of confidence. Confidence that your product fills a gap in the market, solves a unique customer problem, or maybe that it just does everything better than your closest rival. But you can’t know any of that for sure without understanding the lay of the land.
Competitor analysis is kind of a continual thing. Sure, it’s important when you’re first designing what your product is and does, but it’s just as relevant a practice in year ten of your product’s life as in year 0. You’ll often find that competitor analysis can help you pinpoint a niche or a way of pitching your product that you might not otherwise have thought about.
2. Run SWOT analysis
Competitor research can also help you fill out a SWOT analysis. Identifying and writing out all of your product’s strengths, weaknesses, opportunities and threats may sound like homework, but really, the act of going through the process will funnel you toward a clearer strategy.
At the end of a SWOT process, you’ll emerge with a firm understanding of what makes your product special, what you need to do to make it even more so, and how to present all that to customers. That’s strategy, in a nutshell.
3. Nail your product vision statement
Your vision statement is another solid bedrock on which to base your product’s strategy. Identifying who your offering is for, what it offers them, and why it stands out is a powerful way to align teams and define a direction of travel. But if you take it beyond that somewhat templated basis, a vision statement can also cement where you want to end up.
Think about what you ultimately want your product to achieve. What’s the main goal? The big dream? What is your ideal outcome for the future? That’s what a vision statement explores.
5. Figure out what success looks like to you
Your strategy should include a set of defined OKRs (objectives and key results). OKRs are like maps to the market position you want to have, and outlines for how to get there. What’s especially important from a strategy point of view is that you keep your OKRs in mind at all times when planning your product’s roadmap, so you don’t lose focus.
In ProdPad, for example, you track OKRs and their respective initiatives right in your product roadmap. And then, underneath those initiatives, you can also plot the ideas or experiments you want to run in order to solve those particular problems.
6. Be easy to pick up, hard to put down
Great product-led growth comes from being indispensable. That means building into your strategy an onboarding flow that makes the barrier to entry as low as humanly possible. That’ll let people get comfy, after which you can raise the price gently enough that users see paying (and staying) as a no-brainer.
That means thinking carefully about pricing. Often, a free tier, or free trial, can provide that frictionless first experience, while being totally transparent about pricing will help negate any nasty surprises down the line.
Ultimately, if you’re confident enough that your product’s paid features are truly special, you won’t be worried about giving a little something away for free – either for a short while or to a small percentage of your user base.
7. Incentivize word-of-mouth
We’ve mentioned how a certain virality is an inherent benefit in a product-led growth model, but that process can be massively expedited if you wrap your offering up in a presentable bow and encourage users to tell people about how great it is. So think about how you can incentivize that journey through rewards programs and referral schemes.
A great example of this in the B2C space is recipe box companies like Hello Fresh and Blue Apron. They’re famous for offering refer-a-friend schemes that provide heavy discounts to both onboarding customers and the person who made the referral. The customers win here, but so do the brands themselves; for every 100 customers using a referral code, a big enough percentage will become long-term customers to negate the customer acquisition cost (CAC).
8. Think about ‘Now-Next-Later’
Think back to that chess analogy I made right at the start of this article. In chess, a winning strategy can normally be divided into three parts: understanding what’s happening now, knowing what your next couple of moves will be, and having a rough end goal in mind.
In the product world, that’s called roadmapping.
At ProdPad, we’re huge fans of creating product roadmaps using a Now-Next-Later framework.
It’s an approach that takes the focus off of when various new features or improvements need to delivered, and instead gets you thinking about what problems need to be solved – and in what order.
In other words, it’s about making the most of the resources you have in the leanest and most effective way, as opposed to spending the beginning of the year making assumptions, and then wasting a bunch of time trying to come up with the exact dates on when everything’s going to get done.
What’s key about Now-Next-Later is that it removes time from the timeline, and instead gets you thinking about the order in which things are going to be tackled. That means you’re prioritizing at the problem level; you’re asking: ‘is this problem more important than any other?’
Building a strategic roadmap this way helps you make more impactful product decisions, with each one tied back to the objectives that you’re looking to tackle. And, importantly, it lets you make changes to the flow of things without having to unpick a million made-up deadlines.
9. Listen to your teams
Building a product-led growth strategy should be a group project, not something that’s just left up to the product manager alone. It’s worth getting as many stakeholders and teams as possible together to help inform things like your competitor and SWOT analysis, as well as vision statements and your roadmap.
Many hands make light work, sure, but it’s also about being certain you capture every possible hiccup or hurdle, and that you consider every department’s viewpoint. A go-to-market strategy is an essential plan of action for your product, but it’s also an excellent opportunity to align everyone on the mission.
10. Listen to your users
Your users are also a goldmine of useful feedback that should be routinely tapped to help shape your strategy. You’re exposing your product to lots of users, and by doing so, you’re building up tons of qualitative and quantitative data; you’re seeing user behavior and how people adjust to your product as they onboard onto it. But that kind of behavioral data should sit alongside solicited and unsolicited feedback to help you constantly improve and define your strategy.
If, for instance, a group of users says that navigating your product is giving them headaches, you’ll know that UI changes need to become a priority in your roadmap. Once those changes are complete, your marketing team then has something to go and shout about: how your product is new, improved, sexier than ever, and is being celebrated with, say, a month of free premium usage.
That’s effective strategizing – letting feedback inform change, and letting that change inform your tactics for growth.
And if nothing else, remember this…
It’s incredibly important that you don’t get tied down to one particular strategy or tactic.
Always keep in mind that the best strategies are the ones that are shared with other people, battle-tested, and adapted. So don’t just create something at the beginning of the year and think, “yep, nailed it!”. No strategy should exist in a vacuum; you should always be ready to question yours.
What’s key is to take regular looks up above the parapet to figure out how the world has changed. How has the competitive field changed? How have your capabilities changed? And, how has technology changed? Whatever the case, your strategy will need to change to follow suit.
Great strategic thinking means always adapting, continuously improving, and learning from what’s happening around you. Remember: in business (just as in chess) the board is a constantly changing arena – so you need to ensure you’re moving along with it to stand a chance of winning.