How to create a product-led growth strategy

Product-led growth (PLG) isn’t something you can experiment with on the side—it’s a strategic shift that demands full commitment. To truly embrace PLG, your entire organization must align around your product as the driving force behind growth—but this takes time, focus, and sustained effort.

In this guide, we dive into the essential pillars of PLG and the frameworks that will transform your approach from ‘maybe one day’ to ‘right now.’

The 4 pillars of product-led growth

Being product-led isn’t just about creating a great product. (If only it were that simple.) 

Here’s the truth: it’s actually about so much more. It’s a holistic go-to-market approach that aims to obliterate customer acquisition costs by building a product so indispensable, so irresistible, that your users do the selling for you.

1. Market

Product-led brands need to go after a very large market. Being a big fish in a little pond isn’t fruitful for product-led companies. Your industry and 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. Product-led growth casts a wide net before qualifying leads based on firmographic data and product usage.

Pro tip: start-ups must understand their addressable market before investing too much time in product creation. Look for a combination of audience size and willingness to pay, and be ready to pivot if needed. 

2. Pricing and model

Product-led brands run the risk of pricing themselves out of the market if they don’t implement accessible pricing options. Pricing needs to be transparent from the get-go. Traditional sales-led models encourage leads to request a demo, and then speak to a salesperson and get custom pricing. It’s a long process that lends itself to large enterprise companies that have unique needs.

This process is too long for a product-led growth approach. The sales cycle needs to be short, so pricing needs to be transparent and accessible. Users should be able to self-serve (87% of tech buyers want a self-service buying option), put a credit card in, and buy your product right away. You also need an easy way for people to try your product for free, so you need a freemium plan or free trial.

Experiment with your SaaS pricing strategy by gauging price sensitivity with a customer survey, and ask these 4 questions:

1. At what price would you consider the product so expensive that the benefits fall short? (Too expensive)

2. At what price would you consider the product to be priced so low that you would worry about the quality of the product? (Too cheap)

3. At what price would you consider the product is starting to get expensive, but is still worth the price? (Expensive/High side)

4. At what price would you consider the product a bargain given the available features? (Cheap/Good value)

A snapshot of Contentsquare’s pricing page

3. 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.

Fun fact: the Contentsquare uses the Contentsquare platform to create content users want to read. Sean Potter, an Organic Content and SEO Lead at Contentsquare, shares how the team uses content for product-led growth.

4. Product

To use low-cost marketing channels and go after a large market, you need a product with a broad enough value proposition.

Like the market size, your UVP should be broad and be something that a large number of people come up against. If your value proposition is very niche—let’s say you’re targeting B2B agriculture brands—then the word-of-mouth element of product-led growth isn’t going to materialize. People in B2B agriculture will only recommend your product to other brands in the same industry. 

You also need to give your users quick time-to-value. 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, fashion retailer Calzedonia utilized Contentsquare Heatmaps to identify underperforming widgets on their homepage. After analyzing these insights, they decided to remove the unengaged widgets, leading to an annual savings of $20,000 in maintenance costs. 

5 product-led growth frameworks to choose from

While the pillars noted above are high-level guides to a PLG business strategy, they aren’t detailed enough to plan your work. For that, you’ll need a product-led growth framework. 

Here are 5 frameworks to choose from, depending on how customers use your product, your company’s objectives, and your team. 

While each framework is different, they share the same goal: to give your product team a way to conceptualize and prioritize work.

1. Activate, start, discover, convert, scale  

Your users go through a multi-step product journey, but the way they interact with your company doesn’t necessarily align with your top priorities. The ‘activate, start, discover, convert, scale’ framework prioritizes steps in the user journey out of order: 

For example, the ‘discover’ phase relates to a person's time to learn about your product (preferably through those low-cost channels we mentioned earlier). At that moment, the product itself is the turning point between "I’ll give this a shot" and "I’ve gotta have it." 

While 'discover' is undoubtedly a critical phase in product-led growth, it isn’t where you should apply most of your attention. Instead, this PLG framework rates activation, or the 'a-ha moment', as the most crucial product-led moment.

Image via Product Led

Re-prioritizing steps in the user journey lets teams implement the heavy-hitting PLG tactics first. Think of it like the 80/20 rule: if you focus on the most impactful points first, you can make more PLG progress in less time. 

In action, this could look like filtering replays to see what steps your most engaged users took in their first days. Once you find their a-ha moment, you can adjust your product to drive new users to that point quicker, increasing adoption.

Too many ideas, too little time 

Maybe there’s an alternate universe where your product team has plenty of time, resources, and support to power through your entire product backlog. On this timeline, though, teams have to carefully decide which products to work on, and when. 

To make these decisions easier, teams can use a product prioritization framework to strike a balance between:

• Quantitative data

• Qualitative insights 

• Company goals

• Team resources

 Learn more about how to prioritize your work here.

2. Hook model

Another way to drive product-led growth is to create strong user habits. The hook model framework is a habitual loop between 4 stages

• Trigger. This catalyst kicks off user engagement. For example, a notification on your Instagram app.

• Action. A user’s first step is to respond to the trigger, like opening the Instagram app. 

• Reward. Something motivates the user to keep going, like finding new friends. 

Investment. This is a cumulative reward that connects a user to the product, like earning more followers.

Image via Digital Uncovered

The hook model is helpful for products that need to be habit-driven or used frequently. For example, a task management app requires users to log in daily, while payroll software has a stronger monthly use case. 

3. Funnel

If your company isn’t ready or willing to commit to self-serve product sales, you may opt for a product-led growth funnel. 

A funnel can still have self-serve elements, but will include touchpoints to serve different goals. For example, you might start accounts via a self-serve channel, but bring in the customer success team to expand or upsell the account.

Image via Clearbit

Since the product-led funnel more closely represents a traditional SaaS sales model, it can be a useful entry point for PLG. You might opt for this model if your organization is reluctant to adopt a product-led growth strategy or makes changes at a slower pace because of its size or stage.

You can learn more about this method in the product-led funnels vs. flywheels chapter of this guide.

4. Flywheel 

The flywheel framework is similar to the hook model, but it focuses on user growth over engagement. The process relies on the product and user experience to turn lookers into buyers into raving fans.

Image via Product-Led Growth Collective

Since this framework is user-focused, your team must be ready to turn on the empathy and tune in to user insights. It is vital to regularly survey users to hear about issues and opportunities in their own words and analyze session replays to boost engagement. 

We now pronounce you Product and User

To make your users feel like your product was made for them, never stop chasing product-market fit. 

Ryan Singer, formerly of Basecamp, points out that the perfect match goes both ways:

“You want to have customers who pay you because they value what you’re doing; anything else will lead you away from where you want to go. Product-market fit works in both directions: don’t just accept anybody that comes your way. Learn to say 'no' to prospective customers who don’t fit your vision and values."

5. Single point of truth

As the saying goes, "if you want to go fast, go alone. If you want to go far, make sure your entire organization is committed to user-centricity." 

Or something like that. 

The single point of truth framework places your product and customers at the center of all operations.

Image via OpenView

To make this framework work, you need user analytics and data democratization. Learning about users—and giving everyone access to those learnings—keeps the organization close to the people it services, both functionally and emotionally. 

Getting everyone on the same page also makes cross-functional collaboration easier, since everyone is working from the same place of understanding.

Everyone gets access!

Co-op Food, a UK grocery retailer, embraced data democratization with Contentsquare, enabling teams across product, UX, and marketing to act on data-driven insights. By leveraging Session Replay, Heatmaps, and Journey Analysis, they were able to

• Optimize website navigation and improve customer satisfaction

• Gain a deeper understanding of the complete digital journey

• Make data-driven decisions that enhanced the customer experience

• Foster collaboration by giving all teams unified access to insights

(embed: https://youtu.be/VrFA758r5pY)

Product-led growth takes time to implement, and that’s okay

We can’t stress this enough: being product-led is about more than just having a great product. You need alignment across your teams and organization to create a structure and culture for the product-led growth strategy to flourish.

It takes time to get everyone on board, change your workflow, and rearrange priorities and perspectives. It’s okay if PLG takes time, though, because it was never meant to be one-and-done: as your users and industry change, so will your product. 

Frequently asked questions on PLG strategy