Product-Led Growth: How to Drive Adoption and Expansion | DigitalOcean

Product-led growth (PLG) is changing how businesses market products and services. Rather than relying on sales teams and expensive marketing campaigns, PLG is all about making a product so good that it sells itself.

Think about products like Calendly, Grammarly, and Zoom. Their products are so useful, compelling, and pervasive that you can’t avoid them even if you try. They’re omnipresent and often provide free trials or freemium models that give you no excuse not to try it.

That’s product-led growth—when the product is the hero (not the deals, discounts, or marketing slogans) and keeps customers coming back for more.

Product-led growth is a relatively new concept. Blake Bartlett at OpenView Ventures coined the term in 2016, and it’s been taking off ever since. And that leads to some questions:

• What’s making product-led growth suddenly take off?

• Is product-led growth the right strategy for your product?

• How can you get started with product-led growth strategies?

We’re diving deep into everything you need to know about product-led growth. Discover how to leverage this trend to elevate your products and services to star status.

What is product-led growth?

The product-led growth model (as the name suggests) positions the product as the main driver of customer acquisition, engagement, and retention. Traditional growth strategies lean on sales and marketing teams to push products, but PLG leverages the product’s value to pull customers.

Here’s how it looks next to other growth strategies:

• Sales-led growth depends on a direct sales team to close deals. Sales-led companies use strategies that target high-value customers with personalized pitches and demonstrations.

• Marketing-led growth uses advertising, promotions, and content marketing tactics to generate leads that the sales team converts into customers.

• Product-led businesses let the product or service market itself through its inherent value, word of mouth, and user experiences.

There’s a catch with product-led growth, though.

For PLG to work, you need to have a truly outstanding product or service. It can’t just have slightly better prices or features than a competitor—it needs to wow initial buyers and turn even casual browsers into advocates.

Take GitHub as another example. GitHub hasn’t relied on extensive traditional advertising to become known. Instead, it has become essential in the coding community purely through its utility and word-of-mouth among developers. GitHub facilitates code sharing and version control, providing a platform that naturally attracts users who benefit from its features, showcasing how a product can lead its own growth trajectory.

When a product is good, it can speak for itself. It compels customers to try, buy, and spread the word organically—no pushy sales tactics necessary.

Why product-led growth is taking off

Traditional growth strategies aren’t working as well anymore. Simple as that. Today’s buyers want instant value, and they’re more inclined to try products that provide immediate experiences without listening to a 30-minute demo or sifting through a dozen how-to pages.

Here’s why product-led growth is taking off in 2024:

• Consumer expectations: Modern consumers want to explore products on their own time (and at their own pace). They want free trials, freemium models, and self-service platforms to try products themselves before becoming paying customers.

• Market trends: Your business can’t afford to test a marketing business strategy or sales tactics over 90 days to see how it performs—it needs results and data now to acquire customers and upgrade existing customers. PLG helps your business adapt and evolve quickly based on real-time user data and engagement.

• Cost efficiency: When your product drives sales, your business can spend less on marketing and sales—and that means you can put more resources into perfecting your products and prioritizing your product roadmap. It also improves the customer lifetime value without increasing customer acquisition costs.

• Word of mouth: The world is more connected than ever before. Thanks to smartphones and internet accessibility, quality products can go viral without hefty marketing spend.

Product-led growth strategies

Product-led growth is all about making your product irresistibly good, but that’s easier said than done. If you don’t know where to start, give some of these product-led growth strategy ideas a try:

1. Make it easy to use

The best products feel intuitive straight out of the box—no manual or lengthy documentation is necessary. Make it easy for new users to jump in and see immediate value from your products.

Support shouldn’t necessarily be a handhold for users—nor should customer success teams. It should be a last-ditch effort. Give them everything they need to be successful on their own.

2. Improve the user experience

Monitor experience and ask for feedback. What are your users saying? What do they like (and dislike)? Use this feedback to make those little tweaks and changes to keep them happy and turn new users into long-term advocates.

3. Add virality to the product

You can share Dropbox files with non-users, and those without a Zoom account can still join a meeting as a participant (no sign-up or downloads required). They get to experience these products firsthand, and that’s powerful word-of-mouth marketing.

Make it easy for your users to share your product. Don’t force visitors into lengthy sign-up processes just to get their email addresses.

Remember, that’s marketing-led growth—you’re following a product-led model now. You don’t need to convince them to buy your product. Once they use it, they’ll want to buy it.

4. Use freemium models

Let your users try the product with a free version or a trial. Hook them with enough value that they can’t resist upgrading for even better features.

That’s the balance, though. Hold too much value back, and they won’t be invested enough to upgrade. Give too much away, and they might never need to upgrade.

Take a look at SendGrid’s freemium model. Developers can use SendGrid to send 100 emails per day, free forever. Once they exceed that volume, they’ll need to upgrade to a paid plan—but now they see the value and will stick with SendGrid for the long haul.

5. Leverage your data

Look at your analytics to see how users interact with your product. What features do they use the most? What tabs do they rarely visit? Where do they get stuck? This goldmine of data can steer your product development in the right direction.

Examples of companies doing product-led growth right

We’ve already mentioned a few examples of product-led companies, but let’s dive into the details to see how they make it happen:

Zoom

Zoom became a household name almost overnight because of its ease of use and reliability. They focused on making video conferencing so straightforward that people could start a meeting with just a click—no complex setups or technical headaches.

Their free version lets everyone enjoy the product, and that hooks buyers into investing in the paid plans for their businesses.

Slack

Slack is another poster child product-led company. The messaging platform transformed workplace communication by making it functional and fun. They created addictive experiences with customizable channels, personalized emojis, and embedded features like polling and GIFs.

Slack grew mainly through word of mouth. Everyone who used it loved it, and they brought on their teams, who brought on more teams, and so on.

Calendly

Calendly takes the headache out of meeting scheduling with a simple, easy-to-use interface. Users loved eliminating the endless back-and-forth emails to set meetings, and everyone they met with enjoyed the same functionality and experience.

Grammarly

Grammarly uses a freemium model to let all users experience the basic benefits of grammar and spelling checks for free. However, if they want more in-depth writing insights (which they eventually will), they’ll need to upgrade to a paid plan.

Grammarly made itself pervasive and accessible by integrating with tons of browsers, word processors, and applications, becoming a part of everyone’s daily workflows.

Drive product-led growth with DigitalOcean

Whether you’re starting out or scaling up, DigitalOcean gives you the cloud solutions you need to focus on building amazing products rather than managing complex infrastructure.

We help you drive product-led growth by providing everything you need to make your product shine—from scalable compute instances to managed databases and beyond (all with predictable pricing).

• Global data centers: With data centers worldwide, your product benefits from reduced latency and improved performance. That means your users get a great experience, regardless of their location.

• Simplified deployments: Our managed Kubernetes service automates deployment, scaling, and operations for your application containers.

• One-click apps: Speed up deployment and minimize operational overhead with access to a range of pre-configured 1-click apps, such as databases, development tools, and content management systems.

Ready to drive adoption and expansion through product-led growth? Start building with DigitalOcean and see how our cloud solutions help your product take the lead.