Chances are you’ve been on the receiving-end of a product-led business model. While this approach is not new, it has taken the digital world by storm in the last few years. Slack, Dropbox, Zoom, Canva, and Trello are all examples of companies that built their success by creating products that are easy to use, offer clear value, and encourage users to adopt and share them. In this approach, the product itself serves as the primary driver for growth through customer satisfaction and viral expansion. The focus is on creating a product that is so valuable, user-friendly, and well-designed that it inherently drives customer engagement, adoption, and growth.
Sounds great, right? So why isn’t every product organization taking this approach? Many businesses are still tied to their sales-led approach. These companies take you through the traditional sales funnel of telling consumers why their product will benefit them, why they should book a 30-minute demo, followed by more drip messages, just hoping for a response that leads to a sale. It’s familiar, it’s worked well enough in the past, but it can be complex, unnecessary and expensive.
Product-led companies are moving from hard-sell to “no-brainer”. This is accomplished by letting consumers experience the product for themselves rather than telling them. Gone are the days of elongated sales cycles – these companies empower buyers with the "keys" to their product right from the start. The focus isn't just on closing deals; it's on nurturing success stories. These companies focus on helping their buyer become so successful, the resulting decision to become a paid user is an easy one.
Beyond a killer product, there are many other crucial aspects to think about when implementing product-led growth. Here are some key characteristics that distinguish a product-led company from other types of businesses:
A Business Centered Around the Product Itself: In a product-led company, the product is the star of the show and touches every department. It's not just a static item your sales team is pushing as a means to an end. The company believes that a great product should sell itself and be the main driver of customer satisfaction and growth.
A Company-Wide Emphasis on User-Experience: Product-led companies prioritize exceptional user experiences. They invest heavily in designing intuitive, user-friendly interfaces, seamless onboarding, and continuous product improvement based on user feedback.
For example Zoom's user interface is designed with simplicity and ease of use in mind. The platform's intuitive layout and straightforward controls make it easy for users to schedule, join, and conduct meetings without a steep learning curve. In fact we saw millions of users off all ages and technical backgrounds rely on the tool during the early days of the pandemic.
An Opportunity to Experience the Product First-Hand: These companies often offer self-serve, freemium, or trial-based models, allowing users to experience the product's value before making a purchase decision. The product is designed to be easy to adopt and use without the need for much interaction from your team initially. Dropbox offers a freemium version that allows users to store a limited amount of data for free. This enables users to experience the product's value before committing to a paid plan, and reaching the data limit clearly illustrates the user is finding value in the product.
Virality and Network Effects are an Intuitive Part of the Experience: Product-led companies often leverage virality and network effects to fuel growth. This happens when your users start sharing your product with their colleagues and friends through word-of-mouth, referrals, and social sharing. A product-led business makes this easy and intuitive by creating a product that delights consumers so much that they are excited to share, but also builds sharing and networking options into the user experience, leading to organic expansion.
Slack is a network effect success story, designed to promote collaboration among team members and organizations. The more users within a workspace, the more valuable the platform becomes. Slack's ease of sharing channels, messages, and files encourages organic growth as more users join the platform through recommendations and invitations.
A Focus on Data-Driven Insights and Iteration: These companies rely on data and analytics to make informed decisions about product enhancements, customer behavior, and market trends. They have systems in place to quickly act on these insights and continuously iterate on their product.
A Customer-Centric Approach is Woven Throughout the Business Goals: While traditional companies may have a sales-led or marketing-led approach, product-led companies focus on understanding their customers deeply. This means your product aims to solve customer pain points and provide value from the very beginning.
There is Low Barrier to Entry to Get Started: The products offered by product-led companies are designed to be easy to try, often with low or no initial cost. This approach reduces barriers to entry and encourages users to explore the product. This approach also reduces costs for your business if your team does not need to provide a lot of support right-away.
A Business Poised to Scale: Product-led companies aim for scalable growth, as their product can be adopted by a large number of users with relatively low operational overhead. This usually means investing in user experience, data management and operations up front so your team can continue to be agile as your grow.
The Ability to be Agile and Fast-Paced: Due to the iterative nature of product development and the focus on responding to customer needs, product-led companies often operate in an agile and fast-paced manner. The importance of being agile ties in a lot of what is said above, but product-led companies understand this need by default and are motivated to continue improving the customer experience.
Showcasing Customers is at the Core of the Marketing Strategy: Marketing in a product-led company often revolves around customer success stories, case studies, and product benefits, showcasing how the product has positively impacted users. Canva takes this one step further by featuring a marketplace where users can sell their own designs, illustrations, and templates. This not only empowers designers to monetize their creations but also contributes to the platform's diversity and availability of design assets.
Overall, a product-led company puts the product itself at the center of its growth strategy, empowering prospects, driving value, and providing a clear user experience to drive sustainable growth. At Aero we help product organizations create digital experiences that deliver on functionality, usability and delight, all key components to the success of product-led growth.
Our experts provide insight and support to improve your user experience and design operations to allow your business to meet the goals above. Reach out to our team if you’re interested in partnering or starting a discussion about optimizing UX and winning with product-led growth strategy.