What’s the one thing every organization is trying to achieve? The answer: growth. It doesn’t matter if you own a plucky SaaS startup or manage a fortune 500 company; you’re always trying to grow brand awareness, customer satisfaction, sales — and your bottom line metric. That’s why the product-led growth flywheel approach has become so […]
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What’s the one thing every organization is trying to achieve? The answer: growth.
It doesn’t matter if you own a plucky SaaS startup or manage a fortune 500 company; you’re always trying to grow brand awareness, customer satisfaction, sales — and your bottom line metric. That’s why the product-led growth flywheel approach has become so relevant to today’s business landscape.
Here is what the product-led growth flywheel is and how to implement it for your company.
Before we can answer that question, we have to ask, “what is product-led growth?” Without this vital piece of information, the product-led growth flywheel is meaningless.
“A business methodology in which user acquisition, expansion, conversion, and retention are all driven primarily by the product itself. It creates company-wide alignment across teams — from engineering to sales and marketing — around the product as the largest source of sustainable, scalable business growth.”
In other words, PLG is about harnessing the power of your entire company to create better products and, ultimately, experiences for your target audience.
Think about the traditional marketing and sales funnel. Potential buyers start at the top as strangers, filter down into leads, and eventually become paying customers. But then what happens? The answer, in most cases, is nothing — your customers become an afterthought.
To have your customer become an afterthought is a major problem. We have known seemingly forever that 92% of people say they trust recommendations from friends and family — more than all forms of advertising. Modern companies need to engage their current customers so that they spread the word about their brand and products.
The flywheel spreads the good news, and it happens because it encourages organizations to view their customers as a vital piece of their future growth. When customers become promoters, company growth is almost inevitable.
Whew, we’ve come a long way! We now have a shared understanding of what product-led growth and flywheels are and why flywheels are beneficial. But you may have noticed; we haven’t actually answered our original question yet. Don’t worry, we’re about to tell you what the flywheel is and what it does.
The product-led growth flywheel is made up of four user segments and four journey stages.
The four user segments in the product-led growth flywheel are evaluators, beginners, regulars, and champions. Let’s take a quick look at each:
The four journey stages in the product-led growth flywheel are activate, adopt, adore, and advocate. Let’s take a quick look at each:
Now that we have an in-depth understanding of the product-led growth flywheel, let’s talk about how to implement it. Simply follow these four steps and you’ll learn how to be product-led.
If the growth of your company is going to center around the quality of its products, you should really make sure that said products are absolutely amazing.
Ask yourself, “what major challenges do my customers need to overcome?” Then do what you can to ensure your products solve them with as little friction as possible. Easier said than done, true. But if it were simple, everyone would already be doing it, right?
Once you’ve created a top-quality product, you need to address the way you talk about it to potential customers. Lead with pain points and how your offering solves them. Showcase social proof pieces like positive reviews, testimonials, and case studies.
But never exaggerate. You know how you can’t stand a braggart? Well, your customers can’t either. The initial stage brag and exaggeration might help you secure initial customers and users. But it will hurt your flywheel in the long run because it will set your users up for disappointment. Disappointed users won’t advocate for your company, which is the ultimate goal.
If people don’t use your product, you’ll never get your flywheel in motion. That’s why it’s so important to make things easy for potential customers. Remove as much friction as possible between them and becoming a user of the things you create.
Many SaaS companies do a great job of helping customers have easy adoption. Take a company like Slack. You don’t even have to pay a monthly fee to use their service. You just sign up and start messaging colleagues.
Note: some people worry that a freemium model will reduce sales. While it’s true that some folks will remain on your free plan forever, if you’ve built a quality product, plenty will upgrade to paid plans. Freemium is just a way to “get them in the door,” so to speak.
Once people start using your product, you need to make sure they experience its value as soon as possible. By delivering quick wins, you’ll build excitement for your offerings. Quick wins can be done in a few different ways:
Time to value isn’t the only thing you need to prioritize. You also want customers to share their love for your products with their friends, family, and colleagues. To encourage this, try:
Ultimately, you want to make sure your new customers experience the value of your products quickly. Then give them ways to share their positive experiences with the world.
It can help to manage all of your information in one spot. For businesses, all information held in one place could be a tool like Asana or Trello. For the legal field, you may want to look at Filevine case management software or other software that performs these tasks for you.
You won’t know if your product-led growth flywheel is effective until you measure it. This means you need to track a few key metrics during your product management efforts. Here are three we recommend:
There are plenty of other metrics you can measure as well. Choose the metrics that correlate best with your company goals. Then do your best to track your progress and improve the metrics.
Companies that use the product-led growth flywheel put their products at the center of the customer experience. By doing so, they’re able to encourage greater customer advocacy and business growth. To adopt this approach for your organization, follow our four-steps:
If you can successfully take a target audience through the four user segments and journey stages outlined above, your company will be successful. Good luck!
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