The product-led growth strategy is a new way to help you grow your business, and it has several advantages over the more traditional sales-led growth strategy. It's suitable for businesses of all sizes and in any industry, and it will help you find customers for your products quickly. While this strategy does involve some work on your part, it has long-term benefits that will outweigh the short-term investment of time and money.

However, before you can use product-led growth to benefit your company, there are a few things you'll need to do first. The following guide will walk you through the three steps necessary to set up PLG for your business:

Identify your current product-led growth curve

The first step to setting up a successful PLG program is identifying your current growth curve. Think of it as the standard S-curve you learned about in school. The curve begins with a slow climb, then starts to level out and increase at a steeper and faster rate before leveling again as you reach product-market fit or when the market is saturated.

So how do you know where you stand on that graph? A few metrics to look at:

  • If your trial users are converting into paid customers at less than 10%, your business is probably still in the early stages. (This can be measured by reviewing trial-to-paid conversion rates in Google Analytics.)
  • If you're between 11% and 15%, that's good—you're on par with most product companies. (This threshold can be determined by reviewing historical data.)
  • 15% or higher means you've reached the fast growth stage in which the number of new customers outstrips those who churn.

Identify your ideal user for up-sell/cross-sell opportunities

Once you've defined your segments, determine which of them are the most profitable from an up-sell or cross-sell perspective. This will help you identify the ideal user for opportunities to expand their account with additional products.

As a general rule of thumb, look at those users who are already using more features than others Why? Because they're easier to sell to and have a higher lifetime value because they're sticking around longer. To find out which users fall into this category (and learn more about what they do on your platform), analyze user behavior within Amplitude/Heap(or whatever product analytics platform you use). With this data, you can create a list of existing customers who either pay for multiple products or use multiple features within your primary product that aren't monetized yet.

Help your users reach their Aha moment

Your product team should understand what feature users need to reach the aha! moment. If you don’t know what that is, your company is probably going to make the wrong investments to drive growth.

What exactly is an aha! moment? It’s the moment when users realize the value of your product.

The biggest mistake I see startups make with their go-to-market strategy is adopting tactics like freemium without even having a solid understanding of their target customer's aha! moment. They start defining "good" usage patterns by what they think will improve retention and activation metrics instead of investing in features that actually get users hooked on their product.

In the end, growth is about getting more customers. You can do it through the roof, through paid ads or messages, Cross-Selling and Up-Selling or whatever is your favorite strategy. However, establishing a product-led growth culture is a continuous process that every team should be engaged in.