The Ultimate Guide to Product Led Marketing
The way companies sell software is changing.
Years ago, software was sold almost exclusively to CIOs or CTOs to deploy across the entire organization. This was considered a “top down” approach.
In more recent years, many software companies have found success selling to end users instead, such as employees, taking a “bottom up” approach.
With this change, a new marketing approach emerged called product-led marketing.
At its most simple, product-led marketing is a user-focused strategy that showcases the product itself as a means to acquiring new users.
It’s also sometimes called product-led growth marketing, or growth marketing for short.
If your company is looking to become more product led, product-led marketing might be a first step in that direction.
In this article, we’ll cover the basics of what product-led growth marketing is and how you can implement its core strategies in your business.
How product-led growth marketing works
As we’ve already noted, product-led growth is a strategy that hones in on the end-user experience in order to drive adoption.
Slack is a great example of how PLG marketing works.
OpenView describes Slack’s growth by asking:
“How did your company adopt Slack? I’m guessing this is how it happened: Jane heard about Slack from a friend, so she signed up and started using it with her team. Pretty soon the whole company was on Slack, and no one can remember life before it.”
In other words, Slack relies on providing an outstanding end user experience to promote growth. Eventually, the demand for Slack makes its way up the chain and management is convinced to buy the product by employees who are already using it.
The marketing goal is to sign up active users who can then be converted to paying customers.
The product itself becomes the best advertisement for the company. Every time a user shares a file, sends an appointment or emails a signature request using one of these tools, they introduce potential new customers to the product.
Who is involved in PL marketing?
For PL marketing to be successful, many members of your organization will need to be onboard.
In fact, the product-led strategy will likely need to be at the heart of your business plan, shaping not only how your growth leaders and marketing team work, but also other functions, including engineering.
While all areas of your business need to be aligned, for many companies the primary responsibility lies with non-technical growth teams.
This may seem counter-intuitive.
After all, if the product is the start of product-led growth marketing, surely engineers should be front and center?
However, with the rise of no-code solutions that enable growth teams, engineers don’t necessarily need to be deeply entrenched in PL marketing. Growth specialists can focus on attracting users, while engineers are freed up to focus their energy on the live product.
How does a PL marketing strategy move the needle?
A core reason why PL marketing works is because it recognizes the buyer demographics and behaviors that are shaping today’s marketplace.
The profile of the people making purchasing decisions has changed. More than 45% of B2B technology buyers are 24-34 years old and this group is the single largest cohort in this space.
As the makeup of the workforce changes, companies need to adapt to changing demands and expectations from buyers.
Today’s buyers don’t want the traditional sales-motion. Instead, they want to self-educate.
Millennials and Gen Z (the cohort currently entering the workplace) are used to gathering information online, seeking out reviews, looking at comparison websites, etc. They don’t want to operate on a vendor-mandated timeline.
A high-touch sales approach is likely to alienate this highly independent group of buyers who expect the process to move fast.
Within this landscape, a PL marketing strategy meets the demands of today’s buyers and decision-makers because:
- Customers can experience the product for themselves, on their own timelines
- Customers aren’t forced to sit through sales presentations that they don’t trust anyway
- Customers are given the opportunity to recognize how the product will solve their problem before they’re hit with a sales message
The outcome for your business is more leads.
With product-led growth, the idea is to make it easy for customers to self-serve and access your product, whether through an interactive tour or a freemium version of the product.
The traditional CTA (“contact us for a demo”) is replaced by an on-demand, instant-access demonstration of the product’s value—and requires less commitment in order to get started. This in turn will produce higher quality leads, who have some familiarity with the product and who can be targeted more effectively.
Ultimately, this translates to a higher conversion rate, and a more efficient marketing effort.
How to move to a product-led growth marketing motion
If you’re used to traditional marketing methods, it can be difficult to switch to product-led marketing.
These three product-led marketing motions are common approaches to establishing your PL marketing strategy:
1) Product videos
A good product video is a powerful marketing tool that engages your potential customers.
Rather than forcing them to seek out the information they’re looking for hidden in blocks of text, you can directly show them your product, its key features and benefits.
According to Hubspot, video is the number one marketing tool used to sell both products and services. 71% of consumers say they prefer video to other forms of marketing content, and 55% of all consumers use video to make their purchasing decisions.
However, product videos have their limitations:
- Creating a high-quality, well-scripted video takes time and resources.
- Videos don’t provide a truly interactive experience for the customer. They’re still a controlled marketing experience, rather than a chance for the user to independently discover the value of your product.
- Videos are often generic. Since they are aimed at a wide audience, you can’t segment and personalize your pitch.
For many customers, a video isn’t going to be enough—they’ll want a hands-on experience before they’re ready to buy.
2) Freemium/Free trial
Offering free trials or using a freemium model is a popular customer acquisition strategy. Here’s how they work:
- Free trial: Offer full or partial access to your product, but for a limited period of time. Free trials tend to have a better conversion rate (Hubspot suggests free trials convert at a rate of around 30% while freemium converts around 2-5% of users into paying customers).
- Freemium: Offer partial access to your product indefinitely. Limits may be placed on features, support or storage. Freemium models tend to attract more leads than free trial models because there’s less friction (e.g. no credit card sign up) and up front commitment.
Both free trials and freemiums create a funnel of customers who already love and use your product. Many product-led businesses use this model for precisely this reason, and sometimes even combine both.
For example, Spotify is a freemium product that also offers a 30-day free trial of their premium features.
Unlike a product video, these models allow the customer to explore your product independently and on their own time. Another benefit of these models is that you can glean key customer insights and feedback from these users, to help improve your product.
However, there are downsides to a free trial or freemium model:
- Your competitors can easily explore your software
- It is more difficult to control user churn
- You need to front the costs of buidling a free trial/freemium model
Here, costs can pose the biggest risk. If you’re attracting lots of new users and having to dedicate support and resources to servicing these users, costs can rack up fast.
Without a solid product-led marketing strategy to convert free users into paying customers, then quickly, cash flow may become a problem.
3) Product tours
Interactive product tours are a fast-growing alternative to static videos and costly free trial/freemium approaches.
A product tour allows users to get a feel for the product and how they might interact with it, while still allowing you to shape their experience through overlaying interactive guides and drawing their attention to key features.
Product tours have the benefit of being less costly than a freemium or free trial approach, while also allowing customers to explore the product in-depth.
With no-code solutions, you don’t need to invest engineering resources in setting up and managing the demo and nor do you need to have support on hand for new customers.
Of course, product tours don’t offer the same level of freedom to users as a free trial or freemium model might. But the trade off is that a product tour can make it easier and quicker for your potential customers to identify the value of your product.
Whereas many free trial or freemium users may stick around for your high value features, a well-set up product tour highlights the best features right away.
Product-led marketing is the future of many SaaS growth strategies. And for companies that are ready to transition to PL marketing, finding the right sales motion can be critical for success.
Interested in an interactive tour of your software? See a live product tour on our website.