A product-led growth (PLG) motion can be an effective and powerful way to drive growth with reduced sales effort and acquisition costs. Putting the product at the center of the growth model makes it the mechanism for discovery, onboarding, and activation.
But to execute a PLG motion effectively, you need to truly understand what users care about and then serve those needs directly. Plus, you need to efficiently convert them into paying users!
This is easier said than done. Through our own experiences, we learned that PLG is not a holy grail or a panacea, nor a requirement In fact, we’ve moved Command AI away from a fully-PLG, self-serve flow because we found internally that our process went better with a blended sales and product-led approach.
As my colleague Cristina wrote,
"If I had written this story last year, I would have gotten burned at the stake for my hot take. But I missed the mark on being a contrarian, seeing as today, that take is getting colder as more people agree. Removing our free tier, replacing all of our CTAs with "Book a demo," and “forcing” people to talk to sales seems criminal, and makes a PLG enthusiast's eyes bleed, but it’s been one of the most successful experiments we’ve run."
But that doesn’t mean PLG can’t be valuable for your business. It's essential to understand how a PLG motion works before you can decide whether it's the right fit for your business or not.
Plus, you can't possibly personalize your UI for every user. But there are ways to personalize
The world before PLG
Traditionally, sales motions were, well, sales-led!
You employed a team of salespeople, from junior-level folks focused on driving leads to AEs who managed accounts to VPs and Heads of Sales who set strategy, managed teams, and oversaw execution.
But something changed in the 2000s as software evolved from a nerdy nice-to-have into a fundamental underpinning of the economy. While many enterprise tools still maintained a heavy-handed sales cycle, both B2B and consumer software products began experimenting with product-led motions, which let users get into the product before going through any qualifying sales cycle.
The crux was that the product should be good (or great) enough to sell itself.
This meant that users had to be able to:
- Identify with the product marketing message and take a step towards onboarding
- Onboard easily by themselves
- Experience and get value from the tool (the faster, the better!)
Well, it began to work!
Since then, PLG has become a dominant part of the SaaS world, evoking dreams (and realities) of low overhead and highly effective growth with low CAC and sustained LTV. Users love the product, become paying customers, and then share it with their networks, boosting referrals.
However, achieving that takes a lot of intentional design and work to optimize for an efficient motion.
The PLG funnel
Before building an effective PLG funnel, you must understand your user's journey through your product. While this is not one size fits all, there’s the traditional “AARRR” framework which helps capture each stage of the journey.
- Acquisition: How users discover the product.
- Activation: The initial experience that drives users to realize the product’s value.
- Retention: Keeping users engaged and returning.
- Revenue: Monetizing the user base effectively.
- Referral: Encouraging existing users to bring in new users.
Identifying and optimizing key touch points in this journey can significantly enhance overall growth. Command AI aids in this by providing insights through surveys and chats, helping to pinpoint areas where users might be getting stuck or needing more guidance. More on that later.
When you map out your customer journey, you want to map events, emotions, interactions, and potential friction. And you need to do it on a persona level. That's because not all users are alike, and a set of features or experiences relevant to an account administrator might differ from a junior member or a CEO, all of whom could be within your user base.
Once you have defined these key personas, you can begin to map out each stage for them.
Acquisition: How users discover the product
This initial stage covers how people first come into contact with your brand and product. This could be through paid advertising, word of mouth, a Google search leading to a blog post, or any other acquisition channel. Your marketing team usually handles this. If they and the product marketing do their job right, people will try the product.
Activation: The initial experience that drives users to realize the product’s value
Once folks demonstrate interest and click into your product, you need to activate them and get them to experience the power and value of your product as soon as possible.
You need to have an easy but instructive onboarding process to do this effectively. The key here is to ask questions in your sign-up flow that allow you to match users into your previously defined personas to better target and optimize their onboarding.
You should
- Highlight core features
- Personalize as much as possible using the persona-level customer journey maps you built + AI Copilot to aid in unique queries
- Use product tours and checklists to keep folks on track
Retention: Keeping users engaged and returning
Even if you do a great job marketing the product and getting people initially activated, it requires continual effort to keep folks engaged and satisfied. Not only do you need to continually update the product and ensure that you're maintaining feature parity, real value delivery, and more, but you also want to ensure that all of your adjacent support and resources are up to par.
When folks have issues, do they get resolution quickly through your support team, self-help resources, or Copilot?
Do you survey them for feedback and improvements and actually act on this data and information?
Your product team is responsible for constantly finding new, more efficient, and better ways to engage users and continue delivering value well beyond the initial session or two.
Revenue: Monetizing your user base
Ultimately, even if you have a great product, getting folks to pay for it can sometimes be challenging. Building a PLG revenue strategy is a real science and an art that requires input from growth, product, and leadership.
Some folks use a freemium model.
Others use a standard trial of limited features with a push into a premium plan.
Others use a reverse trial, which offers the Premium plan in its entirety for a period of time and then removes it.
Whatever strategy you use, you want to make sure it fits your personas and revenue needs. If you're an earlier-stage startup, this will likely be a moving target, and you may switch from one pricing structure to another. For example, we recently moved from flat, tiered plans to custom plans once we realized that it was better for both us and the customer and offered more flexibility.
Referral: creating virality
The referral stage is one of the most essential parts of the PLG flywheel. You've already notched a win by creating engaged and happy users through your PLG flow. But when you can turn those folks into advocates for your brand who further bring in users and act almost as evangelists or salespeople for your product, you unlock a new level of virality and growth.
You can incentivize this with a formal referral program that rewards folks with discounts or cash for new sign-ups. Or, you can add some calls to action that encourage them to do so after Wow moments.
Another strategy is to offer free invites for colleagues. For example, if you have a messaging app or a task management app that works better with a team in it, you could offer free referrals for teammates for a limited time.
All of these require your product and growth team to have a coherent upfront strategy and well-executed in-app messaging and product design to make referring top-of-mind and easy for users.
Three stage strategy: learn, personalize, and convert
We just reviewed the five-step AARRR framework and the roles and responsibilities in those stages for different teams. However, one way we found success in assisting PLG motions for our customers is by breaking this up slightly differently.
We call it Learn, Personalize, and Convert. While the traditional five-step works, when you look at Learn, Personalize, and Convert, you better understand the actual purpose of those stages, and it's more natural as a grouping.
Learn
In the Learn section, you're doing all of your homework. You're trying to learn what users care about through user research, interviews, surveys, help chat, in-product experiences, and dead ends. Through all this user intent information, you're preparing, learning, and giving yourself a shot at creating an incredible customer journey within the PLG motion.
Personalize
Next up is personalization. You must have personalized in-app messaging through chat and nudges, which allows your users to have great experiences and, critically, to learn what users say they care about. What do they search for? What do they ask about? Where do they click? Through all of this qualitative and quantitative data, you get a better and better shot at personalizing and creating the ultimate tailored experience.
Convert
Finally, in the conversion stage, you can use different tactics, such as nudges, paywalls, or in-app chat, at the right time to encourage conversion.
There's nothing worse than bombarding your customers with conversion-oriented messaging when they are not ready.
It’s like the basketball player throwing up a deep three when he should’ve passed it around so the team can get the best look at the basket.
By having conversion-focused nudges and paywalls at contextually relevant times, you're not only creating a smoother and less intrusive product experience for users but also increasing your growth, expansion, and retention potential.
Two core principles for PLG motion
When you step back and look at these frameworks, two things become clear.
First, it's straightforward to understand what a PLG motion is in principle.
Second, actually building that PLG motion is quite involved.
It requires a lot of homework, constant tailoring and optimization, and tools to help you execute it.
When I asked our CEO, James, about how he thinks about PLG motions, he boiled it down to two core principles.
Make your UI work without human assistance
One, make your user interface work without human assistance. That means that your in-app messaging, help documentation, AI Copilot, and everything else in product need to be as informational and instructive as possible without being intrusive. The product should be easy to use but powerful, and not require hand-holding from account managers, support staff, and other humans in the loop.
Define key personas and understand their journeys
Two, you need to make sure you have your key personas defined and that you understand each customer journey within those personas really well.
This isn't a one-time exercise. As we wrote about, it's an ongoing process that will evolve as your business and product evolve.
If you can do both of these things successfully, you'll be in a good position to create a more personalized PLG motion.
The reality of building a personalized PLG motion
But here's the reality.
It's nearly impossible for you to create a fully personalized experience for each individual. It just doesn't work. There's not enough team time and energy at scale.
But tools like Command AI can help you get close.
With Command AI, an AI-powered guide stands next to every PLG user. Through their feedback from nudges and their engagement with Copilot, we can help you simulate what it would be like to have a human by their side, without all the cost and overhead of maintaining a live team.
When you have the proper targeting for nudges, UX-focused product design, and the ability to turn feedback and data into improved product experiences, you can achieve deeper and deeper levels of personalization.
Together, these allow you to move closer to an individualized, sustainable PLG motion, which improves your growth and retention metrics and users’ experiences.
