Product-led growth (PLG) is rapidly gaining popularity. Why? Because a product-led growth strategy enables companies to glean customer insights from within the product itself. This in turn facilitates the creation of a near frictionless customer experience (CX) while reducing costs, enabling the company to rapidly scale.
Let us start with what PLG is. Forrester’s report, Product-Led Growth: A Forrester Overview, defines product-led growth as the alignment among product management, marketing, and sales to use the product experience and the product’s demonstrated value to drive growth. As with any growth strategy, B2B CMOs are uniquely positioned to orchestrate alignment of the revenue engine. By developing and communicating a clear, differentiated brand story, marketing can build stronger relationships internally and externally, attract more business, and help build the viral and network effects enabled via the ease of learning about, sharing, and experiencing the product. To ensure that the revenue engine stays aligned and focused on the customer, the B2B CMO has a significant role to play in addressing the following seven fallacies of PLG:
- Product-led growth puts the product first. For PLG to succeed, the primary focus must be on the customers’ needs. There must be a laser focus on delivering a great CX both through the product and via a cohesive, customer-focused message. CMOs: Show how marketing can drive a shared view of the customer across the revenue engine.
- Companies must take an all-or-nothing approach. A quality product-led growth strategy enhances the volume and depth of customer engagement and insights via its unique in-product capabilities. Although a pure PLG strategy will maximize these benefits, it may not be the best fit for the company or its offerings. In cases such as these, using a hybrid approach where elements of PLG are leveraged, such as usage tracking, can provide superior insights that can then be used to improve CX. CMOs: Participate in strategy formation to help determine if a pure or hybrid PLG strategy is the best fit.
- Product-led growth is new. It’s not, but the capabilities to support PLG have increased, making the strategy far more effective. These include better in-product capabilities to communicate directly with users and track engagement, customer-centric revenue engine processes that leverage both existing communication channels, and new in-product engagement and PLG technologies designed specifically to enhance in-product reach, engagement, and behavioral tracking. CMOs: Share how marketing can drive new customer interactions and technologies by leveraging existing and new methods to grow brand and company awareness.
- The product has been ignored in favor of marketing and sales. Companies comprised of siloed teams, where any one team has too much influence, tend to limit their growth potential. Companies drive PLG success with great products, supported by an aligned revenue engine with a shared view of the customer and shared goals. CMOs: Work with revenue engine peers to develop and sustain trust in the brand, the company, and the product(s) by focusing on the same goal: a great CX.
- The product alone can scale the company. Experience shows us that successful PLG companies typically employ an integrated approach rather than simply relying on the product to do all the work. To scale more rapidly, attract more attention, and engage in more complex sales, companies that employ a PLG strategy are required to accelerate awareness and engender trust. CMOs: Communicate how marketing can develop effective storytelling to amplify the brand to accelerate more engaging in-product interactions.
- Marketing is no longer needed at the top of the funnel. Although self-service via the product can drive high volumes of demand, the product must be known and trusted by the intended target audience to convert this demand. To maximize the quality and volume of demand requires the creation and delivery, both in-product and outside the product, of a clear, differentiated brand story. CMOs: Demonstrate how marketing-specific skills can help build a first-class digital and nondigital experience to amplify the brand story.
- Operationalizing the insights gleaned from user data is easier with a PLG strategy. A properly implemented PLG strategy provides a higher volume of data, but this does not translate into effective insights on its own. CMOs: Articulate how marketing possesses specific capabilities required to generate, capture, interpret, prioritize, and communicate customer data and insights to improve CX.
By aiding to dispel these seven product-led growth fallacies, CMOs can use the skills unique to marketing to help the company scale for growth. To understand what your CMO and product management peers are focused on for 2023, see Forrester’s 2023 Planning Guides for product management and B2B marketing executives.