What is product-led growth? Building the best strategy

Key Takeaways

• Product-led growth is an effective strategy that allows customers to experience the value of a product firsthand instead of listening to a sales pitch

• Product-led growth begins with users discovering a product and ends with expansion and advocacy

• Slack and Dropbox are common examples of product-led growth in the real world

Product-led growth (PLG) is a business strategy that uses the product to drive customer acquisition, conversion, and expansion. PLG companies let their product do the heavy lifting.

Allowing users to try before they buy gives them a chance to explore features at their own pace and make decisions based on the user experience rather than sales pitches. In this guide, we’ll talk about PLG, how it works, and key product metrics.

What is product-led growth (PLG)?

Product-led growth is a go-to-market strategy in which the product drives acquisition, activation, retention, and expansion. Rather than depending on sales reps to close deals or marketing campaigns to generate leads, PLG means products are designed to sell themselves through exceptional user experiences.

PLG centers on free trials, freemium tiers, and self-service signup processes. This gives users a chance to evaluate products without high-pressure sales pitches, with the opportunity to upgrade as their needs outgrow free trials or freemium products.

Product analytics, like customer behavior and usage data, help teams understand where users find value or friction. This helps product teams continuously improve the moments that lead to activation, retention, or expansion.

How product-led growth works

Understanding how product-led growth works can help you implement PLG strategies that drive customer acquisition and expansion.

1. Users discover the product

Product-led growth begins when users discover a product. Users discover products organically through search engines, referrals, word of mouth, or app marketplaces.

Other users find products through product sharing with other consumers or market-assisted discovery. The primary goal of the product discovery phase is to simply make it easy for users to find your product.

2. Users try the product

The next step is to encourage users to try the product through free trials, freemium plans, demos, and self-service sign-up.

• Free trials: Offering free trials lets users explore the full product features without making a purchase

• Freemium plans: Freemium plans offer a more basic version of a product for free, with premium features available for subscribers at an additional cost

• Demos: Demos allow users to see and experience how a product works in real time, helping customers understand product value

• Self-service signup: Self-service signup allows users to sign up for a free trial or product subscription without interacting with sales teams, reducing friction

• Templates: Templates showcase what a product is capable of and how it can address the specific needs of users

3. Users reach value

After trying your product, users experience an “Aha” moment when they realize its core value. This is a key step in customer acquisition and retention.

Time to value (TTV) is a metric that measures how long it takes users to reach the first “Aha” moment.

4. Users adopt the product

Once users have experienced the core value of your product, they adopt your product and continue using it. Users begin integrating the core features of your product into their routine, forming habits and becoming more comfortable with your product

And as teams gather feedback and identify new opportunities, visualizing and prioritizing these ideas becomes essential for ongoing engagement. By mapping out feature requests and improvements, you ensure your product continues to evolve in ways that keep users invested and satisfied.

5. Users expand or advocate

After users have a chance to fully experience and adopt a product, they often consider upgrading to a premium plan. This also corresponds with increased usage, making your product a core part of their daily routine.

Users also invite teammates, send out referrals, and help attract product-qualified leads who have a high intent to purchase your product.

Product-led vs. sales-led vs. marketing-led

Product managers use three models to measure growth, each with different approaches to customer acquisition and touchpoints along the customer journey. Understanding the differences between these models helps you choose the right strategy for your target audience.

Sales-led companies rely on human interaction to drive growth. This model is best for complex, high-value products that require demos, customization, or hands-on support during the buying process.

Marketing-led growth uses content, advertising, events, and campaigns to generate demand. This model works well when products require more education or broad market awareness before customers are ready to convert.

Product-led companies prioritize the product experience. Users access the product directly, experience value quickly, and convert based on firsthand use instead of relying on a traditional sales process.

Many successful companies combine elements from multiple approaches, but PLG companies distinguish themselves by making the product the star of the show rather than the supporting cast.

How to build a product-led growth strategy in 6 steps

Implementing PLG and growth product management strategies helps streamline acquisition and expansion while growing your business. Building a product-led growth strategy starts with following the right steps.

Step 1. Identify the user’s path to value

Teams need to understand what users are trying to accomplish and which actions signal meaningful value. Identifying the user’s path to value helps you reduce time to value and speed up customer activation.

Collecting user feedback is an essential part of this process. Organizing this feedback into something actionable takes the right tools that let you categorize and act faster. 

Step 2. Remove friction from onboarding

The foundation of PLG is delivering value quickly and obviously to new users. Analyze your current onboarding flow and identify every point of friction that prevents users from reaching their first success. 

Streamline signup processes, eliminate unnecessary steps, and guide users directly to the core value. Your goal is to get users to their "aha moment" as quickly as possible.

Simplifying the onboarding process is a key aspect of product-led growth. Make the signup and setup process easy and create a unique first-use experience that helps show new users some of the key features.

In-product guidance and templates can help users understand how to get value out of your product, and self-service help minimizes time spent talking to customer service teams.

Step 3. Use customer insights to find growth opportunities

Customer insights like feature requests and usage data help you identify growth opportunities. Combining qualitative and quantitative signals gives PLG teams a comprehensive overview.

Jira Product Discovery insights can include customer quotes, support tickets, product analytics, market research, Slack messages, sales input, or web articles.

Step 4. Prioritize improvements by impact, effort, and confidence

PLG teams typically have several potential ideas for growth, so they need a clear product prioritization framework. 

Fields can be used to compare ideas by activation impact, retention impact, business value, effort, confidence, funnel stage, customer segment or strategic goal. This allows you to prioritize improvements based on solid data.

Step 5. Connect discovery to delivery

Product-led growth only works if product decisions turn into shipped improvements that create a better user experience.

Jira Product Discovery allows teams to connect discovery ideas to delivery tickets in Jira and track delivery progress from JPD, providing a product roadmap that keeps engineering and product teams to stay connected.

“Jira Product Discovery combines everything I was doing in spreadsheets and Powerpoints into one easy-to-navigate tool. Plus everything is added straight into Jira, instead of requiring some third-party tool to integrate.”

— Abby Kiesling, Product Manager, EZ Texting 

Step 6. Measure outcomes and keep iterating

Product-led growth isn’t a one-time campaign, and teams need to keep reviewing product analytics, collecting feedback, and updating priorities to build a better user experience.

The data you collect should directly inform product strategy and development priorities.

Product-led growth metrics to track

Using product-led growth metrics and product management KPIs can help you measure the success of your PLG campaign. This data allows you to make key decisions that improve the user experience and drive product growth.

Prioritize product improvements that help users find value faster

Product-led growth is most effective when users can discover value quickly, continue finding value over time, and naturally expand their usage of a product.

Jira Product Discovery makes it easy to capture growth opportunities with ideas, connect them to evidence through insights, and prioritize them with custom fields and views. Connecting JPD to project management tools like Jira helps product and engineering teams move from growth insight to shipped product improvement.

Try Jira Product Discovery free today.

Product-led growth FAQs

Is product-led growth only for SaaS companies?

While PLG is most common in SaaS, any product with a self-service experience, clear onboarding path, and measurable usage signals can apply PLG principles.

Does product-led growth replace sales?

No, product-led growth isn’t designed to replace sales. While PLG reduces friction by providing self-serve and freemium options for new users, you should still have a sales team to handle enterprise customers and custom solutions.

What is a product-qualified lead?

A product-qualified lead is a user who has used a product and experienced its value, who is now likely to purchase that product. Product-qualified leads convert at high rates, making them valuable for product-led growth.

How do you know if a product is ready for PLG?

If your product delivers fast time to value, high retention, and self-service options, it may be ready for PLG. Looking at key indicators like TTV and activation rates can help you decide if PLG is right for your product.

What teams are involved in product-led growth?

Product-led growth spans several teams, including product, engineering, marketing, sales, and customer success teams.