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What is product-led growth?

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What is product-led growth?

Introduction to PLG

Product-led growth (PLG) is a strategy that uses your product to reach and sell new customers, intending to grow without relying on sales or marketing teams. PLG is built around three pillars:

1) Product-led growth (PLG) is a company’s successful use of its product to drive growth without relying on sales or marketing teams.

It involves building an ecosystem around your product that creates value for your users and helps you achieve your business goals.

A PLG approach requires you to think differently about measuring success, focusing on expanding user engagement with the core product rather than increasing the number of new customers coming through the door. This approach can be precious in an industry where competition is fierce, such as travel booking platforms or social media apps—but any company can benefit from incorporating PLG into their strategy to grow their business at scale.

2) PLG uses the product as a way to reach and sell new customers as well as to retain existing ones.

Product-led growth is a term that refers to the use of your product as a way to drive growth. In other words, you use your product as a tool to reach and sell new customers and retain existing ones.

It’s also essential because PLG relies on creating valuable and functional products for all users, not just those in their target market. Suppose you only focus on using your product to reach and sell new customers. In that case, there’s no guarantee that it’ll be something worth buying by everyone else out there (and especially not those who aren’t currently interested in what you offer).

Put it another way: You can’t get any fruits from an apple tree if all you do is pluck off one or two apples every day from high up in the branches!

3) If you have a product, you can use it to grow your business.

If you have a product, you can use it to grow your business.

Product-led growth is not the same as product-led marketing. Product-led development involves using your existing products (or features) in new ways or creating new products or features that solve a critical customer need. In other words, new customers, new markets, new products.

Product-led marketing, on the other hand, involves marketing channels like advertising and PR to drive awareness of what you do and encourage customers to buy from you.

The difference between these two is subtle but essential: while both strategies involve putting more effort into building relationships with customers and encouraging them to buy more stuff from us, product-led growth focuses on making changes within our company, while product-led marketing focuses outside our company—on building stronger connections with existing customers through additional services like free trials or discounts based on previous purchases; reaching out directly through email newsletters; etcetera)

What are the critical metrics of Product-led Growth?

Time to Value

Time To Value (TTV) refers to the time between when a new user first registers for an online service and when they activate their profile.

The goal is to minimize TTV by reducing the time spent watching videos. For video content, where the time to value is inherently longer than text content usually means focusing on the critical actions within your video that lead to activation.

Product-qualified leads

A PQL is a type of lead that has already experienced your company’s benefits and is ready to buy from you. They’re usually the most valuable leads your salespeople will ever get.

A PQL differs from one business to another; it depends on what specific actions a customer takes and indicates that they are ready to move on to a different phase of the buyer’s journey.

You’ll need to conduct user research and A/B testing to determine which user activities lead to conversions and retainments.

Expansion revenue

A product-led approach aims at increasing the number of customers by selling additional products to them. It’s also known as “expansion MRR” (or expansion revenues).

Growth can come from both new customers and existing ones. New customers are great because they’re easy to sell, but existing customers are much harder to convert into paying customers. That’s why it’s essential to focus your efforts on growing your current customer base. You’ll spend less money getting them to upgrade, and you’ll make more money selling them additional products and services.

Virality and network effects

A viral growth strategy is one where a new customer gains value from being part of your community. For instance, if you’re selling a service, then every person who signs up for your service gets access to a group of customers who are already paying for your service. That means they’ll get faster responses, better support, and so on. An excellent example of a viral growth strategy is Dropbox. When someone downloads the software, they automatically get 5GB of storage space. But once they start uploading files, they gain another 20GB of space for free. So not only do they get extra storage space, but they also get to share it with others! Conversely, a company with a strong brand may see little benefit from growing virally. Think about how much money Facebook spends on advertising. They spend billions of dollars annually trying to convince us to sign up for another social media platform. Why? Because we’ve already signed up for them. We know what they offer, and we trust them.

Other measures include traditional ARPU (Average Revenue per User), Customer Lifetime Value, and Net Churn Rate.


In today’s digital age, it’s no surprise that many companies are turning to product-led growth. It’s an exciting way for businesses to grow without spending money on advertising or marketing campaigns. And thanks to its focus on building products with real value for customers, PLG has proven itself an effective strategy for success.

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