Everyone should be PLG-ish

6 PLG principles of the Product-Led Growth Mindset

What differentiates Product Managers who work on a Product-Led Growth (PLG) product from those who work on a Sales-Led Growth (SLG) product?

What can SLG PMs lend from PLG PMs?

What skills do PLG PMs possess?

How do PLG PMs approach problems compared to SLG PMs?

…And why is this even important?

Product Drive 2023

I’ll be speaking about this topic in great detail at Product Drive 2023, a free virtual event hosted by UserPilot.

There is an incredible lineup with speakers like Maja Voje, Ben Williams, Dr. Else van der Berg, Mellisa Kwan, Leah Tharin, and many others.

Sign up for my talk here: https://summit.productdrive.io/talks/driving-growth-the-unique-role-of-the-plg-product-manager/

Until then, here’s a sneak peek… 👀

Once upon a time, before PLG…

Atlassian, founded in 2002, is one of the pioneers of Product-Led Growth.
Thirteen years later, in 2015, OpenView coined the term “Product-Led Growth”, meaning that PLG was a mindset before it ever was a formal term.

Atlassian bravely exercised out-of-the-box thinking, lending B2C tactics to support their go-to-market strategy.

What is this so-called “PLG mindset” constructed of?

Let’s dive in.

The principles that make up the mindset

I’ve identified some of the principles that PLG products are built upon.

A fair disclaimer - I’ll be using broad strokes to convey a cohesive idea but keep in mind that PLG isn’t black and white (!) and always needs to be adjusted and tailored for every product, market, company, stage, culture, etc.

Principle 1: Deliver value, then ask for something in return

PLG products let users achieve value before they pay. Some PLG products go as far as providing value even before users sign up and share their email.

With SLG (Sales-Led Growth), the sales motion revolves around the Salesperson. The Salesperson can be as dynamic as required and pivot to identify the best fit for the prospect.

With PLG (Product-Led Growth), the sales motion leverages the product itself. Unlike SLG, a bottom-up self-serve motion is zero-touch. There is no live, synchronous interaction between the user and a human being, removing our ability to intervene, bridge any gaps, or save the day before users leave.

For PLG products, delivering value before asking for anything in return isn’t just powerful and convincing; it’s mandatory.

PLG Product Managers get one shot at retaining users.

Leading with value is the only practical option.

Principle 2: Experience over functionality

PLG Product Managers build holistic end-to-end experiences that essentially and effectively are in place to sell the product (more on this in my talk on Product Drive). That’s why they often prioritize experiences over functionality.

You heard right! A PLG PM may decide to improve the experience of a particular functionality rather than build & ship something new. They know that an under-satisfying experience does not deliver the value users need.

In many cases, I’ve seen firsthand the functionality is practically worthless.

The best example is when new users who sign up are entirely unfamiliar with the product attempt (a) to understand what this product is, (b) what it does, and (c) how they can extract maximal value from it.

AKA Activation.

Not having a human to show them around, their experience of value realization is what drives them to action. If they achieve value quickly and clearly, they will keep exploring.

Otherwise, tootles!

Principle 3: Beloved products sell more

Experiences are prioritized to the point that PMs attempt to achieve products people love. That’s why PLG companies spend more on Engineering+Product than SLG companies.

I’m sure anyone would agree that products people love will be easier to sell, but for PLG, this becomes critical and urgent.

The “delight” factor isn’t just a buzzword, and it surely is more than just animated confetti shooting all over the place. A delightful experience may be nice-to-have for SLG motions, but when it comes to PLG, it converts.

Principle 4: Transparency builds trust

Trust is gained. Always.

In a bottom-up self-serve motion where everything is pre-built and automated and does not involve human interaction, we must assume that trust is at an all-time low and work our way up from there.

One of the best ways to achieve trust is through transparency.

Zoominfo is an excellent example of what NOT TO DO. Their pricing page shows three plans with “View Pricing” on each. When you click on the CTA, you get a nice big popup to leave your info.

That’s not how you build trust.

Transparent pricing is probably THE most important component when it comes to building trust.

Principle 5: Democratize decision-making

The PLG mindset democratizes the decision-making process by giving individuals (i.e. employees) a seat at the table. 

For example, a team that uses FigJam may quickly find themselves trying out a competitor, miro, liking it, and switching over.

Principle 6: Letting people leave makes them stay

Another way of increasing brand trust (as well as monetization goals) is to let people cancel anytime. With PLG, that translates into monthly subscriptions.

Think about it - with SLG, deals are closed for a 1-year minimum, meaning buyers must decide for a prolonged period when renewal is up. They might not be ready to make such a commitment.

With inexpensive monthly subscriptions, deciding to stay is easier because you can cancel whenever you want.

From a behavioral economics lens, our decision-making is influenced by a mix of biases and effects: the endowment effect, where we inherently value what we own more than what we don't; the status-quo bias, which makes us resistant to change and more likely to maintain current situations; the discounting effect, leading us to prioritize immediate rewards over future ones; and the notion of sunk cost, which compels us to continue a decision based on the amount already invested, regardless of potential future outcomes.

Whenever users consider canceling their monthly subscription, a voice in their head says, “Well, maybe just one more month. It doesn’t have to be NOW.

Borrow from PLG

If you’re working on a product that leverages SLG, consider borrowing tactics from PLG. They bear impactful results for any business.

In my Product Drive 2023 talk, I’ll be going into detailed examples of how PLG and SLG PMs approach problems differently due to these principles and then how SLG PMs can borrow from PLG.

I’ll also share with you 4 unique Product Management skills that PLG PMs possess and exercise on a daily basis.