Would you rather build a product so amazing that it sells itself (product-led growth), or focus on understanding your customers’ needs and tailoring your product to them (customer-led growth)? Which one should your company rely on as part of its go-to-market strategy?

TL;DR

• A customer-led growth strategy uses user data to deliver the greatest possible customer experience. 
• The core driver of revenue growth in a product-led growth strategy is the product experience. 
• SaaS businesses should use both models as a growth strategy
• Prioritize creating a fantastic product, gather customer input, and incorporate those insights into future iterations.
• Conversions from free to paying consumers are increased with the use of a reverse trial. For a brief while, it allows users to test out premium services. They revert to a free plan if they choose not to upgrade. 
• Frictionless signup processes shorten the time to value. Offer choices for single sign-on and avoid requiring payment upfront to minimize friction. 
• Even once onboarding is complete, continue educating current users by using in-app guidance regularly. 
• To increase customer success, provide users with self-service options like video tutorials and support articles. 
• Gather user information while they are being onboarded. In this manner, you may categorize them and provide individualized experiences immediately.
• Keep an eye on user behavior and product usage metrics to determine where friction arises during the product journey. 
• Use a combination of Voice of the Customer programs and in-app micro surveys to directly get feedback from users.
• Be open and honest about how user feedback affects modifications to the product in order to close the feedback loop with customers.
• Share plans with customers via a roadmap, but be careful not to fall victim to the feature fallacy. It’s not always necessary to add new features.

What Is Customer-Led Growth?

Customer-led growth centers on understanding your target market’s needs and desires to drive product development. It entails putting your customers at the center of all that you do.

Customer-led growth is an ongoing process and it demands a constant dedication to getting to know your user base, your product and approach should evolve as your business does and your consumers’ requirements do as well.  

What Is Product-Led Growth?

Product-led growth is a business strategy where your product serves as the primary engine of user acquisition and retention. 

Most PLG companies usually have a free trial or a freemium pricing model to get potential users through the door.

How Do Customer-Led Growth And Product-Led Growth Differ?

Product-Led Growth	Customer-Led Growth
1. It produces a wonderful product that speaks for itself. It’s a “build it and they will come” strategy that depends on a positive user experience to increase user acquisition.	1. Prioritizes understanding customer needs and tailoring the product to them. It’s a “build it with them” approach that emphasizes customer feedback and building strong relationships.
2. Creating a product that is appealing and has a solid core value proposition is the first step. As people realize the value of the product, user acquisition comes naturally.	2. It starts with understanding your target customer and their needs. You build the product based on its pain points and desired functionalities.
3. It focuses on clickstream and feature usage data from user interactions to better understand how consumers interact with the product and pinpoint areas that need work.	3. Significantly depends on data from customer feedback sources (interviews, questionnaires, and support contacts) to comprehend user behavior and issues.
4. Use word-of-mouth advertising and a viral product experience to target organic user acquisition.	4. To reach the target audience and create initial awareness, more conventional marketing and sales strategies can be needed.
5. Faster user acquisition and potentially lower customer acquisition costs.	5. High user happiness and retention due to a product that closely matches user needs.

Which Should We Choose: Customer-Led Growth Or Product-Led Growth??

Both have significant benefits and can be extremely productive based on your individual product and business objectives.

Here’s a breakdown to help you decide which one is a better fit:

Customer-Led Growth:

• Complex Products: If your product caters to a certain niche or has a learning curve, it is important to determine consumer demands early on using CLG. This guarantees that the product addresses their pain areas effectively from the start.
• Long Sales Cycles: If your product has a longer sales cycle, focusing on connections and addressing customer concerns through CLG can be extremely beneficial in converting leads and developing long-term customer loyalty.
• Highly Customized Needs: If your target population requires highly customized solutions, CLG’s emphasis on understanding individual needs enables you to adjust your product or service accordingly, enhancing customer satisfaction and retention.

Product-Led Growth:

• Intuitive Products: For basic, self-explanatory products, a great first offering combined with PLG’s virality can be an effective growth driver. Users discover the value on their own and share it spontaneously.
• Rapid User Acquisition: If rapid user acquisition is critical, PLG’s emphasis on a pleasurable user experience and freemium models can swiftly draw a large user base.
• Scalable Growth: Once established, PLG products are generally extremely scalable. The product itself drives user acquisition with minimal additional marketing efforts, making it an affordable growth approach.

Frequently Asked Questions

1. Which approach gets users faster?

The PLG approach, with its freemium models and emphasis on pleasurable experiences, frequently results in faster initial user acquisition.

2. What if my product requires a long sales cycle?

CLG’s focus on building relationships and addressing concerns can be important for converting leads and fostering loyalty to products with longer sales cycles.

3. Which approach is better for user satisfaction?

Both are effective, but CLG’s emphasis on building strong relationships and addressing user needs directly can lead to higher long-term satisfaction.

4. How do I decide which approach is right for me?

Consider your product’s nature, target audience, and business objectives. If quick user acquisition is important, PLG is an excellent option. For complex items or highly tailored requirements, CLG can be more necessary. In many circumstances, a mixed strategy works well.

5. Does PLG require any marketing efforts?

While PLG focuses on organic growth, some marketing efforts will still be needed to reach your target audience initially.