Thinking About PLG

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I’ll confess, upfront, that I’m skeptical, perhaps even a little cynical about Product Led Growth (PLG). It’s very hot and fashionable right now, but in reality applies to only a very small number of organizations and solutions. PLG based strategies only apply to products in which an individual can acquire and get some value from a product. The idea being, once you identify a critical mass of users within an organization, how they are leveraging the product, you can rapidly expand sales within that organization by identifying other, similar end users, ultimately expanding into the entire organization.

Because of the way the PLG strategy is implemented, in addition to being utilized by an individual (an entire organization can use it, but the strategy is to start with individuals in the organization), it is a cloud based software solution. First, there are a lot of cloud based software solutions that can only be implemented on an enterprise wide basis, so PLG is meaningless there. Second, while there are a lot of companies claiming to be PLG companies, their implementation of PLG (I’m not speaking of their products) is terrible. They think it’s an easy way to sell just by pushing products. But when you look at really good PLG companies (and there are such a small number of them), they are hyper focused on a very specific problem that individuals face in doing their jobs, and for which they can implement a solution. The final area having to to with my “Meh” reaction to PLG is that it applies to a very specific segment of cloud based software solutions. But trillions of $’s of non cloud based products are sold every year. They may be semiconductors, parts, medical devices, hardware technologies, networking platforms, consumer products, services of all kinds, sanitation products, and the list goes on. So the addressable market for PLG products is a fraction of a percent of the total markets for everything else. Recently, I was privileged to speak to one of the leading analysts in this space. I asked him if he was aware of any PLG based strategies for non-software offerings. He couldn’t think of one.

Having outlined my skepticism about PLG offering, I think there are a couple of things the great PLG companies do, that could be co-opted and adapted to the non PLG world. And that’s the exciting part of PLG to me–not the companies claiming to have PLG strategies.

PLG companies are viciously focused on solving a problem for a customer (an individual) and optimizing their experience in using the product to address that problem. Because it is cloud based, they get to analyze and characterize how the customer is using a product, where they might be struggling, how they might change the product to improve the user experience. They can, actually, understand this down to the keystroke/swipe level. They can also characterize the end user very deeply. It’s this deep understanding of a specific problem, the customer experience in using the product to solve the problem, the rapid response to improving the customer experience, and who the customer is that make PLG fascinating. But only in the sense of, how do we apply similar principles and approaches to other offerings?

How do we deeply understand the problem we solve and the customer experience in using our product to solve the problem. How do we deeply understand the total customer experience in finding, experimenting and using the product, how do we deeply understand who they are and the type of solutions that resonate with them, how do we respond quickly to problems in their experience and resolve them. And how do we do this at scale and at a very high speed?

It’s those things the few great PLG companies do very well, that offer tremendous power in better serving customers and driving our own growth outside the PLG world. We won’t and shouldn’t try to do exactly the same thing–for example a lot of this works because they ban monitor utilization in real time, or they focus on such a narrow set of problems, or it’s software that can be adapted/fixed pretty quickly. And while some sort of “freemium” is key to PLG, how to we adapt some of the principles in a non freemium world.

There are some ways to start to approximate this, but they lack the dynamic feedback/response of the PLG world. Jobs To Be Done is an outstanding process for understanding customers, what they need to achieve, how they work, what their experience is. But that’s generally done on the front end of a product/service offering, and what happens afterwards may be limited. Rapid prototyping and experimentation with customers is another way we can start to approximate a lot of this. We have seen rapid advancements in engineering design/analysis/manufacturing tools that can help us and customers in the front end of their processes. Technologies like 3-D printing enable us to do much with physical products.

Over time, as more things become, connected, we will have more data we can leverage in understanding how products/services are used, where there are problems, and the customer experience during those problems. We will have AI tools that can help us prescriptively reach out to customers to help them avoid problems, or in the very least, more quickly address them.

Even if we can’t have such a dynamic, real time, rich understanding of our customers and their experience, we can leverage some of these principles understanding our customers’ experiences, providing help, and enhancing future generations of offerings to address these issues.

Again, I struggle with all the hype around PLG, it applies to such a small part of buying and selling. However, I think there are these things great PLG companies do that we can adapt, applying to our own offerings and improving our customer experiences.

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