Glossary
Product-led growth (PLG)
Product-led growth (PLG) is a go-to-market strategy where the product itself is the main way to acquire, convert and expand customers, usually through a free plan or trial that lets users get value before they talk to sales.
What Is Product-Led Growth (PLG)?
In short In a PLG motion, people sign up on their own, start using the product and upgrade when they hit a limit or need a team feature.
Growth comes from the product spreading inside companies through invites and sharing. Common entry points are freemium plans, free trials and open-source editions.
It works best for products that are quick to try and show value fast, used by people who can adopt them without a committee. It keeps acquisition costs low at the small end of the market, but large deals still need sales: security reviews, procurement and multi-team rollouts do not happen through a credit card form.
Product-Led Growth Example
Example: a diagramming tool has 50,000 free users. It flags companies with 10 or more active users as product-qualified accounts, finds the IT or engineering leader at each and offers a team plan. In this example, 6% of flagged accounts move to a paid team plan within 60 days.
Product-Led Growth in Practice
Many PLG companies add a sales layer as they grow, often called product-led sales. Reps watch for product-qualified leads, such as a company with 15 active users on a free plan, and reach out to the buyer at that account. Outbound helps here: the users are known, but the person who signs the contract often is not.
FAQ
What is the difference between product-led and sales-led growth?
In product-led growth, users sign up, get value and often buy without a salesperson. In sales-led growth, reps run the process from first meeting to contract. Many companies run both for different segments.
What is a product-qualified lead (PQL)?
A user or account that has got real value from a free plan or trial, shown by a usage milestone such as inviting teammates or hitting a plan limit. Sales can then focus on the accounts most likely to upgrade.
What are examples of product-led growth companies?
ProductLed lists Calendly, Slack, Notion and Typeform among its examples. In each, people can start on a free plan on their own, before a team or company pays.
Does product-led growth still need a sales team?
Usually, once it sells to larger companies. Self-serve covers small teams, while bigger accounts need help with security, procurement and company-wide rollout.
Do This in Ken
Do This in Ken
Use Ken Search to find the budget owner at companies whose employees already use your free plan, then reach them with a short sequence in Campaigns.
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The new Ken opens to the waiting list in batches.
Related
- GTM Glossary
Every GTM term, grouped by topic.
- Go-to-market strategy (GTM strategy)
- Inbound marketing
- Customer acquisition cost (CAC)
- Churn rate
- Upselling
- Ken features
Sources
| Source | Checked |
|---|---|
| ProductLed: Product-led growth definition and examples | |
| Amplitude: What is product-led growth |
Changelog
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