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Product-Led Growth and UX

Summary

Product-led growth is a try-before-you-buy business strategy where the product experience informs how all areas of the business function. It is increasingly popular among software companies, as it enables customers to try a product and assess its value before they pay for it. Successful product-led growth relies on strong product utility and usability. This article outlines the advantages and disadvantages of the product-led growth model, as well as the metrics that measure how successful the strategy is. It also explains the key role of UX in product-led growth, focusing on product-led–growth metrics, decreasing friction at acquisition, minimizing time to value, understanding converted customers, increasing customer retention and preventing users from quitting. Finally, it emphasizes the importance of ongoing communication with other business areas.

Q&As

What is product-led growth?
Product-led growth is a product strategy that seeks to acquire, convert, and retain customers by enabling them to try a product and assess its value before paying money for it.

What are the advantages and disadvantages of a product-led growth strategy?
The advantages of product-led growth are getting value into customers’ hands quickly, saving the business money, and decreasing the risk of losing revenue. The disadvantages are that employee time is spent building products for customers that have not yet paid money, and a greater number of paying customers is required than in the sales-led, contract-based model.

What metrics are used to assess product-led growth success?
Product-led–growth metrics include time to value, conversion rate, customer-retention rate, customer-churn rate, usage-churn rate, and customer-acquisition cost.

How can UX help with a product-led growth strategy?
UX can help product-led growth by focusing on product-led–growth metrics, decreasing friction at acquisition, minimizing time to value, spending time on converted customers, increasing customer retention, preventing users from quitting, and ongoing communication with other business areas.

What are the key considerations for UX in product-led growth?
Key considerations for UX in product-led growth include focusing on product-led–growth metrics, decreasing friction at acquisition, minimizing time to value, spending time on converted customers, increasing customer retention, preventing users from quitting, and ongoing communication with other business areas.

AI Comments

👍 This article provides a comprehensive overview of product-led growth and UX, with valuable insights into how UX can help with product-led growth and what metrics to measure.

👎 The article does not provide any new insights on product-led growth and UX, as the content is largely theoretical and lacks practical advice.

AI Discussion

Me: It's about product-led growth and UX, which is a business strategy where the product experience informs how all areas of the business function. Successful product-led growth relies on strong product utility and usability.

Friend: Interesting. What are some of the implications of this article?

Me: Well, the article discusses the advantages and disadvantages of product-led growth. It also looks at product-led–growth metrics, and the role of UX in product-led growth. It talks about how UX can help product-led growth by focusing on product-led–growth metrics, decreasing friction at acquisition, minimizing time to value, spending time on converted customers, increasing customer retention, preventing users from quitting, and ongoing communication with other business areas.

Action items

Technical terms

Product-Led Growth
A product strategy that seeks to acquire, convert, and retain customers by enabling them to try a product and assess its value before paying money for it.
Freemium Model
A model where the user has unlimited access to a subset of the available product features and needs to pay to access premium features.
Free-Trial Model
A model where users have unlimited access to all product features for a limited amount of time before being required to pay.
Hybrid Model
A model that combines the freemium and free-trial models.
Time to Value
The time it takes for new users to realize the product’s true value and upgrade to the paid experience.
Conversion Rate
The percentage of users who convert from free to paid.
Customer-Retention Rate
The percentage of users who return within a given time frame.
Customer-Churn Rate
The percentage of customers who do not return in a particular timeframe.
Usage-Churn Rate
The percentage of users who show potential to churn due to decreased usage.
Customer-Acquisition Cost
The cost associated with attracting a new customer to use the product.
Jakob’s Law
The principle that users expect the behavior of a website to be similar to the behavior of other websites they have used.
Net Promoter Score
A metric used to measure customer loyalty and satisfaction.
Pareto Principle
The principle that 80% of the effects come from 20% of the causes.
Mental Models
The way people think about and understand the world.

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