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Product-Led Growth(PLG): A Case Study

Product-Led Growth(PLG): A Case Study

The PLG model is about showing users what your product can do for them. 

Our goal was for our product to be an MVP, and in doing so, it was essential to have a tight feedback loop between our users and the product. Basically, we needed as many people to use the app to gather feedback. This allowed us to adjust the product to the user’s needs so we could truly stand out.

Starting as a product-led organization was the quickest way to understand how we could lead our users to the value of our product. 

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Competitive Analysis

Competitive Analysis

We discovered from looking at the organic ranking that the following factors came into play:

  • Number of Customer Reviews
  • Overall Rating
  • Price
  • Feature Set
  • Word-of-Mouth/Referral

Word-of-mouth became more important than we initially anticipated. Some of these apps don't even have a website because word-of-mouth alone was enough. 

A lot of the distribution comes from the Shopify app itself. These factors are crucial in getting high reviews to encourage merchants to use a product. 

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The Business Model

The Business Model

We found the majority of the apps on the Shopify App store are product-led; however, nobody was giving users free access to the entire product before they bought it. 

We established that we needed the following to be competitive on the Shopify platform:

  • Get feedback from users.
  • Bring greater value to our product from the feedback.
  • Improve marketing, messaging, and copy from the feedback.
  • Get reviews that comment on these differences.
  • Finally, get revenue from our product. 

We explored product-led models that could bring in revenue. 

  • Limited Freemium
  • 14-Day Free Trial
  • Pure Freemium

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Limited Freemium

Limited Freemium

We noticed that other quiz apps on the Shopify platform applied a limited freemium option, which meant you'd be allocated 5,000 quiz engagements every month for free. Anything over that, you would be bumped up to the basic plan at $39 a month. 

We didn’t find this a good model because, by the time people hit their limit, they would no longer be getting value from the product, and it would be harder to convert them. 

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14-day Free Trial

14-day Free Trial

When we thought about our product-led approach, we had to think about the steps for a user to derive value. The onboarding phase had the following steps:

  • Decide on the quiz questions needed.
  • Put the quizzes together.
  • Implement it.
  • Design it. 

The user had to see it was driving traffic before they could derive value from it. So there were a lot of steps the user had to go through before arriving at the product’s value proposition, and 14-days wasn’t long enough. Plus, we needed users to use it at that moment, give us feedback, and provide us with a review. 

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Pure Freemium

Pure Freemium

it was important to get as many users as possible to help us rank higher organically and improve our product. We saw the importance of tapping into a customer feedback loop as quickly and efficiently as possible.

So we decided to go all-in on a pure freemium model.

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Undermining Revenue Potential

Undermining Revenue Potential

Users have to experience a product without any sales pressuring them to try it or buy it. 

We then went through a slew of doubts about our product:

  • What if our product is not an MVP?
  • What if it has limitations?
  • What if it has shortcomings other apps in the market don’t have?
  • Can we convert enough users on the free plan to sustain us?

These are serious concerns in terms of the pricing model, but we decided to go for it, and that's why product-led growth can be scary. 

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The Value Of Free

The Value Of Free

The biggest challenge might be that users don’t value the product if they don’t pay for it. We know users typically always value a product they have a stake in. If it’s free, it’s easy to fall into that pile of tools that are left behind and forgotten. 

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Challenges of Making Freemium Work

Challenges of Making Freemium Work

To be competitive on the PLG platform, you need to:

  • Get feedback from users.
  • Bring greater value to the product from the feedback.
  • Improve marketing, messaging, and copy.
  • Have reviews that comment on these differences.
  • Finally, get revenue from your product.

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7 reads

Our Core Differentiators

Our Core Differentiators

Product-led growth has a customer-centric mentality and prioritizing which is vital to success.

  • Delivering Value Fast
  • Make onboarding easy, don't make users do anything too complicated, and create a quick path to the "Aha! moment."
  • Play the long game
  • We succeed when our customers succeed
  • Prioritize users - whether they are free or paid.

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The Bottom Line

The Bottom Line

The main goal of starting as a product-led organization is that we were able to get the product used by more users than if we had started as sales-led. In addition, giving users a free product to use eliminates a barrier to entry – pricing. 

From there, we received real insights into the needs of our users. This feedback showed us how to deliver value from our product to the user quicker. Finally, the word got out that we had a great product, and more users came to try the product through the freemium model and became paying users.

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connowillia

Education administrator

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