Build Your Product-Led Growth Playbook

Construct an effective PLG strategy to unleash the true power of hypergrowth.

Analyst perspective

Product-led growth (PLG) has fueled some of the world’s fastest-growing and most well‑known companies, doubling growth rates and cutting customer acquisition costs by up to 50%.

If PLG is so effective, why isn’t everyone adopting it? The answer is simple: Many managers don’t understand the fundamental value principles needed to unlock product-led growth. The hard truth behind many failures is that “free” isn’t actually free.

The reality is that high-value users won’t waste their time trying to figure out a complex product with a lengthy time to value. If your user experience doesn’t create a clear "aha" or "eureka" moment before you ask for payment, you risk setting yourself up for PLG failure.

At its core, PLG requires a company-wide commitment to prioritizing the user experience. Growth shouldn’t rely on begging for referrals – a tactic that reeks of desperation and weakens the viral coefficient. Instead, the best PLG companies leverage exclusivity and fear of missing out (FOMO) to fuel expansion.

Terra Higginson
Principal Research Director
Info-Tech Research Group

Executive summary

Analyst Tip!

Stop chasing basic vanity metrics. Focus on your North Star PLG metrics for real and sustained revenue growth.

The three most important principles of PLG

The three overarching principles of product-led growth center on accelerating the time it takes for users to experience value, creating scarcity that drives urgency and conversions, and leveraging viral loops to transform individual users into advocates. When you deliver value faster, you don’t just win one user, you win entire organizations.

Value, scarcity & timing
Understanding when and how to charge is the art of aligning scarcity with value. Hit the TTV sweet spot, where users see enough to want more but need to pay to unlock it, and turn desire into revenue.

PLG flips the switch on growth

PLG isn’t about growing just a little. It’s about building an unstoppable and difficult-to-copy growth acceleration machine. PLG maximizes revenue growth, reduces competitive risk, and helps you scale your growth efficiently.

Customer acquisition cost is minimized once virality is established.

Feedback loops improve product, service, and organization.

Value is maximized.

Scarcity is leveraged to drive conversions by ensuring users experience value before monetization.

Decisions are made based on data, not ego.

Profits are protected through the product’s unique value.

Free trials don’t work without user value

If free trials have already failed you, focus on building an entry point that will ensure your users reach TTV during the trial.

Fact: The dirty truth is that high-value users don’t want to figure it out themselves. If your product doesn’t naturally have a great UX that almost immediately delivers TTV, then you will need to find a way to accelerate TTV for your premium users.

Fact: PLG helps companies shift their focus from vanity metrics (free users) to bottom-line revenue growth.

Free trials aren’t about giving stuff away but rather about helping clients get to value as quickly as possible.

PLG is everywhere, and you’ve probably already been part of it

PLG has been successfully deployed across many software companies. You may not even realize it, but you might have already been involved in PLG motion.

PLG win: Feedback loops improve product adoption as users naturally expand team usage.	PLG win: Customer acquisition cost is minimized through a freemium model that spreads virally.
PLG win: Scarcity is leveraged to drive conversions, limiting free-tier features to push upgrades.	PLG win: Value is maximized by allowing full-featured free usage that encourages team upgrades.

PLG fails when time to value and virality fall short

Obstacles abound when companies try to adopt a PLG model. There are misunderstandings about what it takes to become a PLG company. We see these common obstacles:

• People think PLG is just about free trials or freemiums, instead of an entire value strategy.
• TTV is the most important PLG metric across the board, but many organizations struggle to understand how their customers perceive value.
• Siloed teams create a lack of alignment that hinders true PLG success.
• The viral coefficient isn’t measured or set as an objective.
• Leadership overlooks PLG for traditional Sales-led model

The biggest myth in PLG
Many people think that PLG is about saving a few bucks by reducing sales headcount. That’s totally wrong. PLG isn’t about cutting costs. It’s about the commitment to continually delighting your customers.

PLG will change how you work and acquire customers, but don’t fire Sales yet

Transform the way your organization creates demand with PLG. In larger and more complex products, there is normally some mix of Sales-led motions along with your PLG. Successful companies build these key principles into their understanding of PLG:

• In PLG, teams are cross-functional and use data to make better decisions about their product.
• In PLG, there is a heavy investment in building a better product, feedback mechanisms, and unified teams.
• In PLG, there is normally some aspect of self-serve with a quick TTV. We define TTV as the time it takes for the user to have their “aha!” or “eureka!” moment, and it normally aligns with a metric that indicates value has occurred.
• In PLG, there is virality because users love the product.

Teams that use PLG have the power to create real value and delight their customers, which leads to virality and an exponential increase in demand generation.

PLG is a growth engine for every industry

PLG creates long-term differentiation through customer-focused outcomes that become embedded in the organization’s DNA.

Professional Services
Streamline client engagement with self-serve portals, automation, and digital-first service delivery.

High-Tech Vendors
Drive viral adoption through usage-based pricing, freemiums, and value before cost.

Manufacturing
Accelerate product adoption and usage with interactive demos, digital twins, and automated workflows.

Government
Empower constituents with digital-first engagement, online applications, and automated user education.

Healthcare
Enable clinicians with self-serve and digital tools, direct-to-clinician adoption and peer-to-peer sharing.

Slow TTV is revenue death

Quicker TTV leads to more conversions, which lead to more referrals, which lead to higher revenue.

Getting to value faster

The magic of PLG isn’t about giving something away for free to trick people into buying your product. Instead, it is about getting to value faster and more consistently. Here are the seven stages to PLG value.

The magic happens at the eureka moment

Define how and where value occurs, as well as what prospects truly want and are willing to pay for to drive explosive PLG revenue growth.

Define High-Value Segments & Key Activation Events

• Identify the most impactful user segments and the critical actions that drive engagement.
• Align key activation moments with user value and gated access points (i.e. the moment you charge for that value).

The User’s Eureka Moment

The moment of value must be swift and create a powerful "aha" experience for users.

Analyze Journey & Eliminate Bottlenecks

• Leverage analytics to pinpoint friction points that delay value realization.
• Optimize workflows to reduce churn and accelerate adoption.

Create Frictionless UX

• Design intuitive onboarding that seamlessly guides users to their first success.
• Ensure consistency in the journey, keeping users engaged and progressing toward value.

Drive Virality

Build viral loops and workflows that lead to referrals, upsells, and cross-selling.

How to create FOMO in PLG

No one wants to be left behind. Make users fear that if they don’t use your product or service, then they are missing out.

Focus on success stories
Create a sense of FOMO with compelling success stories and significant milestones, highlighting impressive revenue growth and time savings. This creates an urgency that encourages adoption by showing that those who hesitate will be left behind.

Follow the yellow brick road (aka upgrade path)
Call out prominent feature gaps in the freemium dashboard and gently push users toward upgrading to a paid plan.

Premium, not cheap
Lastly, frame the product as premium and exclusive, not another free or low-cost option. Make users feel upgrading is the intelligent, high-value decision.

Ruthlessly prioritize high-value segments

PLG for everyone is actually PLG for no one. It seems obvious, but it bears repeating that high-value segments are your money-makers. You aren’t building a product or a service for everyone. You are building it for your high-value segment. The best PLG strategies prioritize the right users, create immediate value, and design paths to organic growth.

When companies get serious about prioritizing high-value customers, we see increased retention and reduced churn for those that both gain and provide real value through your product.