Building a Product-Led Growth Flywheel: How to Make Results Soar
Тhe product-led growth flywheel has dethroned the well-known and loved sales funnel. But why has this happened and what does it bring to the table for businesses who want to grow and succeed? What exactly is product-led growth flywheel and how can your team implement it - fast? Read below.
Or in part, at least. It’s being dethroned by this new framework every company invested in its growth is running: the product-led growth flywheel. It doesn’t matter if you’re running a big company or a small startup – increasing brand awareness, customer satisfaction, and sales are the ultimate goal.
In this blog, we’ve outlined the steps to building a product-led growth flywheel while getting to understand the method better. So, waste no more time and dig in.
What Is a Product-Led Growth Flywheel
The product-led growth flywheel is a framework that is used by teams in organizations that rely on product-led growth. It’s a strategy that surpasses the traditional sales and marketing funnel, changing it up from casting a wide net for conversions to focusing on the user experience as the main point at any stage of the user’s journey. The product-led growth flywheel lets the product take the wheel – because that’s what product-led growth is all about.
It’s something very popular with SaaS companies that helps marketing and sales to align, create campaigns, acquire customers and improve visibility while converting more customers and increasing retention.
Product-Led Growth Flywheel Framework: How Does it Work
For those of you who are still not familiar with the product-led growth flywheel framework, let’s look at it in detail now.
The product-led growth flywheel framework is a method that always prioritizes the user and the main goal is to generate something called customer advocacy. To get to that, however, companies need to follow the framework, know the user segments well and arrange the journey stages around it.
The product-led growth flywheel consists of 4 different customer user segments, namely:
- Evaluator – those potential users who are interested in your product, but not ready to commit; those are the ones who are open to a free trial
- Beginner – users who start to appreciate how this product might help them and start learning about it
- Regular – users who use your product regularly and view it as a key element of their success
- Champion – the true fans of your product, dedicated users who are invested and even refer the product to others; these are the customers who advocate for your product
Each of these user segments represents four journey stages of the product-growth flywheel:
- Activate – Evaluators become Beginners when they activate
- Adopt – A Beginner must integrate your product into their workflow and become a Regular
- Adore – A Regular becomes a Champion and already has a passion for your product
- Advocate – Champions start advocating for your brand
The goal of the product-led growth flywheel framework is to bring the full circle of the stages and create advocates out of the users of your product through three main actions: Attract, Engage, and Delight. This creates a positive loop that drives more acquisition and helps growth while retaining customers.
Benefits of Product-Led Growth Flywheel
Time to take a look at some of the benefits of the product-led growth flywheel that make it so attractive for companies trying to rapidly grow.
Suitable for the SaaS market
The modern SaaS market relies on recurring revenue, so subscriptions need to constantly thrive. This could mean going for a more product-focused approach, but with the flywheel it’s much easier to prove product value and achieve user dedication, keeping customers buying and upgrading the product along the way.
Better Understanding of the Customer Experience
Every company that relies on its product-led strategy for growth needs to improve its customer experience along the way. According to one study, 84% of companies that made effort to improve their customer experience saw revenue growth as a result. To achieve that, keep asking questions and checking in – surveys go a long way, but the product analytics and the data analysis for user behavior and experience create the clearest picture.
Bigger Scalability & Retention
Small companies or startups that strive to grow faster find that the product-led growth flywheel framework brings better relationships with customers and helps them expand faster. It allows them to show their product faster, make it recognizable and align it better with their customer’s needs, leading to higher retention rates.
Better User Segmentation
With a product-led growth flywheel, it’s much easier to understand your customers and develop your user segmentations better. Using behavioral segmentation helps identify your customers’ pain points better. As you then work to resolve those pain points one by one you will improve your customer experience.
Leads with Intent
Analyzing and knowing whom to target brings better focus on product-qualified leads. This exercise provides better chances of advertising to people who have already expressed interest in the product, so it saves time and lowers acquisition costs.
Implementing a Product-Led Growth Strategy
The process of implementing a product-led growth strategy and flywheel is not very complex, but it does require specific and intentional steps to get there. Every company deciding to implement this strategy needs to align all its teams around it.
One of the most important things is choosing the tools to equip your team with that will take your product-led growth strategy to the next level. The effectiveness of the method is impossible to achieve without them. And when you already have your tool of choice, there are two most important things to consider: analyzing the right metrics around it and helping your team collaborate perfectly in executing the strategy.
So here are a few key metrics you need to be measuring in your product-led growth flywheel.
- Customer Engagement – tracking KPIs like time spent on products, which and how many features are being used, interactions, and referral activity.
- Product-Qualified Leads (PQL) – studying the behavior and preferences of people who are already using your product provides a glimpse into what you should be emphasizing on
- Time to Value (TTV) – evaluating the time it takes your customer to reach activation (the first stage in the product-led growth flywheel) lets you shorten the time of your TTV over time and grow faster
- Customer Feedback – find out and analyze what your customers prefer and what they dislike, to keep your product perfect and improve it overtime
The implementation of the product-led growth strategy for your company will happen a lot quicker if you use an all-in-one digital workplace, creating the perfect environment for collaboration, file management, and data dashboards, created and shared fast. Here’s what a tool like Slingshot can assist you with:
- Organize projects, content pinned from every cloud provider, tasks, and chats – to have transparency and clear ownership of everything
- Robust analytics features, including a data catalog and data visualizations in dashboards that pull insights from all your data sources, and are shared fast and the same app (in chat) – helping with the decisions made along the way
You can depend on Slingshot also for data-driven experiments that focus entirely on the user – by creating a seamless process with productivity flows, bringing together team collaboration, chat in context, metrics tracking, and results sharing.
You can also depend on cross-department collaboration, so sales teams, marketing teams, and product specialists can combine their skills to collaborate in one app.