What are the key components of a product-led growth strategy?

This is a Quora question I was asked to answer.

My expertise is in B2C and B2B2C products so I will answer this question in context of these product types.

A product-led growth strategy means the product sells itself without having to rely as much on marketing, distribution and sales.

Product Development

Build the marketing into the product. Build the marketing into the product where the consumer will tell others about the product through word of mouth. This kind of marketing can lead to exponential growth (vs linear growth) when the features and functionality of the product itself require or include social interactions, so people are inclined to tell all their friends about it because the product becomes better when more and more people use it. Think of social and gaming networks as the best examples of social-led exponential growth marketing. Think about building in “WOW” to your product where in 10-seconds or less, the customer thinks “WOW” about the product. I have written more about building in “WOW” here.

Finance

Revenue model. A free product that monetizes through advertising can be the best for product-led growth. But if the product is not free and it is a digital service, try a freemium model that lets users try the product for free with upgrade to paid. If its a physical product that requires purchase before use, purchase is usually a function of competitive differentiation (how well the product differentiates from the competition to capture attention) and pricing.

Marketing, Distribution and Sales

Frictionless sales. Build the product and its sales process such that it is easy to understand, purchase and use. The customer does not need any help to purchase it, understands it quickly and the product solves problems or meets the customer’s desires quickly so they can make an impulse decision to use it now.

ROAS. Product-led growth strategies does not necessarily mean the company won’t need to do any marketing, distribution or sales, unless a product has off-the-charts strong word of mouth marketing and social-led exponential growth, which is rare. it just means that their return on ad spend will be much higher, so they will spend less on promotion. The goal is to to find marketing and distribution channels that give the company high ROAS.