What is community-led growth? What is product-led growth? How do they differ?
What is product-led growth?
Product-led growth is a strategy that focuses on using the product experience as the main path for attracting and converting users, often without requiring traditional sales interactions. Companies that follow this approach often offer a free trial or freemium version so that users can experience the product’s value firsthand before ever talking to sales. The focus is on delivering value quickly and letting the product “sell itself” through an excellent user experience.
What is community-led growth?
Community-led growth is a strategy that puts a community at the heart of growth. Companies that follow community-led growth build and nurture a community of customers. This community-driven approach becomes a powerful engine for customer acquisition and retention. Also users can get quick answers from peers, share best practices, and even create content (tutorials, plugins, forums posts) that attracts more new users.
What are the key differences between product-led growth and community-led growth
The key is a company’s focus. Product-led growth is product-centric and growth comes from users interacting with the product itself. The assumption is that if the product delivers value, users will adopt the product and tell others. By contrast, the community-led growth approach is user-centric, building from the customer’s passion and knowledge.
In the case of product-led growth, we’re focused on how the product can drive usage (e.g. a great feature set or UX). In the case of community-led growth, we’re focused on how people can drive growth by engaging each other. This means product-led growth companies treat users primarily as an audience of product users, whereas community-led growth companies treat them as community members and expect them to actively contribute. The result is that community-led growth companies foster a sense of belonging and peer-to-peer support that the product-led growth approach may lack.
How can one combine community-led growth with product-led growth?
Rather than choosing one over the other, many modern SaaS companies combine product-led growth and community-led growth to supercharge their growth. A thriving community is the perfect “expansion pack” for a product-led growth strategy. Here’s why: Product-led growth makes it easy for users to try and adopt the product with minimal friction. Community-led growth then layers on a support network and advocacy engine that enhances that experience. For example, when new users sign up through a product-led growth funnel, they often have questions or want best practices. An active community provides support, tutorials, and inspiration, which helps new users succeed. This reduces burden on customer support and speeds up time-to-value for users. Moreover, community users create UGC that feeds the sales funnel with more users. Happy community users often spread the word on social media or invite colleagues, acting as a marketing channel that costs the company very little. Prospects also trust recommendations from peers more than traditional ads, so a strong community can significantly lower customer acquisition costs.