Community-led growth and product-led growth are both popular terms in the world of business.
These two strategies are used mostly by owners who want to build a presence online and increase conversion rates.
Coming that they both have different functions in the marketing space, businesses need to tell them apart, in order to incorporate their functions to generate growth faster.
But, what’s really the difference between them?
1. Engagement vs. Product Value
Community-led growth is all about building relationships and engagement among users within a community. The first main goal of communities is to create a sense of connection and interaction among users who might exchange knowledge, support each other, find solutions to problems and even collaborate. The more users share their experience online, the more brands benefit from it (if the feedback is positive).
Product-led growth’s main purpose is to show the value of the product itself. A lot of brands, such as Zoom, Slack, Calendy offer free trials so users can try the product itself before deciding on purchasing it or not.
Actually, if you go to any SaaS company website and a call to action like signup, try it now or free trial that’s how you know it’s a product-led growth.
2. Building Communities vs. Showcasing Features
Community gathers enthusiasts around a product or brand. This includes providing platforms for interaction, such as forums, social media groups, or dedicated community spaces. Some of these are Reddit, Quora, Discord, Facebook groups, and LinkedIn groups.
Product-led growth shows the features and the benefits of the product. This often involves offering a freemium model or free trial of the product, allowing users to experience its benefits firsthand before committing to a purchase.
3. Organic Growth vs. Conversion Optimization
One of the advantages of community-led growth is the ability to generate organic growth through word-of-mouth referrals and reviews. Satisfied customers who are active in communities are more likely to recommend a product they like, just like they might share negative feedback if they had a bad experience.
Product-led growth aims to turn free users into paying customers by providing an intuitive user interface. The focus is on driving immediate value, to increase chances of conversions.
4. Relationship Building vs. User Experience
Community-led growth prioritizes relationship building and engagement, as this is a mechanism that eventually drives growth. This involves, for example, brands investing in community-building activities, asking questions, listening to feedback etc.
Product-led growth prioritizes user experience and product usability.The focus is on delivering a good and intuitive user experience that makes it easy for customers to understand and derive value from the product.
5. Insights from Community vs. Data-Driven Iteration
Community-led growth relies on insights gathered from the community to inform product development and innovation. Businesses gain valuable insights into users’ needs and preferences by listening to them. This is a big advantage as by identifying trends within the community, they can create a product that people will love.
Product-led growth relies on data-driven iteration to refine the product and improve the user experience over time. This includes tracking key metrics related to product usage and adoption and using data-driven insights to iterate and refine the product offering.
Community-Led Growth And Product-Led Growth
When you combine product-led and community-led growth, it’s like getting two superpowers for your business. Here’s how to use these strategies together.
Expand Your Brand
Product-led growth offers a valuable solution for users who want to try a new product, but not pay for it right away.
At the same time, users can share their experiences or learn from other users in communities online, where finding such feedback is common.
This here, is a jackpot for brands, who can thoroughly analyse users’ behaviour and use the data to their advantage, such as by improving the product, or even creating a new one. Sales representatives can have more personalized conversations and guide users towards relevant upgrades, ultimately driving the brands’ revenue growth.
Keep the Audience Engaged
Imagine your audience telling everyone how great your product is. Then, when people try your product and love it, they’re more likely to upgrade or buy more. That’s the power of product-led growth.
Rewarding active community members, encouraging collaboration, and providing resources help businesses create a feeling of belonging and empowerment among users. As community engagement and product awareness grow, the user experience improves and drives long-term value for both customers and the business.
Drive Awareness
One of the key benefits of combining product-led and community-led strategies is their ability to drive awareness.
A good product, supported by a useful trial or freemium offering, lays the foundation for product-led growth. When complemented by community-led initiatives, such as programs that grant superusers early access to new features or showcase real-life success stories, businesses can effectively increase awareness and interest among potential customers.
In a Nutshell
While Community-Led Growth and Product-Led Growth share the ultimate goal of driving growth and success for businesses, they differ in their approach. CLG focuses on building relationships and engagement within a community, while PLG revolves around showcasing the value of the product itself and optimizing the user experience. If businesses learn how to use both strategies right, they have the chance to maximize their growth potential faster.
