The way SaaS companies grow has changed dramatically. Instead of relying on big marketing budgets or outbound sales teams, more businesses are turning to product-led growth (PLG), which is a model where the product itself becomes the main driver of acquisition and retention.
In a PLG company, users can sign up instantly, explore the product on their own, and experience real value before ever speaking to a salesperson. This approach puts the focus on delivering value first, not pitching features.
In this guide, we’ll break down what product-led growth really means, why it’s become such a powerful strategy for SaaS in 2025, and how your team can put it into practice. You’ll see real-world examples, benefits, and challenges to help you decide whether PLG is the right path for your business.
What is PLG or product-led growth?
Product-led growth (PLG) is a go-to-market strategy where the product itself drives customer acquisition, conversion, and expansion. Instead of relying heavily on sales or marketing teams, a PLG company focuses on creating a product experience so valuable that users naturally adopt and recommend it.
In a PLG model, users often start with a free trial or freemium version, explore the product on their own, and only upgrade when they see real value. This makes the product the primary engine for growth, supported by user experience, onboarding, and data-driven insights rather than outbound sales tactics.
You’ll often see PLG strategies in SaaS companies like Slack, Zoom, Notion, and Dropbox, where users can sign up instantly, get value fast, and expand usage across teams organically.
In short, product-led growth is about letting the product prove its worth before the pitch. It builds trust early, shortens sales cycles, and creates a self-sustaining loop where happy users become advocates and revenue grows as adoption spreads.
The biggest benefits of PLG compared to other growth systems
A product-led growth approach can transform how SaaS companies attract and retain customers. While traditional models rely on sales and marketing to push growth, PLG focuses on letting the product do the selling. Here are the biggest advantages of this model, and why it’s becoming the standard for modern SaaS companies.
1. Lower customer acquisition costs
In a PLG model, users can experience the product before paying for it. Free trials and freemium plans create a natural entry point without the need for aggressive sales efforts. Because the product demonstrates value on its own, companies spend less on advertising and outbound sales campaigns.
Instead of paying to convince potential customers, the focus shifts to building a product that converts users through experience. This makes growth more organic and sustainable over time.
2. Faster user adoption and activation
Traditional sales-led processes can take weeks of demos and follow-ups. In contrast, PLG removes friction by allowing users to get started immediately. The onboarding process is simple, often self-service, and designed to help users reach their first “aha moment” quickly.
When people can explore a product hands-on, they understand its value faster, which shortens time to conversion and increases satisfaction early in the journey.
3. Stronger product-market fit
A PLG strategy depends on constant feedback from real users. Since adoption starts with self-service usage, product teams gain direct insights into how people interact with features, where they drop off, and what improvements are needed.
This feedback loop keeps the product aligned with customer needs and helps teams prioritize updates that make the most impact. The result is a tighter product-market fit that evolves with users rather than assumptions.
4. Higher customer retention and expansion
When users adopt a product because they love the experience, retention naturally improves. PLG companies often grow through product-led expansion, where existing users invite teammates, upgrade plans, or purchase add-ons without needing to talk to sales.
This creates a flywheel effect: product usage leads to satisfaction, which leads to advocacy and organic growth. Over time, customer lifetime value rises while churn stays low.
5. Better alignment across teams
In sales-led or marketing-led organizations, departments often operate in silos. PLG changes that dynamic. Since growth is driven by how users interact with the product, product, marketing, and customer success teams share a common goal, improving user experience and activation.
This alignment encourages data sharing, joint experimentation, and a unified focus on user outcomes instead of departmental KPIs.
6. Easier scalability
Because PLG relies on self-service acquisition and in-product upgrades, it scales efficiently. A single well-designed onboarding flow can serve thousands of users without needing additional headcount.
This model makes it easier to grow globally, handle spikes in demand, and adapt pricing or features without rebuilding the entire go-to-market process.
In summary, product-led growth puts the spotlight on value rather than persuasion. By building a product that sells itself, companies can scale faster, spend less, and keep users at the center of every decision.
How to get started with PLG today
Moving to a product-led growth model takes more than offering a free trial. It requires a mindset shift across teams and a product that can prove its value from day one. Here’s how to start building the foundation for PLG in your SaaS company.
1. Identify your core value moments
Start by defining what true value looks like for your users. What is the action or milestone that signals they understand your product’s benefit? For example, sending their first campaign, closing their first deal, or creating their first dashboard?
These “aha moments” should shape your onboarding flow and marketing copy. The faster a user reaches that point, the higher your chances of converting them into a paying customer.
2. Simplify your onboarding experience
PLG relies on self-service. Your onboarding should make it easy for users to explore and succeed without assistance.
- Remove unnecessary steps or setup barriers.
- Use in-app guidance, tooltips, or checklists to highlight key features.
- Offer templates or example projects so users can get instant results.
A smooth onboarding process sets the tone for the entire user journey and encourages activation early on.
3. Offer a free trial or freemium plan
A no-risk entry point helps users experience your product before committing. Decide whether you’ll offer a time-limited free trial or a freemium version with core features unlocked.
- Free trial: Best for products that deliver value quickly.
- Freemium: Better for products that require ongoing engagement or network effects.
The goal is to give users enough access to experience genuine value while still encouraging upgrades later.
4. Measure and optimize key metrics
PLG success depends on understanding how users interact with your product. Track metrics such as:
- Activation rate: Percentage of users who reach the first value moment.
- Product-qualified leads (PQLs): Users showing high engagement and purchase intent.
- Retention and expansion rates: Indicators of long-term product satisfaction.
Use these insights to improve onboarding, adjust pricing, or prioritize new features that drive engagement.
5. Align teams around the product experience
In a PLG company, every team influences the user journey, from marketing and product to support and success. Encourage cross-functional collaboration and shared KPIs that center around user activation, adoption, and retention.
This alignment ensures that all decisions, from product updates to marketing messages, focus on improving how users experience and gain value from the product.
6. Encourage organic growth through advocacy
When users genuinely enjoy your product, they become your strongest promoters. Make it easy for them to share and invite others by adding built-in referral programs, team invites, or collaboration features.
You can also collect testimonials, reviews, and case studies to strengthen social proof. Word-of-mouth remains one of the most powerful drivers of growth in PLG models.
Starting small and iterating based on real user behavior is key. Focus on building an experience that sells itself, one where the product continuously attracts, activates, and retains customers with minimal friction.
PLG examples you can learn from
Many of the world’s most successful SaaS companies owe their growth to a product-led approach. Each one found a way to make the product itself the center of the customer journey, from acquisition to retention and expansion. Here are a few standout examples.
Slack – grew from team adoption, not top-down sales
Slack became one of the fastest-growing B2B apps in history by focusing on bottom-up adoption. Instead of selling directly to executives, the company let small teams try the tool for free. Once those teams experienced the convenience of real-time messaging and integrations, usage spread organically across entire organizations.
The result was a viral effect that turned individual users into internal champions. Slack’s PLG model reduced acquisition costs while fueling exponential growth, leading to its eventual multibillion-dollar valuation and acquisition by Salesforce.
Dropbox – turned free users into power referrers
Dropbox’s freemium and referral model remains one of the most iconic PLG examples. By offering users free cloud storage and rewarding them with extra space for each referral, Dropbox created a self-sustaining growth engine.
This approach turned every satisfied user into a brand ambassador, helping Dropbox grow from 100,000 users in 2008 to over 4 million within 15 months, all with minimal marketing spend.
Notion – built growth through community and templates
Notion’s PLG success came from creating an intuitive product experience and empowering its user community. Instead of relying on heavy advertising, the company encouraged users to share custom templates, tutorials, and use cases.
This grassroots strategy helped Notion expand across teams and industries, as users learned from one another and brought the tool into their workplaces. The product’s flexibility and ease of use became its strongest selling points.
Zoom – prioritized instant usability and viral visibility
Zoom’s growth exploded because it focused on what mattered most: a frictionless video experience. Users could start a meeting instantly without setup hurdles or complicated pricing.
The product’s reliability and simplicity led to rapid word-of-mouth growth, especially among remote teams and educators. When the pandemic hit, Zoom’s PLG model allowed it to scale quickly because people were already using and recommending it organically.
Calendly – simplified scheduling for viral team adoption
Calendly built its growth by solving a universal pain point: scheduling meetings. By allowing users to share personalized booking links, the product naturally exposed itself to new users every time an invite was sent.
This viral loop meant every interaction introduced Calendly to potential customers without paid acquisition. Over time, the platform became a go-to scheduling tool for professionals across industries, powered entirely by the product experience.
Each of these companies proves that great products can sell themselves when built around user value. The lesson: focus on helping users succeed first, and growth will follow naturally.
The biggest challenges of PLG in 2025
While product-led growth continues to shape how SaaS companies scale, it’s not without its challenges. As more businesses adopt this model, competition, data privacy, and user expectations are making PLG harder to execute effectively. Here are some of the main obstacles SaaS teams face in 2025.
1. Standing out in a crowded market
The PLG playbook has gone mainstream. Thousands of SaaS products now offer free trials or freemium versions, making it harder to grab attention. Users are overloaded with options and less willing to try yet another tool unless it delivers clear, instant value.
To stand out, products must focus on exceptional onboarding, differentiated value propositions, and real-world outcomes, and not just nice interfaces or catchy slogans.
2. Turning free users into paying customers
The freemium model attracts a lot of sign-ups but often struggles to convert them. In 2025, users expect premium-quality experiences even in free plans, which raises product costs without guaranteed revenue.
Companies need to design strategic upgrade paths that balance generosity with incentives. Limiting advanced features, adding collaboration options, or tying upgrades to team growth can encourage conversion without frustrating users.
3. Managing data privacy and security
As integrations and user analytics power PLG insights, data privacy has become a growing concern. Regulations like GDPR, CCPA, and AI governance laws now shape how SaaS companies track usage and personalize experiences.
Teams must ensure their PLG data strategies remain transparent and compliant. Over-collecting behavioral data or misusing analytics can erode trust, which is something no product can easily rebuild.
4. Maintaining alignment across teams
PLG requires product, marketing, sales, and customer success teams to collaborate closely. But in practice, that alignment can break down as companies scale. Product teams may prioritize feature development, while marketing focuses on acquisition and sales looks for expansion revenue.
To stay aligned, leaders must promote shared metrics like activation rate, retention, and product-qualified leads (PQLs) rather than siloed KPIs.
5. Avoiding growth plateaus
Early viral loops and referral programs can drive fast adoption, but sustaining growth is another challenge. Once the early adopters are onboard, many PLG companies struggle to expand into new markets or move upmarket to enterprise customers.
Breaking through this plateau requires continuous innovation such as adding new use cases, integrations, or premium features that keep existing users engaged and attract new ones.
6. Balancing automation with human touch
PLG thrives on self-service, but not every user journey should be fully automated. As SaaS products target larger clients, many still expect personalized support and enterprise-level onboarding.
The best PLG companies in 2025 strike a balance: they keep the self-serve motion efficient for small users, while adding high-touch experiences for customers with complex needs.
In 2025, product-led growth still offers incredible potential, but execution is more complex than ever. Success comes from blending automation with empathy, data with transparency, and product experience with human connection.
Wrapping up
Product-led growth has reshaped the way SaaS companies attract, engage, and retain customers. It’s about building a product so valuable and intuitive that it sells itself.
By focusing on user experience, data-driven decisions, and seamless onboarding, PLG companies create a compounding growth engine where every satisfied user can become an advocate. Still, it’s not a set-it-and-forget-it model. Success depends on constant iteration, cross-team alignment, and a deep understanding of user needs.
As competition intensifies in 2025, the most successful SaaS brands will be those that blend product excellence with authenticity, providing users with real value from the very first interaction.
FAQs about product-led growth (PLG)
What does product-led growth really mean?
Product-led growth (PLG) is a business strategy where the product itself drives user acquisition, activation, and retention. Instead of relying on sales teams to convince customers, the product delivers enough value for users to convert on their own.
Is PLG only for SaaS companies?
While PLG is most common in SaaS, the core idea — letting the product demonstrate value before purchase — can apply to many digital products. Any company offering self-service onboarding or freemium access can benefit from a PLG mindset.
What’s the difference between product-led and sales-led growth?
In a sales-led model, the buying process depends on demos, negotiations, and direct outreach. A product-led model focuses on user experience and in-product conversion. The product acts as the salesperson, with customer success and marketing supporting the journey.
Do all PLG companies need a freemium plan?
Not necessarily. Some use free trials instead. The goal is to remove friction and help users experience value quickly, whether that’s through limited-time access or a free tier.
What are product-qualified leads (PQLs)?
PQLs are users who have interacted with the product enough to show buying intent. They’ve already experienced value (for example, reached a usage milestone) and are much more likely to convert compared to traditional leads.
How do you measure success in a PLG strategy?
Key metrics include activation rate, retention rate, customer lifetime value (CLV), and PQL-to-customer conversion rate. These show how well your product engages users and drives growth without heavy sales input.
Can a company mix PLG and sales-led strategies?
Yes. Many SaaS companies combine both. PLG helps attract and qualify users at scale, while sales teams focus on converting larger accounts or enterprise clients. The balance depends on pricing, market, and customer size.
What’s the biggest mistake companies make with PLG?
Treating PLG as a marketing tactic instead of a company-wide strategy. Successful PLG requires alignment between product, marketing, sales, and support teams, all centered around delivering user value first.