The Product-Led Growth glossary

Product-led growth is a relatively recent growth buzz-phrase, and we’ve put together a quick rundown of some essential terms that you need to know when making this type of growth.

1. Product-led growth (PLG): PLG is a business strategy that is the primary driver of customer acquisition, business expansion, conversion, and customer retention. It places the product at the center of a buyer’s journey.
2. Go-to-market (GTM): GTM strategy is a detailed plan of how a company can acquire customers and convince them to purchase a product and gain a competitive edge.
3. Freemium: Freemium is an amalgamation of “Free” and “Premium.” It is a pricing strategy in which a basic version of a product is offered free of cost, whereas a premium (money) is charged for advanced features.
4. Free Trial: A customer acquisition method offers access or a partial product free of cost to the customers.
5. Product analytics: Product analytics is the process you use to understand how everyone interacts with your digital product, including customers.
6. Customer acquisition cost: Customer Acquisition Cost (or CAC) is companies’ money to attract customers.CAC is the sum of actions required to acquire a client, like advertising, sales, PR, and others, that must be incurred to convert leads into paying customers.
7. Customer lifetime value (CLV): CLV is a calculated metric used to determine the worth of a customer compared against all of your marketing and sales expenses. It is the measure of the revenue generated from a customer over his entire relationship with a company.
8. Minimum Viable product: An MVP is just a product that has been refined enough to ensure that early users can achieve their desired result.
9. Product differentiation: Product differentiation is a strategy created to distinguish a company’s products from its competitors.
10. Annual Contract Value (ACV): ACV is the average annualized revenue per customer contract. It does not include any one-time fees.
11. Ability debt: Ability debt is the price you have to pay when a customer can’t use some functionality of your product or if they face difficulty while doing so.
12. Blue ocean companies: Blue ocean companies are the ones who create their market and demand. They make the competition irrelevant.
13. Red Ocean companies: Red ocean companies are the ones that enter an already saturated market and try to outperform the other competitors.
14. Cost-Plus Pricing: Cost-plus pricing is a pricing strategy in which the selling price of a product is determined by adding a specific amount to the cost of each product.
15. Competition-based pricing: competition-based pricing is a strategy in which a company decides the pricing of a product after observing its competition.
16. Dominant growth: Dominant growth is when a company offers a better quality product and charges less for the same.
17. Differentiated growth: Differentiated growth means when a company offers better products and services and charges more for the same.
18. First-Run Onboarding Experience: A first-run onboarding experience is the first time a user goes through your onboarding experience after downloading your app for the first time or requesting access to some of your beginner or introductory content. It can determine if a user will continue to use your product in the future.
19. Product Qualified Leads (PQL): PQL is a customer who has received value by using a company’s product through a free trial or freemium version of the product.
20. Customer-Centric: Customer-Centric is a strategy that focuses on creating exceptional customer experiences. It ensures that the customer is the center of its products, ideas, philosophy, and operations.
21. Frictionless Onboarding: Frictionless onboarding means a modern and efficient approach to onboarding and certification that can considerably quicken time to revenue.
22. Software as a Service (SAAS): Software-as-a-Service (SaaS) is a software licensing model, which allows access to software on-demand either through an application programming interface or an enterprise service bus. SaaS enables each user to access programs over the Internet instead of installing the software on a local computer.
23. Revenue Per Employee (RPE): it measures the average revenue generated through each employee in a company.
24. Sales-Led GTM: A company is entirely reliant on the sales team to close every deal in the pipeline.
25. Sales qualified lead: A person who has expressed enough interest in a company’s product and is ready to talk to the sales team.
26. Total addressable market (TAM): TAM is the entire revenue opportunity available for a product, considering future expansion cases.
27. Value-based pricing: Value-based pricing is a strategy whereby the product’s price is based to a large extent on the value that the customer perceives in it.
28. Value metric: It is a way any company measures the value created in exchange for their product.
29. UCD framework: UCD stands for Understand, Communicate, and Deliver. Each element of the UCD framework is essential in product lead growth.
30. Top-down selling: Top-down selling is a method used by salespeople in which they start from the maximum price package and progressively negotiate down to a package that both parties are content with.
31. Bottom-up selling: A technique for sales is to find your most valuable prospects and invite them to use the product/service you have to offer. Once they become comfortable using it, they might be more inclined to introduce it to others within their own company.
32. Value gap: A value gap is created when the perceived value of a product is significant than its actual value. It creates a gap between a customer’s expectations and reality.
33. Product bumpers: Product bumpers are navigational elements inside your product that guide your users toward using the product.
34. Conversational bumpers: Conversational bumpers educate users, bring them back into the application, and prompt a purchase.
    

This glossary is a great place to start if you’re looking to learn about the terms and phrases used in product-led growth business strategy. We hope it helps you better understand the most prominent terms in product-led growth