Growth Model Guide: Product-Led | Sales-Led | Marketing-Led | Ops-Led

Growth models debunked

Mar 18, 2023

Move beyond just being Product-Led

Product-led growth has become all the rage, and understandably so. With improvement in tech, availability of high-performance computing devices and better user experiences, users of products can now play around with the application, learn it on the go and self-serve their own needs. This led to the birth of a growth model where the product itself drives customer acquisition, retention, and expansion.

Read Product-Led Growth’s 4 Signals (Published on Productify)

However, I wanted to write this post to drive home the point that product-led growth is not the only way to grow a company, and there are situations where other growth models like sales-led growth, marketing-led growth, or operations-led growth may be more helpful. And even often a combination of these growth models makes sense.

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Besides Product-Led, there are other models

Sales-led growth is a growth model that focuses on building a robust sales team that can sell the product to the customers. This model works well for companies that have complex products or services that require a high level of explanation or customization. In such cases, the sales team can help customers understand the product better and provide personalized solutions. Companies like Oracle and Salesforce have successfully used this model to grow their businesses.

Marketing-led growth is a growth model that focuses on building a strong brand and generating demand through marketing campaigns. This model works well for companies that have a strong brand or a unique value proposition that can attract customers. Marketing-led growth can be effective in highly competitive markets where differentiation is crucial. Companies like Coca-Cola and Nike have successfully used this model to build their brands.

Operations-led growth is a growth model that focuses on optimizing operations to reduce costs and increase efficiency. This model works well for companies that have a highly scalable business model that requires high operational efficiency. Companies like Amazon and Walmart have successfully used this model to dominate their respective markets.

How to choose a growth-model / Which questions to ask?

The first question to ask is, "What is our product and who is our target market?" The answer to this question will help determine which growth model(s) might be most effective. For example, if your product is highly technical and requires a significant amount of explanation or customization for enterprise customers, a sales-led growth model might be the best fit. On the other hand, if your product is self-serve and has a viral nature, a product-led growth model might be more appropriate.

The next question to ask is, "What are our company's strengths and weaknesses?" This will help you identify which growth models can play to your company's strengths and which ones might need to be avoided. For example, if your company has a highly efficient and scalable operation, an operations-led growth model might be a good choice. However, if your company lacks expertise in sales or marketing, you might want to focus on a product-led growth model instead.

Another important question to ask is, "What is our company's stage of growth?" Startups in the early stages of growth might benefit more from a product-led or sales-led growth model, while more established companies might be better suited for marketing-led or operations-led growth models. This is because early-stage companies often have limited resources and need to focus on building a strong product and customer base, while established companies might be more focused on optimizing operations and maximizing profits.

Finally, it's important to consider your company's overall goals and priorities. Are you looking to scale quickly, maximize profits, or build a strong brand? Each growth model can help you achieve different goals, and choosing the right combination can help you strike the right balance. For example, if your goal is to build a strong brand, a marketing-led growth model might be a good choice, while if your goal is to maximize profits, an operations-led growth model might be more appropriate.

Combination of Growth Models matters more than choosing one single model

It is worth noting that many companies use a combination of these growth models, depending on their business needs. For example, a software company may use a product-led growth model to acquire new customers and a sales-led growth model to sell to enterprise customers. A consumer goods company may use a marketing-led growth model to build its brand and an operations-led growth model to optimize its supply chain.

Takeaways

Understand your target market: Before choosing a growth model, it's important to understand your target market and their needs. This will help you determine which growth model is most appropriate and how to tailor your product and marketing efforts to appeal to your target audience.
Experiment and iterate: Don't be afraid to experiment with different growth models and strategies to find what works best for your product and company. Keep track of your results and iterate based on what you learn. This will help you optimize your growth efforts and stay ahead of the competition.
Prioritize customer experience: Regardless of which growth model you choose, it's important to prioritize customer experience. Make sure your product is easy to use, intuitive, and meets the needs of your customers. Additionally, prioritize customer support and feedback to ensure your customers feel heard and valued, which can lead to increased retention and growth.