What is the difference between product-led growth and sales-led growth?

In product-led growth, the product drives user acquisition, activation, and expansion through self-serve experiences and free trials. In sales-led growth, human sales reps guide prospects through demos, negotiations, and contracts. Many successful companies use elements of both models.

What is a good free-to-paid conversion rate for PLG?

The average free-to-paid conversion rate across PLG companies is about 9%. Top performers see 15% or higher. The key is optimizing your activation flow so users reach the value moment quickly, then designing natural upgrade triggers tied to genuine usage needs.

Can enterprise companies use product-led growth?

Yes. Many enterprise software companies use PLG for initial adoption, then layer in sales for expansion and upsell. This hybrid model lets individual users or teams start free, prove value internally, and then trigger a sales conversation when the account is ready for enterprise features.

What are the biggest risks of product-led growth?

The biggest risks are high infrastructure costs from free users who never convert, building product for power users while neglecting new user onboarding, and underinvesting in monetization design. PLG also requires strong product analytics to identify conversion opportunities and reduce churn.

What Is Product-Led Growth (PLG)?

Product-led growth (PLG) is a business strategy where the product itself serves as the primary driver of customer acquisition, activation, conversion, and expansion. Instead of relying on sales teams or marketing campaigns to move prospects through a funnel, PLG companies let users experience the product's value firsthand - typically through free trials, freemium tiers, or self-serve onboarding.

PLG has become the dominant growth model in SaaS. 58% of B2B SaaS companies have implemented PLG, and 91% of companies over $50M ARR are using it. The reason is simple: it works. PLG companies grow roughly 50% year-over-year compared to 21% for traditional SaaS.

How Does Product-Led Growth Differ from Sales-Led Growth?

In a sales-led model, the buyer journey starts with marketing generating leads, sales qualifying them, running demos, handling objections, and closing deals. The product is behind a wall until after the contract is signed.

In a PLG model, the journey starts with the product. A user signs up, starts using it, experiences value, and then decides to pay. The buying decision happens after the user already knows the product works for them.

This is not just a pricing model change - it is a fundamental shift in how the company operates. PLG requires the product to be intuitive enough for self-serve adoption, valuable enough in a free tier to hook users, and designed with natural upgrade triggers.

Think of Slack, Notion, Figma, and Dropbox. Each lets you start for free, experience real value, and then hit a natural limit where paying makes sense. That is PLG in action.

What Are the Key PLG Metrics?

PLG companies track a specific set of metrics that differ from traditional sales-led metrics.

Activation Rate

The percentage of signups who reach the "aha moment" - the point where they experience the product's core value. If your activation rate is low, nothing else matters. Users who do not activate will not convert or retain.

Free-to-Paid Conversion Rate

The average free-to-paid conversion rate is 9%. This is the percentage of free users who become paying customers. Optimizing this rate is about designing the right upgrade triggers - not gating features arbitrarily, but creating genuine value thresholds.

Time to Value (TTV)

How quickly a new user gets value from your product. The shorter the TTV, the higher your activation and conversion rates. The best PLG products deliver value in minutes, not days.

Product Qualified Leads (PQLs)

PQLs are users who have demonstrated buying intent through their product usage - hitting usage limits, inviting team members, or engaging with premium features. PQLs convert at much higher rates than traditional marketing qualified leads.

Net Revenue Retention (NRR)

PLG companies expand revenue within existing accounts through usage growth, seat additions, and tier upgrades. Strong PLG companies target NRR above 120%, meaning existing customers grow in value even without acquiring new ones.

When Does PLG Work Best?

PLG is not a universal solution. It works best when specific conditions are met.

The product solves an immediate, tangible problem. Users need to experience value quickly. If your product requires weeks of setup or custom implementation, pure PLG will struggle.

The end user has buying power or strong influence. PLG works when the person using the product can either purchase it directly or champion it internally. If purchasing decisions are made entirely by executives who never touch the tool, sales-led may be more effective.

The product has natural viral or network effects. Collaboration tools, communication platforms, and design tools spread naturally because using them involves inviting others. Each new user becomes a distribution channel.

The market is large enough to support a funnel. PLG is a volume game. If only 9% of free users convert, you need enough signups to make the math work. Niche markets with small total addressable audiences may not generate enough free users to sustain a PLG model.

When Does PLG Not Work?

PLG struggles in markets with complex buying processes, long implementation cycles, or heavy compliance requirements. Enterprise infrastructure software, regulated industries, and products requiring significant customization often need sales-led approaches.

That said, 91% of B2B SaaS companies plan to increase their PLG investment, and many are finding hybrid models that combine PLG for initial adoption with sales for enterprise expansion.

How Does PLG Connect to Your GTM Strategy?

PLG is a go-to-market strategy, not a replacement for one. You still need to define your ICP, positioning, pricing, and channels. The difference is that PLG puts the product at the center of each of these decisions.

Your distribution strategy in a PLG model focuses on getting users into the product rather than into a sales pipeline. Content, SEO, community, and word-of-mouth become primary channels because they drive the kind of high-intent users who are ready to try your product immediately.

We have seen at Conbersa that the most effective PLG companies do not rely on the product alone. They combine a strong product experience with content marketing that educates users on use cases, community engagement that builds social proof, and strategic nudges that guide users toward conversion moments.

How Do You Get Started with PLG?

Map your value moment. Identify the exact point where users first experience your product's core value. Everything in your onboarding should drive toward this moment.
Design your free offering. Choose between freemium, free trial, or a hybrid. The free tier should deliver real value while creating natural reasons to upgrade.
Build activation flows. Reduce friction between signup and the value moment. Every unnecessary step loses users.
Instrument your product. You cannot optimize what you do not measure. Track activation, engagement, and conversion at every step.
Create upgrade triggers. Design moments where paying feels like a natural next step, not a penalty. Usage limits, collaboration features, and advanced functionality are common triggers.
Layer in sales when ready. As you see accounts with high usage and expansion potential, introduce sales to accelerate enterprise deals.

PLG is not a set-it-and-forget-it model. It requires continuous optimization of your onboarding, pricing, and conversion flows based on real user behavior data.