No two companies do product growth quite the same.
This report hopes to shed a little light on how product growth work is planned, completed, and assessed across different organizations. By learning more about how different teams approach growth, we can all learn from each other.
How can you use this report?
- Learn how Product Growth teams are structured, including the benefits and challenges of centralized and decentralized teams.
- Learn where to focus. Discover which parts of the funnel teams focus on, and which experiments are worth trying.
- Find out how Product Growth teams measure success Learn about other team’s key initiatives and metrics
The landscape of product growth has become a critical focus for technology professionals, especially within B2B SaaS companies. With over 40 product growth teams surveyed, the "State of Product Growth 2024" report unveils significant insights that help understand the dynamics shaping this area. This blog post dives into the core aspects that are pivotal for tech professionals at software companies: team structure, funnel focus areas, technology and tools, and metrics and milestones.
Who participated in this report?
Just how product-led are we?
Even distribution of how product-led teams are today (self-reported).
Pricing Approach & Customer Profiles
We are beginning to see a split between functional PMs and growth PMs, who focus on improving growth metrics.
Let’s dive in.
Product Growth Team Structure
One of the report's key findings is the variety in the structure of product growth teams: Who is on the team, who they report to and whether the teams are centralized, decentralized or hybrid.
Centralized vs. Decentralized Teams
Companies have been experimenting with centralized, decentralized, and hybrid structures, each with its own advantages and challenges.
Are Product Growth teams centralized, decentralized or hybrid?
Centralized teams enjoy clearer communication channels and a more focused approach, ensuring that strategies align closely with the company's goals. However, they might suffer from a lack of visibility into other departments' contributions and initiatives.
On the other hand, decentralized teams benefit from broader impacts across the organization, fostering innovation and autonomy. But, the scattered focus and the need to manage different planning cycles can detract from a unified growth strategy.
Hybrid approaches try to balance these aspects, aiming for flexibility and broader impact while maintaining some level of central control.
Funnel Focus Areas
Product growth teams are increasingly zeroing in on specific funnel areas: Acquisition, Activation, Retention, and Revenue. A team’s focus is tailored to the company's stage and specific needs, with many teams emphasizing activation and conversion in a trial period.
Not surprisingly, activation strategies, such as improving onboarding processes and user engagement, are prevalent among growth teams aiming to convert new users into active customers.
Experimentation Culture
For many product growth teams, experimentation is a cornerstone of their ‘test everything’ growth strategy. Others have yet to start their experimentation journey.
There is a positive correlation between the number of experiments conducted and a team’s perception of being product-led – underscoring the significance of an embedded experimentation culture. From rapidly validating ideas to meticulous funnel optimization, experimentation is an important aspect of building a solid foundation for product growth.
Ideas for new growth initiatives or experiments can come from anywhere, but internal brainstorms, best-in-class companies, and competitors were the most fruitful sources.
Technology and Tools
What’s in our product growth tech stack?
The report highlights a significant reliance on analytics, product management, and design tools. Moreover, tools for A/B testing, digital adoption, and customer data platforms (CDPs) can play a significant role in enabling teams to move faster.
However, the report also indicates a challenge in integrating these tools to create a coherent technology ecosystem that supports data-driven decision-making.
Our favorite tools?
Product Growth Metrics and Milestones
Measuring the right metrics is fundamental to understanding the success of product growth initiatives. When teams were uncertain about which metric to measure, it created significant organizational challenges.
The report indicates a strong emphasis on activation rates, conversion rates, and customer retention metrics. These KPIs help teams gauge the effectiveness of their strategies and make data-informed decisions to steer product growth in the right direction.
Additionally, setting clear milestones and aligning them with overarching business goals ensures that growth efforts contribute positively to the company's success.
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Navigating the Future of Product Growth
The "State of Product Growth 2024" report provides insights for product growth teams and leaders who want PLG to succeed within their organizations.
Understanding the nuances of team structures, focusing on the right areas of the funnel, leveraging technology effectively, and measuring the right metrics are all crucial to building a robust strategy.
Product growth teams can foster a culture of growth that propels their products and companies forward by learning from the experiences and strategies of other teams.
While no two companies approach product growth in the exact same way, sharing insights and best practices can help us move this function forward.
Happy growing.
