What is product-led growth? Complete guide & analytics that drive success.

Product-led growth is ubiquitous in B2B SaaS. According to ProductLed’s benchmarks report, a majority of B2B SaaS companies have already implemented a product-led growth strategy, and 91% of those companies plan to invest more heavily in PLG initiatives in 2026. 

The rise of PLG happened relatively quickly: The term “product-led growth” is less than a decade old (it was coined by OpenView Venture Capital’s Blake Bartlett in 2016) but the concept behind it isn’t new. Chances are, you’ve encountered product-led growth before:

“If you’ve ever sampled a perfume before buying the bottle, taken a car for a test drive before signing the paperwork, or savored a wine tasting before stocking your basket, you’ve experienced the power of product-led growth,” says Wes Bush, founder and CEO of Product-led Institute. He describes PLG as “the SaaS equivalent to the ‘try before you buy’ philosophy.”

Most SaaS companies have adopted a product-led growth strategy, or at least implemented elements of PLG to their go-to-market efforts. You can’t successfully execute a PLG strategy without deep analytics to understand user behavior and optimize the entire customer journey, so that users are getting value from your product quickly and frictionlessly. 

Here’s what you need to know about PLG and the digital analytics you need to make it successful. 

At its core, product-led growth is a strategy that uses your product and the value it delivers to acquire, activate, and retain customers. To do that, products need to deliver value as quickly and effortless as possible. 

“The idea behind PLG is that you want potential customers to try the product for free and realize the value it provides for themselves,” Mixpanel’s Head of Analytics, Adam Kinney, explains. Your product itself becomes the primary vehicle for growth. Smooth, frictionless onboarding that allows users to see value early becomes especially important. 

Historically, sales teams and personal relationships drove software sales, especially when it came to large deals. PLG models usually rely on free trials or freemium models, with self-service evaluation that allows potential customers to see the value for themselves, before talking to a salesperson. 

This can lead to some pushback from sales teams, though those fears aren’t warranted, according to Hootsuite’s Senior Director of Product Growth, Partho Ghosh: 

“Sales often has a harder time buying in [to product-led growth] because they’re worried about their jobs. But once they do buy in, they realize it’s so much better because they can work on bigger deals that focus on deeper value realization and sophisticated use cases in your product. And if the product can at least somewhat sell itself, then sales isn’t starting from scratch on those deals.”

Every organization will operationalize PLG slightly differently, depending on factors like the type of product, buyer personas, or company size. But there are a few core aspects of product-led growth that hold across the board. 

If you want your product’s value to drive sales and subscriptions, you have to demonstrate that value before you make a sale. That means offering a free version for users. Usually, companies opt for either a freemium or free trial model. 

Freemium models offer a basic version of the product indefinitely. More valuable or advanced features are locked behind a paywall. Free trials give users complete access to the entire feature set, but only for a limited time. 

Choosing the right model depends on your type of product and when it provides value. For example, for a communication platform like Slack, it makes sense to use a freemium model: The value from the product becomes apparent over time. Sending a single message (or even multiple messages in a 15-day time frame) would not deliver much value to users. 

It’s also important to balance delivering value to free users with not delivering *too much* value. You want the premium features to be attractive and unique enough to be worth paying for, and you want the free version to be valuable enough for users to see the benefits of upgrading. 

PLG relies on users realizing the value that your product offers as quickly as possible. For users to see value from your product, they need to be able to explore it independently, without relying on a sales call or a demo. 

Product-led growth companies prioritize frictionless onboarding and a smooth product experience designed for “aha” moments. Every step of the user journey should be designed to create a seamless experience for users. 

One of the key motors of product-led growth is social sharing: One employee will discover the tool, realize the value it offers, and share it with their wider team or company, for example. Eventually, the company will upgrade to a paid account and adopt the tool more widely. 

For this reason, many PLG products have extensive built-in sharing and collaboration features, which help users share the value of the products with their wider network. Many companies also offer referral programs and incentives for the same reason. 

The best (and really, only) way to deliver value to your users is to understand their behavior and interactions with your product to continuously improve their experience. 

Wes Bush shared an example of data-driven optimization in a blog post that he wrote for Mixpanel: 

“An online photo editing tool I worked with was struggling with low conversion rates for plan upgrades. They dug into Mixpanel and discovered that a particular email activation step was causing a whopping 27% of signups to not go into the product. By eliminating this step, they were able to dramatically increase time-to-value, and—long story short—people began upgrading in droves,”

Finding these drop-off points and moments of friction is the first step to eliminating them. The key to PLG is digital continuous innovation, powered by processes like the OADA loop: Observe, Analyze, Decide, Act. 

PLG offers benefits for both organizations that build products and the consumers who use them. 

Product-led growth reduces dependency on paid marketing and outbound sales, and PLG products’ viral growth features reduce marginal acquisition costs. The self-service PLG model can scale without requiring additional headcount, since you don’t need large sales teams to execute demos and outreach in the early stages.

For users, PLG models aim to provide faster time-to-value than sales or marketing-led models. Users experience product benefits immediately (or at least very quickly), with more streamlined onboarding and reduced implementation friction. 

PLG models also remove barriers to scalable growth: The self-service model means that products can reach a global audience without regional sales teams, and companies can add teams in locations where they know there is a proven market for their product. 

Here are a few examples of companies that are nailing product-led growth, and what they did to succeed. 

Experimentation and optimization platform AB Tasty shifted to a PLG strategy. Thanks to the changes they made, they realized they were experiencing significant friction in product tours, with only a 2% product tour completion rate. Using funnel analysis insights, they were able to increase that to a 15% product tour completion rate. They also reached their goal of converting 20% of free trial registrations to product-qualified leads (PQLs). 

Read the full case study here. 

Dropbox is one of the prime examples of successful product-led growth having famously grown to $10 billion in just 10 years, and used a PLG model to fuel much of that meteoric rise. 

Several factors made Dropbox’s PLG strategy particularly successful: For one thing, file sharing and collaboration work as a natural growth mechanism. Every time a user shares files with another, a new user discovers the tool. 

Dropbox is also relatively easy to use, so that customers can intuitively try it and understand how it works without the help of a salesperson. It’s a simple product that demonstrates value immediately. Dropbox also introduced a successful referral program, which gave users the opportunity to increase their storage when they introduced new users to the tool. 

Calendly’s free online appointment scheduling software immediately creates value for both scheduler and invitees. It eliminates the flurry of back-and-forth emails that come with any attempt to schedule a meeting, especially when multiple time zones and busy schedules are added to the mix. 

Calendly managed to turn every scheduled meeting into an opportunity to market its services to invitees. By adding powerful, seamless integrations to tools people already use and creating clear paths to upgrade as user needs grow, Calendly used PLG to quickly reach its $3 billion valuation. 

HubSpot began with a sales-driven approach but shifted to a PLG model a few years ago, fueled by the observation that ease of buying and ease of use were deeply important for the segments they were targeting. 

HubSpot CEO Yamini Rangan describes their process:

“We started thinking: ‘Okay, how do I make it easy for people to try? How do you make it easy for people to buy?’ That brought us to the buyer experience we have today, where the buyer can go to our website, they can trial our product, and they can get through 90% of everything that they need to do without talking to anybody within the organization."

HubSpot focuses on exceptional customer experience to fuel PLG, with an extra emphasis on metrics like Net Promoter Score (NPS), and they use those results to fuel further investigation and rapid product and engineering decisions, which translates to quick improvements for customers. 

Read the full interview on our blog. 

Product-led growth requires sophisticated analytics: You need to understand user behavior, drop-off points, and value moments, not just traffic and conversions. 

Real-time insights enable rapid iteration and optimization. Accessible, self-serve analytics give cross-functional teams access to shared data, which they need to align around important PLG metrics. 

Traditional web analytics, including Google Analytics, don’t have the sophistication required to support PLG. Product-led growth requires an understanding of user behavior and multi-touch attribution to eliminate friction points and deliver value early and consistently. PLG also requires tracking several key metrics that are difficult to analyze with a traditional web analytics tool, which we get into in the next section. 

There are several key metrics to track and optimize for successful PLG.

Activation rate measures the percentage of users who complete specific key actions in your product, indicating that those users have reached their “aha” moment. It’s important to define activation events that show users are on the path to achieving value from your core product. 

The formula for calculating activation rate is: 

In addition to increasing activation rates, PLG organizations usually optimize for faster activation: The faster the time-to-activation, the faster users realize value from your product. 

Product-qualified leads (PQLs) are freemium or free trial users who are actively using your product and experiencing its value firsthand (and are therefore more likely to convert to paid users down the line). Unlike marketing qualified leads (MQLs), which show a lead’s engagement with top-of-funnel marketing materials, PQLs demonstrate product engagement and are more likely to purchase. 

Viral coefficient and referral metrics: PLG relies heavily on virality, with users sharing products and built-in collaboration features that promote organic growth. It’s important to track invitation and sharing behaviors to understand how “viral” your product is and optimize viral loops for maximum impact. 

The formula for viral coefficient is: 

Finally, conversion and retention metrics help you understand how much your users value your product. Are they willing to convert to paid (showing they value your product enough to spend money on it), and are they sticking around (showing that they continue to get value from it over time)? 

Tools like conversion, cohort, and retention analysis help teams track their conversion and retention metrics. 

Unlike traditional BI tools, Mixpanel provides instant insights. With fast, connected analysis and real-time dashboards, you can quickly identify and correct drop-off points and friction areas. Features like Session Replay and Experiments give you a fast, in-depth understanding of user behavior. Mixpanel’s event-based tracking schema supports detailed behavioral analysis, with live data updates without batch processing delays. 

Product, growth, marketing, and engineering teams can analyze independently, with a shared understanding of results. Metric Trees, Saved Metrics, and Lexicon keep PLG teams aligned and working towards shared goals that serve the company’s product-led growth plans. There are no bottlenecks and no need to wait for data team support: Mixpanel democratizes access to data across organizations, with no-code analysis and an intuitive interface. 

Mixpanel serves as a single source of truth for all PLG metrics, with centralized, unified data from multiple touchpoints combined into a single interface. This eliminates silos and ensures that everyone is measuring success consistently. 

PLG is more than offering free trials—it requires a deep understanding of your users and their interactions with your product. To get that, you need sophisticated analytics and access to data. 

Successful PLG companies like AB Tasty, Calendly, and HubSpot use data to understand their users, optimize experiences, and drive growth. Mixpanel can help organizations fuel their PLG efforts, see where they’re falling short, and optimize their products to get users to their aha moments faster. 

Try Mixpanel for free to start implementing your data-driven PLG strategies.