<div><div><div><div><h2 id="2aaf">A case study of new feature adoption and product-led growth</h2><div><div><div><div><div><div><a href="https://medium.com/@rosiehoggmascall?source=post_page-----19e45c0e87e0--------------------------------" rel="noopener follow"><div><div aria-hidden="false"><div><div><p><img alt="Rosie Hoggmascall" data-testid="authorPhoto" height="44" loading="lazy" src="https://miro.medium.com/v2/resize:fill:88:88/1*3P6NKOdgCpW4rCXca1vHSQ.jpeg" width="44"></img></p></div></div></div></div></a><a href="https://uxdesign.cc/?source=post_page-----19e45c0e87e0--------------------------------" rel="noopener follow"><div><div><div aria-hidden="false"><div><div><p><img alt="UX Collective" data-testid="publicationPhoto" height="24" loading="lazy" src="https://miro.medium.com/v2/resize:fill:48:48/1*mDhF9X4VO0rCrJvWFatyxg.png" width="24"></img></p></div></div></div></div></div></a></div></div></div></div></div></div></div><figure><div role="button" tabindex="0"><div><picture><source sizes="(min-resolution: 4dppx) and (max-width: 700px) 50vw, (-webkit-min-device-pixel-ratio: 4) and (max-width: 700px) 50vw, (min-resolution: 3dppx) and (max-width: 700px) 67vw, (-webkit-min-device-pixel-ratio: 3) and (max-width: 700px) 65vw, (min-resolution: 2.5dppx) and (max-width: 700px) 80vw, (-webkit-min-device-pixel-ratio: 2.5) and (max-width: 700px) 80vw, (min-resolution: 2dppx) and (max-width: 700px) 100vw, (-webkit-min-device-pixel-ratio: 2) and (max-width: 700px) 100vw, 700px" srcset="https://miro.medium.com/v2/resize:fit:640/format:webp/1*NIsaIm7bHFN1AHaTGzwvnQ.png 640w, https://miro.medium.com/v2/resize:fit:720/format:webp/1*NIsaIm7bHFN1AHaTGzwvnQ.png 720w, https://miro.medium.com/v2/resize:fit:750/format:webp/1*NIsaIm7bHFN1AHaTGzwvnQ.png 750w, https://miro.medium.com/v2/resize:fit:786/format:webp/1*NIsaIm7bHFN1AHaTGzwvnQ.png 786w, https://miro.medium.com/v2/resize:fit:828/format:webp/1*NIsaIm7bHFN1AHaTGzwvnQ.png 828w, https://miro.medium.com/v2/resize:fit:1100/format:webp/1*NIsaIm7bHFN1AHaTGzwvnQ.png 1100w, https://miro.medium.com/v2/resize:fit:1400/format:webp/1*NIsaIm7bHFN1AHaTGzwvnQ.png 1400w" type="image/webp"></source><source data-testid="og" sizes="(min-resolution: 4dppx) and (max-width: 700px) 50vw, (-webkit-min-device-pixel-ratio: 4) and (max-width: 700px) 50vw, (min-resolution: 3dppx) and (max-width: 700px) 67vw, (-webkit-min-device-pixel-ratio: 3) and (max-width: 700px) 65vw, (min-resolution: 2.5dppx) and (max-width: 700px) 80vw, (-webkit-min-device-pixel-ratio: 2.5) and (max-width: 700px) 80vw, (min-resolution: 2dppx) and (max-width: 700px) 100vw, (-webkit-min-device-pixel-ratio: 2) and (max-width: 700px) 100vw, 700px" srcset="https://miro.medium.com/v2/resize:fit:640/1*NIsaIm7bHFN1AHaTGzwvnQ.png 640w, https://miro.medium.com/v2/resize:fit:720/1*NIsaIm7bHFN1AHaTGzwvnQ.png 720w, https://miro.medium.com/v2/resize:fit:750/1*NIsaIm7bHFN1AHaTGzwvnQ.png 750w, https://miro.medium.com/v2/resize:fit:786/1*NIsaIm7bHFN1AHaTGzwvnQ.png 786w, https://miro.medium.com/v2/resize:fit:828/1*NIsaIm7bHFN1AHaTGzwvnQ.png 828w, https://miro.medium.com/v2/resize:fit:1100/1*NIsaIm7bHFN1AHaTGzwvnQ.png 1100w, https://miro.medium.com/v2/resize:fit:1400/1*NIsaIm7bHFN1AHaTGzwvnQ.png 1400w"></source><img alt="Spotify logo on white bg" height="434" loading="eager" width="700"></img></picture></div></div></figure><p id="d8b3">Last week, Spotify announced it<strong> </strong><a href="https://newsroom.spotify.com/2023-10-24/spotify-reports-third-quarter-2023-earnings/" rel="noopener ugc nofollow" target="_blank"><strong>returned to profitability for the first time since 2021</strong></a><strong>.</strong> With an income of <a href="https://www.reuters.com/business/media-telecom/spotifys-user-growth-beats-expectations-posts-quarterly-profit-2023-10-24" rel="noopener ugc nofollow" target="_blank">$34 million</a> and 2 million more users than forecast, they really smashed it out the park.</p><p id="8471">Monthly Active Users (MAU) <a href="https://www.reuters.com/business/media-telecom/spotifys-user-growth-beats-expectations-posts-quarterly-profit-2023-10-24/" rel="noopener ugc nofollow" target="_blank">hit 574 million, up 26% on the last quarter</a> representing their<a href="https://www.reuters.com/business/media-telecom/spotifys-user-growth-beats-expectations-posts-quarterly-profit-2023-10-24/" rel="noopener ugc nofollow" target="_blank"> <strong>2nd largest</strong></a><strong> performance result in history.</strong></p><p id="aba6">The reason?</p><p id="cf96">Keeping costs <em>tight</em>.</p><p id="2671">As well as <a href="https://www.cnbc.com/2023/01/23/spotify-to-cut-6percent-of-its-workforce-as-tech-layoffs-continue.html#:~:text=Spotify%20announced%20Monday%20it's%20cutting,cuts%20impact%20about%20600%20employees." rel="noopener ugc nofollow" target="_blank">laying off 6%</a> of their employees this year and rising premium plan prices, Daniel Ek their CEO said:</p><blockquote><p id="c453">“We are still focusing on efficiencies, but efficiencies for us doesn’t mean just cost cutting, it means getting more out of each dollar,â€ —Daniel Ek quoted in <a href="https://www.reuters.com/business/media-telecom/spotifys-user-growth-beats-expectations-posts-quarterly-profit-2023-10-24" rel="noopener ugc nofollow" target="_blank">Reuters</a></p></blockquote><p id="c220">In addition to keeping personnel costs tight, the return to profitability also came from keeping a tight lid on <a href="https://www.reuters.com/business/media-telecom/spotifys-user-growth-beats-expectations-posts-quarterly-profit-2023-10-24" rel="noopener ugc nofollow" target="_blank">‘marketing costs’</a>.</p><p id="3138">I imagine this means cutting channels that are poor performing and focusing on lower-cost acquisition. Which brings me to the second reason Spotify has managed to grow while cost cutting:<strong> product-led growth (PLG).</strong></p><p id="f87f">As many know, one of <em>the</em> best ways to keep markting costs low is to find ways to use PLG to bring in new users. It doesn’t work for every product but, when it does work, it means that users come in for free.</p><p id="8294">$0 acquisition cost.</p><p id="c5bd">Nothing. Nada.</p><p id="0849">This is the stuff of dreams.</p><p id="dbfe">I’ve covered w<a href="https://medium.com/user-experience-design-1/7-examples-of-product-led-growth-in-mobile-apps-390c28835dfb" rel="noopener">hat Product-Led Growth means in the context of consumer apps before</a>, but to sum for those of you who are not familiar, this could look like:</p><ul class=""><li id="00db">Using content to bring in new users (through sharing mechanisms or through SEO)</li><li id="5d8b">Creating referral programs to incentivise the sharer (the person sharing) and sharee (the new user who comes in)</li><li id="4111">Creating micro networks out of subscription packages like family plans, couple plans</li><li id="dc16">Gamification that drives retention through repeat engagement over time…</li></ul></div></div></div>