Product-led growth is one of the key strategies in the SaaS industry. In this post, we will discuss what is product-led growth? and how to approach product-led growth as your GTM strategy. 

What is Product-Led Growth?

Product-Led Growth(PLG) is a GTM (Go-to-Market )strategy that your product itself leads to growth. It uses the methodology that the product itself drives all leads including user acquisition, conversion, expansion, and retention. PLG allows the end-user to experience the product first and helps them understand how it solves their problems. Once the users have a positive experience and find out if it can help to solve their problem, it becomes a conversion to sales.  

Why Does PLG Become a Modern Go-To-Market Strategy?

Over the years, a lot of SaaS companies change their GTM strategy from sale-led to product-led because product-led strategy is a more effective pipeline that leads the prospect into the sales funnel with a seamless customer experience. 

In addition to that, it reduces the sales cycle and onboarding process. Prospects already onboard themselves, while they are using the product, the sales team doesn’t need to put any effort into explaining or educating prospects. It is no surprise that product-led businesses are valued 30% more than the public SaaS market index. 

On the user side, we all know the B2B buyer's journey is not the same as it was 3 years ago. Buyers want to have the time to self-educate themselves in order to fully understand if it is the right product for them even before talking to sales. And their positive product experience will lead to sales without sales ops. 

Traditional Sales-Led vs Marketing-Led vs Product-Led 

Product-led growth strategy is different from traditional sales-led or marketing-led. Let’s begin with sales-led and marketing-led. 

When we go back to the 90s, software sales were based on relationships. The most common sales approach was outbound and client relationships. However, building software became no longer hard nor was it expensive. So more competitors were coming into the market. Plus, a long sales cycle never helps to scale the SaaS business. 

More and more prospects were given the resources to educate themselves and find the information they needed whenever and wherever, with no need to interact with a sales rep. Saas companies moved to a marketing-led strategy, which has a cheaper CPA (Cost per Acquisition) and gains prospect attention more easily than the traditional sales-led strategy. Content-led marketing is a great example of this marketing-led era. 

However, customers can switch over their software from one to another so easily because there is so much similar software that exists, which means the cost for switching from one to another is low. So, they don’t have to stick with just one product. 

Now, software products offer freemium versions and free trials even before they pay for it. So, product-led marketing is the ‘must have‘ strategy for SaaS companies. 

How Can you Approach a Product-Led Growth Strategy?

Now that we understand product-led growth, how do we approach this PLG strategy?

First of all, product-led growth is highly focused on the end-user, you will need to focus on:

What are their pain points? and How can we solve the end user’s pain points? For example, Slack started their product from the pain point that internal email is annoying for everyone. Dropbox started from the pain point that file sharing is annoying to everyone. 

Once you define users' pain points, it’s time to show how your product can solve the problem. Successful PLG needs well-designed products. It is not about visually beautiful design, it is more likely to remove friction and show features that end users stick to your product.

In this stage, you will need to deeply understand the user’s problems and journey as well as design a product that makes it easy for users to solve their problems. 

PLG also requires internal alignment with marketing, sales, consumer success, and product teams and they all have the same goal. Defining the product-led growth metrics as a team, leads towards the best outcome for all members. 

You also need to approach the PLG strategy by applying a paywall. You need to decide where to apply a paywall that encourages upsells once users have enough free experience to see your product’s value. You should keep in mind that the free-trial or freemium versions drive users to minimum values and extended value with paid features is clear to the user. 

Lastly, you should approach a strategic plan that removes onboarding friction. Users won’t wait until your sales team talks about the product. Don’t lose their interest, self-guided tours, in-app tours, or product demos as onboarding can remove long and painful onboarding processes.

Product Demo as Product-Led Growth Strategy

Before you lead customers into free-trial and freemium versions, you should keep in mind that customers will not dive into your product even if it is free, they want more information to determine if it’s even worth trying for free. In this stage, the product demo is a great method to grab their attention. An interactive product tour with a simple interface, showing the main features or a live product demo staging the environment, will enable them to better envision the product and benefits. This will also help to increase the user’s appetite. Showing a product demo on your website or content for email marketing will help potential customers understand the value of your product. Ready for a product-led growth strategy? Start with the Tacpoint demo solution.

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  1. What Is Product-Led Growth?
  2. How to Build a Software Company in the End User Era
  3. What is product-led growth?

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Product-led growth: The modern SaaS Go-To-Market strategy

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