Ever thought about what it would be like when your product sells itself? Well, the 2023 Product Benchmarks Report has shown that product-led growth companies are growing 50% year over year faster than traditional SaaS companies. Therefore, there’s no doubt that product-led growth companies are growing faster, driving more revenue for the business. It has become highly crucial for companies to market their products in the best possible way.
The right balance of marketing, sales and distribution can bring necessary changes in the business. Building your marketing and sales around the product can help to drive product-led growth business strategy. While Software as a Service has taken over the world, PLG is not behind.
It’s time that SaaS companies look forward to making the most out of PLG for their business.
The Core Principles of Product-Led Growth
The right marketing strategy and the best product can play an essential role in bringing the necessary changes for businesses. Even the highest-performing product-led growth companies in the cloud economy are harnessing the principle for growth.
The exclusivity in growth hacking strategy with the core principles has been playing an essential role in helping businesses. Here are some of the key tenets of product-led growth to be mindful of:
Build Product As the Self-Serve Distribution Vehicle
The best product will eventually sell itself without any additional intervention. The leading PLG companies focus entirely on developing the products as the distribution vehicle.
Therefore, the product can help with customer adoption, retention, and expansion without the need for any human interference.
Instant Build the Eureka Moment
The top product-led growth companies focus on building products that can deliver delight in no time. It delivers what it’s designed to without the need for any external friction.
This plays a key role in driving the value of the product. For example, any software as a service doesn’t need to have complex form fill-ups or lengthy onboarding processes.
Creates Value for Customers
The top SaaS companies have always focused on creating value for customers. Well, the product-led growth companies take it one step ahead by making value by letting customers experience what the software is like before actually buying it.
The firsthand experience helps customers understand what the product is like without any risks. This helps in building a loyal and engaged customer base. Integrating the best product launch strategy can also help customers get clarity about the value they will get.
Build a Clear Initial Entry Wedge
Product-led growth is heavily dependent on limited or no sales representative interference to sell the product. Therefore, it becomes crucial for these companies to ensure that the targeted use case is simple to understand.
Thus, the companies build a clean and straightforward initial entry wedge to help customers understand all the potential problems that the product can solve. This ensures that the product is the right marketing fit and meets the customer’s needs and demands.
Network Effects Help in Virality
Virality is a key growth strategy that helps in actual business. Since there are no extensive marketing campaigns involved, PLG businesses rely on virality through network effects to build awareness about the product.
User advocacy is, however, one of the key factors to consider in this case, especially in terms of referrals and word-of-mouth marketing. Building upon it can help to leverage marketing efforts.
Integrate a Transparent Pricing Model
A transparent pricing model is one of the key requirements to ensure the success of SaaS companies. By eliminating or limiting the need for human intervention, PLG companies focus on building an exceptional pricing model.
The clear and accurate pricing models help in reducing friction along the purchasing process. The end users can then focus and understand what the product is and what the budget will be. The customers will not have to depend on research or a sales representative to understand product offerings and pricing.
Case Studies of Successful PLG SaaS Companies
Over the years, numerous SaaS companies have adopted PLG techniques to foster long-term growth and relevance in the market. Below are some of the successful PLG SaaS companies:
Calendly
This unicorn company worth $3 billion is one of the top examples of a PLG SaaS company. Used for scheduling meetings, Calendly has a K-factor regarding the number of invitations. This offers easy scheduling needs, thereby helping in building through network effects.
The freemium model contributed to the success of the platform. The users can schedule one meeting for free for one event type and invite the attendees. This caters to a large user base, thereby increasing the visibility of the platform.
Toplyne
Toplyne has an interactive product demo that helps customers understand how pipeline management can be done easily. The intros and outros help with a well-defined product approach. It has raised funding of $17.5 million over 2 rounds.
There’s a proper description of the first and last steps, introducing new designs and guiding the users on how to use the product. Moreover, the conversational tone also caters to building a user-friendly approach to attracting the attention of customers.
Canva
Canva is on everyone’s list and has an excellent reputation in the market as a PLG company. Canva’s exclusive positioning catered to human emotions. It focuses on the message of helping individuals design anything and publish it. Canva has over 220 million active users.
A significant reason behind Canva’s success is its blazing-fast speed. Canva is extremely fast and can get your design ready within seconds. You can find the template in the software and customize it as per your needs. The final step? Just download the new design. All of this takes less than a minute.
Atlassian
Atlassian is one of the top collaboration tools used by over 300,000 individuals for empowering their teams. The self-service model of Atlassian caters to the audience the most. The target audience can sign up, explore, and use the products with minimal investment. The unique approach has helped in the proper placement of the product.
Atlassian also makes collaboration and work easy. The teams can adapt to using this software. For example, when one individual from the team uses the software and likes it, they’ll encourage their team members to try it, too. This can create a viral effect, thereby catering to the core values of PLG.
Transitioning to a PLG Model (For Traditional SaaS)
PLG is the placeholder in businesses today. Gartner predicts that by the end of 2025, around 75% of SaaS companies will integrate PLG techniques to drive customer growth and expansion. Here are some key ways through which a Software as a Service business can transition into the PLG model:
Implement Product-First Thinking
Having a product-first thinking approach is highly crucial in product-led growth businesses. The product team of SaaS companies should no longer work in isolation but together with the marketing, sales, and customer support teams.
Building a holistic approach across all stages will drive adoption, then usage, and eventually expansion. It is advisable to use customer engagement tools to check the adoption and how customers are liking the product.
Prioritize End Users
Your end users or target audience are the core of your PLG model. Therefore, it’s essential to focus on them and build your product features and strategies accordingly.
Adopting a value-forward and user-oriented approach can be highly beneficial for businesses. SaaS companies should start taking user feedback and then building the product around it. It’s something many consultants, known to be deeply attuned to the needs of the people they advise, are doing quite literally as they are figuring out how to be a consultant in the digital age.
Build Your Product to be Your Marketing Engine
Product experience is of utmost importance for product-led growth companies. If the users love a product, they will try to get people in their network to try it. So, build your product so well that it becomes its marketing engine.
This word-of-mouth marketing provides an organic and reputation-driven reach, which can also attract the attention of other target audiences. As a result, it helps to drive business profit by reducing customer acquisition costs.
Conclusion
SaaS companies trying to adopt product-led growth must ensure that they’re centralizing their services around the product. That’s the main component of your business’ success. Delivering value through the product ensures that your customers eventually become advocates for your brand. As a result, this can help you strive for success in a competitive environment.
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