The sheer rate of digital transformation in recent years has seen the SaaS sector skyrocket. Having already grown 5x since 2016, the industry is expected to see further record-breaking growth by the end of the year as it moves towards a market value of $195 billion.
While this presents a huge opportunity for SaaS companies, it means the market is flooded with solutions. Buyers are inundated with choice. Products get lost in the noise. Getting sales over the line is harder than ever.
In a bid to stand out while maximising growth, an increasing number of SaaS firms are turning to product-led growth (PLG). Here, we explain what PLG means, what the strategy looks like and why it’s booming.
What is product-led growth?
PLG is a strategy used to grow your business by putting your products at the centre of everything you do. That means sales and marketing campaigns. It means engineering and design. It means customer support – and more besides.
Instead of discussing different software features and benefits as part of your go-to market strategy, the product itself becomes the strategy.
Put simply, PLG is the art of letting your products do the talking.
Instead of having to rely on long, rehearsed pitches, or clunky PowerPoint presentations where your sales team tell customers why they should buy your software, PLG lets you show them. This is typically done via “try before you buy” initiatives such as free trials, freemium models and self-serve sign-ups – anything where the onus is on the buyer to explore the software in an interactive and engaging way, in their own time.
It’s not quite as simple as removing a paywall, though. PLG requires all business functions to work together to make the product shine. And this means you must have the right infrastructure in place.
For instance, companies using PLG tend to have a greater number of product managers and developers than a standard SaaS company may do. It also means UI (user interface) and UX (user experience) takes more of a centre stage.
PLG companies tend to have entire teams dedicated to onboarding. Their marketing will talk directly to the product itself rather than top-level benefits. And sales teams will need to have more hands-on technical experience than in other firms.
How PLG can supercharge your business
For some companies, this will seem like a drastic shift in direction, but the data shows it’s worth the effort. Not only does PLG allow time-pressed buyers to interact and engage with your software, on their own terms, but it can allow you to personalise your customer experiences. Both trends can significantly increase sales.
A recent study found that using engaging, educational-led content in the early stages of a sales conversation can boost conversion rates by as much as 131%. Another found that 80% of buyers are more likely to make a purchase when brands offer personalised experiences.
And it’s not simply about one-off purchases. Evidence suggests companies have greater upselling opportunities, improved retention and a higher chance of “going viral”. Once one person in a business sees the benefits of your software, they’re likely to tell colleagues, peers and be more inclined to persuade management to get onboard.
These stats all point to why PLG companies grow 25% faster than their rivals. They’re also more likely to double their year-on-year revenue growth, and perform better post-IPO. Little wonder that 58% of SaaS-based businesses already have a PLG strategy, and 91% plan to invest this year.
If you’re trying to grow your SaaS business, it may be time to consider a leap into PLG.
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