In this write-up, we discuss the reasons that will make product-led growth dominate 2022.
While we have been hearing a lot about product-led in recent times, it would be untrue to say that the concept is entirely true. SaaS products like Dropbox and Slack have used the product-led approach, and they have set an example of how to lead the market using the product as the driver of growth.
It has been iterated time and again that PLG (product-led growth) may not be for everyone. However, the majority of SaaS companies that have adopted the approach have reaped benefits from it.
The PLG model brings the teams together to work on continuous improvement of the product. For instance, as the customer success team is well acquainted with the product as well as the customers’ opinions towards it, they provide valuable insights on what’s working and what’s not. Similarly, Sales teams can provide insights into how to enhance the functionalities. All these together lead to continual improvement of the product, and thus, PLG becomes an efficient way to acquire and retain customers.
Owing to efficiency and increasing popularity, product-led growth became a buzzword in 2021. Some product companies started adopting it, while some were stuck in the hesitancy gap about whether or not to adopt it. If you are someone stuck in the gap or are considering moving to product-led growth, these predictions might be helpful –
The markets are getting competitive with a better product/ new brand coming up every week. This has forced companies to become more digital – to engage with the target audience. At the same time, we are also witnessing the trend where customers are no longer willing to interact with marketing campaigns or sales reps. Rather, they prefer interacting with and trying out the product directly.
So, to stay competitive, businesses need to follow suit and adopt the product-led approach. For this, they should rethink their sales, marketing, and service processes and strategies, and align their customer-facing teams accordingly.
Further, PLG has significantly low barriers of entry, and as the main goal is to keep enhancing the product, there is greater scope for customer acquisition.
The coming times will see that companies with a product-led growth approach will witness broader Product-Led Sales (PLS) adoption. As a consequence, the sales teams spend less time on unqualified leads. Instead, they can focus more on the qualified opportunities based on Product Qualified Leads (PQLs).
Product Qualified Leads are understood better, better defined, and operationalized in the sales process.
In recent times, we have been witnessing an increase in the number of marketing experiments on different digital platforms. There has also been a steep increase in no-code tools and software for analytics, making it easier for marketing experiments. Because product-led growth works quite well with such marketing experimentation, its adoption is going to become much easier.
If the current SaaS environments are to be considered, speed is a key factor that determines the success and growth of a business. From a customer perspective – Why would they wait for three months to get their hands on a product and know if it fits their needs? From a business perspective – What if you have a brilliant idea, but your competitor comes up with something similar just before you? Wouldn’t you lose your first-mover advantage?
Considering these, adopting a product-led growth approach is ideal for ensuring your product’s time-to-market as it depends on developing and releasing the most important features first; and then working on the improvements continually. With this approach, you don’t have to wait three months to get product feedback or to analyze the data.
Adopting the product-led growth approach means bringing the Sales & Marketing, Product and Customer Success teams to come together and work in unison. And now, with PLG and self-service distribution taking center stage, the lines between these teams will blur further, and there will be an increase in collaborative work.
This was surely a trend in 2021, but it is going to dominate the next couple of years as well. Along with the increase in business software adoption, the adoption of self-service software is also growing. This trend can be attributed to the fact that individuals are showing interest in trying new products without having to know about them from a salesperson first.
Thus, SaaS companies can make use of the increasing popularity of self-service, and ensure that their product does the talking – which leads to product-led growth.
Because advanced analytics are now available, firms may get immediate and informative feedback on their products from their customers. This information is valuable because it allows businesses to invest more wisely and modify products and services to make them as simple to use as possible. Analytics also makes it easier for the organization’s goals to be aligned, leading to an improved, more collaborative cross-functional output. As long as the road to PLG is built with the correct data, it can yield huge benefits.
Still contemplating if PLG is going to dominate? These features will throw light –
The key thing in PLG is to have the final users try out the product/service early. Businesses give away a trial version/freemium or a similar value to the customers willing to try it out. This benefits both the business (they get more qualified leads) as well as the customers (they get to try premium features of the product for free).
Before PLG, products/services were customer-centric – meaning that they were designed for the ones who would pay for it. However, with PLG, products are user-centric – the focus is more on improving the product to attract more users. This results in churn.
The top of the funnel (TOFU) for product-led growth is wider than the average sales funnel. A PLG acquires new users/customers considerably faster than a sales-led one since there is very minimal friction. Keep in mind, though, that a larger TOFU won’t help you scale. Sure, you’ll gain more users faster, but you’ll lose them just as quickly if you don’t provide a pleasant customer experience.
These features are all current day businesses need to acquire customers faster.
Convinced but wondering how to get your PLG strategies right? These tips can help –
To wrap it up, it has to be said that the product-led growth strategy is going to dominate SaaS environments in 2022 and beyond. Companies have already started adopting the approach, but now is the right time to do it if you are not among them.27
Hope the above predictions have helped you see why; follow our blog to know more about product-led growth.
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