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If you’re in the Software-as-a-Service (SaaS) business, by now you’d know that SaaS is no longer a business luxury – it is everywhere. There are many well-funded companies as well as start-ups that are thriving and if 2018 was an amazing year for SaaS, with software companie
If you’re in the Software-as-a-Service (SaaS) business, by now you’d know that SaaS is no longer a business luxury – it is everywhere. There are many well-funded companies as well as start-ups that are thriving and if 2018 was an amazing year for SaaS, with software companies in the US spending $63.1billion on R&D and accounting for one-fifth of domestic R&D in the US, 2020, despite the pandemic hiccup, has only made businesses rely more on SaaS to reach out to people.
This ups the game – the next generation of SaaS companies will have to follow a different growth playbook to stand out and out-do competition. The reasons for this are:
There’s one other reason that’s proved to be a game changer, the one that’s helped tech giants and new ventures sing their way to success:
Therefore, those who want to chart success, definitely need to move from marketing their products to letting the product do their marketing ASAP. The future, clearly, is PLG
Follow the successes of Altassian, Survey Monkey, Shopify, Dropbox, etc, and you’ll know. In his blog, SaaS marketing superstar Sujan Patel explains Product Led Growth as “a business methodology in which user acquisition, expansion, conversion, and retention are all driven primarily by the product itself. It creates company-wide alignment across teams—from engineering to sales and marketing—around the product as the largest source of sustainable, scalable business growth.”
PLG, says Hiten Shah, founder of several SaaS companies, in his blog, is about the “product being the core DNA of your company, so much so that the default mode for solving problems—including growth challenges—is to figure out how to use the product to address whatever issue is at hand.”
In other words, the product led growth playbook is all about the implementation of an effective PLG strategy to enable faster, cost-effective growth in this era of subscription model of doing business, where the customer is unwilling to pay for the product till, he’s sure of the experience he’ll have with it.
Blake Bartlett, one of the partners at OpenView Venture Partners, specified the five traits that drive PLG companies to success in his session at SaaStr Annual 2017:
To tick off all the right boxes once again, a good PLG strategy must allow you to scale up quickly, be easy on the users, be slow to hit them with those paywalls, and focus on making all customers “successful across the sales-to-support continuum”.
PLG’s gargantuan success stories has led to its wider adoption – and the next couple of years will see more of this trend. The attribution of the rapid growth of a slew of companies – such as MailChimp, Slack and Calendly to such strategies – makes it the go-to plan of the moment for successful as well as fledgling SaaS ventures. Here are five points that make PLG the secret weapon in your success armoury:
What this basically means is that by giving the customer a valuable experience straight up, you egg on the product’s frequent use and shareability. By treating free trial accounts and freemium accounts as potential customers, you can focus on those aspects of your product that will drive purchasing decisions and customer retention. It’s like giving the foodie a piece of the burger and then enticing him to buy the whole instead of crying hoarse about how tasty it is by showing him a picture of the burger. 11
To conclude, from small software companies to tech giants – all can benefit from following a smart Product Led Growth strategy. PLG hacks are no longer considered frugal, instead, they’re seen an elite differentiator that helps scaling of SaaS companies. Plus, an efficient PLG strategy that balances the best SaaS metrics and growth is your best bet in these times of financial uncertainties.
Rakhin has over 10 years of experience driving business development and client services. In his prior roles, he stayed close to customers to understand their requirements and help them achieve their business goals. He is passionate about customer success.
Published 12 Jun 2020, Updated 12 Jun 2020
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