Customer-centric SaaS replaces out-of-date software, while the product-led trend is still in infancy. Visionary product-driven innovators are still reimagining a lot of systems and processes. New-generation SaaS firms are now eclipsing industries considered disruptive in the mid-2000s.
But What is Product-Led Growth for SaaS firms, and what are the nuances of this revolutionary idea and model? This post will delve deeper into these questions.
Defining Product-Led Growth Or PLG:
Product-led growth or PLG is a sales & marketing strategy in which your SaaS product does the grunt work. Bye-bye to the old-school purchasing strategies. Instead of having a salesperson contact a qualified lead and deliver a demonstration, a prospective end may sign up for your service or product, try it out, and then determine if they want to subscribe on their own.
As a result, the end-user is in command. The consumer learns about the tool, gains value, and decides if it meets their expectations and is worth the money.
In practice, the following are the most effective product-led growth concepts:
- Limited Days Free Premium Subscription: Irrespective of the business’s free forever plan, most product-driven companies feature a free trial of a premium subscription. The corporation can avoid costly and time-consuming sales cycles by letting end-users evaluate the service or product for an average of a week.
The subscriber can try the service or product out and submit their credit card details. Alternatively, the sales staff will only contact them once they have spent a significant amount of time with the offering (and have been a product-qualified prospect) to push them to become a premium subscriber.
- Freemium Plan: Most product-led growth successful projects operate on a freemium model to attract a large number of new customers daily. According to the business, up to 12% of these free accounts could become paying clients.
Why Is PLG Becoming More Popular?
This model is all about connecting to the end user via PLG. Once the end-user has become a product advocate, they may persuade budget managers to purchase it without the need for a sales team to do so.
SaaS firms can reach $1.2 million to $5.1 million in annual recurring revenue (ARR) using product-led growth without recruiting huge teams. This enables tech firms to have a strong revenue-per-employee (RPE). Few product-led growth successful projects cite RPEs ranging from $150,000 to $500,000. To replicate such success stories as a SaaS business, you need to grasp and assimilate What is Product-Led Growth.
As you can see, PLG is pivotal in the ever-evolving future of tech and SaaS businesses. Hence, gravitating to this strategy would be the ideal path to take when planning to develop your SaaS product or service. When hiring a software development company to work on a new SaaS product, make sure the company understands the importance of a product-led strategic approach. The agency should, above all, have a product management team that will interact with users and consumers. You might not be able to create a product that consumers genuinely want if you don’t keep these pointers in mind.