Founders around the world are on the hunt for new strategies that can shine the spotlight on their high-value products.
From helping business owners save time on manual processes to helping consumers get their hands on a game-changing productivity tool, product-focused organizations live and breathe the products they create.
That’s why product-led growth (PLG) has become more than a buzzword; it’s become a solid sales and marketing strategy.
But PLG businesses don’t always have the right information to make tailored product innovations and advancements according to their target markets’ preferences.
Sure, feedback forms, polls, and surveys can help, but what about product users who don’t supply you with the information you need?
Thankfully, each action product users and prospects take on your website is a signal that surfaces their buying intent and core needs—and you can use these insights to respond accordingly. That’s where Breadcrumbs Copilot comes in!
With our latest feature, you simply:
- Connect your lead and customer data with no-code connectors to popular tools (think Marketo, HubSpot, Mixpanel, and Salesforce.)
- Run a Reveal analysis to let us know which contacts segment we should use to define success—for instance, all paying customers or paying customers on specific plans.
- Get data-driven recommendations to refine your PLG approach.
Pretty nifty if we do say so ourselves! But don’t take our word for it. Try it for free, today. Breadcrumbs Copilot is free for the first 1,000 early access signups! All we ask is that you give us some honest feedback on the product.
Now back to exploring the future of PLG growth…
Introduction to Product-Led Growth (PLG) and its significance in today’s market
Product-led growth is a business strategy where the product itself is central to customer acquisition, retention, and expansion.
By building a product that’s easy to try and buy, delivers value quickly, and is designed to become more valuable as time goes on, companies can create a self-sustaining, low-cost customer acquisition model. But that’s just one of the benefits of product-led approaches.
Others include: Creating a customer-centric experience, promoting better product adoption, and fostering customer loyalty. In turn, this can encourage faster revenue growth and increased market share.
What’s more, the PLG model can also make your business more attractive to potential buyers.
In fact, one of the top variables that can make your business more worthwhile during the selling process is having a fast growth rate—the faster the growth, the higher the price. Other variables include market share, your business model, and your product’s competitive advantages:
Product-Led Growth Strategy: The importance of a product-led approach and how it differs from traditional sales-led growth
A product-led approach focuses on creating a product that’s designed to deliver value fast and become more valuable over time.
This approach puts the customer at the center of everything. If the customer wants more automation capabilities, you work hard to add those features to your product. If they want a client portal, you strategize ways to build one. In other words, if a customer says, “Jump!” you ask, “How high?”.
In contrast, traditional sales-led growth puts the emphasis on sales and marketing to drive new business.
This model can be more expensive as it puts the focus on trying to convince potential customers to buy rather than letting the product speak for itself. While effective in some cases, a sales-led growth approach can lead to higher churn rates and a lack of customer loyalty if not strategized correctly.
Characteristics of product-led companies
Product-led organizations have several characteristics in common.
Here are some of the most important attributes product-led companies share:
1. Their products steal the show on their websites
As soon as you head to a product-led company’s website, you see its core product(s) front and center.
Take a look at TSplus’s website to see what we mean:
When you’re at the top of TSplus’s homepage, there’s no confusion about what products TSplus offers, who it designed those products for, and what those products do.
TSplus also goes the extra mile by immediately adding trust elements after it’s main header (see above, where it says “trusted by over 500,000 companies”) to build comfort and ease for potential customers who are still on the fence. It also breaks down its product suite’s values so prospects can compare them against their core needs.
2. They’re hyper-focused on product innovation
As the world of PLG evolves, SaaS brands will be placing an even greater focus on rapid product innovation, which becomes possible with a thorough MVP development strategy in place. The businesses that outshine the rest will be the ones with products that:
- Have minimal (preferably zero) lagging issues and bugs
- Work increasingly better and faster over time
- Have been built with the target customer in mind
- Adapt and improve according to the target customer’s preferences
- Offer 24/7 customer support
- Can be customized to any customer’s chosen preferences (think branded client portals, custom workflows, custom triggers, etc.)
- Offer AI features
- Offer new advancements according to what’s happening in the technological landscape
For instance, Chime, a CRM software for real estate, has adopted AI technology, automation, and a smart CRM with sales acceleration in an effort to innovate its product and stay at the cutting edge of the latest advancements.
Had Chime offered a standard CRM in today’s rapidly evolving PLG world, its competitors offering smart CRM features would’ve surpassed it by a landslide.
TL;DR: Staying informed about what’s happening with technology (looking at you, AI) is crucial to getting ahead of the game.
3. They offer a freemium product
Many product-led organizations offer freemium options so prospects can test-drive their features before investing in a paid plan. But some free plans offer enough features that don’t require investing in a paid plan (think Slack, Zoom, and Trello).
That’s why there’s a caveat, here.
While the freemium model can be a fantastic lead-generation tool, it can also wreak havoc on businesses with smaller audiences.
In other words, if you’ve built up a massive user base or audience for a previous product, the freemium model can work wonders for your new venture. But, if you’re brand new to the product-focused game and your lead list isn’t impressive, be wary about offering a free forever plan.
An alternative? Offer tiered pricing, i.e., a base-level plan, a mid-level plan, and a high-level plan.
The role of the product team in implementing a product-led strategy
As PLG strategies advance, the importance of fostering a cohesive product team becomes even more pivotal.
From marketing to sales to customer success, each of these groups needs to work together to support a successful PLG model.
That means marketers need a solid plan for attracting qualified leads. Sales reps need a strategy for warming up new prospects. Customer service reps need to be armed and ready to answer any product-related questions (and encourage a demo or sales conversation). And product managers need to ensure a smooth onboarding process for leads that are getting ready to convert.
With a multi-pronged approach like this, you can create a PLG model that functions like a well-oiled machine. The catch? You need to get on top of information silos before they cause a communication hiccup or restrict team members from important data.
The best way to get on top of silos is to stay in communication with your PLG team. Hop on a team video call, start a group message in your team chat application, or park your silo updates in your “company news” center, wherever you host it. Be sure to ask all team member to report silos as they come up so you can course-correct as needed.
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How user experience, product usage, and the customer journey affect PLG
Focusing on providing a quality user experience (UX) is vital to encouraging a healthy conversion rate and revenue growth.
Over time, a hyper-focus on creating a pristine UX in line with the customer journey and product usage insights will be essential to PLG’s success.
And speaking of success …
While the metrics you track or UX research software you use for your campaigns may differ, here are some KPIs we recommend keeping an eye on to measure the success of your PLG model:
- Number of active users
- User engagement
- Customer acquisition cost
- Conversion rate
- Customer base
- Recently canceled subscriptions vs. recently acquired subscriptions
- Plan upgrades
- Product usage insights, including which products and features are most used and in demand (and which ones aren’t)
And there you have it! Today we covered the most important aspects of PLG growth and how this approach will adapt over time.
If you’re ready to embrace these tactics, bookmark this article for reference. Your next order of business? Meet with your team to decide which strategies and tools you’ll be implementing to get closer to your product sales goals.
And don’t forget—Breadcrumbs Copilot has your back! Sign up for your free account, today