What is Product-Led Growth?
In the current era of software-as-a-service and subscription economics, software sales have taken a new form. While the traditional method of selling software relied heavily on marketers and salespeople, there is a new approach that appears to be more effective: Product-Led Growth (PLG).
PLG is a sales strategy that puts the product experience at the heart of the customer acquisition and retention process. It relies on the product itself to attract and retain customers, rather than relying on traditional sales or marketing tactics.
Think of companies like Spotify and Marktplaats, which offer a freemium model that allows customers to use the product for free with a number of functional restrictions. As users become more involved with the product or service and discover its value, they are more likely to upgrade to a paid plan. This is the essence of PLG - the product sells itself!
PLG is particularly suitable for software companies that offer their software in a subscription model. By using a PLG strategy, these companies can increase customer acquisition and retention while reducing churn. Instead of paying a lot of attention (and money) to sales and marketing strategies, the company focuses on the product as its main sales strategy. So how can you use Product-Led Growth to sell your software? Let's dive in.
How to use PLG to sell your software
Traditionally, business software has been sold with an out-bound marketing strategy that focuses on acquiring and developing leads. These leads are then followed up by a sales, often together with a more technical pre-sale. Long sales processes with intensive customer contact and extensive demos of proof of concepts are expensive and unfortunately offer no guarantee of success.
With a PLG strategy, you build a product that is so good and intuitive that customers can try it for themselves quickly and easily. Through targeted (online) marketing campaigns, “laser-focused” on your target group, you bring your product to the attention and offer a free trial.
Potential customers sign up, try out the product and buy if the product meets their needs. All online and without seller involvement. Sounds good, doesn't it?
How to implement a PLG strategy
An analysis of several major and successful SaaS products with a PLG strategy shows us the following best practices:
- Offer a free trial: One of the best ways to get customers to try out your product is to offer a free trial with “no-strings” attached. This gives them the chance to try your product without obligations and assess whether it's right for them before taking out a paid subscription.
- Build a great product: The key to PLG is building a product that's so good that customers can't resist using it and recommending it to others. This means investing in product development and making sure that your product is intuitive, user-friendly and meets the needs of your users. An interactive tour or clear “getting started” instructions are essential here!
- Make it easy to sign up: To get the most out of PLG, it's important to make it easy for customers to sign up and start using the product. Oh yes, and there should be no more than a few minutes between signing up and using the software. In other words, “thanks for signing up, we'll be in touch soon” isn't an optimal PLG experience!
- Make the subscription model simple: the latter is perhaps the most important but at the same time the most difficult. We see many software licenses that are far too complex. Choose a model that is simple and logical. And make sure that cancelling is also easy. Trust that the product is so good that cancellations will be limited.
By following these best practices, you can successfully use PLG to sell your software and grow your business.
In a subsequent blog, we will delve deeper into the technological preconditions for implementing a PLG strategy for your software product.
Want to know more about what PLG can do for you?
If you have a software company and are looking for ways to accelerate the growth of your company, then Product-Led Growth might be an interesting strategy for you! By focusing on the perfect user experience and product quality, you'll not only lower your sales costs, but you'll also improve customer retention. Feel free to take contact with us if you're curious about what PLG can do for you.
At Blis Digital, we help companies unleash the power of cloud technology in all aspects of an organization. We create technological solutions that penetrate deeply into the core of the organization. In specialized teams, we devise, build and manage digital solutions that allow our partners and clients to make optimal use of technological opportunities.
We are Blis Digital. Creatives, Tech Talents, and Entrepreneurs.
.jpg)
