If you have a killer product that’s easy for customers to adopt, then your company can benefit from adopting a product-led growth (PLG) strategy.
PLG leverages the inherent benefits of your product to create a more direct relationship with your customers — for instance, by allowing them to start a free trial, try out a “freemium” version of the product, or simply purchase your product without having to engage directly with sales. The goal is to make the initial decision to engage with your product frictionless, then generate a “wow” moment that inspires customers.
Adopting a PLG strategy means that your product comes first in terms of resources, planning, strategy, and execution.
Slack is a great example of a company that leverages PLG in its go-to-market strategy.
Kelly Watkins, former VP of Global Marketing at Slack described the company’s product-led approach: “It starts with the product first and the product experience first and by the nature of that product experience itself having substance and providing value to people, that is where the benefit comes in of it selling itself, or of it being the mechanism that propels the success forward with other aspects of the company assisting in that.”
Here are some of the benefits that come from being a product-first organization:
- A stronger suite of offerings
- Lower customer acquisition costs
- Loyal customers who buy more
All of those benefits also translate to real-deal value for the companies that utilize this strategy. OpenView found that “product-led businesses are valued more than 30% higher than the public-market SaaS Index Fund.”
Let’s look at the benefits to going all in on your product and how you can make the most of this strategy.
Dark Funnel Customer Insights Should Inform Product Development
At first glance, PLG seems d like it puts sales and marketing on the sideline. The truth is that sales and marketing insights should play a central role in driving product development so you can make sure you are delivering a product that customers want and need.
To really let your product be the showcase of your business, you need to have a deep understanding of your buyers. What are their pain points? What do they expect from a product like yours? What particular features get them excited?
Answering all of those questions requires having your finger on the pulse of your audience. One of the best ways to do this is uncover the actual research they’re performing online related to your line of business.
Because roughly 70% of the buyer’s journey happens online and anonymously — in what we call the Dark Funnel™ — you’re often in the dark about the exact things your audience is reading and researching.
By lighting up your Dark Funnel™, you can gain access to the following information about your buyers:
- The keywords they’re searching
- The specific pages on your website they’re reading
- The industry publications they trust the most
- A clearer picture of buying teams
- The technology they currently use
- The events they attend
Just think about having all of that information about your potential customers, and how you can use it to inform decisions about the development of your product. Suddenly, you’re delivering the exact product your audience wants!
Lower Customer Acquisition Costs by Focusing on Customers Ready to Buy
Even if you have a ton of customers, that doesn’t mean they’re necessarily ready to upgrade to a new offering or buy a full-version of your product at any given time.
Product-led growth means also understanding when your buyers traditionally like to buy and aligning to those timelines. To discover when they like to buy you have to understand the buying signals they give off.
Using the power of AI, you can leverage historical data about your company’s previous deals, wider market trends, and performance data about particular prospects. You can also get real-time reports highlighting your customers who are likely ready to purchase a full-version or upgrade from a trial. Wouldn’t selling be a lot easier if you knew who was most likely to upgrade?
Not only will selling be easier, it will be cheaper. When you confidently know what message will resonate with a buyer at the exact moment they’re ready to hear from you, costs to acquire or expand that customer’s business start to drop. No more costly campaigns targeted to broad audiences that might not even be in-market.
Create a Strong and Loyal Customer Base
A great product-led business also focuses on delighting its current customer base — and increasing the amount they spend with you. When you think about developing new features or entirely new lines of products, it’s important to keep your current customers in mind.
Establishing a great relationship with your customers isn’t all that dissimilar from what we talked about with creating an efficient buying process for prospects. You need to understand your customer’s pain points, the research they’re performing, and what external factors are influencing their decision-making.
Here’s how you can utilize the information you gain uncovering the Dark Funnel™ as it relates to your own customer base:
- Set alerts for customers who are searching for keywords related to your competitors’ offerings
- Create dynamic reports for customers with renewals upcoming and specifically target them with product enhancements
- Launch advertising campaigns targeted at your customer base with real quotes and reviews of your product
To truly be product-led, your business needs to incorporate all of that data about your customers into the way you develop your products. When you know exactly what your customers are researching and what resonates with them you can create a product that keeps them coming back for more.
Running a product-led organization means you put your product before anything else. You focus
tirelessly on iterating and improving your offering until it’s as perfect as can be. The best way to develop a can’t miss product is to truly understand your buyers’ needs, deliver them the right message at the right time, and never forget about delighting your customer.