You’ve spent thousands of dollars building a minimum viable SaaS product and selling it to your audience through traditional marketing strategies. But getting the visibility and sales you deserve is proving daunting. You’ve considered product-led growth marketing but have not committed to it yet because you wanted to give the current approach more time.
Meanwhile, your open rate for cold emails barely moves up, sales calls are no longer hitting the mark like they used to, and enterprise buyers are considering switching to your competitors. That’s because the aggressive, shove-it-down-the-customer’s-throat approach of sales-led growth no longer moves the needle.
SaaS audiences now expect a more personalized and solution-centric experience before they commit to a sales intro call. And that’s where product-led growth marketing comes in.
In this article, we will explain product-led marketing (PLG), explain why it is preferred over a sales-led approach, and offer compelling tips to scale your ROI with PLG.
Product-led growth (PLG) marketing is a growth strategy that involves using your product as the main driver for customer acquisition, retention, and business expansion. This approach places your product at the center of “selling” by providing a more “personalized experience.”
Key principles to consider when starting to implement the PLG model:
Quite a number of SaaS businesses use these principles.
Product-led growth marketing offers benefits such as effortless and independent product adoption, a high conversion rate, and data-driven product iteration. Here’s how:
The PLG model leverages a do-it-yourself (DIY) or self-serve approach, which allows users to independently access, evaluate, and integrate a product or service into their workflow, often without direct assistance from a sales or support team.
Both steps 1 and 2 have one thing in common—the experiences are self-guided. Your sales team only comes into play when users want to upgrade their plan. This helps your customers adapt and learn at their own pace while also reducing the need for human support, though it is always available when needed.
Slack is a perfect example of a SaaS that uses the self-serve method to boost and offer a personalized user experience. The communication and collaboration platform offers a freemium plan with limited functionalities. Once users sign up, their onboarding is handled by in-app tours, pre-recorded tutorials, and in-app prompts.
No persistent calls or spammy emails from the sales team. Upgrade when you’re ready to go.
The easier users can adopt and integrate your product into their processes, the higher their overall satisfaction will be. High customer satisfaction leads to improved retention and can help nurture your most loyal buyers into brand advocates.
While product adoption is self guided, the user experience doesn’t stop there. The product should also be frictionless to adopt.
One way Airtable does this is by reducing the barrier to entry through:
Product-led growth marketing taps into product-customer interaction data and uses the knowledge acquired to improve your product. Once your product is well-polished to solve demands, it easily becomes a lead magnet - even after introducing a premium plan. Real-time data collection from your customers also enables faster time-to-market product development.
The more you know about your audience or potential customers’ needs, the more effectively you can tailor your product to solve their problems. That’s why user feedback is critical.
And the most efficient marketing method for collecting this feedback and putting it to use is PLG.
Take Dropbox as a case study. The product-led company used only a freemium offering to acquire hundreds of thousands of users, but that wasn’t the only goal.
Dropbox’s other aims were to:
Sure enough, the product-led strategy was successful; today, the cloud storage company has over 700 million satisfied users.
Autonomous product adoption, frictionless user experience, and improved customer satisfaction all contribute to a high conversion rate because:
Ultimately, these factors create a compelling case for the product, leading to a higher likelihood of conversion.
Another marketing model that’s just as popular as PLG is the sales-led growth (SLG). Let’s explain why you may consider a product-led growth model as an alternative to sales-led growth:
SLG marketing primarily involves leveraging seasoned sales professionals to identify potential customers, engage them, and convert them into paying clients via cold calling/emailing, networking, and direct sales.
While this approach often works, it’s expensive - especially for small and medium-sized businesses - because:
These factors result in an expensive customer-acquisition cost (CAC).
On the other hand, product-led growth marketing projects your product as a must-have and can-have solution.
Your CAC eventually gets lower, and the model results in high ROI.
SLG can exaggerate the effects of organizational silos as every team is busy hitting team-assigned targets instead of working together to improve the overall customer experience.
Marketing is fixated on generating as many leads as possible for the sales team to convert. Your sales team is laser-focused on converting every prospect that comes their way. Product teams are only brought in when “a new high-value customer wants you to add some features” or “make a few tweaks to the interface.”
In contrast, the product-led growth model focuses on:
This creates a converging point between your marketing, sales, customer success, and product teams, with a single end goal: solving customers' problems more effectively and efficiently.
We’ve seen how product-led growth marketing can supercharge your business. But how do you practically implement it? What are the fundamentals to implementing this strategy?
Before putting your product at the forefront of marketing, it should be able to solve a problem no one else is solving, or solve it more efficiently. So, focus on your customers first and understand their pain points.
If you’ve already launched your product, you can send out a public survey and ask people what problems they want you to help them solve and how. Then Integrate this feedback into your product.
Another way to maximize data collection for product iteration is to adopt a hybrid growth model: PLG + SLG. Dropbox implemented this approach, according to Giancarlo 'GC' Lionetti, the former CMO of Confluent and VP of Self-Serve Growth at Dropbox.
Dropbox initially leveraged a PLG (Product-Led Growth) approach, focusing on user acquisition through a freemium model and viral features like referral programs. Data collected from feedback was used to refine the cloud-storage software and scale offerings.
As Dropbox’s user base grew, they adopted the SLG (Sales-Led Growth) model to target enterprise clients and optimize monetization opportunities. This allowed them to collect data from both users on the free model at the early stages of launch and unbiased feedback from paid enterprise users afterward.
Giving your customers the option to experience your service or product live without paying first reduces the entry barrier. This builds an instant positive impression about your brand, and if your product delivers on its value promise, you’ve easily earned a high lifetime-value (LTV) customer and possibly an advocate.
You could also combine both free trials and freemium to form the reverse trial strategy.
Here’s how Trello did that.
Step 1: Users sign up for a freemium plan with limited functionalities.
Step 2: Trello wants you to enjoy all its functionalities, so the next page offers a 30-day free trial.
Step 3: If a user wants the freemium plan, they click “Take me to Trello”. If not, they go ahead with the free trial.
Even to the last stage, users can still choose between a freemium or free trial.
Step 4: Once users exhaust their free trial and are not ready to upgrade, they can always switch back to the freemium plan. However, there’s a higher chance they will upgrade after enjoying Trello’s full functionalities.
A growth loop is a self-reinforcing process where user actions generate outputs that fuel further growth, creating a sustainable expansion cycle.
While there are different loops, the commonly used ones include referral and product use loops.
Payoneer uses a referral program to drive growth by rewarding users who refer new customers. When existing users invite friends or business partners to sign up, they receive bonuses or credits once the new users complete certain actions or transactions.
This incentivizes current users to refer more people, increasing sign-ups and engagement. The cycle continues with new Payoneer users who reinforce the referral loop with every share.
SurveyMonkey leverages users’ activities to generate more customers. Here’s how:
Step 1: Company A registers to use the software and sends surveys to employees, customers, other businesses, etc., to collect user feedback.
Step 2: After completing the survey, the respondents receive a page encouraging them to send out their own survey. This leads to new registrations, and the loop continues.
Note that you can combine as many loops as possible to achieve the desired results.
Your brand advocates are 70% more likely to influence a purchase than any of your marketing tactics.
So imagine dozens of your existing users sharing their positive experiences using your product on their social media handles. That’s social proof with an infinite value compared to website reviews and testimonials.
Since UGC is based on customers’ successful interactions with your product, you can safely ask them to share their best experience using your product on their social accounts.
Unify all UGC posts by providing a common hashtag for everyone to build sufficient momentum and unify your efforts. It should be as simple as possible and memorable. For example, #MyAsanaJourney, #SalesforceandSalesforce, #ScaleWithHubspot, etc.
Geegpay, a payment platform for businesses and freelancers, used this method to build awareness after asking customers to share their customized image on social media with the branded hashtag #GrooveWithGeegpay.
You might also need to provide incentives to encourage maximum participation. Depending on your marketing budget, this could be a full-month subscription to a discount at checkout or other incentives.
Let's examine a few more product-led companies that have implemented the same strategies we discussed.
Freightify is a logistics SaaS company for freight forwarders to compare freight prices, streamline logistics operations with a customized storefront, and track vessels in real time from over 30 ocean carriers.
While Freightify boasts a feature-rich unified product, their customers - the freight forwarders - can only access it after making a purchase. Hence, Freighify couldn’t fully tap into the available market demand and their lead generation wasn’t very effective.
That’s where TripleDart came in. Our team assessed Freightify’s product and tied it to the needs of its potential customers. We realized that most of these leads would ultimately become buyers if they could interact with the product directly without having to pay a dollar at first.
We proposed a freemium model: free usage of Freightify’s container shipping rate calculator for two to three times. The aim was to create a good impression on leads and help them see the benefits of using the product’s full package, which would eventually make conversion much easier.
After implementing this strategy, Freightify’s user engagement and lead acquisition skyrocketed, boosting overall ROI and customer lifetime value.
ChatGPT is perhaps the most revolutionary software of the past century. As we all saw, it gained much momentum and rapidly scaled in size after its initial launch in November 2022. However, what most people ignored was that it was a PLG marketing motion - free use of ChatGPT in the early days - that contributed most to its success.
In return, OpenAI got valuable data from people’s interactions with the bot. This data was used to train and improve ChatGPT, alongside other resources, to become much smarter and more efficient at solving user problems.
Although ChatGPT is now offering other paid and advanced models, the freemium model helped scale its customer base to over 100 million users. Currently, the bot has over 200 million users, with over 3.9 million paid users. Additionally, the freemium model continues to serve users who don’t need the capabilities of a paid model or can’t afford it - and the OpenAI product gains data to update its product every day.
At the early stages of launch, Dropbox needed a better growth strategy to compete against existing cloud storage hegemons like Google and Microsoft.
It chose a hybrid subscription method—freemium with premium. Users could use a limited amount of storage space—2GB—for free, and they could pay to get more capacity if/when they needed. Freemium users could experiment with Dropbox’s features, compare them to other competitors without any financial constraints, and choose a premium plan once they had exhausted their free storage capacity.
But Dropbox enhanced this model with a referral loop. They introduced an incentivized referral program. Users could get an additional 500 MB of space for each friend they refer, which turned on the referral frenzy for more storage capacity.
And it worked phenomenally well!
Today, Dropbox has over 700 million users, recording over $2.5 billion in revenue in 2023.
There’s more market competition than ever before, and relying on your big pocket is no longer sufficient to gain an edge. If you want good results, you need to show, not tell, potential customers that your product can solve their problems.
And the first step to do that is to build a product they need, not the product you think they want. Various versions of the freemium model, viral growth loops, and positive social proof can then help you boost product retention and conversion. Lastly, optimize your product to make it a better lead magnet by integrating your sales and marketing teams with customer success teams, and invest in customer support.
You now have a clear understanding of product-led growth marketing, its significance for your business, and actionable steps to implement it for accelerated growth.
However, we understand how complex the whole process can be, and that’s why we want to help you. At TripleDart, we’ve developed a one-hit SaaS product-led growth marketing approach drawing on our decades of experience with various SaaS brands.
Our team analyzes your customers’ needs, evaluates your product, and aligns it with your brand goals to design a result-oriented PLG that moves the needle.
Ready to start? Let’s hop on a call!
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