Chances are if you’ve hopped on a call in the past year, you’ve heard the term product-led growth (PLG) bounce around a few times. From Figma to Zoom to companies, this growth strategy is what’s driving the success of tech’s most innovative companies. But if you’ve ever had to stop and google “what is product-led growth?” you’re not alone. And how can businesses be sure if it’s right for their organization?
Every couple of years, a strategy or concept takes over tech and changes the way we do business. Over a decade ago, it was growth hacking. While Sean Ellis coined the term, the approach of using low-cost strategies to stimulate growth caught on with lean startups looking to generate returns more rapidly and sparked leagues of growth teams at startups like Uber, then-Facebook, Tinder, and more. Instead of bloated marketing ad spend, growth marketing teams soon became the way forward for businesses to get ahead and stay there.
The benefits of product-led growth are contained within the name. Rather than a sales-led or marketing-led approach to growth, a PLG strategy builds on the foundations of what it takes to scale a business effectively and puts the attention squarely on your company’s best salesperson—the product itself. Where you see this play out most dramatically is in the software space. People aren’t buying these products like they used to. Apple has enabled consumers to go direct and shop for software from their phones. In fact, there’s pretty much a product for every single stage of the customer lifecycle, and it’s never been more crucial for businesses to cut through the noise to make sure they’re reaching customers exactly where it counts. So, if you’re wondering if a PLG strategy is right for you.
10 Reasons to Implement a Product-Led Sales Strategy
- To improve the customer experience. According to a recent Emplifi study, 86 percent of consumers will leave a brand they trust after two poor customer experiences. A product-led approach puts the focus on your product and the customer's experience of it. By providing a valuable product and an easy-to-use platform, you position yourself to deliver a stronger customer experience overall. This is especially true of companies with a product-led sales structure. Product-led sales enable companies to provide a higher quality of customer support, from delivering comprehensive articles that can help users learn more about the product to FAQs addressing common concerns or questions their customers may have about the product or service they offer.
- To increase customer loyalty. Loyal customers will reward your business with purchase after purchase, but getting them to trust you isn’t always easy. Adopting a PLG strategy enables companies to ensure customers have positive experiences with their product that make them more likely to become loyal users, from surfacing frequent surveys to find opportunities to improve your product to measuring their satisfaction overall. Implementing this fast and frequent feedback with your customers helps companies to iterate an optimize the overall experience in real-time, and can lead to increased customer retention and even boost word-of-mouth marketing.
- To shorten the sales cycle. Sales cycles can take months to complete, and this is especially costly for startups where you need to make every dollar spend count. Taking a product-led approach can help cut the sales cycle significant by providing customers with the information and resources they need to make a purchase decision on their own. If you’re looking to increase conversions and drive revenue, a PLG sales motion might be right for you.
- To unlock customer lifetime value. Repeat customers are the holy grail of any business. By investing in the best product and customer experience possible, companies can greatly increase their customers’ lifetime value. This means that customers will continue to use your product and potentially purchase additional products or services from you in the future, should you opt to unlock the potential of product-led growth at your company.
- To reduce reliance on sales teams: Great sales hires are costly to recruit, and just as costly to retain. What happens when one of your best and brightest accepts a position somewhere else? With a product-led strategy, the product itself becomes the primary driver of sales. The benefits of this are twofold. 1. It can reduce the kind of reliance on a sales team that could become a hindrance to growth, and 2. It helps put the focus of your sales teams on more high-value activities, such as upselling and cross-selling to existing customers.
- To increase operational efficiency. In the current macro environment, many businesses are looking to cut costs and fill leaks in the bucket. A product-led approach can streamline the sales process, making it more efficient and cost-effective overall. Ultimately, this can help reduce the cost of customer acquisition and increase your overall profitability. It means fewer reps need to be involved in each transaction. PLS strategies can benefit your bottom line greatly. From automated promotional campaigns to cleverly integrated chatbots on your site, PLS strategies are designed to help businesses looking to save money without sacrificing the customer service experience at scale.
- To improve scalability. You can’t market to a customer you don’t know, and in today’s world that means having the right data at your fingertips. But for many years, being data-driven in practice was a time-consuming process. Those days are gone. For companies that adopt a PLS motion, it’s easy to leverage tracking data like website visits and conversion rates to measure and optimize campaign performance in real time. What’s more, these same businesses gain valuable insight into what resonates with other customers at every stage of the lifecycle. It becomes easier to scale the business, drive growth, and reach a larger customer base.
- To offer flexible pricing options. Today’s customers want more freedom with it comes to their purchasing habits, which can be scary for businesses looking to ensure a steady pipeline. In a PLS setting, companies break out pricing to reflect the usage journeys of individual users. For instance, you might introduce a more flexible “pay-as-you-go” model, or a monthly subscription plan. Enabling your customers to choose what works best for them leads to increased satisfaction and higher conversions for your business in return.
- To be more competitive in the general market. Face it. In a noisy and crowded market, the goal of every business is to stand out from the rest of the pack. Product-led strategies can enable your company to do just that. Your product is custom-built to meet the needs and interests of the customer. You’ve got a closer pulse-check on what value customers expect from your product and those within your category, and the data to build an exceptional user experience.
- To have greater control over the sales cycle. Being product-led isn’t a hack, it’s a long-term strategy for business growth. Conversions are what drive revenue, and in a PLS setup, you can pinpoint exactly where in the buyer journey a prospect should receive specific information about your product. This helps make the parts of the sales cycle that benefit from being more self-serve easier to scale, leaving room for your team to be more high-touch in the areas where it accounts. For instance, early on, they may just need to know a few of your core value propositions, while later they might benefit from seeing a case study that displays the full power of what your company offers. Either way, PLS tactics enable potential customers to have all the information they need to make an informed purchase decision, at the right time and in the right context—and does so without putting the onus on your team’s time and resources.
Conclusion
Today’s most cutting-edge products are geared around the entire customer journey, from activation to engagement and loyalty. While it may be intimidating to take on a new orientation like PLS, it also spells an opportunity for companies looking to unlock unprecedented business growth. Thinking about steering your company toward a product-led sales motion? At Userled.io, our team is dedicated to helping companies break through the inefficiencies of the sales cycle and unlock their creativity. For more ways to scale your sales operations using the best tools and tactics for product-led growth, visit us at Userled.io.
