Why Transition to Product-led Growth in 2022

As an alternative to outdated sales-led growth strategies, product-led growth can give SaaS companies an edge over competitors who haven’t started the transition – or refuse to change altogether.

Traditional growth strategies are also often less efficient and more expensive than product-led growth marketing.

Why is product-led growth worth the effort, and what are the benefits of transitioning?

How can sales-led organizations make the transition to becoming product-led?

Executing a PLG transition involves two phases: product optimization and organizational realignment from the C-suite down to the sales development rep.

Plenty of businesses remain entrenched in the old-school mindset where a salesperson must walk qualified prospects through a product’s benefits and features.

PLG is different – prospects essentially educate themselves on a product without the guidance of a salesperson.

Still, transitioning to PLG isn’t as simple as having a few meetings about optimizing the user experience with a product. It takes more than that to succeed, and it’s all in the timing.

Here’s how to tell whether or not the moment is right to make the transition to PLG.

What are the considerations when exploring this transition?

Initially, the entire organization should align with the new growth strategy, and it takes the whole company pulling in the same direction.

Otherwise, it’ll be harder to realize the benefits in a reasonable time.

At the very least, there should be a cross-functional collaboration that centers around ways to optimize the acquisition, activation, and retention of customers.

A cross-functional team often includes roles like product management, user experience designers, software developers, analytics, and a re-imagined marketing mix.

What types of companies are not ready for PLG?

The next question is this: how can businesses tell if they’re ready for a PLG transition?

First, if a product takes a long time to set up and has an above-average time-to-value metric, it’s not ideal for PLG.

Another caveat is that products with a long – or ill-defined – onboarding process will be more challenging to fit into the PLG model.

System integration could also be a potential issue, de-railing the project’s timeline substantially.

However, there are alternatives to free trials and freemium that enable more complex software to try PLG - we’ll go over it later in the article.

What are the benefits of product-led growth to the company?

The benefits of PLG growth include:

  • Better time-to-value for the end-user
  • Higher quality leads who are familiar with your product
  • Shorten deal cycle through eliminating POCs

  • Better time-to-value for the end-user

    PLG relies on building the product experience so that prospects can essentially onboard themselves with an enjoyable, valuable experience. Rather than wasting their time filling out lead cap forms and asking to speak with representatives for demos, prospects will evaluate the product much sooner in the buying cycle and have a shorter time-to-value.

    Higher quality leads who are familiar with your product

    Adding in a product experience will enhance prospects’ understanding of your product. And when leads already understand what your product does before they walk in the virtual storefront, sellers don’t have to waste time answering easy product-related questions; they can just focus on selling.

    Shorten deal cycle through eliminating POCs

    Once a prospect understands that your product will solve their problems, sales teams don’t have to go through their standard pitch to convince people to buy一it becomes a no-brainer. This means eliminating the need for lengthy proof of concepts and technical setups.

    What happens if your product is not designed for a freemium or trial?

    The downside of PLG is that not every company or product is ready for a change.

    As previously mentioned, complex products may have too long of a time to value for limited trial or freemium. Or some companies may not have the engineering resources to build out a free trial or freemium model.

    That’s where interactive product tours come into play. Interactive product tours are prime examples of how to jump-start product-led growth, without needing an engineering team to custom build a new version of your application.

    The idea is to get prospects to a “wow moment” much faster than a freemium trial ever could. Along those lines, the entire point of PLG is to empower the customer in ways that competitors can’t or don’t care to develop.

    See what a product-led sales motion looks like in one of our interactive product tour.

    Build interactive product tours.Request a demo with our team.