The no-marketing-trap: Why even product-led growth companies need to invest in marketing early

Product Lead Growth (PLG) is usually considered the most powerful go-to-market model for SaaS businesses. Driven by the strength of the product and word-of-mouth recommendations, customers come inbound and sign up for your product by either self-serve on the website or after a light sales touch from the “Inbound” team. So far so good. But what do you do once you have a successful PLG model?

Having worked for several companies with highly successful PLG motions, including Slack, Dropbox and Google in the early years (yes, PLG was also Google’s initial growth driver), I’m often asked what the new generation of SaaS companies should do following very high initial growth driven by PLG.

From my experience, it is obvious that even with the strongest PLG momentum you need to invest early in building a marketing engine, long before you even think about moving to Outbound sales. Here’s why:

Hitting the adoption curve

To understand why it’s important to build a high-performing marketing function early, it helps to take a look at who adopts your product and when — the so-called Adoption Curve.

The first users will be Innovators. Trying new things is important to them. They are the driving force behind your initial growth. They are risk-takers, inspired to try new things by technology communities, by what they read in blogs and social media, etc. The more momentum you create in this early phase, the better. Following on are the Early Adopters. They also get their inspiration from blogs, forums and social media. But they seek a lot more information before deciding to use a new product and look for proof points that your technology will work.

The third group is the Early Majority. While it is not quite so critical to them, they still do have an interest in staying at the forefront of innovation but are concerned about the risk of failure. They are typically unwilling to do a lot of research, so relevant information needs to be easily found. The final two groups are Late Majority and Laggards, but they are less relevant for you now.

Each of these groups needs to be spoken to through marketing. However, each audience requires different channels and ways to connect. If you fail to adapt your marketing as you progress through the adoption curve, or you don’t do any marketing in the early phases, your PLG will slow down prematurely. You will have less momentum with Innovators, and Early Adopters may not come inbound at all. Moreover, Outbound Sales targeting the Early Majority will also struggle if there is no effective marketing team in place.

Think about website offerings

Your website is your shop window and you only have a few seconds to catch a visitor’s interest (estimated to be 10-20 seconds). It’s vital, therefore, to invest the time to craft clear compelling messaging that will capture their attention and there are a few things to consider as you think about how that website will support the next growth stage.

Bringing more traffic is the obvious next step, but making sure you are attracting the right traffic is key. Understanding the buyer persona you are targeting and creating content for that persona will attract more of the buyers you want.

Content fuel

“Content is the fuel your new marketing engine runs on” says Liz Smyth, VP of Marketing at Slack. “First and foremost capture and tell your best customer stories.”

They are not just the proof points that your prospective new customers need to hear, but also critical in helping the market understand new product offerings, their use cases and the value that can be derived. Also, take the time to create a few key pieces of thought leadership content. This is content that educates and informs. It is often research-based or presents your opinions and insights on specific topics. Together, those become the cornerstones of your early PR strategies.

Optimise the engine

Once the engine is running, it will be time to find ways to optimise it, often by looking at conversion rates and finding ways to improve them. Look at your website analytics to understand where your website visitors are engaging or dropping off. A 1% or 2% improvement at the top can make a big difference farther down your funnel and accelerate it. At this stage paid lead generation, webinars and content for specific personas and buying stages become increasingly important.

This content, often called ‘full-funnel’, is designed to meet the buyers where they are on the attract-engage-convert journey. Light and short content for top-of-funnel targets who just heard about your product or search for a particular problem to solve e.g. answering “what is …” questions or “what to do if …”. Deeper content for mid-funnel including pain points solved, use cases, demos. For bottom-of-tunnel customer stories, feature comparisons, pricing info and analyst reports.

Laying a strong foundation


If you have a strong PLG business, delaying building a strong marketing function or, as we’ve seen in extreme cases, almost leapfrog marketing and jump directly to building an outbound sales motion, is a mistake.

If you don’t invest in a marketing team, you are likely to face significant difficulties building an Outbound motion, and eventually even experience premature slow-downs of your PLG. Instead, companies that use the initial time of strong PLG to build out a proper marketing function experience a longer period of healthy PLG and Inbound growth and are eventually more successful in their efforts to go Outbound.

The original content of the note was published on Eu-startups.com. To read the full note visit here

Building A SaaS Growth Model: A Comprehensive Product-Led Growth Framework

In the rapidly evolving SaaS landscape, growth isn't just about acquiring users—it's about creating a seamless, value-driven experience that turns users into advocates. Product-led growth (PLG) is the key to achieving this, positioning your product as the primary driver of customer acquisition, engagement and retention.

I'll outline a detailed framework for building a robust SaaS growth model, using insights from key metrics and strategic levers.

The SaaS Growth Journey

Our growth model is structured around three pivotal stages: activation, retention and monetization. Specific levers support each stage to guide strategic decision-making and drive outcomes.

Activation: Transforming Sign-Ups Into Engaged Users
-Sign-ups by source. Analyze where your users are coming from—be it organic channels like search and referrals, viral invites or paid acquisitions.
-First value moment. Identify the "aha" moment when users first experience the core value of your product. This is usually the first moment an end user discovers value.
-Habit formation. Encourage actions that turn casual users into regulars. In the case of Qualtrics, the habit moment was when a survey received at least 10 real responses, the end user generated a report, and this report was "bookmarked" in the navigation.

Retention: Keeping Users Engaged
-Weekly engagement tracking. Monitor user engagement on a weekly basis to identify drop-off points and refine retention strategies.
-Personalized communication. Implement personalized communication strategies such as targeted email campaigns or in-app messages to keep users engaged.
-Proactive support. Offer proactive customer support to address potential issues before they lead to churn. By using the same customer journey map above, we started proactively prompting the chatbot in the product if we saw a user had stalled in the setup process or was hovering/inactive in certain product areas (such as setting up a CRM integration) that were inherently tough to accomplish.

Monetization: Converting Free Users To Paying Customers
-Self-serve conversion. Track the percentage of monthly active users converting from free to paid plans. Tools such as Amplitude are extremely helpful in instrumenting and measuring these metrics with several out-of-the-box funnel and conversion reports.
-Sales-led strategies. Complement self-serve efforts with targeted sales-led strategies. There are several frameworks to develop a sales playbook, but the best one is by starting with the fundamentals.
-Pricing experiments. Conduct A/B tests on pricing models to determine the most effective strategy for conversion.

Conclusion


Building a successful SaaS growth model requires a deep understanding of the customer journey and a commitment to product excellence. By focusing on activation, retention and monetization, as well as leveraging data-driven insights, SaaS companies can achieve sustainable growth through a product-led approach.

The original content of the note was published on Forbes.com. To read the full note visit here

3 Ways Businesses Can Transition to a Product-Led Growth Model

The rise of product-led growth (PLG) strategies is reshaping many aspects of modern businesses, from customer acquisition and retention to the way we create and build software. PLG is well-documented as an effective and profitable strategy given that 50 percent of software-as-a-service (SaaS) PLG companies hit $100 million annual recurring revenue within the first five years. Additionally, Gartner predicts that by 2025, 75 percent of SaaS providers will implement product-led growth techniques to foster expansion among their existing customer bases.

PLG places the product itself at the center of a company’s growth model, rather than relying solely on traditional sales and marketing tactics. Companies like Stripe, Slack and Zoom have demonstrated the power of PLG via rapid scaling with relatively lean teams compared to traditionally sales-driven business models.

Rather than relying on large sales teams, companies could grow efficiently — despite macro-economic pressures and trends — by prioritizing the process of crafting an exceptional, user-centric product.

The Cultural Shift Behind Product-Led Growth

The shift to PLG is harder than it seems. It’s not just one singular action, but a cultural shift, moving away from a sales-first mentality to a product-first focus on delivering exceptional user experiences. Historically, companies like Salesforce and ServiceNow have allocated close to 40-50 percent of their spending to sales and marketing. Yet, with the rise of PLG, customer acquisition costs have come down significantly because the product leads the charge instead of a human.

In a traditional sales-led growth approach, the sales team, talent and processes are in the driver’s seat. Sales representatives must convince customers to buy a product or service through various tactics like campaigns, promotions and even relationship-building.

In contrast, a PLG strategy enables companies to prioritize product development and user adoption, both of which are equally vital to growth. An organization’s newfound relationship with the user means the product must be easy to learn, easy to use, easy to scale for the user’s needs, and perhaps most importantly, has to create value for the user quickly.

How to Transition to a Product-Led Growth Model

For those that are looking at the PLG strategy as an exciting opportunity but feel the cultural shift may be daunting, here are three ways businesses can transition to a PLG model.

Champion Product-First Thinking Across the Organization

In a PLG approach, product teams can no longer operate in isolation. They must collaborate closely with sales, marketing, and customer success because a modern, effective PLG strategy requires a holistic user experience at all stages of the journey, from initial adoption through ongoing usage and expansion.

Prioritize Your End Users and Their Feedback

Product-led companies put end users at the center of their strategy and build each feature with a specific user need in mind. This value-forward, user-oriented approach to product building makes for a more delightful product experience and a stickier use case. Along with this, consistently soliciting and incorporating user feedback is paramount with PLG. Modern analytics, onboarding and customer feedback tools have popped up to enable data sharing across the organization for a multitude of uses.

Empower Your Product as a Marketing Engine

With PLG, the product experience becomes a powerful marketing channel in and of itself. When users love a product, they naturally invite colleagues from their personal networks to try it out, similar to how Slack propagated virally. This organic, reputation-driven adoption reduces customer acquisition costs and emphasizes building a remarkable product over expensive sales and marketing campaigns.

PLG Leads the Way

Making the transition to PLG involves fundamental changes like placing product at the center of problem-solving, crafting artful user experiences and continuous iteration versus employing humans to mitigate poor product experiences.

At its core, PLG reorients an organization’s culture and problem-solving approach around developing innovative, user-centric products that sell themselves. This ethos of product craftsmanship transcends any specific growth strategy and will be imperative for businesses to thrive in increasingly competitive digital markets.

The original content of the note was published on Builtin.com. To read the full note visit here

Product-Led Growth Is Great. But Product-Led Retention Is Probably Even More Important.

So somehow, “Product Led Growth” became a seemingly magic savior for many struggling SaaS companies. Or at least, they hoped so. A magic cure for sales costs that are just too high. What if we just add a Free edition?
Sometimes it does work. I mean, Canva’s metrics for example are just awesome. $500k in revenue per employee at $2 Billion in ARR, and profitable. Now that’s a solid PLG motion.
But just as often, if you were any good at “PLG” — you’d already be doing PLG. Still, if you go all-in, truly 100%, add a free edition and a true hands-off free trial if you can. It will make your product better and easier to use, if nothing else. If it doesn’t magically change the trajectory of your startup.
But with everyone discussing PLG, there just isn’t enough discussion in B2B of Product-Led Retention. In fact, I can’t think of a single board meeting where I’ve even seen a slide on it.
Our products in SaaS just don’t tend to automatically retain themselves. To be so valuable, so cost-effective. and so deeply embedded in the fabric of our customers’ businesses that they’d never churn. They tend to come close enough to get most renewals though. Most. But far from all.
But our B2C friends obsess about Product-Led Retention. Sometimes in dark ways — making it hard to cancel. Sometimes in great ways — forcing B2C subscription businesses to relentlessly provide a great end-user experience. Churn is so high in most B2C and B2B2C they have no choice but to obsess on improving their value proposition constantly. Every month, the meal kit, the clothing, the game subscription, the video subscription almost has to be better than the month before.
But in SaaS? Well, we do all track NRR, churn and hopefully GRR too. And then sort of throw Customer Success at it. And usually — that’s almost about it.
I’m not saying the best product leaders don’t think about retention all the time at the product-level. They do. I just don’t see the obsession here across B2B companies, founders and their entire management teams. I just don’t see it discussed all that often.
Some of this may be that in the enterprise, many products really are so hard to rip out, you don’t have to worry as much about Product-Led retention. Look at $100B market cap Service Now, which is very, very enterprise. Customers often sign 3+ year contracts, and architect their entire business processes around ServiceNow. As a result, no one leaves. Renewal rates are steady at 98%-99%.
But that’s not most us. In fact, most of us saw churn rocket the past 12-18 months, and NRR fall. In fact, NRR fell all across the board in SaaS.
Raising prices and making threats at renewals helped a bit in 2023. But that’s not really Product-Led Retention. That’s not making your product so, so, so great and so, so, so important no one will leave.

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The Silent Salesman: Relying On Your Product To Drive Growth

For as long as I can remember, the traditional sales strategy involved a highly active sales team pounding the pavement, crisscrossing the country to attend trade shows, and lots and lots of phone calls and follow-up emails. The goal is to get in front of potential customers to tell them what your product offers and why they need it. For SaaS companies, the initial goal is to book a product demo. However, as the industry dynamics evolve, so do the engagement methods. There’s undoubtedly still a place for this approach, but there’s a new kid in town called product-led growth (PLG), and let’s just say there’s talk.
Let Your Product Do The Talking
In the early 2000s, SaaS companies turned heads when they started using their products to attract and retain new customers rather than relying solely on their sales and marketing teams to push leads through the sales funnel. Once the sales touch is removed, you really only have your products to drive growth—hence, the term product-led growth.
The Diverging Paths To Business Growth
Everyone is familiar with sales-led organizations. They prioritize human interaction as a way to sell products and services. Simply put, they let the sales team do what it does best—relationship building and articulating the value of their products and services. With this strategy, customers typically have to request a demo and have a sales team member walk them through all the bells and whistles of the product to see it in action. And don’t get me wrong, this way is still alive and well. It’s particularly effective for complex products that don’t lend themselves to self-guided experimentation.
Contrarily, product-led organizations let customers self-serve, meaning they get to use a product before they speak to anyone at the organization.
Shifting The Product Development Mindset
The thought process toward product development often leans heavily on the technological aspect, prompting questions like "How do we build this?" and "Who would want this product?" However, I’ve realized that this approach isn’t that effective.
Core Advantages Of A Product-Led Growth Strategy
Customer Benefits
-Superior User Experience: Free or limited access trials let users autonomously assess the value of a product at their own pace, allowing customers to experience your product when and how they want without any hurdles.
-Continuous Customer Feedback Loop: This helps you improve the product in real time and focus on developing products that meet the needs of your current and future customers.
Business Benefits
-Shorter Sales Cycle: Self-onboarding removes the obstacles (e.g., human interaction and demo requirements) for potential customers so they can immediately start using your product. Converting them into paying customers doesn’t take long if they find it valuable.
-High Retention/Lower Churn Rates: Creating customer-centric products and delivering them to users with a dedication to product enhancement increases customer satisfaction, making it easier to attract and retain customers.
Attracting And Retaining Customers Through User Experiences
Customers expect a lot these days. To thrive, businesses must take a highly focused, customer-first approach to product development and delivery. Trials or "freemiums" allow customers to test drive a product or solution before making a purchase decision.
This methodology creates a win-win situation for the customers and the organization, making it an effective strategy for SaaS businesses aiming for sustainable growth.

The original content of the note was published on Forbes.com. To read the full note visit here

Embracing Product-Led Growth: The Shift Toward User-Centric SaaS Solutions

It’s time to say goodbye to traditional marketing-driven strategies and hello to product-led growth (PLG)! I believe the shift toward user-centricity is about to revolutionize the way we think about software as a service (SaaS). According to UserGuiding, 21 large companies have implemented PLG with a total market capitalization of $208 billion, and MarketSplash has found that the brands that have adopted PLG harness 60% higher average revenue per user than non-PLG brands.
Based on my experience, let's explore how embracing PLG can lead to success for SaaS companies, providing tangible benefits for both businesses and their customers.
The Rise Of Product-Led Growth In SaaS
PLG is reshaping the SaaS landscape by focusing on user-centricity and instant gratification, leading to higher conversion and retention rates. According to Emerge, “PLG companies have 60% more ARPU (Average Revenue Per User) than non-PLG companies.” PLG is all about letting users experience your product firsthand and allowing its value to speak for itself. This can provide a number of benefits, including:
-Sense Of Ownership
One of the key advantages of PLG is its ability to foster a sense of ownership among users. By allowing individuals to discover and engage with a product at their own pace, you give them a way to develop a deeper understanding of its features and benefits and discover its value before they invest in it.
-The Snowball Effect
PLG also empowers SaaS companies to scale quickly via virality and network effects.
-Data-Driven Product Development
PLG equips companies with smart tracking to help them gain user insights, identify pain points and make data-driven decisions.
Three Strategies For Implementing PLG In SaaS
1.The Freemium Model
Consider offering a self-serve free trial or freemium model in SaaS to provide immediate value. In my experience, this model can often bypass sales engagement and speed up adoption while collecting helpful user data. Freemium models are generally designed so that, once hooked, users can easily upgrade for more features.
2.Shareability
Embed social sharing in your product, and incentivize referrals by offering rewards to those who bring in new customers. This win-win situation can turn satisfied customers into loyal brand advocates who bring in new customers.
3.Product-Led Conversion Funnel
Traditionally, marketing funnels were driven by generating leads, which were then handed off to sales for closure. In PLG models, the focus is on building an in-product conversion funnel. This involves streamlining the user journey from sign-up to long-term usage, minimizing friction and showcasing immediate value.
Challenges With Adopting A Product-Led Growth Model
As with any system, there are potential challenges when adopting product-led growth. For example:
1.Sustainable Customer Acquisition: A great product attracts customers, but they need to know it exists first, especially before you have cultivated solid word-of-mouth referrals. Consider implementing targeted marketing and sales channels to sustain your growth and maximize revenue potential.
2.Continuous Innovation: User needs are constantly evolving, so keep innovating and iterating to ensure your product keeps meeting those needs. I recommend investing in R&D and incorporating ways to maintain team agility into your overall plan.
3.UX Design: It can be hard to create a seamless UX that drives continuous product adoption. I recommend continuously A/B testing your UX elements to find what resonates most with users. Menus and options should be intuitive, as complexity is often the enemy of adoption. Integrate tooltips, walkthroughs and tutorials so that learning is part of the experience.
Overall, embracing a product-led growth strategy requires putting your product at the forefront and using it as a catalyst for success. By focusing on delivering immediate value and empowering users to become advocates, your SaaS company can unlock great growth potential in today's competitive landscape.

The original content of the note was published on Forbes.com. To read the full note visit here