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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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}

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}