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The Rise of Product-Led Growth SaaS Companies

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Product-led growth or “PLG” has been a staple buzzword in the global business ecosystem in the past several years. By definition, PLG is a type of business strategy that treats a company’s product as the main driver that controls the acquisition, activation, and retention of customers. Unlike sales-led businesses that aim to shepherd a customer from the starting point of their journey to the endpoint in a sales cycle, PLG companies turn this traditional sales model upside down. 

In a PLG model, SaaS companies typically provide customers with a means to explore the product at no cost, either through a freemium offering or a free trial period. If customers experience a significant benefit while using the product, the decision to upgrade to a paid plan becomes a natural and compelling choice.

How Did PLG Start?

PLG was popularized by OpenView’s Blake Bartlett in 2016 when he emphasized the importance of a product walking the talk to boost business growth: “Buying power has shifted for business software, and end users are the new gatekeepers,” he said. “End users want a customer journey that begins with product-led self-service, rather than human-led sales conversations.”

In 2018, OpenView had a clear objective: to establish PLG as a household name. To achieve this goal, the company organized PLG West and PLG East summits, made PLG the central theme of their BUILD podcast, and made it the theme of every blog post published by the firm. 

PLG’s impactful ascent began when companies started exploring diverse approaches, such as “freemium” product models and self-guided tours, to achieve simultaneous growth and profitability. In conventional growth models, there was often a trade-off between pursuing growth and maintaining profitability. However, PLG effectively bridged this gap, with the companies adopting the techniques and strategies linked to this concept achieving remarkable levels of success in both aspects.

Reaping the Rewards

Today, businesses – startups and enterprises alike – reap the abundant benefits from PLG strategies, including driving product improvement by necessitating self-service excellence, enabling products to consistently deliver value independently. 

Furthermore, PLG fuels rapid and continuous growth without being bound by the pace of hiring sales personnel. It optimizes capital expenditure through self-service and automation, reducing costs in sales, marketing, and onboarding. Most notably, PLG broadens the total addressable market (TAM), as a single PLG product can effectively cater to individuals, small to medium-sized businesses, and large corporations.

Top PLG Players

Some of the most established PLG players in the digital age include Calendly, whose PLG model provides users a complimentary trial option, allowing them to subsequently transition to a premium subscription; Slack, which permits users to explore the platform’s features before committing to a paid subscription, and Trello, which revolves around user-friendly features and the capacity to visually map out projects and workflow processes.

Other tech tools have also emerged, aiming to support companies’ PLG models, with a focus on enhancing revenue insights, data administration, and ensuring customer success, among various other facets. At the forefront of these innovations is Coho AI, whose advanced AI platform combines the efficiency of PLG with the effectiveness of enterprise sales to consolidate data silos and boost revenue intelligence. This allows teams to focus their efforts on the most relevant opportunities and deliver value to their users while driving business growth.

The rise of PLG marked a milestone in the modern business world, revolutionizing traditional sales models and providing businesses with a path to sustainable growth and profitability. As technology evolves and data-driven insights become increasingly sophisticated, businesses will have new opportunities to fine-tune their PLG approaches. Automation, personalization, and AI-driven recommendations are likely to play pivotal roles in enhancing the PLG experience, making it more seamless and effective.

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