Product-led growth is one of the “hottest” SaaS concepts. In fact, most leading SaaS brands have already adopted PLG, and 91% of these companies are expected to invest more in PLG in 2024.
But is the concept of SaaS PLG crystal clear to all brands, especially mid and early-stage startups?
Probably not! That’s precisely why only 9% of free user accounts get converted into paid ones.
While many brands have capitalized on product-led growth in the last few years, only a few could keep up with the latest PLG trends. This led them to miss out on high-value prospects despite having a solid product.
So, how do you leverage PLG in your SaaS brand’s expansion?
What are the PLG models and strategies to focus on in 2024 for consistent success?
You’ll find all these answers in this article.
What is PLG?
Product-led growth (PLG) is a business growth strategy that leverages the product as the primary driver of customer acquisition, expansion, and retention. Unlike traditional marketing-led or sales-led approaches, PLG puts the product at the forefront of the customer journey. It focuses on delivering an exceptional product experience that drives organic growth through user adoption, satisfaction, and advocacy.
PLG marketing is based on the idea that if your product truly speaks to the end user, it will become a powerful tool for customer acquisition and retention. By providing value upfront and allowing users to experience the product before purchasing, PLG creates a self-serve model that eliminates the need for heavy sales and marketing efforts.
Why PLG Matters in B2B SaaS?
The rise of PLG in the B2B SaaS industry is not a coincidence.
Today's B2B customers, both individuals and enterprises, have come to expect a consumer-grade user experience, personalization, self-learning capabilities, and instant value.
PLG aligns perfectly with these customer preferences, providing a seamless and engaging experience from the moment they interact with the product.
The benefits of adopting a growth strategy driven by product are numerous. Here’s a description of a few:
Top SaaS PLG Models that became Popular and will Shine the Brightest in 2024
While PLG is not a one-size-fits-all approach, companies adopt several widely recognized models based on their product, target market, and business goals.
Here are four of the top Product-led growth models:
The Freemium Model
This model offers a free product with limited features or usage to convert users to upgrade to a paid version for additional functionality or advanced capabilities.
Let’s take Slack as an example. Slack’s free plan offers some of its best features like:
- 1:1 huddles with team members
- Video clip recording
- Limited integrations
But the catch is that you get the Free Trial for only 90 days. Additionally, the Free Plan also doesn’t let you access “nice to have” features like automation, compliance support, and security features.
A user who is looking for a workspace solution and has already used Slack for 3 months they are likely to make a purchase decision. And if they decide to upgrade the plan, they would seek advanced features like automation to speed up repeat tasks.
Usage-based Model
In this model, customers are charged based on product usage, such as the number of API requests, messages sent, or data stored. This model is popular among developer tools and platforms.
Think of the email marketing solution Sendgrid as an example. This tool's Free and Essential plans offer the same set of features. The only difference is in terms of the number of emails you are sending a day.
Note below 👇
The Free Plan allows you to send up to 100 emails a day. And if you want to send over 100 emails, you must opt for the Essentials Plan. The Essentials Plan offers no new features but allows you to send up to 50K monthly emails. In case you want to send
Trial Model
The trial model allows customers to try the full product for a limited period before making a purchase decision. The trial can be time-based or feature-based, giving users a taste of the product's value and encouraging them to convert to paying customers.
ConvertKit follows this Product-led growth model. As soon as you sign up, ConvertKit allows you access to their Creator Plan as a Free Trial, which costs $9 monthly. During this 14-day Free Trial phase, you will get access to ConvertKit’s all-powerful features mentioned below 👇
By the end of 14 days, if you don’t purchase the Creator Plan, you are automatically downgraded to the Free Plan with limited features.
Hybrid Model
The hybrid model combines elements of different PLG models to create a customized approach that suits the company's specific needs. This model allows companies to leverage the strengths of multiple models, offering a tailored experience to their target customers.
Productivity app Notion offers hybrid pricing. While Free, Plus, and Business Plans are available, opt for a tailored Enterprise plan to access all your favorite features at personalized pricing.
5 PLG Marketing Strategies and Best Practices for SaaS Businesses
Knowing about the PLG models might help, but not until you use them best. A balanced strategy is the one that is built by and for your product.
Your Product-led growth marketing strategy should include many product explainer videos, interactive demos, product tours, and everything that simplifies the product for your target audiences.
Below are some of the best PLG tactics:
Opt for in-app customer onboarding
User onboarding is a crucial stage in the PLG journey. Designing an onboarding flow that guides users to experience the product's value quickly and effortlessly is essential.
PLG companies like Notion prioritize user onboarding by providing personalized experiences, clear sign-up flows, and incentives to complete the onboarding process.
Notion has designed an intelligent PLG onboarding workflow for each user that comprises of:
- Asking the users questions related to workspace set-up, data migration, etc.
- Followed by helping the users with a set of applications to personalize their workspace
- And finally, a quick in-app product tour that clears their doubts about product usage, like this 👇
- Notion further suggests significant templates based on your preferred use cases to get you started.
Provide interactive tutorials, walkthroughs, and self-help resources within your product to guide users through onboarding. This improves user experience and reduces time-to-value.
Companies drive user activation by focusing on a seamless onboarding experience and setting the stage for long-term engagement.
Go for interactive product demos to increase product awareness
Use interactive demo software to create personalized product tours that allow users to explore your product's features and understand its value before purchasing. This increases user engagement and conversions.
We love how Bigin by Zoho has added an interactive demo in their homepage. The product demo is positioned on the homepage and gives a quick overview of the product to increase awareness for all new visitors:
Product-led content marketing strategies
Content marketing plays a significant role in Product-led growth strategies. Companies should create valuable and educational content that showcases their product's capabilities and helps users derive maximum value from it.
PLG companies attract organic traffic by providing product-focused content, establishing thought leadership, and positioning themselves as industry experts. Sharing customer success stories, tutorials, and best practices further enhances the value of content marketing.
The idea behind driving a product-led content strategy is to find the overlap between your company’s and product’s narratives. Think of Atlassian, for example.
Atlassian’s content hub consists of the following types of assets:
- Podcasts
- Company updates
- Blogs
- Atlassian university
- Microsite
There are two types of messaging that this brand communicates through these content assets:
- Message 1: Try out Atlassian’s free product
- Message 2: How do you use Atlassian’s products for best results?
Data-driven decision-making has never been easier
Product marketing teams of PLG companies rely heavily on data to iterate and optimize their marketing efforts. By analyzing user behavior, product usage, and conversion data, companies can identify areas for improvement and make data-driven decisions.
A/B testing, conversion rate optimization, and funnel analysis are techniques used to continuously optimize Product-led growth marketing strategies.
For instance, if you use an interactive demo software, it comes with intuitive dashboards, offering insights into in-product analytics to track user behavior, engagement, and usage patterns, like below 👇
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Use this data to make data-driven decisions, identify upsell opportunities, and enhance the user experience.
Plan affiliate programs with irresistible incentives
Viral loops and word-of-mouth referrals are essential components of PLG marketing. Companies should incentivize their existing users to refer their friends, colleagues, or network to the product.
This can be done through referral programs, rewards, or exclusive benefits for advocates. By leveraging the power of social proof and user advocacy, Product-led growth companies drive organic growth and expand their customer base.
Notice how Notion requests its top users to join the affiliate program and offers excellent incentives 👇
3 PLG SaaS Examples from Leading SaaS Brands
Let's take a closer look at three successful PLG examples from leading SaaS companies that cracked the code to Product-led growth successfully:
1. Hotjar
Hotjar, a popular analytics and feedback tool, has adopted a freemium model with a strong focus on product-led growth. By offering a free version of their product, Hotjar attracts a large user base while providing value from the start.
Users experience the core features of Hotjar's product and upgrade to a paid plan for advanced functionality. Hotjar's emphasis on product-led onboarding and user engagement has contributed to its rapid growth and success in the market.
2. Airtable
Airtable, a collaborative work management platform, leverages a trial model to drive product-led growth. Users sign up for a free trial and explore Airtable's features and functionalities.
The trial period allows users to experience the product's value and understand how it streamlines their work processes. Airtable's user-friendly interface, intuitive onboarding, and powerful collaboration capabilities have made it a top choice for teams and organizations worldwide.
3. Wordtune
Wordtune, an AI-powered writing assistant, utilizes a freemium model to drive Product-led growth. Users access Wordtune's core features for free, including suggestions for improving their writing.
The freemium offering allows users to experience the value of Wordtune and upgrade to a premium plan for additional features and advanced writing support. Wordtune's product-led marketing strategies, personalized engagement, and continuous product iteration have positioned it as a leader in the AI writing assistant market.
Benefits of B2B PLG for SaaS Businesses
Your product is your biggest asset. But how will your prospects know what your product is capable of if they don’t get a chance to use it?
This is crucial to developing a product-led growth strategy in B2B SaaS. Below are a few benefits:
- Shorter Sales Cycles: Product-led growth reduces the time it takes for users to convert into paying customers by delivering value upfront and allowing users to experience the product on their terms.
- Lower Customer Acquisition Costs: By leveraging the product as the primary customer acquisition tool, Product-led growth reduces the need for heavy sales and marketing investments, resulting in lower customer acquisition costs.
- Higher Revenue per Employee (RPE): With the product driving growth, employees focus on specific roles that help drive revenue, leading to higher revenue per employee and improved profitability.
- Better User Experience: Product-led growth puts a strong emphasis on delivering an exceptional user experience, resulting in higher customer satisfaction, retention, and positive word-of-mouth referrals.
- Enhanced Analytics: Product-led growth provides valuable user data and analytics to make data-driven decisions, identify upsell opportunities, and improve the overall user experience.
Challenges of SaaS PLG
While PLG offers numerous benefits, it is not entirely out of risk. There are some challenges that SaaS businesses should note and stay prepared to address before adopting this approach on an organizational level:
- Product-Market Fit: Achieving a solid product-market fit is crucial for the success of Product-led growth. Without a product that resonates with the target audience and meets their needs, driving user adoption and growth is challenging.
- User Onboarding: Designing and executing a seamless onboarding process is essential for user adoption and retention. Without proper onboarding, users may struggle to understand the product's value and may not fully utilize its features.
- Balancing Self-Serve and Sales-Assisted Approaches: Finding the right balance between self-serve and sales-assisted approaches is challenging. While self-serve models can drive scalable growth, some customers may require personalized assistance and guidance from sales teams.
- Scaling and Global Expansion: Scaling a PLG strategy can be significantly complex when expanding into new markets. Adapting the product, onboarding process, and marketing efforts to different regions and languages requires careful planning and execution.
Start your Product-led Growth Journey with Rivia
Now that you have all the information and resources you need, it is time to create a self-guided product tour.
And the good news is, with an interactive product demo platform like Rivia, creating your first product tour just takes 10 minutes.
All you have to do is:
- Take HTML captures
- Edit and add modals, tooltips,, steps, flow, images, charts
- Publish and place it across multiple marketing touchpoints
To get started, Book a demo!
FAQs
What is a PLG sales funnel?
A Product-Led Growth sales funnel is a customer acquisition model that focuses on driving the adoption and usage of a product to generate leads and convert them into paying customers.
Why should you aim for PLG Go-to-market?
Aiming for a PLG GTM strategy is beneficial because it allows SaaS companies to leverage their product as a marketing tool, leading to faster customer acquisition and higher retention rates.
Is the PLG Business model a good option for SaaS brands?
The PLG business model can be a good option for SaaS brands because it aligns with the changing customer expectations and preferences for trying before buying, resulting in higher customer satisfaction and revenue growth.
What is the best PLG sales strategy?
The best Product-Led Growth sales strategy involves offering a free or freemium product version, providing a seamless onboarding experience, and leveraging in-product analytics to identify and nurture potential customers.