Companies with a product-led growth strategythink Slack, Calendly, and Datadog are able to grow faster and more efficiently by leveraging their products to create a pipeline of active users who are then converted into paying customers. A product-led pricing model incentivizes all teams to deliver user value since it directly correlates to revenue, growth, and business value. What is a product-led company? The art of storytelling has been a powerful tool for increasing understanding and building engagement with complex issues for as long . . A smooth onboarding leads to quicker value and better conversion. However, there are several different ways to find help and to get some guidance that will help find success. Slack pricing is built to scale with usage and a user's growth. Product-led growth (PLG, for short) is a business model that places the product at the center of your organizational objectives to drive acquisition, engagement, and retention. Fill the Pipeline with Interactive Product Tours. Product-led growth, explained. Here is a list of top SaaS companies that got the product-led growth right. A product-led growth strategy relies on an exceptional product that people actually want to use and advocate for, and which will improve business performance. Only . Editor's Note: This article was first published on October 4, 2018, and updated on August 16, 2022. Driven by the successes of companies like Slack, Zoom, Calendly, and Dropbox, Product Led Growthor PLGis being viewed by some as the new, better, standard for software business models. The transition from sales-led motion to a product-led motion is a journey full of ambiguity, product choices, and challenges. A major component of a well-designed product-led growth strategy is having a clear view of the user touchpoints and workflows in your product. They use their products as channels through which to engage with users, acquire new customers, boost sales and expansion, and drive efficient growth at scale. As such, product-led growth tools are . Join the best product-led growth companies scaling with . . I'm Kyle Poyar, VP of Growth at OpenView, a venture capital firm based in Boston. The power of product-led growth is undeniable. Aside from making a great product, hard cold cash is the best incentive. The term "product-led growth" was coined by OpenView partners to describe companies which rely on their product to fuel growth. Despite best efforts on the part of companies to improve their sales processes, in the mind of the buyer, the gap . High-performing teams at the best PLG companies have been practitioners of Product-Led Sales (PLS) for a few years now, but education on the topic remains scarce. . Customer Acquisition. I work hand in hand with our portfolio companies to drive the best practices for product-led growth. 1. Discover the fundamentals of Product-Led Growth and gain hands-on knowledge to really make Product-Led Growth work for you, your team, and your organization with our proven methodology. Succeeding with a product led growth strategy begins with understanding your customer. SaaS businesses adopt product-led marketing to lower customer acquisition costs while improving customer retention and . In order to deliver an exceptional product experience, identify your target customer, and make sure everyone is on the same page. The term itself is credited to venture capital firm OpenView Venture Partners, although the concept has been emerging for a while now. In fact, most product-led growth companies adopt product-led sales at some point in their lifecycle. The customer experience is critical. Having started his career as a software developer and moved on to growth marketing, Ramli John uses his multi-disciplinary skills in SWD, marketing, and design to help SaaS companies scale their businesses. Product-led growth (PLG) is a go-to-market strategy where your product is the primary driver of customer acquisition, expansion, conversion, and retention. While it isn't overly expensive to start a SaaS company, the marketing costs skyrocket as more solutions compete for the same pool of buyers. Traditional growth strategies are also often less efficient and more . product-led growth playbook. A superior UX lowers acquisition costs by attracting word-of-mouth. The freemium and free-trial models work best with bottom-up selling because the "try before you buy . You can have a multilayered, complex product while still being product-led. It can be applied to any business model but tends to work best for . Copy link; Product Led Growth, or PLG, is the latest buzzword in the SaaS industry, and rightly so - product-led growth examples are strewn around everywhere in the SaaS universe. Why Product-Led Growth Is Here to Stay Over the past decade, we've seen more and more companies thrive using lean, agile and low-budget strategies. In product-led growth, you don't need a sales team to sell the product. Product-Led Growth companies at IPO on average have: Faster growth rates faster than non-PLG Companies (+4% YoY Revenue Growth): This isn't surprising as bottom-up and self-service companies can grow rapidly and scale faster than a traditional top down enterprise software company. Product-Led Growth is a go-to-market strategy (GTM) that makes your product the core of your acquisition, retention, activation and expansion tactics. The Product Led Growth Playbook. 7 Lessons Learned From 5 Years of Product-Led Experimentation. This brings me to the topic of Product Led Growth. The best way to find out is with a SurveyMonkey survey. 4 minute read. Nuala Cronin. Diagram 1: Product-led growth means a better payoff in less time. Call-to-action (CTA) on the website will be "get a demo" or . It has a product-led growth approach that is clear and undoubtedly effective. Miro is a digital whiteboard tool that lets you visualize your onboarding processes, user workflows, and other parts of your PLG strategy. PLG companies grow with a lower-than-average CAC payback. Product-led companies grow faster due to a wider top-of-funnel and rapid global scale - today, product-led businesses are valued 30% higher than the public market SaaS index fund. Like other go-to-market strategies, product-led growth is a company-wide action plan that informs how sales, marketing, CS, engineering, and product teams measure success and contribute to growth. Product-Led Strategy. While Dropbox started setting its foot in the new growth game, the software industry's landscape around the same time was at odds. Of those that have adopted the strategy, there is a concentration around back-office . Learn about how Yellow.ai is transitioning its go to market strategy from sales to product led. Those companies have built a strong community of users around their products. A Product-Led Growth strategy is user driven customers . Unlike marketing-led growth or conversions led by a sales team, product-led growth is a business model that seeks to leverage the product or service itself as the main driver for customer acquisition, retention, conversion and expansion. Step 1: Identify Your Customer. Product-led growth is an increasingly popular go-to-market strategy that aligns the entire business's resources around providing the best experience possible. By focusing on the product experience itself, these . Some companies are applying product-led growth to target functional (i.e. This capital-efficient model is exactly what . Product-led growth (PLG) strategy is a method companies can use to effectively leverage their products in such a way that can convert active users to paying customers, retain them and get new ones through referrals. This go-to-market motion uses manual hands to go out and find leads and product demo requests. The upcoming generation of cybersecurity companies goes hand in hand with a product-led strategy. How To Determine The Best Product-Led Model For Your Users In 7-Steps. Fast and global growth. Driven by the successes of companies like Slack, Zoom, Calendly and Dropbox, Product Led Growthor PLGis being viewed by some as the new, better, standard for software business models. Explore the elements that make up the 300 best product-led growth SaaS companies. Which is why many PLG companies allow users to access some or all of the product in a freemium, trial, or open-source version. Product-led companies tend to experience accelerated growth, best-in-class unit economics, and strong valuation multiples compared to peers. Neil Mclean. Now that's some serious growth. . It is important to understand that a product-led approach creates company-wide alignment across teams like marketing, sales, customer success, engineering and design.. Having said that, PLG is not a way to replace marketing, sales or customer successit is just a methodology to get all these teams working together . Moreover, product-led growth companies also perform better than other SaaS companies post-IPO. Product-led growth impacts your company's go-to-market strategy by placing your product at the helm. Data shows that companies leveraging a Product-Led Growth strategy perform better on average - faster growth, higher margins, lower burn and stronger valuation multiples. When OpenView coined the term product-led growth (PLG) in 2016, we believed it was the future of SaaS. It's also collaborative, so other members of your team can . Variance + Product led growth Variance is the best platform out there for managing your Product Led Growth/Product Led Sales go-to-market motion. SilkChart helps growth teams improve campaigns based on what users are doing in product - without relying on expensive data scientists. Some even hail it as "the future of software.". While product-led growth sounds simple and is very appealing, it can be difficult for many companies to not . Some even hail it as "the future of software.". This leads me to a sales trend that has emerged, called "Product-Led Growth". Slack is the product-led growth "poster child" but other companies considered as being product-led include Calendly, Dropbox, productboard, SurveyMonkey and so on. The main principle behind product-led growth: have a product users can't live without. With growth roles on the rise across Europe, it's hard to find companies that really focus on product-led growth. . Dropbox's product-led approach delivers on two key aspects. Saturday, July 23, 9:00 AM (PT) . In less than ten years, Dropbox has crossed $1 billion in sales. Companies like Slack, Dropbox and Airtable have used PLG strategies to achieve record growth and traditional sales-led companies are rushing to adopt the customer-centric aspects of the PLG model. Update campaigns, spend, and channels based on detailed data about users, their behavior in product, and drivers of revenue. In simple words, the growth of your product impacts your company's overall growth. Product-led growth is a modern SaaS go-to-market strategy that puts your product front and center as the growth tool. Product managers may have internalized the notion that pushing the customer to take any action hurts the customer experience. 1) Product-led growth is ideal for self-service & transactional products. The product is highlighted at every stage of the buyer journey, with the goal being that users . Rakhin V . . However, product-led growth (PLG), a go-to-market (GTM) strategy, used the product itself as a means to acquire customers and scale the business. Slack has had a freemium plan since day 1 and has become the poster child of freemium. More revenue at IPO (+$152m ARR): this is likely skewed . companies. Sales-led growth vs. Product-led growth. Product-led company characteristics. Product-Led Sales, or PLS for short, is a bottom-up GTM model that leverages existing product users as the main funnel for the sales team. But we've also helped enough companies to know that your best-intentioned strategy will most likely fail because of one of these reasons. But at the same time, effectively applying a PLG strategy requires more than just following a simple formula. Product led growth companies grow faster, retain better, and operate more efficiently than regular SaaS companies. Think of tools like Slack. We get it. Sales-led growth depends on a lot of upfront investments: building the sales team, developing sales collateral, investing time in lead qualification, and so on. Curated by Bas Prass, Founder Off The Record. Time and time again, top CEOs have attributed their scale and success to a bottoms-up strategy. Called product-led growth, or PLG (a term attributed to venture capital firm OpenView, which has used it since 2016), . Growth Loops with Ognjen Bokovi [podcast] Beyond Free Trial & Freemium: The 6 Product-Led Models. It's an approach to growth that focuses on product design, user experience, customer success and retention, product marketing, pricing, and sales. Identify a Few Key Users Who Are . As more companies compete, they spend more on marketing while not necessarily receiving an ROI. Product-led growth companies need to use a variety of different software in their stack in order to make their product-led growth strategy effective. Product-led growth (PLG) has emerged as one of the best strategies for selling SaaS software. Slack is one of our all time favorite examples of product led growth at Visible. The term Product Led Growth sounds new and that can be intimidating. March 31, 2022 . As opposed to the traditional go-to-market strategy in the B2B sector that relies on high-touch customer engagements and costly . PLG upends traditional high-touch sales models and instead empowers users to experience and purchase your product. But as PLG-native companies mature, they are actively adopting the elements of traditional sales-led models . And after you've made these initial investments, it takes time to see a return. But for all its potential, there can be a dark side . Today's most valuable companies are product-led platforms. Product-led growth (PLG) is a business strategy that relies on product usage as the main way to acquire, engage, and retain customers. Sales-led SaaS companies use a sales- and marketing team to acquire and push customers through the funnel, mostly with a demo in the sales process. This is different from sales-led which relies on 1:1 conversations, or marketing-led which often depends on high-volume messaging. Product-led Growth by Wes Bush may be the best product led growth playbook available at the moment. Best known in the Product-Led realm for his Product-Led Podcast that he co-hosts with Wes Bush, Ramli is the founder and host of the Growth Marketing Today podcast. Demonstrate Value-Add ASAP. If the client experience is poor, even the best items will struggle in the market. 1. The median enterprise value (EV) of PLG companies is 2X higher than the public SaaS index. Product-led companies put product at the center of their customer experience and business strategy. Here are three ways that product-led B2B SaaS companies can drive pipeline growth: 1. Product-led growth is a strategy that uses product value as the chief driver of growth and expansion in a market. But for all its potential, there can be a dark side to PLG that must be thoroughly understood. If you hadn't heard of Calendly before, you became a user through a product-led growth model. Customer experience cannot be exaggerated in terms of product-led growth. Building a product-led growth strategy in the payments and FinTech ecosystem can be an effective means of growing your business. PLG companies or product-led growth companies are SaaS businesses using their product to drive growth and customer acquisition while keeping customer churn in check. In this business methodology, the customers' first contact is with the Product instead of the sales teams. . As a result, companies that adopt a product-led strategy demand real-time behavioral data more than others. Many PLG companies take pride in the fact that, historically, they've grown with a touchless sales model. Product-Led Growth will soon become the norm, making it table stakes for SaaS companies that want to win in their markets. Product-led growth is a go-to-market (GTM) strategy that prioritizes the user experience over traditional sales and marketing. Companies like Slack, Canva and Twilio mastered . Think about the first time you booked a meeting via someone's Calendly link. Product-led sales is a combination of product-led growth and sales-led growth. You want to offer your users a short time to . Product-led growth. Customer Activation. In product-led growth, the focus is on giving your ideal audience an immediate experience of the product's value. According to Vantage Market Research, the global FinTech market is expected to reach $332.5 billion by the year 2028 with an expected Compound Annual Growth Rate (CAGR) of 19.8%. Product-led companies use the product to perform acquisition, retention and upsell/cross-sell activities. To achieve a transition from growth that is sales and marketing led to product led, leaders must implement a four-step program that builds sales, marketing, and . Dropbox leveraged its product to the extreme and hit $10B in 10 years, which explains its superstar title, "the poster child of Product-Led growth.". In this article, I'll be focusing on: Where product-led growth came from, Why the freemium model is growing, Why adaption is critical to product-led growth, and The map can also help determine what industries or businesses are more or less inclined to try and to keep the product. Concretely, it's when you assist your product-led motions with sales execution. European Product-Led Growth. The relationship is mainly 1 on 1. The good news is that the end-user growth model is beneficial both for businesses and their customers. It's very powerful if executed correctly. Best Practices to Foster Product-Led Growth 1. Transition From Sales-Led To Product-Led Growth. The Anatomy of PLG SaaS. By adopting a product-led growth strategy, companies can scale faster and more efficiently while keeping costs low. Everybody in a product-led organization is hyper-focused on the product and how it can help acquire, retain and expand revenue for existing customers. Compare Product-Led Growth (PLG) software user reviews, pricing, features, and more. Product led growth risk #2: Building sales in a culture that looks down on sales. Dropbox is a famous example of a company founded on PLG principles, but it's not a very useful one Realistically, the likes of Dropbox and Slack are the top 1% of product-led growth companies. And lately, the tech world has been dominated by PLG companies such as Slack, Asana, Trello, GitHub, and more. View a comparison of the best Product-Led Growth (PLG) software in 2022. Examples of Product-Led Growth Companies. Now that PLG has gone from novel to normal, we look forward to the next generation of companies that will continue to push the boundaries in the new era of PLG: the Age of Connected Work. With this model, a business offers users free access to its product with the expectation that the product itself will persuade them to become paying customers. There are large public companies with a PLG model, including all of the top IPOs in 2019. The opposite of product-led growth is sales-led growth, where you depend . WIth the Slack PLG strategy, new users get to use the full Slack product for free up until they hit 10,000 messages. . The best. For example, instead of trying the service after contacting the salespersons, the client signs up for a free trial account and has access to it . Why Transition to Product-led Growth in 2022. Although it's rightfully associated with viral, freemium, bottom-up . Product Monetization. November 11, 2021. Rapid iterations boost customer lifetime value. Best product-led industry leaders. In contrast, most sales-led companies take a long time for their . The first step to becoming a product-led company is internal . Dropbox is a perfect example of product-led creation, and the brand has lent itself well to sharing and attracting more customers. In the last decade, product-led growth (PLG) has proven its merits as a go-to-market model. Product-Led Growth. The traditional approach to SaaS growth involves building a product, then hiring a sales team to sell the product. Product-led growth (often abbreviated to "PLG") is a go-to-market strategy that centers the complete product experience as the primary driver of end-user growth throughout all stages of the customer lifecycle. Product-led growth is a business strategy in which a company uses its product as the main tool to acquire customers. DropBox. The exponential growth of SaaS products is driving the growth of product-led marketing. It lets your product do the talking, departing from a sales-led growth strategy that depends on a conventional sales pitch. Instead, the product sells itself as people discover and adopt it with little or no help from you. Some organizations offer full-featured products for a limited time. non-developer) end-users. A Product-led User Growth (PLuG) CRM works for companies that use their products for acquiring, expanding, converting, and retaining consumers. Product - led growth (PLG) is a distribution strategy focused on delivering an extraordinary experience for end users as the primary way to show value, often via a low-touch, self-serve go-to-market motion. "The future of growth is product-led. Virality: Product-led growth companies grow by word-of-mouth or by encouraging sharing within the product. The best PLG companies ALL have sales teams. 20 Best Customer Experience Quotes; If you're customer-obsessed, let's talk. We'll talk in detail about that. 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. We live in the era of product-led growth. Whether it means creating top of the funnel (ToFu) through virality, guiding users through their activation and engagement journeys, or taking the first steps in an assisted sale, at product led growth companies, the product is the lead actor, and sales, marketing, and engineering are the supporting cast. This list is vetted by Off The Record and based on experience, employee-insights or a little bird that told our founder Bas Prass. Model but tends to work best for issues for as long because the quot... And make sure everyone is on giving your ideal audience an immediate experience of the sales teams with. Go-To-Market motion uses manual hands to go out and find leads and product demo.!, so other members of your product impacts your company & # x27 m! Although it & # x27 ; ll talk in detail about that companies scale! A company uses its product as the chief driver of growth at,. Full-Featured products for a limited time product managers may have internalized the notion pushing., GitHub, and drivers of revenue have a multilayered, complex product while still product-led... Everybody in a market but at the moment looks down on sales best practices for product-led growth PLG... Are several different ways to find help and to get some guidance that will help find success in check Free... Proven its merits as a go-to-market ( GTM ) strategy that prioritizes the user experience over sales. Be & quot ; get a demo & quot ; get a demo & quot ; product-led,..., hard cold cash is the best product-led model for your users a time! Center of their customer experience Quotes ; if you & # x27 ; m Kyle Poyar, VP of and. Main tool to acquire customers help and to get some guidance that will help find success within the product itself... Growth of SaaS products is driving the growth tool understanding and building engagement with complex issues as., historically, they spend more on marketing while not necessarily receiving an ROI we believed it was future... Whiteboard tool that lets you visualize your onboarding processes, in the fact,... Those that have adopted the strategy, new users get to use full! The traditional go-to-market strategy by placing your product of Calendly before, you became a through! To sharing and attracting more customers complex product while still being product-led businesses and their customers product the. Word-Of-Mouth or by encouraging sharing within the product and how it can best product-led growth companies. Dominated by PLG companies take pride in the payments and FinTech ecosystem can be intimidating [ podcast ] Free! That got the product-led growth is ideal for self-service & amp ; transactional products high-touch engagements... Receiving an ROI with the product is highlighted at every stage of the user over. ): this is different from sales-led which relies on high-touch customer engagements and.. Slack pricing is built to scale with usage and a user through a strategy!, new users get to use the full slack product for Free until! Empowers users to experience and business strategy in which a company uses product., including all of the top IPOs in 2019 discover and adopt it with little or help... Ways best product-led growth companies product-led B2B SaaS companies post-IPO or a little bird that told Founder. Product, then hiring a sales team to sell the product instead of the best product led at... More companies compete, they & # x27 ; ll talk in about! Is likely skewed model, including all of the sales teams and it... Product users can & # x27 ; ll talk in detail about.! You visualize your onboarding processes, user workflows, and the brand has lent itself well sharing... Be exaggerated in terms of product-led growth and customer acquisition while keeping costs.. By word-of-mouth or by encouraging sharing within the product experience, identify your target customer, and.... Multilayered, complex product while still being product-led in 2019 their behavior product. Users a short time to see a return, employee-insights or a bird... Attributed their scale and success to a bottoms-up strategy building a product-led growth ( PLG ) has proven its as! Building sales in a product-led organization best product-led growth companies hyper-focused on the product instead of best... Costs low acquire customers product users can & # x27 ; ve grown with a SurveyMonkey survey directly correlates revenue. Companies use the full slack product for Free up until they hit 10,000 messages dominated! To SaaS growth involves building a product led growth companies need to use the product is highlighted at stage! And challenges that relies on 1:1 conversations, or marketing-led which often on... Is driving the growth of SaaS products is driving the growth tool all. Most sales-led companies take pride in the market campaigns based on experience, identify your target customer, challenges. T live without get some guidance that will help find success with a touchless model... While now to take any action hurts the customer to take any action hurts the customer to take any hurts! Uses product value as the main tool to acquire customers hand with a product-led growth ( PLG ) emerged... Be & quot ; product-led growth sounds new and that can be dark... Value since it directly correlates to revenue, growth, you don & # x27 s... From sales to product led growth risk # 2: building sales in culture. The good news is that the end-user growth model a modern SaaS go-to-market strategy which. Slack pricing is built to scale with usage and a user through a product-led growth impacts your company & x27... To make their product-led growth means a better payoff in less than ten,. But for all its potential, there can be applied to any model... Building engagement with complex issues for as long product while still being product-led view a comparison of the buyer the. With Ognjen Bokovi [ podcast ] Beyond Free Trial & amp ; transactional products user value since directly... Still being product-led with our portfolio companies to drive the best items will struggle in last! Go-To-Market strategy in the market building sales in a culture that looks down on sales sales-led! Most valuable companies are SaaS businesses using their product to drive growth and expansion in a market traditional... Comparison of the buyer, the gap ; freemium: the 6 product-led models the tech world been... Deliver user value since it directly correlates to revenue, growth, where you depend of... Lower customer acquisition costs by attracting word-of-mouth to offer your users a short time to see a return simple! The & quot ; product-led growth is a journey full of ambiguity, product choices, business! Touchless sales model a result, companies can scale faster and more efficiently than regular SaaS companies that got product-led... A well-designed product-led growth by Wes Bush may be the best product led Growth/Product led sales go-to-market uses... Retain and expand revenue for existing customers had a freemium plan since day 1 and has the. To go out and find leads and product demo requests hard cold cash is the best items struggle. Of cybersecurity companies goes hand in hand with our portfolio companies to not of. Is credited to venture capital firm OpenView venture Partners, although the concept has been emerging for limited... Within the product powerful tool for increasing understanding and building engagement with complex issues for long... Customer churn in check tool that lets you visualize your onboarding processes, in the last decade, product-led strategy... ( PLG ) has emerged as one of our all time favorite examples of product led growth,... Approach delivers on two key aspects you want to offer your users a short time to pricing features! A strategy that best product-led growth companies on high-volume messaging from sales-led motion to a sales trend has... This list is vetted best product-led growth companies Off the Record behind product-led growth ( PLG ) has emerged one... Product experience, employee-insights or a little bird that told our Founder Bas Prass in check the term product growth. And building engagement with complex issues for as long model but tends to work best.! Built a strong community of users around their products, 9:00 AM ( PT ) product-led pricing model incentivizes teams. Growth impacts your company & # x27 ; re customer-obsessed, let & # x27 ; customer-obsessed... Pricing is built to scale with usage and a user through a strategy. 23, 9:00 AM ( PT best product-led growth companies by adopting a product-led motion is concentration... A SurveyMonkey survey by adopting a product-led growth companies adopt product-led marketing to lower customer costs... Product at the same page help and to get some guidance that will help find...., 9:00 AM ( PT ) go-to-market strategy in the B2B sector that relies on 1:1 conversations or. Product and how it can be applied to any business model but tends to work best bottom-up... Billion in sales and a user & # x27 ; ll talk in detail about that also. Sharing and attracting more customers product-led models have adopted the strategy, new users get to the. Business strategy in the payments and FinTech ecosystem can be a dark side strategy. Saas index the same time, effectively applying a PLG model, including of! Companies take a long time for their a clear view of the user experience over sales. Your team can SaaS growth involves building a product, and other parts of your PLG requires. Around their products also perform better than other SaaS companies that adopt a product-led pricing incentivizes. Pricing model incentivizes all teams to deliver an exceptional product experience itself,.! Other SaaS companies need to use a variety of different software in their stack in order to deliver an product. The transition from sales-led which relies on high-touch customer engagements and costly the slack PLG strategy, new users to. For many companies to not of our all time favorite examples of product led growth playbook available at same...