Product-led growth, or PLG, is a model in which the product is more responsible for driving customer acquisition, conversion and expansion than sales or marketing. The way organizations acquire new software has changed dramatically over time, and PLG aims to take it a step further.
PLG relies on cost-effective engineering that allows for a leaned-out marketing model to drive organic adoption. Think about how an organization might adopt an inter-team communication tool, for example. Oftentimes, a small group of employees start using it and, over time, it becomes a necessity for everyone. By creating value for the end user, the platform captures the larger audience.
Direct end-user adoption is why PLG SaaS companies can go from nascent startup to unicorn faster than any others. Long sales and implementation processes formerly made it challenging to get small groups within an organization onboard with new software; now, PLG aims to fix that by proving utility with end users directly. What was once a top-down process led by CIOs and IT is now a bottom-up process led by end users.
A flawless, intuitive product interface is the industry standard, and now the question remains: Which customer pain point can you alleviate to drive end-user acquisition? Automate a severe headache, and make your solution accessible and painless to adopt, then let PLG go to work. Additional best practices for keeping PLG at the core of customer acquisition include assessing your PLG maturity, eschewing gated whitepapers/demos as your sole selling mechanism, and nurturing a community of developer and software integrator partners, says OpenView Venture Partners.
Because PLG entails avoiding big spending on marketing and sales, it keeps cash burn low, which in a time of uncertainty is the primary concern for most startups invested in getting their product just right.
Anthony Stames helps manage NetSuite’s go-to-market strategy for high-tech verticals, collaborating with development, product management, sales, marketing and business development.