3 Reasons Scaling Companies Should Implement a Product-Led Growth Strategy
By Stuart Croft, Chief Revenue Officer of Blackthorn.io
The ways in which people use and consume technology are constantly evolving. Over the last few decades, we have evolved into an age focused on the end user, leaving big-scale software implementation behind. In this new era, products are developed with an emphasis on consumer’s needs to drive productivity and allow them to work more effectively. With more focus on the consumer than ever before, a product-led growth (PLG) strategy is critical for scaling SaaS companies.
Digitally-native generations want more autonomy in the B2B sales process. In fact, more than 60% of customers today prefer to use digital self-serve channels. To ensure companies are meeting the changing needs of the workforce and staying competitive, they must move away from sales-led strategies and begin to adopt a PLG mindset.
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If you are not considering implementing a product-led growth strategy, here are three of the biggest reasons you should be:
1. PLG Increases Brand Credibility
Modern buyers’ are inherently skeptical of sales representatives and the marketing messages they encounter. Today, only 3% of buyers trust business reps, but 92% trust referrals from people they know. This makes building brand credibility more challenging than ever. To establish credibility with consumers, businesses can implement a PLG model, putting their product directly in the hands of their users and allowing them to see the value themselves at the forefront of usage.
In today’s workforce, the most successful companies are building credibility through their end users. It is likely the first time you’d heard of brands like SurveyMonkey or Calendly was when a link to fill out a survey or schedule a meeting was shared with you. With PLG, end users are your biggest advocates and executing this strategy establishes trust in your brand and your solution.
To increase your brand’s credibility, you must start by developing an understanding of users’ needs. Through feedback and product data, you can gain insight into their main pain points and better position your product to resolve their issues and concerns in a timely manner. When issues are resolved quicker, users will share their positive experience with others, establishing better credibility across the user landscape. Word-of-mouth drives growth in a PLG model so encouraging users to share the product with their peers is crucial.
2. PLG Forces Product Excellence
The SaaS market pace has sped up significantly in recent years and companies are rolling out new solutions on a constant, ongoing basis. If a product isn’t performing or meeting expectations, companies will see immediate consequences and a large impact on success metrics. Modern buyers don’t have the patience to wait for your team to fix bugs, especially when there are so many solutions to choose from, which means it’s critical you guarantee product quality the first time around.
In a successful product-led growth strategy, the product must be user-friendly and solve problems faster than any other solution available in the market. In other words, the product has to speak for itself. To make sure your product meets these expectations, you must adopt a PLG mindset. Though a PLG model isn’t enough to ensure success on its own. If your team isn’t aligned on your customers’ needs, you won’t be able to meet expectations as effectively. Building an exceptional user experience begins with access to valuable user information.
While growth strategies can look different for every company, they all share the same end goal: to sell to new customers while simultaneously solving issues for existing customers. To reach this goal in the modern workforce and do it better than your competitors, a PLG strategy is the answer. Ensuring your business not only survives but thrives means implementing a strategy that focuses on end users needs by listening to their problems and creating solutions to resolve them.
3. PLG Compresses the Sales Cycle
For SaaS companies, the average sales cycle is about 84 days, meaning teams are spending almost three months trying to gain one new customer. A PLG strategy helps companies compress this cycle by transforming traditional ways of thinking to combine new customer data insights. These insights allow companies to create products that reel customers in much faster .
Using a PLG strategy in the sales process can cut down the time it takes your team to close a deal, enabling your business to scale faster. For example, companies like Slack have moved past their competitors by adopting a flywheel approach to customer engagement and realizing their customers are the best salespeople. This has allowed them to deliver greater customer satisfaction and adoption so their growth is driven by their users.
Your company message, marketing content, and product must speak for themselves when the success of your sales cycle is in the hands of your buyers. A cohesive message that informs audiences about how your product resolves their biggest pain points will ensure they come to you when they decide they are ready to buy.
Those without a product-led growth strategy are missing a crucial component for today’s environment. By making the decision to adopt a PLG mindset and grow your business with the end user in mind, you can ensure you position yourself ahead of competitors and maximize your business’ capabilities, setting you up for future success.
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