As a product leader or manager, it may feel like you’re being asked to help your company outrun the competition while the field becomes more and more crowded.
You’re not alone. Across the globe, SaaS products are flooding the scene, and the market is becoming saturated with competition. For many companies, it’s up to Product teams to pump up the product and help the organization break away from the pack.
Here’s the bad news: If you aren’t relying on a product-led growth strategy, you may end up running against the wind. Here’s why product-led growth strategies are absolutely essential if you want to grow in today’s competitive SaaS market.
What is a product-led growth strategy?
Product-led growth is a business strategy that’s centered around strengthening your product and improving your user’s experience. Within the strategy, you use your product to accomplish everything from acquiring customers and improving onboarding to increasing retention, enhancing adoption, and expanding the company.
Wondering how product-led growth differs from other strategies? In the past, many SaaS companies leaned on a sales-led strategy. Those models funnel a large amount of time and resources into spraying marketing messages to a wide range of leads. This approach was popular in the early days of SaaS that involved selling single units, physical software packages, or disks.
Product-led growth strategies provide a modern approach for SaaS companies that have adopted freemium services, free trials, subscriptions, and recurring revenue models. Rather than blasting out ads to anyone who will listen or trying to land one-off sales, product-led growth focuses on boosting more expansion revenue from your current users. Essentially, product-led growth helps you constantly improve your product at each stage of the user’s journey—a formula meant to inspire more product engagement, upgrades, revenue, and growth.
How is the SaaS market changing?
The SaaS market has ballooned in recent years—and it’s projected to continue to grow. And that’s caused SaaS companies to race into the market.
What’s more, that surge in product offerings has built up high expectations for users. In fact, one in every three customers now say a single bad experience is enough to cause them to walk away from a brand they love.
SaaS companies can’t rely on traditional strategies that focus on selling the product, walking away, and ignoring the user’s experience. To stand out in the modern SaaS market, you need to take a magnifying glass to the user’s experience and use what you find to build a product experience users love.
How do product-led growth strategies help companies stand out?
Product-led growth strategies allow your company to squeeze the most out of your team’s most prized possession: your product. Here’s how product-led growth strategies help your company stand out:
They rally your teams around a better user experience.
Product-led growth anchors departments across your organization to the north star vision your company chooses, and it motivates all teams to improve the user experience.
They lower customer acquisition costs.
Product-led growth places less emphasis on trying to convince often uninterested leads to pick up your product. Instead, product-led growth aims to keep money flowing within your company by boosting long-term metrics, such as net dollar retention. In the process, your organization is able to save money on customer acquisition costs and funnel those resources into building a user experience that rises above the competition.
They help you fine-tune the full user journey.
It’s no longer enough to just hand a user a product and walk away. To stand out, you need to improve the user’s experience no matter where they are in the user’s journey. Product-led growth strategies use in-product analytics to drive higher onboarding, adoption, retention, and growth. The more you master each of these areas, the happier users will be—and the faster your company will blow past the competition.
What are the best product-led growth tools?
The best product-led growth strategies are propelled by a few critical tools: data and analytics. Here are a few ways you can use in-product analytics to launch product-led growth:
Get to know your users.
With in-depth user data and reports, you can dive into who your users are and what they need. By examining behavior analytics and tracking how your users travel through your product, you can see exactly what their objectives are. From there, you can spot the obstacles stopping them from using your product to its fullest and eliminate those friction points.
Unite your teams through KPIs.
Product KPIs and user reports don’t just make it easy to see—and prove—how your decisions are paying off. They also help unite departments across your organization. With the whole team marching forward in the same direction, it’s easier to supercharge your users’ experiences together.
Plan, test, improve, and repeat.
User data and analytics is the engine that pumps out better product experiences. These tools show you what moves you should be making, they allow you to test your decisions, and they provide insights you can use to refine those plans. Ultimately, that means you’re constantly adjusting, improving, and leading your company to more growth.
Learn how to drive company-wide product-led growth
Product-led growth is designed to help SaaS companies thrive in the modern world. And if you want to lead your company to product-led success, you can start building your expertise now. Download our “Product-Led Success: The Professional’s Handbook” to learn how to lift your team and organization to a whole new level.