Buyer , User , Startups , Scaleups — 12.20.2022

What You Need to Know Before Implementing PLG

Spencer Abrams, Principal Product Manager

In years past, companies acquired software products after a months-long sales process. The entire team adopted the software at once and the team leading the charge held their breath, hoping they made the right choice. As more products transition to the SaaS model, that type of transaction is becoming obsolete.

Instead, teams are choosing to try before they buy. They can test with individual users or teams, and then invite others to collaborate as they prove the product’s value. This requires a change in the sales process because teams won’t have a live sales conversation every time they want to modify a small number of user licenses. 

To attract, engage and retain users, you have to make it as easy as possible for customers to do business with you.

The best way to remove purchase friction is through product-led growth (PLG). PLG is a go-to-market strategy that relies on usage to drive acquisition, conversion and expansion. As a result, PLG can do the heavy lifting for attracting and onboarding users to your product, freeing up time for your team to focus conversations with prospects on strategic vision and the customer’s goals. 

What does this look like in practice? Some examples include:

  • A guided sign-up experience that allows users to easily invite their team
  • A first-time user experience to direct trial users to features that will prove the product’s value
  • Freemium features that can offer a preview of the product to stakeholders not ready to purchase a paid license
  • The ability to sign up for a paid account (or purchase additional licenses for new team members) at any time from within the product
  • Previews of gated features to show users the value they could get by upgrading to a higher pricing tier

Your users know what they need your product to help them accomplish. Implementing some of these PLG strategies gives them the tools to advance in the product at their own pace. If you have a lean team, PLG can help you scale more quickly by easing the burden of your customer success and sales representatives. 

Sounds great, right? While PLG can be impactful for some, it is not right for everyone. Understanding the benefits and risks of taking a PLG approach can help you make the right decision for your business.

Who is PLG best suited for?

PLG may be the right option for your company if: 

  • Your sales team struggles to fill your pipeline with prospects
  • Lower-tier users aren’t organically subscribing to higher pricing tiers
  • You’re not achieving your growth goals

If you’re feeling intense pain around growth and revenue, consider additional ways to achieve growth. It doesn’t always have to be through live conversations or heavy sales processes. There are often ways to incorporate a few touch points within the product to remind people of additional value they’ll get if they access premium features or refer new users. 

People used to expect live sales conversations. Now, they barely tolerate it. It’s only a matter of time before the requirement of speaking with an SDR guarantees a lost deal. Providing users with the tools they need to try the product and upgrade on their own minimizes friction. This doesn’t prevent you from building a relationship with customers as they look to you for how to get the most value from the product over time.

But not everyone is ready or fit for PLG. 

PLG may not be the right fit if: 

  • Your product requires substantial customization and education to onboard users. Customers, especially new ones, can only handle so much before they get frustrated and look elsewhere. If there’s not a shared experience for the majority of your customers because of detailed customizations, a more white-glove human-centric approach is ideal.
  • It’s difficult for the product to be adopted by a small team. PLG’s impact is maximized when customers can start small and grow at their own pace, bringing in others on their team as they go. If your product requires mass implementation across an entire organization to be effective, then PLG is not the best option. 
  • You are targeting large enterprises with custom, in-depth purchase processes. Enterprise customers often have strict requirements when it comes to purchasing new software, such as completing RFPs and security questionnaires. If this type of process is common in your target industries, some of these user acquisition strategies may need to be adapted. The key here is that you want to support their buying process vs. forcing them to support how you want to sell.

If you’re considering implementing a PLG strategy, keep in mind it’s all about growth. PLG helps you grow your business by attracting new users to “land and expand,” encouraging them to become ambassadors for your product within their organizations. While your customers will enjoy having more team members collaborate with them in the product over time, it’s important not to over-index on PLG functionality and forget about the existing users. Your roadmap will need to strike a balance between functionality that supports growth and functionality that expands the value for your existing users.

Seamless buyer and user experiences are no longer luxuries— they’re table stakes. Software customers are demanding automation, speed and flexibility that complements their own pace of growth and usage. Players who move quickly and strategically will come out on top while others will be left behind. 

Find out how our product strategy experts can help you achieve product-led growth.