a man with a headset is working in front of his computer
Share on facebook
Share on twitter
Share on linkedin

Benefits of PLG Approach for a SaaS Company    

The world is changing rapidly, and the business techniques once a viable option are now somewhat obsolete.

Sales-led growth is a common approach that SaaS organizations use. The sales department would sell the product to qualified leads as per this approach. But, now, the benefits of this approach are being shadowed by product-led growth.

Companies like Canva, Figma, and Calendy follow the PLG strategy to acquire more customers.

Earlier, SaaS companies worked on an outbound cold calling system, leading to longer sales cycles and inefficiency. After the outbound approach came to the inbound marketing approach, but it did not solve the problem of user satisfaction.

Such companies are now adopting a product-led growth approach to acquire more customers.

Join Our Small Business Community

Get the latest news, resources and tips to help you and your small business succeed.

But, what is product-led growth?

As per the PLG strategy, companies focus on improving the customer experience and fostering self-learning to increase the product’s perceived value in the consumer’s mind. They make the product deliver high value to the prospects, lower the barriers to entry, foster self-learning, and take advantage of low software delivery costs to convert the active users into paying ones.

Here are some of the benefits of PLG for a SaaS company:

1. Lower Acquisition Costs

The PLG approach helps lower the acquisition cost because the prospects learn about the product themselves. Therefore, when the time comes to sell them the product, they are often more aware of the product’s features and details, making it easier for the sales department to close the deal.

This shortens the sales cycle as the department does not have to spend as much time on a single prospect as it would under a sales-led growth strategy.  A shorter sales cycle approaches more cost-efficient as it lowers the cost of acquisition.

2. Organic Selling Approach

The product sells itself if the companies make the product worthy for their target audience. If the product has virality, then it can lead to organic growth.

For instance, individuals who start using Canva may also invite their colleagues or friends to collaborate on a design. This increases the number of users organically and creates a selling opportunity.

3. Reach a Wider Audience

In marketing terms, a wider audience can be referred to as a broader top of the funnel (ToFu). The PLG approach offers the product to the target audience as per a freemium model or a free trial basis. Both these approaches attract many people to the platform.

Once the users start enjoying their free trial, the chances of becoming paying customers will increase if they find value in the product.

4. Improved User Experience

The entire approach is quite user-centered, which compels the SaaS companies to focus on improving the user experience.

If a product provides an exceptional user experience, it increases the perceived value proposition, which improves the company’s chance of acquiring more paid customers.

By enhancing the user experience, the users feel more connected to the product, leading to more loyal customers in the long run.

So here is the answer to the question, “what is product-led growth?” along with some benefits of the approach. The PLG approach makes it easier for the company to acquire new customers at lower costs, improve customer satisfaction and experience, and create an organic selling opportunity.


Some other articles you might find of interest:

Marketing blogs you must follow as an entrepreneur:

29 Marketing Blogs Every Small Business Must Follow

Are you feeling cramped in your home office space? You might enjoy this article:

Home Office Design Ideas for Small Spaces

Join Our Small Business Community

Get the latest news, resources and tips to help you and your small business succeed.