Product-led Growth (PLG) is the keyword that promises to introduce a new era in B2B Software. A generation that shifts focus from Sales to Product, from guidance to self-service. Nowadays, users engage more and more in self-education and research, and try-before-you-buy is something that customers more and more expect in specific fields.
Irrespectively if we are talking about B2B or B2C, the buyer journey will probably not start with grabbing the phone and just calling a provider once the need for new products and services were identified. Instead, users usually begin their journey with a search on Google to get a better feeling of what options exist on the market. Following, some of the solutions identified are assessed more closely by looking at companies’ websites, reading review sites or articles about the product, or using social media as a source for third-party opinions on certain products. By the time a user is ready to engage with the solution or company for the first time, a certain level of expertise on the topic can be expected.
Moreover, being ready to spend time engaging with the solution shall not be confused with being prepared to decide on a commitment to a software solution.
Once the user has identified a solution that could solve his need, trying it out with (at best) no strings attached is what is becoming more and more expected standard not only in B2C but with B2B solutions.
To most of us, this approach of sourcing, comparing, and assessing potential solutions may sound familiar. Most have probably gone through or even actively follow this journey with every new purchase. However, changing perspectives from the user to the provider and transferring it to the B2B software environment suddenly requires significant organizational-, process, and mindset shifts on how B2B software is accessible, promoted, and sold.
This buying behavior demands products to be designed, structured, and priced in a way to allow full intuitive self-educating and self-onboarding. To organizations, this means taking away pressure from Sales and Marketing Teams for lead generation and education and shifting focus towards the product, pricing, usability, and onboarding.
Product-led Growth (PLG) – What is it, and who does it?
The idea behind Product-Led Growth (PLG) was early adopted by some of the most successful growth organizations known to all of us. Companies like Slack or Dropbox realized this approach years ago and focused their efforts early on building products their customers love and want to use. This approach helped them to replace outdated, complex, and clunky legacy systems in no time.
Product-led Growth describes a business approach that collectively aligns all efforts for user acquisition, expansion, conversion, and retention towards the product itself. So, instead of enabling huge Sales and Marketing teams meant to support, educate and win potential customers, companies shift and simply provide the customer with direct access to the product. Resulting, Forrester forecasts that 1 million US B2B salespeople will lose their jobs to self-service eCommerce in the following years.
Product-led Growth has been shown to significantly impact software company performance and growth, including lower Customer Acquisition Costs (CAC), shorter sales cycles, and higher revenue per employee. In addition, some studies show that PLG organizations achieve a higher valuation on average than non-PLG organizations in the SaaS Index.
How to transform towards PLG?
One aspect that will majorly affect the success of B2B software companies in the future is outstanding customer experience starting from day one. The relevance of customer experience is nothing new, however building and offering your product in a way that allows the customer to test, and experience the value based on self-education and self-service only, requires massive improvements to most data-driven software tools on the market. Transforming from a sales-driven to a product-led growth company does require organizational and mindset changes on multiple levels.
Building a truly engaging product experience that demonstrates value to your clients early on requires new customer education, onboarding, and retention approaches. In data-driven industries, every user journey’s first impression and starting point is the data onboarding process.
Customer self-service requires a well-thought-out onboarding process starting with seamless and intuitive data importing, validation, and eventual cleaning steps.
To conclude, even though PLG seems to be the correct answer and way to strive for software companies in the future, there is no simple answer to how to become a product-led organization.
However, the one crucial factor that should be at the center of product development and all activities around it should be a customer self-service-focused user journey.
nuvo enables software companies to become Product Led and offer their end-users a seamless self-serve data import, validation and cleaning experience. The nuvo software library can be embedded in minutes to scale your customer onboarding and make the next steps to a fully Product Led corporation.