Benefits of Product-Led Growth for your SaaS
Sales and marketing driven growth is being replaced by a new model: product-led growth. SaaS users are comfortable exploring and finding solutions on their own. They know their end goals and if your product can deliver, that is much more powerful for growth than a savvy sales team.
This is a huge opportunity for SaaS. A great value-adding product drives customer success and satisfaction which drives growth. Product-led SaaS don’t need a huge sales team to increase revenue.
What exactly is product-led growth?
Product-led growth is a business methodology for SaaS where growing traffic, driving leads and converting, retaining and upselling users are driven by your product and it’s improvement.
Essentially, instead of focusing on driving sales and keeping users through aggressive marketing and sales, you focus on improving your product to ensure customer success and organic growth.
Product-led growth is a whole team effort – not just product marketing, or development. All areas of your business have to communicate with each other to better understand customers, create the right features and improvements, support customers, and communicate the value of your product effectively.
Why shift your team’s strategy to product-led growth?
Here are some of the benefits of focusing on product-led growth for your SaaS:
1. More efficient budget spending.
When you fully rely on marketing and sales efforts to drive leads, convert customers, and keep customers on, it can get expensive fast. There’s so many different activities that need to happen simultaneously to keep the “engine” running, so to speak:
- Paid traffic (Adwords)
- Paid ads
- Direct sales (your sales team’s labor)
This can add up and eat away at your capital quickly with minimal results. With product-led growth, instead of shifting your focus entirely to driving traffic and leads to only convert 2-5%, you focus instead on improving your product and getting organic attention and growth by keeping users happy and leveraging their success to drive more leads.
2. Adopting a self-serve model takes the pressure off your sales team.
An interesting part of focusing on product-led growth is that you effectively allow customers to serve themselves in the sales process instead of relying on your sales team to close the deal. It seems like it wouldn’t work but today’s SaaS customers have a different outlook on shopping for tools. Nearly 75% of B2B buyers say they’d rather buy through an app or website, rather than a sales team. They are used to doing research on different options themselves, making comparison, reading reviews, and selecting products to try out. However, that means that you need to communicate the value of your product in a really strong, clear way throughout your website.
You need to give customers all the information they need to choose your product on their own:
- Cases studies to show value
- What end value your product brings them
- Best features
- FAQ and guides on how your product works
With a self-serve model, customers should be able to come to your site and immediately determine that your product is the solution they’re looking for. There should be clear CTAs to take the next step of actually trying out your product because with a product-led growth model, your product sells itself.
3. Boosting retention through new feature adoption.
SaaS is an interesting model because its growth also depends on how many customers stay using and paying for your product. If your team is working really hard to drive new customers but you continue to lose customers to churn each month, you are playing a losing game. You are not able to keep growing revenue if you are constantly fighting to keep customers onboard.
What is churn and why is it important to prevent?
Churn is, month over month, how many of your users leave your product and stop paying for your service. If your churn is high, you are losing revenue that could be long term recurring revenue each month. It’s also likely that the new customers you’re working to convert will churn out soon if your churn is consistently high. It’s important to focus on decreasing churn so that you can exponentially grow revenue.
What’s the cure for churn? Customer success and product/CX improvement.
As long as you are consciously improving your product to make customers happy and solve their pain points, they are successful in using your product. That’s the goal of a product-led growth strategy.
To achieve that your team needs to:
- Listen to customer feedback
- Determine the features and updates that will ensure customer success
- Be consistent with releasing new features and updates
- Effectively communicate new features and ensure user engagement
Beamer is a great way to let users know about new features and get them engaged with your product. Beamer is a changelog that sits within your product or website that users can interact with. Users can click a “What’s New” tab in your navigation or icon in your product’s interface to open up the sidebar newsfeed where your team can share updates.
You can use Beamer to announce:
- New features
- Bug fixes
- Special offers
You can add photos, videos, and GIFs to better demonstrate your new features. You can include CTAs to get users engaging with them right away. Beamer allows you to use push notifications to bring users back to your product or website any time you announce new features to boost engagement and bring back users who were churning out. You can also segment notifications to better target users by language, location, past behavior, and URL. This way, you can present users with updates that they are most likely to engage with. It’s an easy way for your team to better engage with users and show the progress you’re making on your product.
For a product-led growth strategy, showing progress and new features is a must.
4. Lower sales and marketing costs.
When you focus on your product doing the talking for you, you need to spend less time on trying to “make a splash” in terms of sales and marketing. Shifting your team’s focus away from being the loudest in the market to being the most effective is, in the short and long term, most cost effective and result-oriented approach. Even if you spend a ton of time and resources on marketing, if your product does not help customers to be successful and your customer service is not supportive enough to keep them on, you will not experience sustainable and consistent growth.
By shifting efforts towards interacting and supporting customers, communicating the value of your product, and expanding features, you save on sales and marketing costs. Eventually, with happy customers, you reap the benefits of them doing to sales and marketing work for your team.
5. Power of word of mouth, recommendations, and referrals.
When customers are happy, they tell others. When you ensure customers are happy with your product and create value for them, they are more than likely willing to advocate for you to other potential customers. Satisfied customers can be your most powerful marketing and sales asset. Reviews and peer recommendations drive sales online with many customers looking to validation from others like them.
With product-led growth, customers advocating for you is the outcome. When you continually serve and help them, they can help you with creating strong case studies, reviews, recommendations, and referring your product to others. This is much more powerful than your team trying to reach new customers.
Are you customers happy enough to advocate for you? Your NPS score tells you this. Your NPS, or Net Promoter Score, is an average score of your customers’ satisfaction.
NPS splits your customers into 3 groups:
- Promoters: happy and likely to tell others
- Passives: neutral on your product
- Detractors: unhappy and likely to churn out
With a product-led growth strategy, the goal is to improve your SaaS NPS score so that you can use your promoters to bring new users. To track NPS, you can use a simple rating survey via email and within your product with Beamer NPS. With Beamer NPS, you can ask your users their rating on your product in context and get a quick overview of how your team is doing in terms of customer satisfaction. You can identify your promoters on the backend and see how users rated your product.
When your team has a clear view of your NPS and how satisfied your customers are with your product, you are able to focus on generating product-led growth. Read more about using NPS to increase growth for your SaaS.
6. Get powerful feedback for product development.
When you are focused on working with your users and within your product, you have many more opportunities to collect direct and indirect feedback from your users. For example, through customer support, you can literally have conversations with your users and have them tell you when they like and don’t like about your product. Or you can watch engagement with features within your product to better understand what is popular. When you’re watching how users interact with your product and listening to feedback, it can help your team make better decisions on what features to build and complimentary products. Read more about using feedback to boost customer engagement.
Making the move from focusing on marketing and sales with marginal results to organic and exponential growth through a product-led strategy can save you and make you more. For an easy way to boost engagement with your SaaS product and shift to a product-led growth strategy, try Beamer today.