How to Build a Product-Led Growth Strategy for SaaS
As the internet opens the door to endless options and information for SaaS customers, they’ve become more and more savvy as to what is marketing and sales content, copy, and tactics and what is real value. This means SaaS teams, in order to attract and convert the right customers, need to move forward with a product-led strategy. A product-led strategy allows SaaS companies to use their ever-changing, ever-developing product as the basis of all marketing and sales – the product and its value “sells” itself.
What does it mean to be product-led?
Product-led strategy means marketing and sales teams allow the product and its growth and development to speak for itself. The goal is that the product shows its immediate value to the customer and this builds trust. The product’s features, functionality, and consistent development are what marketers use to make the sale. The focus is literally demonstrating the value of the product before asking for customer’s money or commitment. Product-led goes beyond just the marketing and sales process. It encompasses all activities including product development. Products that continue to meet customer needs succeed. Product teams must listen to customers and leads in determining what changes need to be made to the product, what new features need to be added, and what the core value of the product is for customers and how they can further that value. A product-led strategy is supported by all areas of business.
Product-Led Growth changes how companies grow because it brings a focus on how the product you’ve built can help you acquire more customers. Customer acquisition doesn’t just become something marketing is focused on, the responsibilities for acquiring great customers expands to the product team as well.”
– Hiten Shah, Co-Founder of FYI, Product Habits and Crazy Egg
Determine your target customer and need:
The first step in being able to grow with a product-led strategy is to understand your target customer and niche and their needs. What are the pain points and challenges they currently face? Where could they save time, money, and effort? From a product-led perspective, the next step is taking a look at your current product and determining what is the greatest, immediate value to your target personas. What are the features that make it specifically valuable and stand out from competitors? What makes it a must-have for their processes? What pain points specific to those customers does it solve? These are all questions you should be able to identify answers to for your product to be a good market fit for your niche. This is top of mind when achieving growth through a product-led strategy. As you tweak your messaging and product itself, the immediate value your product brings to your target customer should be the focus.
This leads you to your market position. A good example of this is determining your product to be a “CRM for real estate”. You’re not just a “CRM” and competing openly with all other CRMs including large, well-established ones. Rather, you’ve decided on a niche and now you can use a product-led strategy to ensure your product fulfills the needs of that niche and communicates with those target customers effectively. This, of course, begins with identifying your key customers or personas.
What does product-led marketing and sales look like?
Marketing should always be around the product and its features itself – straight to the point. Once you’ve determined your market position and core value to your target customers, your messaging and marketing strategy can be more product-led. Product-led messaging should be centered around conveying the core value of your product to your target personas as clearly, relevantly, and easily as possible. Customers have a lot of options and they move quickly in their research for a solution. If they don’t know right away that your product is the right solution to solve their pain points, they won’t ever. Your messaging has to communicate to your niche specifically in the pain points you address, the features you choose to highlight, all in a way that is easily understood by the user. If your product is a CRM for real estate, you want to make sure your messaging highlights the features that directly solve the pain points of law firms and is not focused on the generic features all CRMs have, for example. These are the key differentiators in your product and your marketing strategy should lead with them.
Marketing through action:
Additionally, your focus after communicating the value of your product is to let your product and its features speak for itself. Product-led marketing’s goal is to get the user to discover the value on their own as soon as possible through interaction rather than a long sales process. For example, getting customers interacting with a free trial and lowering the barrier to that action as much as possible. Once customers experience the product, the idea with a product-led strategy is that they will see the value.
Examples of product-led marketing tactics:
- Free trials
- Freemium models
- Interactive demos
- Live demos
A huge part of product success and retaining users is ensuring that customers themselves are successful with your product. In order to be successful, onboarding after sign up has to be simple, intuitive, friction-free, and informative. Here, the important part is your UX. Your customers should find your key features intuitive and an easy fit to their current process. There should be cues throughout the onboarding process to highlight key features and teach users how to best use your product right away. Customers should be able to go from sign up to saving time and effort with your product right away through design.
Product-led customer service and support:
SaaS is an ongoing job. The sale is never done. You’re asking customers to pay month over month for value and you have to ensure your product delivers over time. This is why a product-led strategy is best for SaaS. Clearly, with a product-led strategy, your product has to progress and improve. But how do you know what to improve? By listening to and communicating with your customers. Product teams tasked with ensuring the product-led strategy manifests in the development of the product have much to learn from customers.
Ask for feedback in context:
Ask your customers what they want, they will tell you. Ask your customers about the current state of your product and its features right within your product with in-app surveys and questions. Even adding a chatbot to ask questions that they can immediate respond to is better than survey emails which often go unopened and ignored. Knowing exactly what your customers want to change and add to make the product more valuable will help your team keep your development strategy moving forward on the right track.
Learn from internal data:
There’s even more to learn for a product-led strategy in the actions that customers take. Using heat maps and data on usage within your product can help show your team what is working and what is not so you can improve your product to be of better value for customers. For example, if there is a feature that is not being used or a feature that is being used quite a bit, then you know what your customers see more value in and you can use this information to better your product and to also craft your messaging around the features that are of value. If there are points of friction, then you know where to improve and eliminate what is unneeded.
Product improvement for increased engagement
Communicate to engage customers with your product:
A big part of keeping your product successful and keeping users engaged is effectively communicating and updating customers on your product. There is no use in making conscientious changes to your product if customers don’t know they’re happening or don’t realize how much your product is improving for them.
A big part of your product-led strategy for showing users the value of your product through action is feature discovery. Feature discovery is elements within your user interface that introduce users to a new feature that has just been added or shed light on a feature they may not have noticed. This product-led approach to engaging and demonstrating your product to users helps to engage users and onboard new users to ensure a successful long term sale. Beamer is helpful for this as you can add tutorial GIFs and videos to Beamer updates that can help users better understand how to use your product and its features.
Effectively updating customers on updates and new features via email, which is sort of the default, is near impossible as users rarely open emails and it’s quite out of context. A better, more in context way to engage users is within your product using Beamer. Beamer is an in-app changelog and newsfeed that opens when customers click an icon or “What’s New” tab in your navigation. On your Beamer feed, you can share updates for anything, new features, bug fixes, helpful content, tutorials, etc. to better engage users and show your product is improving. It puts your product’s value at the forefront and helps keep users on board and engaged. With Beamer, you can also send push notifications to bring users back to your product when you announce something great.
Upselling as part of the product-led strategy
Upgrades and premium features:
With a product-led strategy, you can utilize your product to create additional revenue in the form of upgrades and premium features. Once you have customers onboarding and working with your product at a free or paid level, you can offer additional features and other perks for a greater monthly price. Extra storage, more users, additional support are all common upgrade perks.
Affiliates and word of mouth:
Using your customer base, you can reach more customers like them. They know and love your product and their word is powerful in helping to communicate your value directly to more target customers. You can do this within your product by adding sharing features and asking users to share your product with peers. A good time is when you announce new updates or features. You can also allow them to invite peers to join and collaborate with them as a natural way to grow your user base. Additionally, you can reward customers. Dropbox gave users who brought on other sign ups additional storage space. You can also establish an affiliate program where you can give those who become ambassadors for your product to their networks a cut of sales as a reward for sharing your product with your target audience. Word of mouth is far more powerful than paid ads in the long run.
Just like anything product-led, product-led pricing is focused on providing value. You want to give your target customers the access to the features and parts of your product in a way that is value-driven and specific to them. SaaS is a space where there can be a lot of variance in your customers’ size and also the way they use your product. As a result, try using a more flexible method of pricing that is focused on the product and features. “A-la-carte” style pricing lets customers choose their pricing based on the value of the product and what they use it for. It’s product-centric and doesn’t exclude the different use cases your product may have. Customers can choose their level and still get the access they need. With this pricing, you’re lowering the barrier to value for your product.
A product-led strategy makes sense for SaaS companies. Your product can be versatile and its value variable depending on your clients. Focusing on providing the right features and growing with their needs is the best way to ensure successful sales, marketing, and customer retention. For the best way to engage customers and keep them in the loop on your product, try Beamer.