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According to a new report from Gainsight and RevOps Squared, SaaS companies are clearly gravitating toward product-led growth (PLG), a go-to-market strategy that is transforming the way products are designed and delivered. This strategy puts the product at the top of the customer journey to drive acquisition, conversion, adoption, retention, and expansion.
PLG can achieve these goals by leveraging product usage data to deliver immersive product experiences at scale. Subscription-based SaaS companies that need to align their products with their customers’ needs at every stage of the customer journey are natural candidates for PLG strategies.
According to the study, 58% of SaaS-based subscription companies already have a PLG strategy, 91% plan to increase their investment in PLG strategies, and 47% plan to double their investment in PLG.
SaaS-based companies are also finding success with their PLG initiatives. According to the report, free trials with product qualified leads (PQL), a popular PLG strategy, convert 25% of the time to paid customers, compared to 9% without PQLs.
Meanwhile, 36% of responding companies said they use product data to predict customer churn (another PLG strategy), and 38% of companies said they use usage data to identify opportunities for expansion.
But companies still don’t get it all, as many don’t track PLG metrics effectively – only 17% said they track time-to-value, only 26% track activation rate, and just 24% track PQLs.
“Overall, the results are very encouraging,” said Mickey Alon, CTO of PX at Gainsight. “The most exciting takeaway from all of the data is that there are still so many opportunities for PLG to drive sustained growth for SaaS companies. As companies mature their PLG strategies, the result will be a stronger economic entity, moving from acquisition-led growth to retention- and expansion-led growth.”
For their report, Gainsight and RevOps Squared surveyed over 600 companies of various sizes, with different annual contract values and from different industries.
Read the full report from Gainsight and RevOps Squared.
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