Product Led Growth (PLG) is where you give away some of your product for free in order to get leads and more people using your software. This allows your customers to use your product for free with the end goal being they eventually sign up for the full paid version.
Many companies offer this type of service. Slack offers up to 10k of your team’s most recent messages, Dropbox offers individuals up to 1TB of storage, and ResourceSpace offers a free open source version of its software.
These companies rely on the product to sell itself. Generally, most of the companies which offer free versions of their products are software which solves a very basic problem. They tend to strip their product back to remove any excess complexity and deliver value immediately to the customer. This is different to a time bound free trial.
PLG can be a great strategy to get people using your product. The most basic idea behind PLG is that ‘product usage is the primary driver of customer acquisition and expansion without requiring the intervention of a sales rep’.
Traditionally, companies which offer PLG find that their biggest sales channel is word of mouth. We all know everybody likes a freebie, and encouraging others to use the software for free and removing the traditional paywalls most software has, already puts your product in a positive light to potential new customers.
It works particularly well with ‘viral’ software. Slack is no good if you’re the only one using it; Dropbox isn’t great if you have no one to share your files with, and so on.
The end goal is of course getting your free users turned into paid users. Many software companies offering free versions have limitations on their free usage (such as Slack’s maximum 10k messages), and others limit the more advanced tools to their paid versions. If your paid version offers something that may help your user solve a problem – shout about it in the free version and encourage them to sign up. Make sure you develop good relationships with your free users and establish a sales team who can be advisors to your potential paying customers.
Before you start giving away your SaaS product for free, establish whether this type of marketing strategy is right for you. Ask yourself the following questions before:
If you’ve answered yes to the majority of those questions, your SaaS product will likely benefit from a PLG marketing strategy.
If you’re thinking of implementing a Product Led Growth strategy, whether you’re a start-up or a well-established business looking to expand or improve your marketing, Xander Marketing can help you.
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