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According to a new report by Gainsight and RevOps Squared, SaaS companies are clearly gravitating to product-led growth (PLG), a go-to-market strategy that transforms the way products are designed and delivered. This strategy puts the product at the forefront of the customer journey to drive acquisition, conversion, adoption, retention and expansion.
PLG can achieve these objectives by leveraging product usage data to deliver immersive product experiences at scale. Subscription-based SaaS businesses, which need to align their products to their customers’ needs at every stage of the customer journey, are a natural candidate for PLG strategies.
According to the research, 58% of SaaS-based subscription businesses have a PLG strategy in place already, 91% plan to increase their investment in PLG strategies, and 47% plan to double their investment in PLG.
SaaS-based businesses are having success with their PLG initiatives, too. According to the report, free trials using product qualified leads (PQL), a popular PLG strategy, convert to paid customers 25% of the time compared to 9% without PQLs.
Meanwhile, 36% of responding companies said they’re using product data to predict customer churn (another PLG strategy), and 38% of companies said they are leveraging usage data to identify expansion opportunities.
But companies don’t have everything figured out, as many are not effectively tracking PLG metrics – only 17% said they are tracking time-to-value, just 26% are tracking activation rate, and merely 24% are tracking PQLs.
“The results are very encouraging overall,” said Mickey Alon, CTO of PX at Gainsight. “The most exciting takeaway from all the data is that there is still so much opportunity for PLG to drive durable growth for SaaS companies. As businesses mature their PLG strategies, the result will be a stronger unit of economics and progression beyond acquisition-led growth to retention-and expansion-led growth.”
For their report, Gainsight and RevOps Squared surveyed over 600 companies of various sizes, with varying annual contract values and across multiple industries.
Read the full report by Gainsight and RevOps Squared.