My lectures about product-led growth always start with a poll: I ask the audience to mark with their fingers what they really think about PLG, out of the following options:
- Product-led what?
- Yet another trend
- New name for old stuff
- Great but not for everyone
- The future of business
If a company is already going down the PLG route and invited me to talk about the challenges and how to do it right, I often see lots of 4’s and 5’s because people are already convinced in the direction they are pursuing. When the audience is mixed I usually see many 2’s and 3’s – people who don’t understand why it’s such a big deal. If you are curious I’ll share that I have gone through all five options myself at different times and different levels of experience with this topic.
To be able to make up your own mind, and more importantly, succeed with PLG if you already decided to go down that route, you must dive deeper into the roots of product-led growth to understand for yourself what it’s all about (hint: much more than a great onboarding experience). Here we go.
The Lines Between B2B and B2C Are Blurring
If you voted for #3 above, you probably have a solid B2C background. I’ve heard people with such background say that they don’t get the fuss, they have been doing it for years. Well, they are both right and wrong.
In the past, the line between B2C and B2B products was crystal clear. B2C meant selling directly to consumers, while anything sold to businesses, even small ones, fell into the B2B category. However, over time, this line has shifted and become blurred. Companies have come to realize that even when targeting smaller businesses, applying consumer-centric methodologies and practices can lead to greater success. Take the example of Wix, a thriving company that initially catered to small business owners, such as hairdressers seeking a simple website. These businesses make purchasing decisions akin to consumers, rather than large enterprises with complex decision-making processes and budget considerations. As a result, the world of selling to small and medium businesses has adopted B2C practices, and over time, even companies selling to larger enterprises started using consumer-centric strategies.
Here is a fascinating example of this phenomenon, which goes all the way back to the 2011 Super Bowl ads. Which products are you expecting to see in these prestigious ads? Mostly consumer products, right? You wouldn’t be surprised to hear about a blockbuster movie or a fast food chain, but in 2011 there was something completely different. It was actually an advertisement by Salesforce, a SaaS company renowned for serving large enterprises with their intricate software solutions. B2B and even enterprise B2B (or B2E) started using consumer practices, only to find out that it’s not that easy. We’ll get back to this example later.
Why Now?
There are a few reasons why product-led growth is so relevant in recent years. The greatest impact to this shift though is the evolution of SaaS, and more specifically, the new generation of SaaS products that come pre-integrated to other SaaS products and ready to use.
Think of the following example: let’s say I’m a project manager and need project management software. In the past, getting such software was a hassle. I had to ask my manager, who had to involve the IT department because it had to be installed on our servers and maintained by them. IT had the final say, and selecting the right software was a big deal. They had to do market research and choose the single software that would work for everyone in the company since they couldn’t deal with the costs and complexities of taking care of multiple systems that would fit the different preferences of each team.
But then came SaaS. Suddenly, I didn’t need IT anymore. The software was in the cloud, so I could skip the whole installation process. My department manager could choose that they want to use software X while everyone else in the organization would use software Y, and it was ok. IT wasn’t the main decision maker anymore.
But it’s when SaaS products evolved further to be pre-integrated with each other, the real revolution happened. In this new era, I no longer need anyone in order to decide which product to use. I can try one, link it to other software within the organization with my own credentials (that’s all that is needed to get the systems connected) and immediately experience the value of the product myself.
The Power Goes Back to the End Users
If you think about it, the need for any organizational software always came from the end users. It was never a decision made by IT out of the blue. However, there were valid reasons to prioritize what was best for the organization over what worked best for the end users.
But things have changed now. With the growing demand for speed and efficiency, along with the diminishing need for centralized IT management of enterprise software, there’s no longer a need to override the end user’s preferences. The opposite is often true – companies work hard to empower their employees to work in a way that truly suits them since we all know we must move fast in order to win.
This not only changed how decisions are made but also how companies are selling software. When IT was the king, you only needed to convince them in order to win a deal. Even if they consulted with the end users, the decision eventually was theirs. It’s them that you had to sell to. Nowadays, things are different. Even if managers make the decision, the end user’s preference is a critical factor.
This shift in dynamics necessitates a change in the way we approach sales. In the past, it made sense to invest in building strong relationships with key executives, but as we move toward the end-user era, the numbers become too large to handle. It’s no longer feasible to personally engage with every user. Additionally, SaaS and integrations have made it possible for users to adopt software without direct interaction with anyone, and experiencing the value firsthand is better than any sales deck. That’s how we ended up not just with bottom-up sales, but also low-touch or even no-touch sales.
The Bad News
Up until now it all sounds like magic. We’ll put our product out there, people will embrace it and money will flow in. But it’s much harder than one might think, as you might have discovered yourself if you started walking down this path. Succeeding with PLG is not easy, but when done right it has a tremendous ROI.
If you still need to be convinced that it’s hard, think about the Salesforce example above. The product they advertised in the Super Bowl of 2011 was Chatter – an organizational chat as the name suggests. Salesforce is a successful company that knows what they are doing (it invented SaaS as we know it!), and still, we all know how its chat endeavors ended up. With a $27.7B acquisition of Slack, perhaps the most well-known PLG company.
I might have convinced you to avoid PLG altogether, but the real bad news is that it’s not always up to you. If your customers prefer buying products in this new way, without going through a cumbersome process with pushy salespeople, you must adhere. They simply won’t talk to you otherwise. You have to play their game, whether you like it or not.
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If you want to know if PLG is right for you, and if so – how to actually succeed with this challenging journey, we created an online course that takes you through the necessary steps to make the important decisions along the way. Approach product-led growth strategically with our Unboxing PLG course to help your company succeed.
