We are in the midst of another generation of software. This time it’s about how B2B SaaS buyers want to discover and buy software and how SaaS products go to market. It’s called ‘Product Led Growth’ (PLG) and if you haven’t heard of it or aren’t doing something about it, you’re behind in the market and the customers you serve.

Gainsight, led by Nick Mehta and  Mickey Alon, recently completed a PLG survey of 600 companies. The survey revealed that 42% of companies do not have a PLG motion. A PLG motion puts the product and its usage at the center of the buyer journey to drive conversion, adoption, retention, expansion, and advocacy. The PLG motion includes product content consumption, product community engagement, and product usage.

Fundamentally, how customers want to buy is changing, even in traditional, conservative, complex, and yes, political, B2B. Some consider it the ‘consumerization’ of B2B where buyers want to Google their problem, find how to solve it, and experience the results immediately. Consumerization of B2B sales involves the recognition that B2B buyers are people first. But what does this mean exactly? B2B buyers, in their corporate roles, have come to expect the same customer experiences they have in their personal lives. The consumerization of B2B SaaS has a lot to do with the growth of the PLG movement.

The below chart from a PLG survey highlights key reasons why companies may not have a PLG strategy.

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Source: Gainsight: The Product Led Growth Index (2022)

As I reflected on these reasons, I was struck by the fact that I have experienced these PLG strategy myths in SaaS companies I have worked with. I have also experienced the realities of how to address these myths.

  • Product is not ready for PLG: Myth: “Our product is too expensive, too complex, and requires too many customer approvals for PLG to ever be a good fit.” Reality: Most companies that did not begin with a PLG motion are not ready to embrace a PLG motion. My point is that it is the company and executive management, not the product, that is not ready for a PLG motion. Nearly all products are good candidates for “try before you buy” PLG models with simplifying assumptions and the unbundling of products into consumable snippets that offer time and cost-efficient value realization.
  • Product requires complex configuration: Myth: “The design envelope of our product encapsulates many degrees of freedom that need to be discovered and configured by our staff before the customer can use the product.” Reality: Virtually every successful SaaS company has scaled by some use of simplifying assumptions and pre-configured, best practices solutions to rapidly get customers initially onboarded and realizing value.
  • Product requires assistance to deploy: Myth: “Our product is too complicated to be deployed without our services team being heavily involved.” Reality: There are simplifying assumptions and guardrail deployments (i.e., limited number of users, feature limitations, configuration and data volume limitations, etc.) that can be used to enable self-serve or highly automated deployments.
  • Product requires user training: Myth: “Our product requires in-person or human-tailored trailing before it can be used.” Reality: There are a variety of SaaS in-app product training tools that offer best-of-class self-serve product training. These tools include support for self-guided in-app product tours, on-demand product resource centers, in-app help, and personalized notifications to relevant product content based on product usage patterns.
  • Product requires data loading: Myth: “Our product cannot be used without ETLing (“extracting, transforming, and loading”) data.” Reality: I have seen a number of clever solutions to the data loading challenge. For example, I have seen effective self-configured and easy-to-configure ETL tools built to migrate data from a competing app into another app. Secondly, I worked with a SaaS company that sells to publicly-held companies. Their solution requires access to historical financial company data to demonstrate value. They require the prospect to upload this data. This was creating friction in the buying process and not allowing a prospect to experience an Aha value moment prior to making a purchase decision. The team pivoted and made the simplifying assumption to use the Yahoo Finance API to automatically import company financial data as the basis for demonstrating value.
  • PLG is not relevant to the industry or product: Myth: “Our category and the markets we serve are different and not ready for PLG.” Reality: PLG is not relevant to your industry or business, until a competitor leverages the model to their advantage. In fact, simply introducing a modest PLG motion that incorporates product content and product community can drive leads further down the qualifying funnel before a human assist sales motion kicks in can be beneficial. Furthermore, the recent TrustRadius B2B SaaS survey indicates that virtually 100% of B2B buyers want some form of self-serve. Take a look at the diversity of industries represented by the Variance PLG Index to see the many industries being disrupted by a PLG motion, including many in the large enterprise space.

I have yet to see a SaaS company that would not benefit from a PLG motion of some kind. My experience is that companies that did not start with a PLG motion are often the most resistant to explore or embrace it. The resistance to change is not unusual for vendors wedded to their existing go-to-market strategies. We’ve seen this resistance before, especially when it comes to disruptive business model changes.

Here are some questions you should ask if your product has no elements of a PLG motion:

  • Have we accepted the myths of why PLG is not relevant to our product?
  • Have we addressed the hard realities of changes we may need to make to explore a PLG motion?
  • What simplifying assumptions or product snippets could be made to allow the prospect to experience the product prior to purchasing it?
  • Is a competitor successfully exploiting a PLG motion? If so, what can we learn from the competitor?

We shouldn’t be asking ourselves ‘should we go PLG?’ but ‘when and how do we get there?’. It’s not easy! It requires a change in mindset, product, and business/go to market/operating models. But we need to mirror how the customer wants to discover, explore, experience, and buy the value we have to sell. And there is no doubt customers want that to be product led.

As always, my work is better because of the people I work with. Shoutout to Jon Sappey, Greg Coticchia, Jim Sheward, Jeff Monteiro, Scott Williams, and Al Nejmeh for challenging me and making this a better blog.

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  • Brian Nejmeh

    Brian NejmehSenior Operating Partner

    Brian is a Senior Operating Partner with 25+ years of enterprise software experience.