Gainsight’s 2022 PLG Index found that 58% of the companies surveyed already had a product-led growth plan in place. 47% intend to double their investment.
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Gainsight’s Product-Led Growth Index 2022 shows that 58% of companies already do product-led growth. This is a strategy that transforms how products are designed and delivered.
These objectives are achieved by PLG using product usage data to create immersive product experiences at scale. Gainsight says that subscription-based SaaS companies, which must align their products with customers at all stages of their customer journey, are an ideal candidate for PLG strategies.
Gainsight believes that a traditional model that relies on the marketing and sale funnel is no longer effective to drive sustainable growth in subscription-based SaaS. Companies are now looking for ways to maximize customer lifetime value, reduce customer acquisition costs and retain customers without increasing their spending on high-touch resources.
It is possible to make the product a central player in the customer experience and lifecycle. Gainsight reported that the PLG strategy places the product at the center of the customer journey in order to drive adoption, retention, expansion and conversion.
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More success with qualified leads
According to the report, 91% of companies have adopted a PLG plan in order to increase their investment. 47% also plan to double their investment.
57% of companies that use product experience data use it to create product roadmaps. The report stated that “the best product teams don’t hedge bets – they use data to determine their decisions.”
SaaS companies also have success with PLG initiatives. A further finding was that 25% of paid customers are converted by product qualified leads who receive free trials. Companies using PQLs have better results and more sales opportunities than companies that use free accounts.
According to the report, 36% of respondents said that they use product data to predict customer turnover, while 38% said they leverage usage data to identify growth opportunities.
However, most companies aren’t able to track PLG metrics effectively because they don’t know everything. Only 17% of respondents said they track time-to-value. 26% and 24% respectively are tracking activation rates, while 24% and 24% are monitoring PQLs.
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Nearly half (46%) of respondents indicated that they use other tech tools. This means that companies aren’t yet using their product to create personalized experiences for their customers.
In a statement, Mickey Alon (chief technology officer at PX at Gainsight), stated that “the results are very encouraging overall.” The most important takeaway from the data is that PLG can still drive sustainable growth for SaaS businesses. Businesses will see a greater unit of economics as they mature their PLG strategies. This will allow them to move beyond acquisition-led growth and into retention- and expansion-led growth.
The PLG strategy delivers early value through free trials and freemium model, and drives product adoption that accelerates stickiness and time-to-value. Engaged customers are more likely to stay engaged and ready for expansion.
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The report stated that growth-minded companies are seeking PLG strategies to maximize customer lifetime value. It’s not a matter of whether or not your company will adopt the model.