- Gainsight and RevOps Squared surveyed more than 600 companies of different sizes, with fluctuating annual contract values and spread across multiple industries.
- PLG is a go-to-market strategy that transforms the way products are designed and delivered.
A new report by Gainsight and RevOps Squared, published in the 2022 Product-Led Growth Index, has revealed that SaaS companies are eagerly heading towards product-led growth (PLG), a go-to-market strategy that alters the designing and delivery of products. This strategy puts the product at the forefront of the customer journey to drive acquisition, conversion, adoption, retention, and expansion.
While this concept is relatively in the development stage, SaaS businesses are really moving towards PLG. For instance, 58% of surveyed companies already had a PLG motion in place. Furthermore, 91% of surveyed companies are adopting a PLG plan to boost their investment in PLG strategies, and about 47% aim to double their investment in PLG strategies.
The report is comprehensive and has details like the current status, defining metrics, and tools used by SaaS-based subscription businesses pursuing PLG. Gainsight and RevOps Squared surveyed more than 600 companies of different sizes with fluctuating annual contract values and spread across multiple industries.
PLG leverages product usage data to achieve the objectives and deliver immersive product experiences at scale. A natural candidate for PLG strategies is subscription-based SaaS businesses, which need to orient their products to the needs of their customers and that, too, at every stage of their journey.
According to the report, free trials using product qualified leads (PQL), a popular PLG strategy, convert to paid customers 25% of the time instead of 9% without PQLs.
At the same time, 36% of respondents said they’re using product data to forecast customer churn (another PLG strategy), and 38% of the firms said they utilize usage data to identify expansion opportunities.
But firms have not figured out everything – many are still unable to successfully track PLG metrics – only 17% reported 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.”