Report: SaaS Companies Are Doubling-Down on Product-led Growth
While a relatively nascent concept, SaaS businesses clearly are gravitating to PLG, as evidenced by the Gainsight report.
SAN FRANCISCO, May 17, 2022 (GLOBE NEWSWIRE) -- Gainsight has published its 2022 Product-Led Growth Index, a comprehensive report detailing the current status, defining metrics, and tools used by SaaS-based subscription businesses pursuing product-led growth (PLG). Along with RevOps Squared, a benchmarking research firm, Gainsight surveyed over 600 companies of various sizes, with varying annual contract values and across multiple industries. The report can be downloaded here.
PLG is 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 achieves 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.
While a relatively nascent concept, SaaS businesses clearly are gravitating to PLG, as evidenced by the Gainsight report. For example, a PLG motion already exists in 58% of surveyed companies. Meanwhile, 91% of surveyed companies adopting PLG plan to increase their investment in PLG strategies, with 47% planning to double their investment in PLG strategies.
SaaS companies 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.
- 36% of responding companies said they’re using product data to predict customer churn (another PLG strategy).
- 38% of companies said they are leveraging usage data to identify expansion opportunities.
But most companies don’t have everything figured out, as they 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, Chief Technology Officer 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.”
Gainsight will be showcasing the insights from the PLG Index at its Pulse conference in San Francisco on August 17th-18th. The global event brings together thousands of professionals from Customer Success, Product, and Community teams to learn winning strategies and share best practices.
About Gainsight
Gainsight’s innovative platform helps companies of all sizes and industries drive durable growth through customer-led and product-led strategies. It offers a powerful set of customer success, product experience, and community engagement solutions that together enable businesses to scale efficiently, create alignment, and put the customer at the heart of innovation. With Gainsight, it’s never been easier to drive acquisition, increase product adoption, prevent churn, and grow with renewals and expansion. Learn how leading companies such as GE Digital, SAP Concur, and Box use Gainsight at www.gainsight.com.
Media Contact:
Jordan Sher
Vice President, Corporate and Brand Marketing
[email protected]
