How To Use PLG Strategies To Win in a Challenging Economic Environment
As businesses face challenging times ahead, most are looking to reduce costs, retain existing customers, and acquire new ones more efficiently. Fortunately, there is a go-to-market strategy suited for this scenario, and that is PLG. Here, Sarah Chandler, director of product, Heap, discusses two PLG strategies to emerge stronger amidst a possible recession.
If you are checking the news or even just monitoring LinkedIn (and who is not?), you are likely aware that signs are indicating challenging times ahead. Many businesses are already feeling it, as the recent spate of tech layoffs has shown.
Yet there is a silver lining. It is this: some of the strongest companies in the world were born in challenging economic times. eBay, Amazon, and Priceline all emerged from the dot-com crash. Netflix and Warby Parker survived 2008. These companies were able to leverage operational excellence and efficiency, customer focus, and excellent product-market fit to not only survive but also thrive in tough times.
If you are like most companies now, you are looking to reduce costs, retain existing customers, and more efficiently acquire new ones. Luckily, there is a go-to-market (GTM) strategy that is tailor-made for a scenario like this one.
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What is it? Product-Led Growth (PLG).
Product-led growth has emerged as a dominating strategy for companies looking to acquire customers more efficiently. A few companies using a product-led growth strategy are Slack, Datadog, and Calendly. Because it puts the product at the center of your acquisition efforts, it allows your product to effectively sell itself and expand your customer base without having to leverage an army of salespeople.
PLG is more than just a GTM formula. A company – even the one selling to a large corporation or operating in niche markets – can adopt product-led growth principles to enhance user experiences (UX) and increase GTM efficiency. And PLG does not seem to be going away anytime soon.
Here are two PLG strategies you can use right away to emerge stronger amidst a possible recession:
Demonstrate Real Value
All product-led growth tactics center around helping your customer realize demonstrable value from your product. During periods of slower growth and recession, customers (both individuals and companies) become much more cost-conscious. The best way to protect your product during ruthless budget management is to ensure customers understand the value you provide.
At Heap, for example, we offer a 14-day trial of our platform. During that trial, customers get a complete, automatically-collected set of behavioral data from their site or product. This is hugely useful information! With it, customers on trial learn a ton about their product and users and find opportunities to improve their business, often significantly.
The key is that we do not deliver a demo or a promise; we give trial users tangible insights they can put to use immediately. This helps prospects understand the value they get from our product and helps turn them into confident buyers and long-term customers.
What if your product is not suited for self-serve trials? No worries. You can still deliver tangible successes to your customers:
- Focus on customer onboarding. Identify trends among successful customers and work to get new customers to those milestones sooner.
- Quantify the value your product has provided to your customers. How much time have they saved? How many additional products have they sold? What has been the impact on top-line or bottom-line revenue? This information can equip admins with the data they need to renew or reinvest with you.
Lean Into Self-Serve
More and more customers would rather research and try out a product themselves than engage in a lengthy sales cycle. Luckily, this shift makes things more efficient for you and is easy to scale.
At Heap, we have learned that helping customers build a robust data dictionary is key to their success. At one point, we did this with live meetings. We would talk with customers about their product and their data, and then we would help them define events and manage their dictionaries.
This process worked but was resource-intensive. So our engineers and data scientists embarked on a project to automatically create an account’s initial data dictionary. By using data science to analyze a customer’s data, we found a way to identify key events, page views, and user segments. This lets us create a dataset the customer can use immediately — no meetings required!
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In addition to improving our operational efficiency and delighting our customers by getting them to value faster, these data-science features ended up becoming a competitive differentiator for us. (What is that about necessity and invention?)
Here are some more ways to lean into self-serve to reduce costs and delight customers:
- Streamline manual customer support. Analyze common issues and improve user experience to solve problems before they happen. Offer documentation links and guides in-context in the product.
- Offer self-service credit card purchases to remove buying friction and reduce the costs, thereby closing more deals.
- Invest in developing product trials and free and introductory versions of the product. Spend less time and budget on live demos, in-office meetings, and tradeshows.
Offering customers the ability to self-serve is a better experience. While it requires some upfront work, once complete, self-serve is scalable and efficient.
PLG for Tough Times
The economic winds may look scary, but by investing in PLG now, companies can equip themselves to sail through choppy waters. By putting the focus on your product, you can sell to and expand your customer base without a large team and lean into self-service to meet customers who want to play it safe. PLG is a recipe for not only surviving tough times but also for achieving long-term success, whatever the economic climate.
Have you used product-led growth as a GTM strategy for these tough times? What benefits have you seen? Let us know on Facebook, Twitter, and LinkedIn.
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