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The Product-Led Growth (PLG) Collective, a community that promotes products as the 'biggest lever of growth', says sales-led and marketing-led philosophies have had their time - and the future is product-led philosophy.
The two biggest success stories of the product-led SaaS philosophy in recent years include the financial services and software company, Stripe, and the cloud communications platform, Twilio (we’ll look at both in this article).
These companies are pioneers of the product-led approach through their meticulous emphasis on the customer journey and the need for quicker, simpler, customer experiences.
Companies that are product-led put their products at the heart of their customer strategies. A good example is Figma, which employs a product-led solution to graphic design pain points like team collaboration and file management.
There are alternatives to being product-led:
A company with a sales-led approach will adapt their sales pitches to developing unique solutions for each customer. However, many companies have shifted away from sales-led approaches to focus more on the value proposition of their products as opposed to a purely sales-based approach which can neglect the customer experience.
Companies adopting this approach perform their market research first, invent a product based on their findings, then reach out to prospective customers. A marketing-led company will be too focused on acquisitions, whereas one using the product-led approach will pay close attention to activation and retention, as well as acquisition.
This does two powerful things:
In a recent blog post, James Allgrove, the former head of the US East Coast at Stripe, said the only way to convince a developer to consider your product is to make it as easy as possible for them to experience its value.
This means SaaS companies need to 'unblock any challenges' developers might face, focus on a collaborative, product-led strategy, and ensure their sales strategy is aligned with their customers' buying habits.
While Stripe also sought to evaluate how customers pay for products online to create a more seamless experience, it did not just stop there. The company also looked at the bigger picture, such as the experience of the customers of your customers.
This is in stark contrast to PayPal, which requires you to sign in to your account or to checkout as a guest to pay for a product. This created a seamless experience for the user. No time wasted having to log in to another company. No page redirects. A simple, hassle-free buying process without any interruptions.
Launched in 2007, Twilio was used by more than 7 million developers and over 172,000 customers by 2019. The founder and CEO, Jeff Lawsons, said there is a 'Darwinian evolution' happening in which a company will win against its competition if it hires software developers, listens to its customers, and builds a better customer experience.
Traditionally regarded as a temporary solution, APIs are now an essential part of any SaaS strategy for companies that want to focus on product differentiation.
A report by IDG in 2018 found that 73% of SaaS organizations were already using one or more API applications as part of their computing infrastructure in the cloud. A follow-up report in 2020 found the figure had increased to 81%!
Digital engagement, digital agility, and a digital scale
Twilio also created developer and admin tools that helped it customize its core product so that enterprises could use it as they see fit.
Other features, such as 'advanced monitoring' to prevent security issues, and the 'Application Monitor and Request Inspector' for 'error analytics', are extremely valuable for companies that need to improve their security and compliance.
Key takeaways from this blog: