How Product-led Growth Differs from Free Trials and Freemium Models
Are you looking for ways to accelerate your product growth? Product Led Growth (PLG) may be the answer! PLG is getting a lot of attention lately, giving companies an effective way to scale and drive adoption. In this blog, we'll discuss what PLG is, and how it differs from free trial and freemium models.
What is Product-led Growth (PLG)?
Product-led growth (PLG) focuses on a company's own product and its incredible user experience to generate success; instead of relying on traditional marketing or sales. With PLG, the product itself is the driving force behind reaching new heights.
Why do You Need to Consider PLG Now?
Today millennials make 73% of B2B buying decisions (Forrester Research). It’s clear that you are selling to a new generation of buyers . Gone are the days where the C-suite make all buying decisions. And gone are the days where your sales team wine and dine with executives as part of the sales process. B2B buying is democratized. Your new B2B buyers prefer :
- Self-education: the average buyers today are 80% through their journey before they reach out to sales.
- Try before buy: they prefer to experience the value of the product before committing to a purchase.
- Simple buying experience: they are comfy with self-service portals, convenient online demos and cutting edge virtual events!
Given these changes in buying behavior, as a product marketer, you need to adjust your strategy and get ahead of your competition. To win hearts, minds, and budgets of the new buyers, you need to offer them value before they purchase.
Big Picture
Most of us think of free trial as the most common PLG strategy. Not surprisingly, many companies are not offering that. In a recent survey by Corey Hines on the State of SaaS Marketing, 84% of the respondents indicated they do not offer a free trial.
Free Trials & Freemium are not Product-led Growth
Free trials and freemium models enable potential customers to try out a product before deciding if it meets their needs or not. This can be very beneficial in terms of building trust and increasing conversions. What’s more, free trials also provide you with valuable insights into how users interact with their products. Your product team can use these insights to guide them in making future decisions on features and pricing.
In many cases, many products offer you a time-limited free trial. The goal is to create an urgency with FOMO. Then you have to ask yourself if your prospects can experience value from your tool within a limited time. Otherwise, the time-limit becomes meaningless.
As for freemium, you need to decide which features are worth the most for your target audience. For example, for a tool like Vidyard, you can use it for free until you want to customize your videos or you want to get insights into how your videos perform.
Based on the survey results indicated above, many companies are not ready or willing to offer free trials. It’s possible that their product is not ready for that. Or there’s a lack of development capacity to enable that. Above all, they still believe that the best route to increasing revenue is the sales-led motion.
Product-led Growth is Value First
Unlike free trials and freemium models, PLG places the value first and foremost. Before you capture the value from a customer through a sale or subscription, you're delivering the value to the end user. PLG will only work when the user realizes the value of your product before they decide to purchase. Two great ways to do that is through product education and sandbox.
If you like this article, give Instruqt test drive a try. And see how Instruqt can help turn your product into an engine for growth.
Are you looking for ways to accelerate your product growth? Product Led Growth (PLG) may be the answer! PLG is getting a lot of attention lately, giving companies an effective way to scale and drive adoption. In this blog, we'll discuss what PLG is, and how it differs from free trial and freemium models.
What is Product-led Growth (PLG)?
Product-led growth (PLG) focuses on a company's own product and its incredible user experience to generate success; instead of relying on traditional marketing or sales. With PLG, the product itself is the driving force behind reaching new heights.
Why do You Need to Consider PLG Now?
Today millennials make 73% of B2B buying decisions (Forrester Research). It’s clear that you are selling to a new generation of buyers . Gone are the days where the C-suite make all buying decisions. And gone are the days where your sales team wine and dine with executives as part of the sales process. B2B buying is democratized. Your new B2B buyers prefer :
- Self-education: the average buyers today are 80% through their journey before they reach out to sales.
- Try before buy: they prefer to experience the value of the product before committing to a purchase.
- Simple buying experience: they are comfy with self-service portals, convenient online demos and cutting edge virtual events!
Given these changes in buying behavior, as a product marketer, you need to adjust your strategy and get ahead of your competition. To win hearts, minds, and budgets of the new buyers, you need to offer them value before they purchase.
Big Picture
Most of us think of free trial as the most common PLG strategy. Not surprisingly, many companies are not offering that. In a recent survey by Corey Hines on the State of SaaS Marketing, 84% of the respondents indicated they do not offer a free trial.
Free Trials & Freemium are not Product-led Growth
Free trials and freemium models enable potential customers to try out a product before deciding if it meets their needs or not. This can be very beneficial in terms of building trust and increasing conversions. What’s more, free trials also provide you with valuable insights into how users interact with their products. Your product team can use these insights to guide them in making future decisions on features and pricing.
In many cases, many products offer you a time-limited free trial. The goal is to create an urgency with FOMO. Then you have to ask yourself if your prospects can experience value from your tool within a limited time. Otherwise, the time-limit becomes meaningless.
As for freemium, you need to decide which features are worth the most for your target audience. For example, for a tool like Vidyard, you can use it for free until you want to customize your videos or you want to get insights into how your videos perform.
Based on the survey results indicated above, many companies are not ready or willing to offer free trials. It’s possible that their product is not ready for that. Or there’s a lack of development capacity to enable that. Above all, they still believe that the best route to increasing revenue is the sales-led motion.
Product-led Growth is Value First
Unlike free trials and freemium models, PLG places the value first and foremost. Before you capture the value from a customer through a sale or subscription, you're delivering the value to the end user. PLG will only work when the user realizes the value of your product before they decide to purchase. Two great ways to do that is through product education and sandbox.
If you like this article, give Instruqt test drive a try. And see how Instruqt can help turn your product into an engine for growth.
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