Empowering Users: Embracing Product-Centric Strategies in SaaS

We're living in a digital age that's ripe for hands-on experiences. With the ease of access to the internet and digital devices, consumers are prioritizing experiencing a product before purchasing and hungering for immediate gratification such that they abandon those that do not supply them. But what does all this mean? Now more than ever, it is vital that SaaS companies prioritize developing intuitive customer experiences that convince users of their value. A 2022 study by Considered Content found that more than half (53%) of buyers prefer to buy without interacting with sales. As the purchase decision shifts from team leaders to core users, SaaS companies also need to adapt their go-to-market strategies, highlighting a need for product-led growth.

Seeking growth in the digital era? Product-Led Growth (PLG) as a growth motion could be your best friend. PLG means building a product and making it the front driver that acquires users, engages and activates them by showing a unique value proposition, and retains and monetizes the user base driving substantial value to the customers. Leading with the product is not just an experiment and for it to be a game changer, there needs to be a deep understanding of the product, its purpose, and the target customer base.  Let’s start with a SaaS product that cracked it. 

Stewart Butterfield and his team embarked on a mission at the end of 2012 to streamline work processes and increase productivity, leading to the development of Slack. Within 24 hours of its beta launch in 2013, the collaboration platform had grown to 8,000 users and was already over 50,000 by the following weeks. Slack had an impressive valuation of $7 billion when it went public in 2018.

Slack’s success is a poster example of prioritizing product-centric strategies which was not just about creating a stellar product but also getting it in the hands of users and focussing on accessibility. Slack prioritized gaining the users’ trust by providing a no “paywalls”, fully functional product allowing teams to truly experience the platform without requiring credit card details. 

Deciding to transition to a product-centric growth strategy is not a switch-flip. There are significant considerations to be made both, for the product but also the organizational structure. A core value of a successful product-led company that is seen to be a market leader today, is to leverage a bottom-up approach that allows users to experience consumer-grade products through free trial options. Allowing users to explore and experience the product’s value on their own time instead of a forced sales interaction is seen to work for these successful SaaS products. Not to say that sales, customer success, and marketing teams have run their course, but they need to be integrated into the product through thoughtful onboarding, in-app messaging, and using product engagement to qualify valuable leads for them to pursue. The best example of this is Pinterest. Their off-the-charts growth is enviable but also achievable. Having leadership that rallies different parts of the company to focus on developing a stellar product and listening to users can lead to impressive growth - a successful IPO in 2019, reaching a valuation of $12.7 billion.

A non-negotiable requirement for a SaaS product to succeed with a product-centric strategy is for it to be intuitively designed with minimal friction and a focus on delivering value as quickly as possible. This is not a set-and-forget task demanding a profound understanding of the critical user journey and ruthlessly prioritizing friction and pain point elimination instead of just plastering feature promotions through in- and out-of-product interventions. However, this cannot be done if teams don’t use data analytics or prioritize the voice of the customer through feedback loops to further product development and work towards building a loved and delightful product. A great example of a PLG pioneer is Figma. As the state of the digital landscape shifted towards more intuitive UX and a bigger focus on investing more in product design, Figma emerged as a roaring success focusing on addressing pain points and challenges faced by designers and keeping their needs at the forefront of product development that led to a successful acquisition by Adobe for $20 billion in 2022.

On the other hand, adopting a product-led growth approach requires fundamental organizational shifts.  The success of PLG requires a combined, multidisciplinary team dedicated to continuous improvement and adaptation of the product to support both new customer acquisition as well as retention and growth. As the product is the main driver of sales, the marketing and sales teams are not in a position to provide any aid. Teams need to constantly work to break down silos to ensure ongoing focus on user needs, agility, and experimentation. Additionally, there are financial considerations that should be addressed. A primary user experience-led growth motion requires putting the product in the hands of the users for free. At the organizational level, the finance teams must be aligned with these upfront costs since conversions are gradual with a long-term sustainable growth focus. 

Ultimately, we are living in an age of significant transformation where marketing and sales-led growth motions have had their time. Being laser-focused on building a product that not only solves a pain point but also focuses on ease of use and frictionless experiences, companies like Airtable, Notion, and Slack have proved that remarkable growth and substantial market success are possible. As more companies adopt this approach, they are likely to emerge as leaders in their respective sectors, setting new standards for customer engagement and satisfaction, by effectively integrating their product capabilities with their operational strategies.

The article has been written by Sumedha Nagpal, Product Growth Lead, Databricks.inc