Customer acquisition costs are constantly rising, and traditional marketing and sales tactics are becoming less effective.

That’s where product-led growth (PLG) comes in. PLG is a customer acquisition strategy that focuses on delivering value to users through the product itself. By creating a user-centric product experience that drives engagement and activation, PLG can help you acquire new customers organically and at scale.

13 Proven Product-Led Growth Tactics for SaaS Companies

These tactics are independent and can be implemented individually or in combination to enhance your product-led growth strategy. Let’s dive into how each tactic can be applied, with examples from successful SaaS companies.

1. Share Referrals (Like Slack)

Slack credits customer’s subscriptions when they refer new teams to use their chat platform. This motivates users to invite more people to use the product.

How can you implement this strategy?

Provide your users a reason to encourage their friends and coworkers to join. This could be money if it results in more paying business, or it could be access to premium features.

• Offer cash rewards 
• Give customers access to free products 
• Ask for a referral at the right time 
• Provide referral templates for customers 

2. Simplify Signup Like Faqprime

Faqprime provides a simple onboarding procedure with detailed instructions. To ensure that new users immediately obtain value from the platform, they are walked through the important features on their demo page. Additionally, they offer a chatbot on their website to assist customers in finding information.

How can you implement this strategy?

A friction-free sign-up flow enables users to enter the product without any delay. This minimizes the time needed to onboard the users and brings them directly to experience the product’s value.

The following actions can be taken to achieve it:

• Reduce the number of steps and information needed to sign up.
• To assist new users in grasping and using the product rapidly, offer tutorials and guided tours.
• Make thorough FAQs and video tutorials.
• Use chatbots to help users with common problems.
• Contract e-signature tools can help hasten the agreement process.
• Provide a range of payment methods and set up automatic billing. 

3. Implement Usage-Based Pricing (UBP) (Like Snowflake)

Snowflake has achieved 178% net-dollar retention with the usage pricing approach. They tracked various usage metrics such as API calls and data transfer. And then billed customers based on their actual usage of these resources.

How can you implement this strategy?

When usage-based pricing is implemented, customers pay only for the amount of service they use, rather than an estimated amount.

Here are some steps to implement UBP:

• Determine your value metrics. You may determine the components of the product that customers value most by looking at the most common use cases.
• Communicate your pricing structure on the pricing page. A usage-based subscription model is preferred by many clients. Explain what is included in each tier. Highlight the advantages that each tier provides in detail so that clients know what to expect.
• Establish a customer usage limit to activate prompts for upgrades. Setting usage restrictions that motivate users to upgrade is a way to implement UBP. One way to set usage limitations is to control the capacity (GB, DPM, etc) of every subscription tier.

4. Offer a Free Trial or a Freemium Subscription to Draw in New Users

Zapier’s freemium model, let the users begin with five zaps (automation) that can perform up to 100 tasks monthly at no cost.

Their free plan is used to get users to test out a few zaps, which is how their freemium business model operates. They are aware that after automating a few tasks, it will be difficult to resist automating more. 

How can you implement this strategy?

PLG companies offer free trials or freemium models to provide free access to their products. By this, users first utilize the product for a while at no cost to know its worth.

Freemium has no time limit but merely allows access to the essential elements. Free trial offers them free, temporary functioning features.

• Decide Which Features Are Core: Choose the features that users will find most important and that should be provided in the free version.
• Set Limits: Restrict the free version’s usage, limit its storage, or provide less functionality than the premium version.
• For your premium version, establish pricing tiers that provide various features and services at different price points.

5. Guide Users with Personalized Onboarding

Personalized user onboarding focuses solely on the features important to their use cases.

With Faqprime, you can enhance how customers use your product and help them get value faster.

How can you implement this strategy?

Here are steps to create a customized onboarding process:

• When a user signs up, get information about their role, industry, and goals.
• To customize the onboarding process, divide users into segments according to their profiles.
• Send the user a personalized welcome email that includes the onboarding procedure and addresses them by name.
• Highlight the important features and advantages that correspond to their specific use case.

Faqprime is known for its ability to guide users through personalized onboarding experiences. Using the data you provide them, they create targeted experiences:

• Smart Tooltips & Overlays: Imagine role-specific tips – marketers see features for building FAQs, while support teams see tools for managing inquiries.
• Guided Workflows: Interactive walkthroughs based on your industry. Setting up a knowledge base for a tech company might differ from a healthcare provider. Faqprime tailors the steps accordingly and personalized to your company’s requirements.
• Dynamic Checklists: Forget generic to-dos. Faqprime creates checklists based on your goals. 

By personalizing onboarding with these features, Faqprime gets you to use the most valuable features faster, leading to a smoother experience and quicker product adoption.

6. Gather Customer Feedback to User Experience

Collecting feedback isn’t just for newly released features.

PLG businesses conduct surveys regularly. This enables them to monitor user sentiment patterns and spot chances to improve the product’s value.

How can you implement this strategy?

Here are the steps to implement it:

• Identify the critical stages in the customer journey where feedback is valuable. Stages like onboarding and after-product usage.
• Decide which techniques are best for gathering input. You can use surveys, interviews, and customer reviews. 
• Create a well-defined survey or feedback form that combines both closed and open-ended questions. Make sure the inquiries are pertinent to the user’s objectives and experience.
• Integrate direct feedback channels into emails and the product website. Use email requests for feedback and in-app surveys.

To learn if the content in the knowledgebase is helpful or not Faqprime gathers continuous customer feedback, ensuring the knowledge base remains relevant and addresses user needs effectively. They capture both qualitative and quantitative feedback.

• Article Rating System: Users can directly rate knowledge base articles as helpful or not. This provides immediate feedback on the content’s effectiveness.
• Search Analytics: Faqprime analyzes user search queries within the knowledge base. This reveals what users are actively looking for, allowing brands to identify knowledge gaps and tailor content accordingly.

7. Announce Features (Like Userpilot)

Userpilot uses in-app messaging to announce new features contextually, increasing user engagement.

How can you implement this strategy?

To fully realize the product’s potential, the fundamental features introduced during the early phases of the onboarding process will not be enough. As users gain more expertise, use in-app messages to gradually offer more complicated functions.

• Determine which users would benefit most from learning about new features and when. This might be during particular steps or after a particular action.
• Segment users according to their behavior and usage habits. Make your in-app messaging relevant to every user group by customizing them.
• Compose clear messages that highlight the benefits of the new features. Make use of understandable and engaging language.
• Create in-app message triggers that are triggered by user activities like signing in or hitting a particular button. Make sure the messages show up at the most appropriate times.

8. Analyze Usage (Like Spotify)

Spotify tracks data such as daily active users and time spent listening. They monitor user behavior with powerful analytics tools and platforms. By taking these actions, Spotify is able to apply product usage analysis to make data-driven choices. This helps them to keep their position as the top music streaming service and consistently improve user experience.

How can you implement this strategy?

Analyzing client behavior within the app allows you to objectively determine where the product may be lacking.

For example, your consumers may provide positive feedback on the new feature, but its low usage rate could imply that it does not exactly satisfy their expectations.

• Determine key performance indicators (KPIs) that are in line with your company’s objectives. User engagement, retention rates, and conversion rates are examples of these.
• Use analytics tools like Google Analytics or Clarity that monitor product usage and user behavior.
• Set up particular actions in your product to be tracked. This can involve activities such as logging in, seeing pages, and clicking buttons.
• Make sure your analytics configuration permits real-time data gathering. This is so you can track user behavior in real-time and act fast on any trends or problems.

9. Offer Prompt Customer Service to Both Free and Paying Clients

The fact that a user is on a free plan does not exclude them from receiving support. Free users may require your assistance even more. They have recently signed up and will be unable to progress to the activation stage without assistance.

How can you implement this strategy?

For free consumers,

• Providing useful resources like FAQs and guides to help them get the most out of your product.
• Also, use automated emails to check in on their experience and provide assistance. 

For premium clients,

• Proactive assistance could include personalized onboarding.
• Regular check-ins to guarantee their satisfaction with the product.

10. Drive Virality Like Trello

Virality and network effects are two key growth drivers for many SaaS applications.

Every new user adds a significant value. That’s because they have a stake in growing the user base, current users promote the site on their own by showing them how valuable they are. They see how well the tools handle problems, so even if they aren’t users yet, they soon would want to be.

How can you implement this strategy?

These steps can be followed to produce viral and network-impact products:

• Define the main benefit that users of your product will receive.
• Ensure that as more people use the product, its value rises.
• Provide features that encourage communication and connection among users.
• Provide a way for users to quickly invite other people.

11. Build a Community (Like Notion)

Notion’s community fosters user engagement and loyalty, driving organic growth.

Building a strong community is a critical strategy for accelerating PLG in SaaS companies. A well-engaged community not only increases user retention but also acts as an effective driver for organic growth. By creating a space where people can connect and support one another, you can build a loyal user base that advocates for your product.

How can you implement this strategy?

• Create a space just for your community.
• Actively participate in community discussions.
• Encourage a culture in which people are at ease disclosing their insights and experiences. 
• Get feedback from the community and make changes in response to their recommendations.

12. Encourage a Product-led Culture Within Your Company

A product-led growth culture implies that every department in the organization is focused on the product. To build a product that delivers value, your business needs the right culture.

How can you implement this strategy?

Creating a product-led culture in your firm entails several critical actions. 

• Know your customer: Who are you building for? Set goals based on their needs. Help sales & support understand them too.
• Make it easy to use: Invest in user research & focus on a smooth, intuitive product. Offer a free trial or freemium plan.
• Track & Learn: Use data to understand how people use your product. Run tests to improve it. Share what you find with everyone.
• Encourage “fail fast, learn fast” culture: Don’t be afraid to try new things. Learn from mistakes and iterate quickly. Celebrate improvements!
• Work together: Break down silos. Get product, marketing, sales, and support on the same page. Share goals & communicate the product vision.

13. Invest in Customer Success 

Create or purchase the tools required for CS teams to identify customers with the potential and likelihood to grow with your product. Only a few SaaS companies have developed tools to discover upselling opportunities based on usage patterns.

How can you implement this strategy?

• Set specific objectives for your customer success activities. These may include boosting consumer satisfaction and promoting product adoption.
• Hire specialized support workers to ensure your product’s success with customers.
• Customers can be segmented based on their industry and usage patterns. Customize your customer success strategy to meet each segment’s specific demands and challenges.
• Develop specific success strategies for each customer segment. These plans should be developed to help clients navigate their experience with your product.

Frequently Asked Questions

1. Why should I care about PLG for my SaaS?

It can save you money on sales & marketing, boost customer happiness, and keep them using your product longer.

2. What role does user onboarding play in a PLG strategy?

A smooth onboarding process helps boost activation rates and reduce friction. It ensures that new users grasp and appreciate the value of the product right away.

3. What KPIs should I monitor to see if my PLG strategy is working?

User activation rate, time to value., product usage frequency, feature adoption rates, customer retention, and net promoter score (nps).

4. Which strategies work well in a PLG model to increase user engagement?

Personalized experiences, in-app notifications, frequent feature updates, and gamification.

5. How can SaaS providers make sure their product doesn’t lose its user-friendliness as they grow?

Iterative design procedures and continuous user testing may promote the company’s growth. It promotes the product’s evolution while preserving a user-friendly experience.