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p/gainsightThe customer success company
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Eithiriel DeMerè

Product-Led Growth Index 2022 - The current state of product-led growth

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Executives from over 600 companies answered questions about their current PLG strategy, their investment plans for the next 12 months, and the performance metrics they use to ensure durable growth.

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Eithiriel DeMerè
Hunter
"In the tech industry, competition is driving the adoption of a new growth model. Increasing investments make it easier than ever to launch a new business, but the proliferation of new products in the market means it has never been more challenging to achieve growth. A traditional model based on the marketing and sales funnel no longer works effectively to build sustainable growth for subscription-based SaaS. Instead, companies are searching for ways to successfully maximize customer lifetime value by lowering Customer Acquisition Cost (CAC) and improving Net Revenue Retention (NRR)—but do so without drastically increasing spending with high-touch resources. The solution? Make the product itself a key player in the customer lifecycle and experience. At the center of this new philosophy is product-led growth (PLG). PLG is a go-to-market strategy that transforms the way products are designed and delivered. This strategy puts the product at the forefront of the customer journey to drive conversion, adoption, retention, and expansion. PLG achieves these objectives by leveraging product usage data to deliver immersive product experiences at scale. With PLG, companies align their products to the customers’ needs at every stage of their journey. From delivering early value using free trials and freemium models, to driving product adoption that accelerates time-to-value and stickiness, this strategy produces engaged customers who are much more likely to be retained and primed for expansion. Growth-minded companies are looking to PLG strategies to help achieve maximum customer lifetime value—it’s not a question of if, it’s a question of when your company will adopt this model or get disrupted by it. While not effortless to implement, PLG leads to stronger units of economics, like Net Dollar Retention (NDR), Gross Revenue Retention (GRR), and CAC. This model uses the product as the primary vehicle to drive end-to-end value realization, build consumption-based pricing, prioritize the product roadmap to optimize customer outcomes, and unlock organic expansion using self-serve provisioning. Gainsight has seen companies achieve durable growth and success by deploying a PLG model across different market segments in B2B and B2C. They wanted to track and understand where companies across all verticals fall on the PLG spectrum. Along with RevOps Squared, a benchmarking research firm, they surveyed over 600 companies of various sizes, with varying annual contract values and across multiple industries, to learn about their journey towards implementing PLG strategies. They wanted to discover what solutions they use and how they measure success."