Sep 27, 2021
Why Proactive Support Drives Product-led Growth (and How to Deliver it)
artificial intelligenceB2B supportcustomer experienceCustomer Success
Product-led growth depends on offering a proactive service experience, whether you’re an established product-led growth company or looking to transition to a PLG model.
There’s no question—product-led growth (PLG) has proven to be a powerful go-to-market (GTM) strategy with the blockbuster success of SaaS companies like Zoom, Calendly, HubSpot, and Dropbox.
The term “product-led growth” was first coined in 2016 by venture capital firm OpenView. Since then, software companies large and small have embraced the PLG business model—meaning their product is the main driver of customer acquisition, retention, and growth—and they’re seeing success as a result. The stats are numerous (and impressive), so we’ll highlight just a few benchmarks:
- For PLG companies, growth happens faster once they hit $10M in annual recurring revenue (ARR) than with your standard SaaS companies.
- PLG companies experience 2X average higher valuation than the public SaaS index.
- According to 645 Ventures, “only 6 publicly traded SaaS companies have taken less than 5 years since inception to reach $100m in ARR: Square, Dropbox, Slack, HortonWorks, Pivotal and Elastic. All except Square (a point-of-sale company) follow PLG models.”
So what’s the key to becoming a product-led growth engine? OpenView and other resources point to three fundamental pillars:
- Pillar 1: Design for the end user
- Pillar 2: Deliver value before capturing value via a freemium model, self-service trial, etc.
- Pillar 3: Invest in the product with go-to-market intent
We believe there’s an important missing component: forward-thinking support. Product-led growth depends on offering a proactive service experience, whether you’re an established product-led growth company or looking to transition to a PLG model.
We need proactive support because products are imperfect
OpenView’s three pillars are fundamental to product-led growth by keeping companies focused on creating a valuable, user-driven product. But the framework assumes that once you complete each step, you’ve created a “perfect” product that users can seamlessly adopt on their own via low-touch customer support (like online self-service portals, knowledge bases, and video tutorials).
However, we all know that technical product adoption is often not a seamless experience. A 2020 study by Wyzowl found that over 90% of customers believe companies “could do better” in onboarding new users. It doesn’t matter how well-designed or intuitive your product is. When it comes to product adoption, you can expect new customers to encounter an unexpected friction point that will require help from a person.
Without customer support, you’re vulnerable to losing users from the jump. Look no further than the before-mentioned study, which found that 8 in 10 users have deleted an app because they couldn’t figure out how to use it. And as SupportLogic’s Chief Evangelist and Head of Solutions Marketing Martin Schneider put it, “In the subscription/experience economy, customer churn can be as little as one mis-step away.”
Given this reality, there’s a fourth pillar that needs to be included in your product-led growth strategy: an intelligent, proactive service experience.
“Creating an optimized service experience is critical,” says Schneider. “It drives the customer relationship, protects revenue and helps grow the lifetime engagement between business and customer.”
We need proactive support for successful user onboarding and product adoption
No matter your freemiums and pricing or your great product features, customer success starts with helping users get through onboarding. If a product-led growth company fails to provide a successful onboarding experience, users won’t experience a product’s value and won’t adopt your product. Without user adoption, your product-led growth journey is over before it’s begun.
Get new users to your product’s “a-ha moments” with a world-class service experience platform. And make sure it’s part of your PLG strategy and woven into the product experience.
Consider Figma, the PLG-based design platform that’s experienced wild success and virality. If a new user experiences an issue using superscripts and specialized fonts, but none of the self-service support resources address this problem, the customer might file a ticket, but they also might move on to another software solution.
How proactive support improves the customer experience—and the product
Gone are the days of traditional, reactive customer service based on limited systems of record and lagging metrics. To offer the proactive support needed for this type of growth model, consider implementing a service experience platform like SupportLogic SX. It uses artificial intelligence (AI) and natural language processing (NLP) to discover and measure how users feel about your product in real time, so you can proactively address issues.
Our SX platform extracts those insights from the bottom up by mining unstructured data contained within support tickets, phone calls, feedback forms, social media, chatbots, and other channels.
Those actionable, forward-looking insights enable:
Escalation prediction and churn reduction
In the end-user era, product-led growth companies need to address and resolve urgent/high-severity cases before they escalate (and the customer bounces). A service experience platform like SupportLogic helps teams avoid escalations—and ultimately reduce churn—through intelligent predictive alerts. And given the rising customer acquisition cost (CAC) across industries, we know how vital it is to retain customers.
Data analytics companies Qlik and Databricks reduced their customer escalations by 30% and 40%, respectively, using SupportLogic SX’s intelligent predictive alerts. And leading data pipeline company Fivetran saw a 25% reduction in customer churn after implementing our predictive analytics and customer sentiment score.
A service experience platform also gives PLG companies and SaaS businesses an agile, scalable way to reduce case backlog and streamline the case assignment process. Tickets are routed more effectively to the right agent or agents, which ultimately leads to faster resolutions and fewer SLA misses.
Within the SupportLogic SX dashboard, for example, a manager can review customer sentiment score, attention score, case history, and other important details to identify high-priority cases and push them in real time to the right agent and technical expert—within minutes.
Sharing real-time VoC signals across teams
Real-time customer data is key when it comes to understanding the root cause of customer issues, such as onboarding pain points and barriers to customer activation. SupportLogic helps you gather that real-time data on your customers and share it across roles, such as your product managers and engineers, your sales and marketing teams. This enables product-led growth companies to both retain at-risk customers and prevent other users from having similar negative experiences with their SaaS products.
Continuous product optimization
Product performance is vital to a PLG company’s current and long-term success. PwC found that 32% of all consumers will abandon a brand after just one bad product or support experience, and more than half (59%) of U.S. customers will leave after several negative experiences.
Imagine your support team gets a call or email from a user regarding a sticky point with a product feature. That’s vital information for product teams because other users are likely getting tripped up by the same error. An intelligent service experience platform will alert you to those recurring errors or flag sentiment scores showing user frustration with different aspects of your product. This information is vital for a PLG company to understand—and it’s too often lost in the ether within traditional CRM systems and support ticketing solutions.
A great example of this is Slack, which took a customer-centric approach from the get-go by listening to its users and “evaluating virtually all customer feedback.” Even after Slack had achieved “stellar growth,” the company didn’t rest on its laurels. It continued to leverage customer feedback to improve the platform’s core functionality and introduce a host of new features that its users desired. The rest is history.
Bottom line: When customers succeed, so does product-led growth
We’re in a new age in which a company’s success is no longer just tied to qualified leads, new logos, sales reps, and upsells.
Regardless of where your company is at in its PLG journey, it can only grow and protect revenue if it understands and acts on customer signals across every service interaction. Self-service support certainly has its place. Augmenting that with an AI-based, proactive service experience can bridge the gap and help SaaS companies transition to PLG more quickly and successfully.
As OpenView notes, “Most companies—especially those with roots in the CIO and exec eras—are not product-led. Achieving product-led growth is a journey.”
The end-user era demands that companies eliminate user pain points and create a seamless customer experience. SupportLogic SX helps you create that roadmap, seamlessly plugging into your existing ticketing system and delivering valuable insights immediately. Get started with a test drive today.