What is PLG and why you should consider it in your SaaS Business Model
- Upselling: Designing the product to convert the frictionless initial experience into a paying customer and continually leading the buyer towards higher sales tiers. The product is the sales person.
- Virality: Design the product so that it naturally spreads and pulls in larger groups of users. The product does it's own marketing.
Why SaaS and PLG are intrinsically linked
- Fast release cycles
- Real-time measurements and analytics across all users
These two characteristics allow a rapid, virtuous cycle of testing, analyzing, and refining different techniques in the software. The tests are vital to understand how key aspects of the customer experience are working and constantly improving the outcomes. Is the customer investing time, experiencing key features, adding more information, converting to paid and spreading the experience others? With these goals in mind a PLG company can use the benefits of SaaS to systematically test new ideas and iterate their way to success.