Sanjay is a Technologist and founder of Vervotech, a SaaS-based accommodation data provider. He also founded Techspian.
There’s a lot of uproar and debate in the market about growth strategies that work for SaaS businesses. Some say only a product-led growth (PLG) strategy can put your business on a high growth path, such as companies like Atlassian and Hootsuite, which managed to build their fortunes on the back of PLG approaches. But companies like Drift and HubSpot may disagree with them because they achieved enormous growth using marketing-led growth (MLG) strategies. So, is marketing-led growth the best way to grow your SaaS business? Or does a product-led growth approach work better?
What’s the solution to the conundrum above? Which growth strategy should you bank on? I say none. In this article, I make a case for the intersection of MLG and PLG, which is what I follow at Vervotech—a bootstrapped and profitable SaaS company. Before I talk about the benefits of that intersection, I’ll briefly outline the two strategies (MLG and PLG), what they offer and the areas in which they lack.
Marketing-Led Growth (MLG) Strategy
The marketing-led growth strategy (MLG) can allow you to grow faster and at a scale by using marketing assets like blog posts, e-books, whitepapers and infographics to obtain leads in large numbers. Also, this strategy includes search engine marketing (SEM), which is one of the most cost-effective methods to sizably increase the visibility of your brand.
Furthermore, when you build a SaaS business, you have a target market in sight. With the help of surveys and polls, you can further narrow it down and attract that market by tailoring your brand messaging throughout your brand communication channels.
Also, MLG allows you to be flexible with your growth strategy. You can always alter your marketing messaging: If the current campaign isn’t delivering the desired results, you can test and pivot to a narrative that can resonate with your target market.
One drawback of an MLG strategy is the actions that marketing campaigns require prospects to take, such as filling out forms or downloading marketing assets, which don’t guarantee purchase intent or sales.
Product-Led Growth (PLG) Strategy
In the product-led growth (PLG) framework, your product drives all customer acquisitions and keeps your revenue streams oiled through self-signups.
PLG allows your customers to experience your product right away. The customer doesn’t have to bear constant sales messages or sit through demo calls. If a customer likes your product, your sales cycle reduces significantly.
Like other growth strategies, PLG also has its share of disadvantages. When you focus only on PLG, you compromise other crucial business aspects, such as branding, which can potentially hamper your growth in the long run.
Another potential drawback of PLG is it pushes the product as a core marketing channel, so there’s always a risk that customers don’t perceive the value you’re offering. If the gap between perceived value and the value being offered widens, you’ll likely see fewer signups and a drop in revenue.
SaaS Growth From The Intersection Of MLG And PLG
Both of these approaches have their advantages and disadvantages, but there’s no one-size-fits-all growth strategy for SaaS businesses. Not all products are as straightforward as Hootsuite, for example. Most SaaS products are complex by nature, and just riding on PLG can be counterproductive because very few people are willing to buy from a stranger. On top of that, if you’re not communicating value before it’s perceived, it’s likely there’s a silo between consumer expectations and your offerings. And those silos can hurt your business prospects despite having a great product.
However, you can’t entirely depend on your marketing to bring in qualified leads. Because marketing incurs a longer buyer cycle, it can sometimes slow down your growth. That’s why the answer lies in the middle of MLG and PLG. You shouldn’t be stubborn about using one strategy over another. You can get the best of both worlds by driving growth from the intersection of MLG and PLG. Let me explain how.
When I explained both growth scenarios, the major drawback of MLG that came to light was a lead’s intent, which may not always convert into sales. But it certainly helps put your brand in the public eye, which can eventually drive sales. And when we looked at the PLG scenario, the major shortcoming that came out was the potential difference between perceived value and the actual value on offer that can emerge due to a lack of communication from a SaaS company.
Therefore, when I make a case for driving growth from the intersection of MLG and PLG, I mean that your marketing function should focus on creating the right noise among your target audience and building authority and a brand name that serves you both in the short and long term. And you should keep using all the cost-effective methods like SEM and content marketing to attract more customers to your platform.
At the same time, your product should be readily available to your customers with minimal friction. Prospects should be able to experience the look and feel of your product organically. You can strategically decide how much access you want to offer to your prospects and when to pitch for organic signups. This way, you can keep all your growth channels active and get the best of both growth strategies—MLG and PLG.