Learn the fundamentals of Product-Led Growth from the bestselling author of Product-Led Growth in this practical, no-fluff course.
Here’s what you’ll learn:
✅ What it truly means to be product-led
✅ Why product-led growth is becoming of rising importance
✅ What the main benefits of product-led growth are
✅ How you can become product-led
✅ The role every team plays in creating a successful product-led business
And more!
Best of all, if you pass the exam at the end, you’ll get a PLG Fundamentals Certificate that you can show off to your colleagues. ????
Wes Bush:
Over the next few minutes, I'm going to share why product-led growth is becoming of rising importance on a macro level. Once you hear these reasons, you'll understand that product led-growth, it's here for the long haul, and if you don't adapt you're actually going to be putting your business at risk. Now, that's because over the next five minutes I'm going to describe the three tidal waves that are coming for your business right now. The reason I describe these as tidal waves is because if you don't pay attention these tidal waves will quite literally smash into your business and wreck havoc.
Wes Bush:
Let's hear it for tidal wave number one. Tidal wave number one is all about the fact that technology is deflationary in nature and, to be honest, it's always been this way. If we look at even just hard drive space over the last 20 years, you can now get a one terabyte hard drive for under $100 when that kind of space used to cost more than a million not too long ago. You can see this in countless examples of technology and, if you haven't noticed already, technology is just deflationary in nature and every year it's getting more affordable to purchase great tech.
Wes Bush:
As a result of all this fact that technology is deflationary, customer willingness to pay for features has dropped by a whopping 30% in just the last five years, according to ProfitWell. This trend shows no signs of stopping. If anything, it's accelerating. That is the first tidal wave I want you to be conscious of because it's impacting everyone in our industry and you need to be aware of it, that people expect to get more for less every single year that your business is around.
Wes Bush:
The second tidal wave is really just the fact that, well, startups are more expensive to grow. This is largely because of the low barrier to entry in the software space, competition has literally exploded. Just take a look at the famous MarTech landscape comparison in 2011. There's still quite a bit of companies in this entire marketing technology landscape. Fast forward nine years. Yes, those dots, those are logos, and there has been a 5233% growth of this one landscape since 2011, and that's just one industry.
Wes Bush:
Because of this rising exploding competition in the software industry, what we're noticing is that because of this heated competition it's becoming just more expensive to acquire customers. Just take a look at these three channels. I won't go through all of them since you can read faster than me, but just take a look at Facebook. There was 171% increase in advertising costs in just 2017, that's mind-boggling to think of your cost of acquisition going up that much.
Wes Bush:
As a result of this, customer acquisition costs have actually increased by over 55% in the last five years, according to ProfitWell. That's over 10% every year. The first two tidal waves, on their own, they might not sound that scary because, "You know what? Okay, our costs increased a little bit and, you know what? People want to pay a bit less every year." That's fine. Combine them and they become something scary. On one hand you have your rising costs. On the other, you have a lower willingness to pay.
Wes Bush:
Now, you don't have to be a financial whiz to understand that this means your expenses, those things that you're paying for go up while your profitability goes down. If you don't change your strategy, it will just be a matter of time before you're running an unprofitable business, and that's before we're even touching on the third tidal wave, which is the fact that your buyer has changed. People have high expectations whenever it comes to your product experience and how they interact with it.
Wes Bush:
Now this trend, a lot of people will think, "Hey, this just applies to the business to consumer space." Well, don't go so quick. As Gainsight notes, Enterprise buyers also expect to try and evaluate software in an easy, frictionless way. As such, product experiences have actually become an essential part of the buying process. People expect to be able to try before they buy, and that is becoming the norm in our industry.
Wes Bush:
To recap, these three tidal waves aren't stopping anytime soon, they're here to stay. Consumers like us, we actually demand it. Your SAS business might be able to weather one of these tidal waves, but do you really want to take a chance on surviving all three? Now, the choice is yours to make but, before you make it, I want you to consider why other companies are opting to be product led, because although there are inherent risks in not becoming product-led, you'd have to be blind not to see that there are also incredible benefits to becoming product-led too. Let's dig into what some of those main benefits of product-led growth are. I'll see you in the next lesson.
