Product-Led Growth Marketing

If no one knows about your SaaS Product, how many trials will you convert to revenue?

The answer: ZERO

As a Product-led SaaS company, Sales may be optional, but Marketing is required. It is necessary so that your ideal customers can discover your product, build trust with you, and try your product to eventually become a great customer.

In this week’s article, I’ll walk you through the key components of Product-led Growth Marketing through the types of customer acquisition funnels that I’ve seen working in the SaaS industry.

Traditional Marketing Funnel

The traditional marketing funnel is a structured approach that helps you guide potential customers from initial awareness to final conversion. Here's a breakdown of how it typically works:

1. Awareness

The first step is generating awareness about your product or service. This can be achieved through various channels such as ADs, outbound marketing efforts, social media campaigns, and search engine optimization (SEO). The goal here is to reach as many potential customers as possible and make them aware of your SaaS product.

2. Lead Generation and Nurturing

Once you've captured the attention of your audience, the next step is to generate leads. This is often done through lead magnets, which are valuable pieces of content or offers designed to entice prospects to share their contact information.?

Once you’ve gotten their information, you’ll use it to nurture them through email marketing and educational content. Engaging with them through targeted content and personalized communication will build a relationship and address their needs and concerns. The aim is to move them further down the funnel and prepare them for a sales conversation.

3. Sales Engagement

At this stage, the nurtured leads are ready for direct sales engagement. This could be in the form of a sales conversation, a product demo, or a consultation. The objective is to provide detailed information about the product or service and address any specific questions or objections the potential customer may have.

4. Conversion

Finally, the goal is to convert the lead into a paying customer. This involves closing the deal and securing a commitment from the customer, whether it’s a purchase, subscription, or contract.

The traditional marketing funnel is particularly effective for SaaS businesses with an Average Customer Value (ACV) of at least $20K. It may require a significant investment in salespeople and resources, but, when executed properly, this approach can yield substantial results, driving revenue and growth for the business.

Lead Magnet Funnel

The lead magnet funnel is an effective strategy for SaaS businesses that are product-led. This funnel begins by attracting leads through the use of a lead magnet or a Manifesto. Here’s how it works:

1. Attraction

The process starts by offering a compelling lead magnet, such as a Manifesto, 10-Step Guide, or 5-Point Checklist. This initial offering must be designed to provide value and draw in your ideal customers.

2. Lead Capture

Once attracted, these potential customers are encouraged to sign up for a free trial of the product. Unlike traditional funnels that rely heavily on salespeople, this approach leverages the lead magnet to seamlessly transition prospects into trying the product themselves.

3. Education and Engagement

During the free trial period, it is crucial to educate and engage users. A manifesto or similar educational content plays a significant role here, guiding users on how to get the most out of the product. This content helps in addressing any concerns, showcasing the product's value, and convincing users of its benefits.

4. Conversion

As users experience the product firsthand and understand its value through the educational content provided, they are more likely to convert into paying customers. This model supports economies of scale because it reduces the dependency on a large and expensive sales team.

By using a lead magnet funnel, SaaS businesses can efficiently attract, engage, and convert leads. This approach not only lowers the cost associated with sales efforts but also leverages the product's strengths to drive growth. Through strategic use of educational content and free trials, businesses can scale effectively while providing a seamless and convincing customer experience.

PLG Funnel

Lastly, the third Marketing funnel that PLG businesses can leverage is the PLG funnel. This funnel directly promotes the product, skipping the educational content and lead magnet. This is usually done through offering a free trial. The messaging and value proposition that would have went into a lead magnet, are incorporated into the trial experience. This type of funnel is particularly effective for SaaS products targeted at end-users who can quickly see the value and benefit from a trial. Offering onboarding calls and additional education resources during the trial can further boost conversion rates.?

The third marketing funnel for PLG businesses is the PLG funnel. This approach goes straight into promoting the product without using educational content or lead magnets.?

Rather than starting with a lead magnet, your lead capture offer is a free trial right off the bat. This lets potential customers dive straight into using your product. The messaging and value proposition that would have been in your lead magnet are incorporated into the trial experience. This way, users immediately see the product’s benefits.

This funnel is particularly effective for SaaS products aimed at end-users who can quickly grasp the value and benefit from a product-trial. To increase conversion rates, offering onboarding calls and additional education resources can help users get the most out of the product.

In Conclusion

It's important to note that while these three types of funnels offer a proven framework for customer acquisition, there are still nuances to consider. Factors like market fit, messaging, positioning, and pricing can impact the success of each funnel type. It's essential to constantly test and iterate to find the right approach for your target audience and ideal customer profile.

I hope you're starting to see the power behind these three customer acquisition funnels. They simplify the process and provide a clear strategy for growth. However, executing them successfully requires a solid understanding of your ideal customer profile, crafting a compelling manifesto, and implementing an effective go-to-market strategy.

If you’d like to learn more about how to build an end-to-end GTM Strategy, check out my 5-Point SaaS Growth Strategy Guide: ??

Want to learn more about building a proper GTM strategy for your SaaS business? Grab a complimentary copy of my 5-Point SaaS Growth Strategy Guide here.

TK was CEO & Founder at ToutApp (backed by a16z, Jackson Square Ventures and prominent angel investors in Silicon Valley). After scaling ToutApp, it was acquired by Marketo where TK went on to join Marketo's executive team and serve as their Senior Vice President of Strategy. After running a 2-year transformation as part of the executive team, Marketo was acquired by Adobe for $4.75bn.?

TK now spends his time as a Strategic Advisor to 300+ B2B SaaS Founders globally. As the Founder of Unstoppable, he helps other SaaS Founders grow their startups faster through his Weekly Youtube videos and his application-only SaaS Go-To-Market Program.?