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Product-Led Growth

Top User Acquisition Strategies for PLG Companies

Are you struggling to acquire customers for your product-led company? Check out the five best user acquisition strategies to grow your customer base.

6 mins read time
Jeanna Barrett
Jeanna Barrett

Jul 12, 2023

Product-led growth (PLG) companies rely heavily on their products for customer acquisition and growth. The product does the selling itself instead of a sales team.

So, as a PLG company, you need a product-led acquisition strategy where your product does the heavy lifting of acquiring new users.

But what does that look like? Well, you're in luck! Check out the top five user acquisition strategies to help you reach new customers and grow your company.

1. Simplify the User Registration Process

No matter how awesome your product is, acquiring new users will become challenging if the sign-up process is complicated or too long.

Make it easy for potential users to register and start using your product. Access to the product should be immediate without any barriers. Product-led user acquisition should focus on giving access to the product right away.

A whopping 88% of people intentionally leave a website registration form blank or enter wrong data, and 11% abandon a purchase if asked to register.

Calendly has a simple, short form that asks for an email address and lets new users sign up with Google or Microsoft accounts:

One of the best user acquisition strategies is to give instant access to your product and collect data later. You need to collect data progressively as users engage with your product:

saas sign up flow 3

Source

However, this isn’t possible for all types of products. In most cases, you need to filter users via a registration process to avoid product misuse and server overload. In such a case, only collect email addresses and that’s it. This will significantly increase user acquisition in the PLG model.

2. Create a Referral Program

A referral program is a must-have for product-led growth companies.

It can help you achieve two primary objectives:

  • High user acquisition at a very lost cost
  • High customer retention for both existing and new users

Research shows that people trust product recommendations from friends and family, and verbal referrals have the highest sales conversion rate:

Sales Conversion Rate by Referral Methods

Source

This doesn’t mean you shouldn’t have a formal referral program for your product. Your existing users are less likely to recommend your product to their social circle if you don't have a referral program.

You need to ask your customers to bring in new customers.

And they won’t do it without an incentive. This is why you need a formal referral program to reward your customers for their efforts. Studies have shown that 83% of customers are willing to refer, but only 29% do so.

A referral program keeps this ratio high because you reward customers by offering them exclusive valuable incentives. Here is an example of a referral program in action from Evernote:

Source

The company is offering a valuable incentive that not only improves the existing user's product experience, but also benefits the new user. Giving the new user access to the premium version of the product right off the bat shows them all the bells and whistles, making it difficult to "downgrade" to a free or more limited version of the product.    

3. Offer a Free Trial or Freemium Version of Your Product

Let people use your product for free!

Free trials have an average conversion rate of 45% when the trial duration is between 4 and 32 days. This means that almost half convert to customers after trying your product if it has potential and it's a good solution to their problem.

trial conversion rates in-app subscription

Source

Free trials or freemiums have several benefits:

  • It helps you build trust
  • It can lower acquisition costs
  • It makes users comfortable with the product, making it harder to switch after a certain amount of time

A free trial or freemium product work best if your primary goal is user acquisition. But don’t do it without basic protocols that include:

  • A solid onboarding sequence to help free users get value from your product as quickly as possible, preferably within the trial period
  • A transparent process for auto-renewing or upgrading to a paid plan

4. Improve Product Awareness

Product awareness sits at the top of the funnel for PLG companies. You need to increase product awareness to boost user acquisition because the more people know you, the more users you'll acquire.

The PLG Funnel

Source

Your product awareness strategy should align with your overall marketing strategy and use a mix of channels to reach and connect with your ideal customers. Here are a few ways to boost product awareness:

  • Organic and paid search: Get in front of people searching for solutions like yours.
  • Social media: Target your ideal customers with tailored ads, leverage influential folks in your industry, and encourage your champions to share your product. 
  • Partnerships: Collaborate with another company that complements yours and has a similar audience. 
  • PR: Get coverage from a trusted publication and watch the traffic roll in. 

5. Leverage Data

The number of product-led companies has increased significantly in recent years, but each product's path to success is different. 

For example, Notion relies a community-led technique, HubSpot is the master of content marketing, and Dropbox uses referral marketing.

An infographic showing the rise in the number of public product-led companies.

Source

You have to find what user acquisition strategies work best for your product. And how do you do that? Data.

Consider your North Star metric, buyer personas, product, and resources to inform the tactics you start with. Run tests, analyze the results, and keep optimizing until you find what works. 

Where to Begin

If you're not sure where to start or need help up-leveling what you're already doing, we're here to help. 

Get in touch with us to create and optimize a product-led growth strategy for your company.

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Jeanna Barrett

Jeanna is the Founder & Chief Remote Officer for First Page Strategy, an award-winning, fully distributed marketing agency. Jeanna has a combined 17 years of inbound marketing experience at venture-backed startups, digital agencies and Fortune 500 companies, with an expertise focus on business and tech. She's been named 'Top 40 Under 40' of brand marketers and 'Best in the West' for financial technology marketing. In 2016, Jeanna left the U.S. to lay roots and build her business in Belize, and in 2021 First Page was named #43 in fastest growing private companies of Inc. 5,00 Regionals: California.

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