SaaS Product Management and PLG: Best Practices for 2024

SaaS companies thrive when they meet customer needs. After all, the name “Software as a Service” reveals that the main goal of these companies is to provide a service through their software.

Services are most effective when they fulfill customers' demands—this is where product management comes into play. Product management employs various strategies to meet customer needs, and one of the most effective is Product-Led Growth (PLG).

Product-led growth bypasses traditional sales techniques, shaping the product itself to attract customers without the need for sales teams and campaigns. In the PLG model, the product draws in customers, engages them, and earns their loyalty. SaaS product management and product-led growth work together to create products that users find valuable.

In this article, we’ll explore both SaaS product management and product-led growth, showing the relationship between the two. Then, we’ll discuss the best practices for product managers in the SaaS space.

Understanding SaaS Product Management

As the name suggests, SaaS product management is about the product. Here, the product manager and team ensure that the product is developed, launched, and updated as needed. Product management integrates customer feedback, business goals, and market demands to refine the product.

Effective SaaS product management starts with research. Product managers work with certain hypotheses revolving around users. They conduct customer satisfaction surveys and perform user interviews. Research can be generative or evaluative. Generative research focuses on unknown customer needs, while evaluative research centers on issues already known.

Another core aspect of SaaS product management is strategic thinking. No form of management can work without strategies, which help managers make accurate decisions.

Like winning at a complex video game or waging war, strategic thinking helps managers draft plans, identify challenges, and compare two viable decisions. With strategic thinking, managers can align the product with the company’s goals.

Additionally, product management is a team effort. Software engineers, designers, and stakeholders all contribute to product development. A final element is continuous feedback from users. Feedback requires a two-way communication process, where the product management team communicates with users, and in turn, users provide their thoughts and suggestions. This feedback helps fix bugs and drive the development of new features. Learn more about communicating with users from our article on timely releases.

What is Product-Led Growth (PLG)?

Product-Led Growth is all about strategizing with the product at the center. The product is designed to attract and retain customers through direct engagement.

The public is already flooded with sales techniques, such as pop-up ads. Even with the right strategy, the chances of gaining attention have decreased. PLG offers a more effective way for customers to engage directly with the product, building trust. These users can become self-marketers, generating more leads for the business. Additionally, SaaS companies also cut costs when they adopt this method.

How SaaS Product Management Fuels PLG

Product management and PLG work hand in hand to develop and launch products that users love. A good product manager understands the value of PLG, and the strategy becomes more effective when product management is executed successfully. In this synergy, the customer remains the priority, which is what every SaaS company wants.

Within this framework, product management has key practices that fuel PLG. One such practice is customer-led innovation, which drives changes based on customers’ interests. Product managers use the best feedback methods to gather suggestions from users and make product updates based on these suggestions.

Another practice is data-driven decision-making. Product managers collect and analyze data on user engagement, and then make decisions based on the analysis.

Best Practices for SaaS Product Managers

Data-driven decision-making and customer-led innovation are not the only practices available to product managers. With increasing competition, product managers must evolve, adapting to the best practices around. Here are some of these practices:

1. Focus on Customer-Centric Design

Product managers can take at least three approaches when developing a product: company-centric design, product-centric design, and customer-centric design. Of all three, the customer-centric design is best suited to the PLG model and overall goals of SaaS companies. This design approach relies on tools like customer survey models to “listen” to customers. Feedback Collection and Innovation go hand in hand here.

2. Use Automation Tools

Automation tools make tasks easier for the development team and enhance the user experience. Automation tools also facilitate other practices mentioned. For example, they quickly collect feedback, which improves the entire product management process.

3. Prioritize Product Metrics

Based on the PLG model, product managers focus on product metrics above gaining new customers. Traditional sales methods measure success by the number of new customers. In contrast, Product-Led Growth measures the customer’s actual interaction with the product. Through this metric, product managers figure out who still uses the product, who has stopped, how features are used, and which users convert to paying customers.

4. Collaborate Across Departments

We’ve already established the collaborative nature of product management. Thus, a good product manager must have strong interpersonal and communication skills. From marketing to sales to engineering, different forms of expertise are needed. Proper communication of product launching strategies ensures harmony among all players from each department.

5. Have a Flexible Product Roadmap

The product roadmap is the blueprint that product managers follow, and it should be adaptable to changes. With digital advancements, our world moves at a fast pace. A rigid product roadmap will make product managers lag behind advancing trends. While having long-term plans, product managers should also be agile.

6. Keep on Learning

Life makes us permanent students, and in a digitalized world, we learn even more. The SaaS industry is highly competitive, and new trends appear quickly. Webinars, conferences, and constant networking keep product managers fresh.

Conclusion

The SaaS industry remains on the rise. That’s the good news. The not-so-good news is the competition that this rise brings. Any product a SaaS business launches must meet user needs, transforming curious users into lifelong customers. The Product-Led Growth model, with its approach of reaching users directly through the product, is ideal for product managers.

SaaS businesses rely heavily on the patronage of satisfied customers, calling for customer-centered practices. By adopting these practices and keeping up with trends, product managers can remain effective. Remember, feedback is crucial.