☠️ Is the age of product-led growth over?
An overview of different software growth strategies and an intro to integration-led growth
Hey friends 👋🏿,
Today’s article dives into different growth strategies and why you should consider integration-led growth in 2024! For a video overview of the contents of this article check out YT video!
Sales-led growth
At the core of any business growth strategy is the go-to-market motion. Historically, sales-led growth dominated, focusing on acquiring customers through direct sales efforts.
This approach requires a robust sales team, personalized onboarding, and premium pricing to justify the high cost of sales operations. Giants like IBM and Oracle exemplify this model, primarily targeting enterprise clients.
While sales-led growth strategies can be effective, they do face several challenges:
High Costs: An extensive sales force and support infrastructure significantly increase expenses, affecting profitability.
Long Sales Cycles: Each prospect requires detailed attention, delaying revenue generation and impeding rapid scalability.
Scalability: Achieving more or faster growth often requires expanding the sales team.
Product-Led Growth
Product-led growth (PLG), which started gaining traction in the 2010s, uses the product to get and keep customers. Companies offer freemium or free trials to let users try the product.
Successful examples include Calendly, Figma, and Canva. They focus on easy use, fast value, and sharing with others.
Product-led growth offers advantages in streamlining growth through self-service and automation, yet it also poses certain challenges:
Monetizing free users: Converting free users into paying customers can prove more challenging than anticipated, with some free users never making the transition.
Support for Free Users: Free users demand support and resources similar to paid customers, without contributing to revenue.
Engagement with Large Enterprises: The self-service model might not provide the personalized interaction and tailored solutions that large organizations expect, which can limit its effectiveness in these segments.
Integration-Led Growth
Integration-led growth (ILG) is part of ecosystem-led growth. It uses integrations with other services to gain customers, keep them happy, and grow. This method values partnerships, working together with other platforms, and being present in marketplaces.
HubSpot is an example of a company that has done well with this strategy. They have built a strong ecosystem around their platform that helps everyone involved grow.
Integration-Led Growth in Action
An illustrative example of the benefits of ILG is the journey of Cycle, which transitioned from a PLG model with a freemium product to a more integration-led approach.
Since the shift, a substantial portion of new signups now originate from integrations with platforms like HubSpot and Linear.
Who is integration-led growth for?
Integration-led growth excels for B2B software companies that offer products compatible with other tools.
For those whose solutions are commonly used alongside other applications, pursuing an integration-led approach can open up new expansion opportunities.
And that’s a wrap? What do you think? Will you be exploring integration-led growth in 2024?