Product-Led Growth in 2025: Challenges and Predictions

Product-led growth (PLG) is a strategy that emphasizes delivering value through the product itself. It allows users to experience the product’s benefits before encountering sales interactions or payment requests. 

This approach is particularly beneficial for software as a service (SaaS) companies because:

• The initial investment risk for customers is low, and 
• It can accelerate user adoption.

What kind of business benefits from a PLG strategy?

Even though it has many benefits, product-led growth isn’t for every business out there. 

There are a few things to think about when evaluating this strategy. 

Answer to a recurring need

First off, the product needs to be something people use over and over again, to be a solution to some recurring need. That’s why SaaS businesses often do well with PLG. 

If your product is more of a one-time deal, users probably won’t stick around long enough for the strategy to work. 

Offer a straightforward product

Secondly, the product should also be pretty easy to understand and explain. 

An overly complex product most likely requires a personalized high-touch approach. In this case, sales-led growth (SLG) is much more suitable. 

Therefore, PLG tends to work better for businesses that deal with many customers who might not spend a ton. So, it’s a good option for the consumer market and small and medium-sized business (SMB) market. 

Calendly can be a good example of a successful PLG in B2B SaaS. 

They are serving quite common, recurring issues of scheduling meetings. So, it’s very easy to explain what their product does, and value can be experienced quickly for free, rather than talking to sales. Furthermore, they have a strong word of mouth — every time a user sends a Calendly link for scheduling a meeting, they’re essentially promoting the product to potential new users.

On the other hand, if you’re selling to enterprises, PLG might not be the best option. 

Enterprise solutions are quite complex, as big corporations often need a lot of hand-holding and have all sorts of special requests regarding customization, integration, and compliance. Plus, they have longer sales cycles and multiple stakeholders. So, naturally, sales teams are better equipped to serve these customers. Therefore, sales-led motion fits better here.

Consider the company size

Lastly, it’s important to consider the stage your company is in an organizational sense. 

PLG is easier to carry out if you’re smaller or just starting to grow. This is mainly because implementing this strategy requires extensive organizational changes. Smaller companies have the flexibility to change direction faster and easier.

Challenges of product-led growth

PLG is still a solid strategy, but like anything in business, it’s not a one-size-fits-all solution. The effectiveness of PLG can vary depending on many factors, such as:

• Market conditions,
• Investment priorities, 
• How well your product fits the market, 
• Your pricing strategy, and
• How well your teams are aligned. 

During tough economic times (like the one we’re in now), there’s a greater emphasis on efficiency. Hence, it’s no surprise that people are taking a closer look at PLG’s efficiency and profitability, which has its downsides. 

PLG companies often target smaller businesses, which can be more vulnerable when the economy takes a hit and this directly reflects on PLG companies. 

In comparison to sales-led companies, this issue is more immediate for PLG companies due to shorter sales cycles and less reliance on long-term enterprise contracts.

And, if it comes to cutting costs to boost profitability, it’s easier for SLG companies to adjust headcount based on sales performance, than it is for PLG companies and product development teams. 

Maintaining PLG strategy efficiency

To maintain efficiency, it’s important to regularly evaluate your PLG strategy by analyzing user feedback and engagement data. Furthermore, you need to be aware of the upmarket or downmarket motion as you grow as a business. 

If you’re changing the positioning to target a different segment of customers as you scale, it might be a good idea to consider implementing a product-led sales approach. This involves combining the efficiency of PLG with strategic sales interventions for enterprise clients.

For example, if you’re a SaaS serving the lower end of the market, and you’re going upmarket, you’re moving closer to the enterprise segment where the SLG is a more suitable strategy. You would still get the most of your users from the PLG approach, and handle the adoption of the product. But, when it’s time to convert them, you would have to decide when to use the self-serve approach and when to involve sales for a high-touch approach. 

What to expect from product-led growth in 2025

Users now expect highly personalized experiences. Personalization is becoming a standard rather than a competitive edge. 

In addition, I anticipate even more data reliance from PLG companies, especially with the rise of AI. AI allows for better, faster, and easier data collection and analysis. This enables companies to lean on figures further and become more data-driven. 

Consequently, we can expect more companies to start using predictive analytics to anticipate user behavior and needs, allowing them to tailor their onboarding and products proactively. 

The challenge here is — it’s going to become increasingly difficult to stand out and acquire users. Companies will look for more ways to differentiate their product and provide unique value. On the upside, stepping up the product game could lead to more innovations. 

Furthermore, as freemiums became a standard in SaaS, converting free users to paid will also be harder.

To handle growing competition, many companies could focus on optimizing the pricing of the plans they offer. This could result in an increase in value-based pricing. Value-based pricing is aligned with the value from product usage — the more value users get, the pricier the plan.

All things considered, my predictions for 2025 include:

• More personalization,
• Higher and easier reliance on data,
• Stronger competition, which could result in more innovation, and
• Focus on pricing optimization and the possible rise of value-based pricing.