Macro trends driving interest in DAPs

TL;DR of the macro trends creating the market for DAPs👇🏼

  1. Product-Led Growth (PLG): Teams want to run more UX and product experiments (which DAPs enable) to reduce friction, and improve activation and conversion rates without a sales process.

  2. Product-Led Sales (PLS): Even in go-to-market motions that were previously sales-led or sales-heavy, companies want to offer more self-serve product usage (e.g. sandboxes or trials), which require more product guidance (that can be built via a DAP).

  3. Consumerization: Users expect their B2B software to be as slick as B2C, which is often personalized-at-scale, and DAPs can enable these more personalized experiences.

  4. Usage-based pricing: As pricing models tie closely to usage, it's critical to drive product engagement, for retention and upsells, and DAPs can help users adopt features and expand usage.

  5. No-code/low-code: More people are expecting to be able to make changes to their software UX without requiring as much engineering, so turn to DAPs for this.

Product-led growth (PLG) gets companies more sign-ups

Product-led growth is a general overarching term for leveraging product usage and engagement to drive “growth” for a company. This growth could come from product “loops” (i.e., cyclical funnels) that drive increasing engagement, expansion, or revenue from using a product.

Over recent years, PLG has become a rallying cry for companies wishing to create more efficient growth channels (leveraging technology is more efficient and scalable than humans). Although it can encompass many aspects, including some of the other macro-trends listed below, OpenView reports that after $10M ARR, PLG companies scale faster than non-PLG companies. 

DAPs can significantly improve an organization's ability to implement PLG by allowing it to experiment with in-app messaging and UX faster than relying on in-house engineering resources. 

If you’re considering moving towards or improving your PLG motion, check out our product-led growth cheatsheet.

Product-led Sales (PLS) makes the Sales process more efficient

Product-led sales is an evolution of a traditional sales motion that relies more on product during the sales process. This can include:

  • Icons 300 Using product engagement signals (data) to initiate sales outreach
  • Icons 300 Incorporating self-serve product usage as part of a trial process
  • Icons 300 Prompting users to engage with sales teams inside the product at opportune moments
  • Icons 300 Leveraging product demos (interactive / sandbox / self-serve) earlier in the prospect’s journey
  • Icons 300 Creating cross-functional teams incorporating GTM, RevOps, CS, Product, etc., to help improve the user journey for prospects and new users
  • Icons 300 Training their sales team to deeply understand the product, use cases, and value it provides.

DAPs can support a PLS motion by enabling companies to prompt users in-app with relevant CTAs (e.g., booking a call with a sales rep) at the right moments of their journey or helping them learn the product more self-serve. Ultimately, DAPs support all of the above strategies. 

Consumerization (changes in user expectations)

Historically, companies bought software via their IT departments, letting the techy folks take the demos and then rolling out tooling to the rest of the organization. 

Now, every individual has been evaluating and purchasing software, either for personal use (e.g., apps on their mobile phones) or for professional use (tools like Airtable, Notion, Dropbox, etc., that use a bottoms-up model to break into companies). 

This means buyer expectations for B2B software are starting to mirror the standards and experience of these B2C or bottoms-up tooling. This includes:

  • Icons 300 Free / no-cost trials
  • Icons 300 Value even without paying (freemium plans)
  • Icons 300 Quick setup and onboarding
  • Icons 300 Personalization to each individual’s use case
  • Icons 300 Real-time feedback and success
  • Icons 300 Independent, self-serve learning

According to the Harvard Business Review:

81% of all customers attempt to take care of matters themselves before reaching out to a representative.

DAPs support this trend because they can make it feasible to show personalized experiences to users based on their context, intent, and demographic/firmographic information. They enable more independent and self-serve learning and help unblock users without requiring human intervention (which can be delayed).

Usage-based pricing

How software is priced and sold is changing; no longer are companies paying high upfront costs for software licenses that are disconnected from their usage or success. Switching costs for tools are lower than ever, and there is pressure for SaaS companies to have higher and higher Net Revenue Retention metrics. 

All this leads towards usage-based pricing, where software users pay more and pay when they use more of the software. The units of “usage” vary, for example:

  • “Blocks” of content in Notion

  • “Records” within Airtable

  • “Message history” in Slack

  • “Dynos” in Heroku

  • “Seats” in LinkedIn Sales Navigator

  • “Monthly Tracked Users” in Chameleon

  • “Teammates / Seats” in Salesloft (or HubSpot)

These units may be the gate between free and paid versions, between pricing tiers, or may be charged independently. There are also cases of hybrid pricing, which may include usage combined with features or seats. 

DAPs support these models because they help drive usage (as users discover and understand more features), which can directly lead to more revenue for a business. 

No-code/low-code movement

With the explosion of the technology sector and as software eats the world, there are many more jobs within the industry and a growing demand for effective software. This demand is much greater than the supply of software engineers to write code, so this, along with the desire of more people to create impact without needing to rely on coding skills, has led to a rise in no-code or low-code tooling. 

These solutions eliminate the need for software engineering and empower non-programmers to create or leverage software to perform their jobs. 

DAPs fall into this category because, after the initial installation, engineers are not required to manage DAPs' ongoing usage, including designing, building, deploying, analyzing, and adjusting/optimizing in-app experiences.Â