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Product-led growth
The document outlines the principles of product-led growth (PLG), emphasizing a bottom-up approach that prioritizes demonstrating product value to users rapidly. Key factors include self-service access, transparent pricing, and a customer-centric culture that fosters continuous improvement, along with metrics to measure success. It also discusses the integration of PLG with traditional sales techniques to enhance revenue and address wider market needs.
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Product-led growth
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- 2. ● Bottom uptargeting Puts product first, delivers value quickly. Targets ‘Doers’ ● “Show me the value” (and let me try it) Vs “Tell me about it” ● Self Service Transparent pricing and ability to transact ● Customer-experience- oriented org Culture of fast, continuous product improvement PLG Checklist
- 3. ● Bottom uptargeting Puts product first, delivers value quickly. Targets ‘Doers’ ● “Show me the value” (and let me try it) Vs “Tell me about it” ● Self Service Transparent pricing and ability to transact ● Customer-experience- oriented org Culture of fast, continuous product improvement PLG Checklist ● DIY, easy onboarding ● High speed-to-value ● Shorter sales cycles ● Faster revenue growth ● Lower CAC ● Higher LTV ● Net Retention
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- 5. The The prim ThePromise
- 6. Less or equalto 5Y More than 5Y, less or equal to 10Y More than 10Y, less or equal 15Y More than 15Y Source: Kimchi hill Years to reach $100M ARR
- 7. Less or equalto 5 y > 5 y, less or equal to 10 y > than 10, less or equal 15 y > than 15 y 65% Of co’s that reached $100M within less less than 10Y Are PLG companies Source: Kimchi hill Less or equal to 5Y More than 5Y, less or equal to 10Y More than 10Y, less or equal 15Y More than 15Y Years to reach $100M ARR
- 8. PLG vs NonPLG PLG NON PLG
- 9. PLG vs NonPLG Benchmarking success Revenue Growth Net Dollar Retention CAC Payback Period Source: publiccomps.com
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- 11. CONVERSION CUSTOMER ACTIVE CUSTOMER LOYAL CUSTOMER Content VISITS Content Paid Other MQL Channels SQL IN- PRODUCT ENGAGEMENTS OUTSIDE PRODUCT ENGAGEMENTS Marketing team Salesteam Customer success team TIME Customer Lifecycle in a Sales-Led GTM
- 12. “98% of MQLsnever close” SiriusDecisions
- 13. PQL CUSTOMER ACTIVE CUSTOMER LOYAL CUSTOMER Content VISITS Content Paid Other TRIAL Marketing | Growthteams Sales team Customer Success team Product | Growth teams TIME IN- PRODUCT ENGAGEMENTS OUTSIDE PRODUCT ENGAGEMENTS Customer Lifecycle in Product-Led GTM
- 14. What is aPQL? Activation ICP Match PQL Engagement
- 15. ● Interaction withcore features ‘X’ number of messages / actions / etc ● Addressed pain point Solved a problem / Experienced your value prop ● Invited team members PQL Definition Activation Engagement ICP Match Have they experienced the value of your product?
- 16. ● Active User Theykeep coming back for more ● Recency & Decay Recent activity ● Behaviour (in-app + website) Visited Pricing page, consumed blog content, etc PQL Definition Activation Engagement ICP Match Are they signaling further interest?
- 17. PQL Definition Activation Engagement ● Technographics Technologyinstalled, Integrations ● Firmographics Company Size, Industry, Revenue, Funding, Geo ● Customer Persona Department, Job Title, Pain Points ICP Match Aligned with Ideal Customer Profile?
- 18. Aha moment /ä-hä ˈmōmənt/noun 1. Pivotal moment when new users first realize the value of your product 2. A moment of sudden insight or discovery
- 19. Activation Engagement ICP Match Aha! Momentexamples Connect with 7 friends within the first 10 days 2000 messages sent within a team Returning 1 day after sign up Save 1 file on folder on 1 device Defining the Aha! moment
- 20. Visitor Trial PQL Customer Active customer Loyal customer Churned customer Visitor to TrialCVR Trial to PQL CVR PQL to Customer CVR Active Customers Rate Churn Rate Renewal Rate Days from Trial to PQL Days from PQL to Customer Days to Break Even Avg Customer Life CLV- to CAC ratio Customer lifecycle Effectiveness Velocity METRICS TYPE Key Performance Indicators Avg Selling Price
- 21. Visitor Trial PQL Customer Active customer Loyal customer Churned customer VISITOR TO TRIALCVR Trial to PQL CVR PQL to Customer CVR Active Customers Rate Churn Rate Metric Optimizations Efficiency Renewal Rate 2%* Opt-in Free Trials ● Quality of the traffic ● Website content ○ Messaging ○ Design ○ Supporting visuals ○ Site architecture * Innertrends
- 22. ● Onboarding ○ Qualification& Segmentation ○ Guidance ○ Goals & Personalization ● Time to value → ‘Aha moment’ Visitor Trial PQL Customer Active customer Loyal customer Churned customer Visitor to Trial CVR TRIAL TO PQL CVR Active Customers Rate Churn Rate Metric Optimizations Efficiency Renewal Rate 25%* Opt-in Free Trials 1-10%** Freemium * sixteen ventures ** Insight Venture Partners PQL to Customer CVR
- 23. Visitor Trial PQL Customer Active customer Loyal customer Churned customer Visitor to TrialCVR TRIAL TO PQL CVR Active Customers Rate Churn Rate Metric Optimizations Efficiency Renewal Rate 25%* Opt-in Free Trials 1-10%** Freemium * sixteen ventures ** Insight Venture Partners PQL to Customer CVR Have your trial users experienced the value of the product?
- 24. “60% of userswho try your app will never come back” Intercomm
- 25. Starts using addons and other integrations Converts to paid Consecutive ‘Aha’ moments & activation points Sees the product as a solution Loyal Customer Active Customer Trial User Website visitor Engages directly with brand Value Time Aha moment(s) Product Adoption Activation
- 26. DESIRED OUTCOME CURRENT STATE ●User Onboarding Emails ● In-app messages ● Sales outreach ● Product Tours ● Interactive walkthroughs ● Progress Bars ● Checklists ● Onboarding Tools Content Product Accelerating Speed-To-Value
- 27. Not Every SignUpIs A Core User Likelihood to activate Likelihood to Convert CEO Director / CXO Product / Project Manager Developer Designer Marketer Analyst CORE USER CORE BUYER Source: Madkudu
- 28. Qualification & Segmentation Explicit,Enriched & Behaviour-Based Data Explicit | Sign Up Survey Enriched | 3rd Party Behaviour-based WEBSITE ● Firmographics ● Technographics ● Persona... IN-APP ● Webinar attendance ● Pricing page ● Blog posts consumed ● ... ● Number of Interactions ● Team member addition ● Completion of core journeys ● ...
- 29. ● Onboarding ● Emailnurturing campaigns In- app messaging Sales reach outs ● Customer persona ● Use Case / Pain Points ● Industry, Firmo & Technographics Personalization Criteria Applied to
- 30. Core User (Marketer)Buyer (CEO) Sign Up Usage Invite Team Members Invite Team Members Add Credit Card Product Overview Call Sign Up Custom Journey & Content Hi Mark, I’m Mark, VP of Sales at <Company Name>, we are thrilled to have you onboard! To get the most out our app, be sure to <Usage Tip #1>, so you can <Product benefit number #1> Try it out and let us know if you have any questions, Hi Kevin, I’m Mark, VP of Sales at <Company Name>, we are thrilled to have you onboard! I wanted to help jumpstart the onboarding process by offering a quick product overview to ensure your team gets the most out of it. You can pick a convenient time that works best for you here Additionally, here you can find some quick resources on how sales <company name> helped companies in your industry to <benefit number #1> and <benefit number #2> Email # 1 to Core User Sign Up Email # 1 to Buyer Sign Up
- 31. Visitor Trial PQL Customer Active customer Loyal customer Churned customer Visitor to TrialCVR Trial to PQL CVR Active Customers CVR Churn Rate Metric Optimizations Efficiency Renewal Rate 25%* Opt-in Free Trials 1-10%** Freemium * sixteen ventures ** Insight Venture Partners PQL to CUSTOMER CVR ● Activity-based content nurturing ● Community, documentation & support ● Frictionless self-service ● UX & product optimizations ● Sales follow up post PQL qualification
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- 33. User session replay A/BTesting B2B Tech Stack Prototyping & design CRM Reporting & Data visualization Lead Scoring Product Analytics Web Analytics Personalization Contact Enrichment Market Research
- 34. A/B Testing andExperimentation https://www.optimizely.com/sample-size-calculator/ DON’T TEST IF ● It’ll take too long to get actionable results ● Low downside risk of the change, high effort to test it. ● You’re launching something completely new WHY TESTING ● Learn ● Decide ● Quantify ● Align
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- 36. Value-based pricing ● Valueis a proxy for usage. ● Pricing based on a value metric allows you to maximise revenue potential. Opportunity costs
- 37. Companies using value-based pricingare growing at double the rate, with half the churn Value-based pricing Source: Profitwell.com
- 38. Freemium vs Freetrial
- 39. Freemium Pros: ● More visitorto ‘trial’ conversions ● Higher virality ● More product data to optimize UX ● Paid users who convert from free tend to better retention, and much lower CAC1 Cons: ● Limited features could result in a inferior experience ● Lower sense of urgency ● Higher cost to service 1A16z
- 40. Free Trial Cons: ● Lessvirality and buzz ● Requires more effort and time commitment on the user Pros: ● Sense of urgency ● Full feature set, most optimal UX ● More effort in a short timeframe, higher likelihood of conversion if UX is optimal The challenge Delivering on the promise of your business (aha moment) as fast as possible
- 41. Freemium vs FreeTrial Complex Product? High price? Large Market? Targets doers? NO YES NO YES YES NO NO YES Freemium Free trial Sales-led
- 42. Bottom up +Top down GTM
- 43. Combining PLG anda Sales Led GTM Pure PLG Sales + PLG A self-serve GTM, later combined with a strong direct sales motion ● Compounds revenue growth ● Lowers CACs ● Enables larger contract values The Sales role in a mixed GTM strategy: ● Customer onboarding, expansions and renewals (Customer success) ● Work with resellers, distributors and MSP’s ● Help convert PQLs from large enterprises and other ‘hot leads’
- 44. Estimated ARR WhenTop Down Sales Was Layered In $100M+ $50M+ $30M+ $25M+ $20M-$25M Source: Andreessen Horowitz When do we add a Top Down GTM?
- 45. When to LayerTop Down Approach Bottom up flywheel working ? NO YES Continue developing bottom up GTM Customer demanding product at enterprise level or enough penetration? NO YES Introduce Top down GTM Continue developing bottom up GTM When do we add a Top Down GTM? Source: Andreessen Horowitz
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