Debunking the idea that PLG is “not right for our business”
Product-led Growth. Or PLG as you’ve probably heard it referenced. It’s a term that’s been picking up more and more steam in recent years, especially in the wake of the tremendous success of Zoom and Slack, which are PLG products. However, many companies are hesitant to adopt this strategy with their own products. Let’s dive into why that is and then debunk the biggest myth of all: PLG is not for our business.
PLG, as defined by Wes Bush in his book ‘Product-Led Growth: How to Build a Product that Sells Itself,’ is “a business methodology in which user acquisition, expansion, conversion, and retention are all driven primarily by the product itself.”
THE MYTH
Now, if you read this definition in its absolute literal sense, you can see where companies may be hesitant to try it. The push back I’ve received is that ‘the product is doing all the work, yet we have salespeople to feed.’
Most B2Bs will have a sales team, either small or ginormous, depending on their stage, size, or complexity. “Feeding” the sales team with leads to follow up on is a standard requirement of marketing. If companies convert to being product-led, sales will have nothing to do. This is the myth.
DEBUNKED
Here is where the problem arises. There is a tension that exists (and shouldn’t) between marketing and sales because marketing is a service organization for sales. It is intended to provide both air cover to make it easier for a salesperson to penetrate a prospective customer, but also to deliver leads to the sales team so that they can close deals. The latter is where the problem arises because most marketing organizations are not measured on the close of business or assigned an ARR target. They are measured on the number of marketing qualified leads (MQLs) they generate or pipeline, which is seldom quantified (confidence level).
Every company defines the MQL differently, but it’s typically a lead that has demonstrated some level of interest in your product. These get routed to sales as someone that needs to be followed up on. Then sales determines if those MQLs are sales qualified leads (SQLs) based on an initial conversation with the contact and if it’s worth pursuing. But what’s the biggest complaint I’ve heard in my career? “The leads we are sent suck.”
Fair. This is typically a result of circular logic: Sales needs more leads to follow up on -> marketing lowers its threshold for an MQL -> more leads are sent to sales -> sales complains those leads aren’t good enough -> marketing increases the number of leads (and budget) coming in to filter for more MQLs -> the lead status doesn’t improve. And on and on we go.
The problem here lies not in the number of MQLs sent over but how qualified these MQLs are. Sales wants to call into the leads provided and find a receptive person, who knows enough and is interested in enough about the product or service they are pushing to have a conversation. But a person who downloaded a white paper or attended a webinar is likely not educated enough or qualified enough to have that initial conversation.
The Customer’s Way All the Way
In fact, most prospective customers don’t want to be contacted at all in the early stages of their search. Today, customers are very savvy. They are consumers in their non-work life, used to doing research on their own, talking to their friends and family for recommendations on products or services that solve a problem. The decision to purchase or utilize a product or service lays in their hands. We see this with car purchases, TVs, apps, vacations, etc. And that behavior leaks into business. It’s why Reddit, Stack Exchange, Gartner Peer Insights, or TrustRadius are so popular. They ask their peers for their opinions in these channels.
Sure, salespeople are used to talking to the decision makers or buyers of their products and services. This is typically who is signing on the dotted line and who they must convince to buy. But practioners, the people using the product or service, now have a bigger say in what they use to actually DO THE WORK required by their company. Particularly with the advent of SaaS and cloud services, it’s easier than ever to rip and replace things that aren’t working or if there is a better alternative.
PLG enables better qualification of leads if done right. Sure, the tactics to draw a person to a given product still exist for education purposes (white papers, infographics, videos, blogs, etc.), but if you can get a prospect into a product and have them start using it on their own via a free trial or freemium offering, you’ll be able to glean information that is even better than getting their email address and phone number on a conversion form. You’ll be able to track what features and functionality they use most, how often do they log in, when they see value in using the solution. This is beyond valuable to the sales team.
Finding the Gold
A well-constructed PLG product or service will measure telemetry, deliver in-product alerts and guidance, and help guide the customer to the value points that will hook them.
And THIS is where the gold is buried. You want customers hooked on your product. You want them to find it untenable to not have it. And this is where sales steps in and does their thing.
Sales now gets a lead that has been nurtured along to being happy with a taste of your product, who is already consuming, who is ready to buy. This is why there shouldn’t be just one sales motion in your organization. PLG is not just “only in the product,” meaning transactions are only made within the application or platform. It can be a hybrid, with customers using the product or service and raising their hand or indicating enough value has been realized for sales to step in.
Given that marketing is tracking how people come into the product, it can become much more prescriptive in how it goes after marketing to additional users. It now will be able to validate the titles of the users, which functionality is attracting them, and how the users get to value quickly. It’s iterative, but the final result should be a finely tuned engine.
Isn’t this what we all want? The best of both worlds? Lower customer acquisition costs (CAC), increased consumption, faster time to sale, happy and buying customers?
If you have any questions about PLG or how to get started, please contact me at rosa@rosalear.com or fill out my contact form here. Have a great day!
