PLG and Product-Led Revenue: What’s the Difference ?
Product-led growth is a go-to-market strategy that uses the product as the largest source of business growth.
PLG is all about building a product that solves real customer pain points and then creating a company-wide alignment across all teams to support the product and mission. In effect, it enables people to start using the product for free and, ideally, experience value.
At its core, product-led growth strives to create delighted customers who become raving fans and go on to promote your brand – all on their own.
Product-led revenue is closely tied to that product-led growth motion. Simply put, product-led revenue is the idea of understanding how people are using your product to unlock new revenue and expansion opportunities.
The industry’s first product-led revenue platform – Correlated – empowers both sales and marketing teams to identify which users are ready for upsell and pinpoint the right time to engage with them based on their in-product experiences.
Why Do We Need a Product-Led Growth CRM?
Although there are plenty of existing tools that can help you understand how people use your product, there’s an overall lack of solutions that are able to pair that up with traditional sales data.
Current CRMs are still a great data source when it comes to existing and prospective customers’ information, opportunity tracking, and sales engagement history.
That said, they don’t give clear visibility into free trials and non-paying uses, product usage, and the overall user journey before payment.
This information is an extremely important piece of the puzzle for sales teams trying to identify signals of whether a user is ready to take the next step and take the next best action to win that lead.
Breezy Baremount, Head of Growth at Correlated, shares: “What Correlated does is we help tie together different data sources so you can layer together some of the things that are important to you on the sales or marketing side.”
Based on signals and the users’ engagement with your product, a product-led growth CRM shows you the opportunities where you can nudge those free trial and freemium users to become paying customers. It can also prove to be immensely useful in finding expansion opportunities for your existing customers, too.
How to Explore Usage Signals and User Behavior Within Your Product
Choosing PLG as your go-to-market model enables you to have better visibility of how your users are engaging with your solution.
Once you know who is engaging, you can flag those users automatically and nurture them with relevant touchpoints such as utilizing drip campaigns, handing them over to your sales team, or assigning a dedicated onboarding specialist.
Enriching your data (CRM) with those signals also gives you the ability to predict, with a certain level of certainty, the future value of your users.
Ultimately, using product signals is key for uncovering how people actually use your product.
You can break down sufficient usage data into two main categories:
Events – Events are the actions that users take inside your product. Tracking these actions is crucial because they describe activity. In turn, this can also reveal insights on how valuable a person could be for your company if they become a paying customer.
Accounts – An account is a company within which you’d have one or more active users.
Users – Users refers to a single user or team that performs an activity/event in your product. Even if they’re on a free trial or freemium model, the best part of PLG is that you can still leverage these users to expand into accounts (i.e. more users or teams).
Identifying Usage Signals in PLG SaaS
Based on usage signals and behavioral patterns within your product, you can find sales-ready leads more effectively.
For many SaaS businesses, a lead often signals readiness to buy when it has:
Signed up
Invited X amount of teammates
Created X amount of channels/groups/tabs
Used a certain feature
Has recognized value and reached the Aha! moment (e.g. completed their first conversation)
“As the company evolves, I like to call this the goldilocks, the signals change,” Breezy says.
Although brands know product usage insights are crucial, many struggle to make it easy for sales teams to understand and act on those signals and events, as well as monitor change over time.
Here’s where one of Correlated’s biggest differentiators comes into action.
A quick example Breezy shared: “you might want to know if their [users] usage has been over a certain amount in the last week and if it has increased or decreased in some way. But if you’re using a BI dashboard or trying to pipe data into your CRM, the change over time is something you’re missing out on.”
Effectively, Correlated creates actionable usage-based insights for sales and enables the team to start layering on both the CRM data and product usage.
“So, it doesn’t have to be just sign-ins and one thing from your CRM. It could be multiple layers of firmographic or demographic data and multiple layers of things that users are doing in your product,” Breezy adds.
3 Ways Marketers Can Leverage Product Usage Insights
Because it’s generated through in-product actions, product usage data is a fantastic way to gather valuable insights and find out if your customers are up-to-speed, getting value, and ready for expansion.
Product usage insights also enable you to see whether users need some extra support and engagement to experience the full benefits of your product.
Let’s take a closer look at three different ways that you can utilize product usage insights to enhance your digital marketing efforts.
Set Up Value-Based Bidding
Armed with product usage insights, Correlated can help you to understand where you could optimize for different levels of conversion, and “it could be leveled out as well. It doesn’t have to be just one conversion, there could be a lot of different conversion pieces that you could be focusing on.”
By pairing product usage analytics with creating several different micro-conversions (and assigning nominal values to them), you can effectively bring those conversion events into Google ads.
What’s even more, you can see how changes in the product affect user behavior and test which customers are most likely to be receptive to your messages.
You can also implement different value-based bidding strategies, such as Google’s maximize conversion value bidding. This allows you to optimize campaigns to values such as profit margins and sales revenue and let Google set bids based on these targets to drive the best possible return.
Increase Retention
Breezy shares another way PLG marketers can leverage product usage data: “in a product-led growth company, you want to let the user get their hands dirty and start to click a few buttons, and get that value for themselves. But, as they do that, there might be ways you could be adding value.”
As users click around and explore your product, you’ll start to see places where they’re getting stuck, places where they might be missing out on different opportunities to use the product in a more effective way.
By harnessing product usage data, you gain access to important insights about people’s intent to buy, and – combined with other intent signals that marketing tracks – this can be an invaluable indicator about when a user is ready to engage.
You might, for instance, look at what actions within your product lead to the most valuable customers and then create relevant campaigns that drive more users to take those exact actions. You can also leverage insights from product usage to identify and tackle potential churn risks early on.
Create a Seamless Customer Onboarding Experience
It’s a good idea to remember that user onboarding is typically the only aspect of your product that every single user will experience – including those who decide it’s not the right fit for them.
Incorporating product usage data into your strategy can be an excellent way to create a more seamless product-led onboarding flow, as well as a more targeted customer experience that reduces common points of friction during onboarding.
It also has the ability to empower the marketing and product teams and get the time-to-value happening earlier in the process.
For instance, let’s say that the moment of value capture for your business is when people create 3 signal events in 24 hours. Currently, this is sitting at step 4 in your onboarding tour. By pairing it with product usage data, you can now redesign your PLG onboarding and move it up to step 2 or even 1 one and help people get to the Aha! moment as quickly as possible.
The Role of Sales and Marketing in the Product-Led Motion
Product-led growth has played a transformative role in the growth of many of the biggest names in enterprise software, such as HubSpot, Slack, and Lucidchart.
One of the most common misconceptions about SaaS PLG, whether in big or small companies, is that you do not need a sales team. In reality, however, you’ll still need a robust team of sales experts, even when you have a game-changing product.
Although it might seem counterintuitive at first, product-led growth and sales make a very powerful combination.
The role of sales in a product-led company is slightly different but “it’s definitely still there and very much alive. What the difference is is that sales becomes more consultative. They’re focused on the success of the customer.”
Your sales team becomes key for crafting killer sales narratives, discovering opportunities to layer additional revenue, and making sure no one is leaving money on the table.
When it comes to your marketing team, Breezy notes that “a marketer’s job has changed because we’re no longer trying to just get leads in the door to have a sales conversation. Your job now is to get people into the product.”
The core principles of effective marketing, such as being where your customers are and being a thought leader, haven’t changed. The difference, however, is that “as you are getting people into the product, you now need to have a really solid understanding of what your product does, how people can benefit from it, and what are its strengths and weaknesses.”
Pursuing PLG to Enhance UX and Business Efficiency
SaaS businesses have the unique opportunity to engage not only in product-led growth but in product-led revenue, as well.
Adding this extra layer into the sales and marketing motion enables you to become a thought leader for your customers and spend more quality time engaging, educating, and enticing them to take the next step.
©Copyright 2023.All Rights Reserved.
Disclaimer : This advertisement and the information related to it are provided and maintained by the advertiser. Atipes.com is not responsible and can not guarantee the accuracy or completeness of this advertisement. Please note that every advertisement for rent or for sale should at a minimum, display the energy performance rating of the property. See our Flats and Housing Posting Rules for more information.
Avoid scams: Signs of fraud: wire transfer, money orders, cashier checks, payment via gift cards, shipping, escrow, "transaction protection", "guarantee". Be safe by dealing locally.
