This mini-series started with a first article about the impact of your business model on the potential application of Product-Led Growth in the business. This week we’ll look further at how the approach and maturity of your existing Go To Market can impact your plans for PLG.
Building on the result from the last article, I will add further questions to the survey we started. There is no need to manually track your answers to these questions, as you can use the automated survey on this link.
Go To Market maturity
An important factor when deciding how to go about your PLG efforts is understanding how the company has grown to date and understanding the role the sales team has had within the organization in recent years.
If you are a brand new startup then that’s easy, because there is no history. But most companies have been in business for a while already and we cannot ignore that reality or put existing growth at risk before having proven that the PLG motion performs as expected.
The same goes for the role of customer success or any other customer supportive function. If your existing model heavily relies on these personal interactions then this cannot just be discarded.
At the same time though, if there is a high reliance on sales and/or customer success, this also gives an indication of where gains can be achieved using product-led principles.
If the same sales rep or CSM can close twice as many deals by leveraging the product more in the customer journey, this will significantly improve the economics of your growth motion. It could even allow you to serve customer segments or contract sizes that were previously not economically viable to serve.
Keep in mind that there is no “good vs bad” here. PLG is not by definition better than sales. Follow the numbers.
How customers buy today
Then let’s get started with the first questions about the existing process through which new customers engage with your software:
Q11 – Can potential customers sign up for your product by themselves?
This refers only to signing up and first use, not the conversion to paid.
Yes
No
Q12 – Do new users typically get familiar with the product functionality by themselves?
This could be through in-app onboarding, a help center, or other training materials.
Yes
No
Q13 – Do new customers typically get a dedicated Customer Success Manager?
A dedicated CSM proactively engages with the customer to help them succeed.
Yes
No
If your process is currently heavily people-driven, meaning for example that a conversation with sales is required first and a CSM guides new customers through their onboarding, then regardless of what the outcome was in the section on customer journey, then onboarding could be a good area to focus your first PLG efforts.
This is because it is very hard to acquire customers in a product-led manner if users cannot start using your product without speaking with someone.
Even if you implement product-led onboarding, you can still decide to assign a CSM to high-value customers. What’s important though is that the self-service onboarding exists, is a good experience, and is used by some segment of new customers. This will help with organizational efficiency as well as lay the groundwork for further product-led initiatives.
This can also still mean that new customers speak with sales first but then the rest of the onboarding is product-led. Or it can be a free trial that engages the user in the product before speaking with sales. Any combination is possible if it drives results.
Company tendency
Next let’s look at the decision-making culture in a company.
Q14 – Are your companies’ decisions primarily driven by sales or by product and engineering?
Even if both participate, which is the dominant voice in the company? Look at your CEO if you’re not sure.
Sales
Product or Engineering
Some companies are heavily driven by the sales stakeholders. This is often (but not always) the case when the company has high deal values or when the CEO is more wired as a sales person, but can also happen in other businesses.
If this is the case, then alignment of the initial goals for PLG with the sales organization is important, and you’ll want to start with small wins that have a meaningful impact on the bottom line of the company.
Now of course this is generally a good approach, but in a sales dominant environment it will likely be more challenging to apply PLG so it’s important to be aware of.
Level of success
Finally let’s also look at how effective the go to market process has been so far:
Q15 - How much annual revenue does your company currently make?
More than $1 Million
Less than $1 Million
Q16 – Is your company currently growing?
This measures if the current growth model is working, as opposed to growth being stagnant or in decline.
Yes
No
If a company is just starting or hasn’t made a significant amount of revenue yet, then the growth model could be considered unproven. In that case the risk associated the transition to a product-led approach is much lower.
On the contrary, if the company has over 1000 customers and is growing fast, then you’d want to be mindful not to break the existing motion. Any mistakes or unexpected outcomes could come at a high price to the company.
A setback like that would also put a significant damper, if not kill, the organizational momentum for any product-led initiatives.
As a guiding principle, if something seems to be working, then don’t throw out a working system until you’ve proven that the new system is better or complementary.
What’s next
Based on the above questions about the growth state of the company, we should be able to further fine tune our starting point for PLG and the approach we take to get to first results.
But there is one more thing to consider, which is if your company has the right people and processes in place to execute on a product-led strategy. More on that next week.