What to do when your CEO asks you to start doing PLG @ SaaSiest Digital 2023

On September 27 I gave a talk at SaaSiest Digital to give some guidance to operators who get asked to start doing PLG without proper context. I’ll cover how to align on expectations as well as how to identify first areas to start applying product-led principles. Hope you like it! Transcript below.

Recorded on Sept 27, 2023

TRANSCRIPT:

What to do when your CEO asks you to start doing PLG. This is quite a common thing. People hear a lot about PLG nowadays. They hear stories of Slack, Figma, whichever company you can think of and they want a piece of the pie, right? Like I also want that success. I want to be that well known and get that much revenue for the company.

But what do you do when you're asked? And so I'll try to cover that a bit. For context, my focus is on companies that are already in business because that's when this would happen, right? So you're already in business and maybe you're doing a sales motion or you're growing in some other way.

And now suddenly you're asked to figure out how PLG can help the business. So let's get to the meat of it.

The five steps to start doing some PLG, right?

Step one as I think I teased already a bit. It's like you want to start by setting the goal. What are we trying to achieve and I'll cover each of these steps in more detail on on the next slides.

Second is manage the expectations.

There's a certain view that people have of PLG. Actually many people have different understandings and aligning on what it is and what it isn't and how it works is important because your expectations will be very different. And then success will also look different.

Then there's the look at like: are you a good fit for PLG or for the type of PLG that you're intending to do, right? So there are different kinds or different parts of the customer journey where you can apply it. And based on the state of your company and what you offer, one might be a better fit than the other.

Once you figured out that, and so you have your goal, you know where you want to apply it, you start doing the work, right? And as you go through those motions PLG is an iterative process. So you want to build momentum. And this comes down to organizational change. How do you get people on board?

I'll cover some items on that as well. And then finally take off. So how, once it starts working, how do you go from there? Alright, so first of all, setting the goal. I'll, I'll won't spend too much time here, but just to give some clarity of like, what are the different goals that you can achieve with it?

So dependent on what the company wants or needs, you could do PLG for new business revenue, right? This is like the most common thing that people think of. I want more customers, more users will become more customers. And that will become more revenue. So that's, you know, that's great. And, and of course, no one would say no to that, but nonetheless, there are other goals that can also be very valuable for the company.

A second one is expansion revenue. So you could say, Hey, we have a lot of customers already and we want to sell them more. And we want to present the right products or modules in the, in their context and use PLG to drive sales or to qualify leads through that you can use for go to market efficiency.

So you can say, well, we are selling something that is. Below 10 K in annual revenue. So like traditional knowledge would tell you, you can not use a sales team for that based on the conversion rates. However, if you use the product to qualify those leads and maybe conversion rates can be much higher and therefore you can actually sell this product at that price to that audience, right?

So that's another way where you can enable a growth motion that else would not be possible. Customer engagement. So here we're talking about onboarding, keeping people engaged with the product and in the end countering churn. Is another important business goal that you could have and the last is brand awareness Which is kind of like getting your name out, but not necessarily expecting immediate revenue to come from that.

So Depending on your company. It depends where you'll want to focus but this is important because this It tells you if you're achieving your goal, yes or no, because again, the goal is not to do PLG. The goal is to do one of these things or something else, if that's been defined. All right, so managing expectations and often managing misconceptions, right?

So the first and foremost thing that you might've heard already in other places is growth will come gradually. It's not one moment to the other that everything will be working. Like it's a lot of things need to fall into place. So you need to focus on the leading indicator on the small wins at a time.

First you get sign ups, then the sign ups activate and from activation we get to recurring usage and then maybe there's invitations happening and so on. Right. So you need and you need to manage that message and that needs to be clear from the beginning that that's how you'll build the journey. Because if you're expecting to see revenue in month two, that's just not realistic right in many cases not always Then plg does not mean product only and this is a big one that i'll get back to later as well Especially for the context I mentioned right you're in business already.

Let's say you're doing sales Now someone says let's do plg. That doesn't mean fire your sales team and let's do this by no means never do that Right that means See how the PLG motion can fit with what you're doing already and unlock more growth, right? And so having PLG and sales is great Having it the other way around is also great.

It's one tool in your tool chest to grow, right? It's just product is one thing marketing is a thing sales is a thing and you just pick which you need where And what gets you the best results to grow? Because in the end, that is the goal, right? It's not cheap PLG it's cost effective when you scale, but it's not cheap, right?

Like you'll need a lot of work to go through, to develop the thing that you want and then to iterate on that. And then you need to maintain that. But once it works, then yes, you can scale the volume. much easier than you could scale through, for example, a traditional sales team. But there's a difference between those meanings of cost effective and cheap.

It's also not just about getting leads, right? And the last two I'll kind of cover in one. So there's like, it's not just about getting signups and then pushing them to the sales team. Like there's more the product can do and should do often. It's like you can qualify that lead and send. Better leads to your sales team.

And it's therefore important that they understand that what's known to them as an MQL or something that they want to pick up on maybe is not the same as a PQL, who is someone that, that is in a different context. They're a different stage of the buying process there. In some ways less committed and other ways more qualified already.

So it's just, it's a different motion that we need for that. And it's again, important to not just start using product as a lead funnel somehow to, to the existing sales motion. You'll need to look at what, what works in that new customer journey that you're creating. All right. So step three, assessing your PLG fit.

Now there are three main areas that I typically look at here. First of all, is the business model, which is the first thing I guess that comes to mind for many. So do you have a use case that is a natural fit? For the type of field you want to do. Let's say you want to use it for customer acquisition.

So you want, you want to become, you have emotion like slack or zoom hat, for example, people invite new people and they start using your product. Well, to do that, you need the certain use case that, that You know, enables that if you're selling a CRM, that might be hard, right? But if you're selling a designer collaboration software, that might be very natural.

And so it, you know, that doesn't mean it's always a no, if you're in the other scenario, but it requires more thinking and you really need to look at, you know, what is your customer audience? Like how do they behave? What are our natural emotions there? The pricing model comes into play there. So. Do you have standardized pricing or do you always do custom pricing if it's the latter that that's going to make things harder?

You know, what components do you have in your pricing? Is there like things like users or other Usage or module driven things or is it just a flat fee? All these things will Define if you're well or less well positioned. It's never a no, it's just an indication. In terms of go to market maturity, it's it's more about, like, how far are you on the journey, right?

If you're doing, like, 10 million in revenue and you have a successful sales team and growth is fast, You want to be very careful about what you put in in terms of PLG. Take small steps, small wins, and help that motion work better until you've proven that maybe this is a better thing. Whereas if growth is stagnating and, you know, it seems not to work, or maybe if you're a new company and, you know, nothing is there yet.

Then it's much easier. You can try anything basically, because it'll likely be better once it starts working. And then the last one here is organizational readiness. So you know how do you handle feature and roadmap requests? Like, how do you do prioritization? How user driven are you in your release process, in your analytics?

And so in the end, all these things need to meet a high standard for PLG to work well. So where you are today with those will kind of give some indication of how big the shift will be for you as an organization to start adopting these principles. Now, once you have a good idea for that, and ideally, of course, you'll find You'll pick something that like a part of the customer journey that allows you to achieve your goal.

That is a good fit with where you are as a company on, on these three components, and then you'll start building momentum. So you'll build a momentum again. I said, it's a lot about change management. Identify low hanging fruit is the first thing. Quick wins. You want to show that this is working.

Something's happening that's a benefit. Not just to your team or your project, but to the company. And it aligns with the other things that are happening. So it's helping sales. It's not taking away from sales. And be open about that. Share and discuss these things. And whenever you do that, make sure that you set the context for that.

So we are doing this because we were looking for these results and this is what we're seeing right now. And it is, or is not helping us get to the goal that we define. This is really important because people come in with their own frame of reference and it's a different frame of reference because PLG works differently, right?

And therefore it's, it's important to every meeting kind of take a step back before you get into it. And kind of run say what we're trying to do again and where we are on that journey. The last one there is make sure that when you have wins you celebrate them together. It's never a PLG win It's a growth win.

It's it's ideally a joint win with the sales team Or with any of the teams that were involved you want everybody to be excited about this and To get them on board with the fact that you can maybe make some bigger investments in this as a next step As you go on that journey. All right. So as things then start taking off, you keep iterating, right?

So the process is iterative. You, you need to keep looking at the data, keep improving and what's working, that's where you invest more. And, you know, at some point this will then become a solid part of your growth motion, and if you then want to take it further, if you say, Hey, there's more opportunity.

You can repeat these steps to find the next area for PLG or any other type of growth, of course, if that makes more sense there to wrap it up then. So we have some time for questions. Again, doing PLG is not an activity. It's, it's an activity. It's a strategy. It's not a goal. So while I believe in PLG, A lot.

I think it's a very exciting and powerful way to grow. I think many companies won't be able to get around it. They will have to do something with it. Doesn't mean that every problem needs to be solved with PLG or that is the only way to grow. So really look at what makes sense and what your goals are.

There are many different types of PLG. So as said, you can, you can use it for expansion as well as for customer acquisition or for marketing and dependent on your goals, this will change how you apply it and even how much work it might be to get results. Keep a look, kind of keep your eye on those objectives.

That's what matters. Not how much product lead it is or not. It matters if you're achieving your goals and based on that, just make further decisions. That is it. So let's switch to the questions.