PLG is more than just alerts
"Everything starts out looking like a toy", #90
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Hi, I’m Greg 👋! This is a weekly essay on a data-related topic, along with highlighting a few interesting stories. Writing helps me find patterns, understand trends in the data world, and create future product insights. (Also, it’s fun.) If you need a background on how we got here, check out What is Data Operations?
This week’s toy: a history of Dad Jokes, and maybe why we groan on reading or hearing them out loud. Edition 90 of this newsletter is here - it’s April 25, 2022.
The Big Idea
A short long-form essay about data things
⚙️ PLG is more than just alerts
PLG - Product Led Growth - looks easy on the surface. When trial customers show up, people get alerts in Slack, and are able to engage with those prospects as they are experiencing the product process. Some of those prospects end up buying the product, and the initial effort to find and land them is much lower than the traditional sales motion. Woohoo! When you look at successful companies that have scaled quickly, particularly in the business-to-business segment, you’ll usually find a PLG motion.
The folks at Correlated do an excellent job defining PLG:
What’s a PLG Motion? It’s a way for potential buyers to try out the product experience before they buy and to get a sense of what it’s going to be like to be a customer of that company. Some of us who have been in the software business for a hot minute may compare this to “freemium” or “free trial” but it’s a bit more than that.
Product-Led Growth is a process of letting the prospect self-discover the features and functionality of the product mostly on their own, but with a tightly choreographed sales motion behind the scenes where the team is ready to learn from that prospect, augment their trial, and potentially divert what they are experiencing as needed to deliver the best customer experience. With PLG, a team is setting up a preferred journey they hope will lead to prospects ready to have great conversations.
It’s all about the Customer Journey
A trial prospect is more than an alert in Slack. A trial prospect arrived at your site because they are curious, or because they have a problem they think you can solve, or because someone told them to check out what your product can do. In short, PLG represents the customer journey for all of your potential customers. You will notice the ones who will show up for a trial, fail to meet their needs, and leave before you have a chance to engage with them. They’re not the only prospects in the PLG game.
PLG is also the place where you first encounter a customer in the wild and ask them to do a job with your product. It’s a way to find out if your marketing machine aligns with the customer experience you’ve built through your success, product, and sales teams. And it’s also an excellent way to get almost immediate feedback for the part of your sales process that seeks to convert interested users into qualified leads lower in the funnel.
When you invite someone to try your product, you have a responsibility to invite them in the door, help them validate why they are here, and align them to what they are about to experience.
CAUTION: it’s easy to get fixated on the alerts you might get as a seller, a product person, or a support team member.
A new person has signed up!
Someone wants a demo …
There’s a support ticket from a new user …
These alerts are super important. Someone is engaging with the product! You might have built out silent notifications with a product like Userflow, or are using a more traditional method like a Zendesk chat or an in-product form. Here’s the important part: to deliver a great experience, you need to have been able to envision what a successful prospect, an average prospect, and an unsuccessful prospect might do during the PLG motion.
I made this simple flow to describe what’s going on. The part of product-led growth that generates alerts is an outcome of the strategy that drives the team to have asked a prospect to go through this in the first place.
What makes the journey possible
PLG process is not just the initial request to create an account. It’s all of the steps a prospect needs to take to go through signup, initial activation, the first-time experience, use cases that deliver value, and the decision to come back again. If the prospect doesn’t come back, the likelihood of purchase is very low.
The various teams in the company need to work together to deliver this experience. From the copy and design of the initial form by the marketing team to the rules of engagement for the sales team to the support team ready to help, all of the teams need to collaborate to deliver the PLG motion. Not far behind all of this are the product and engineering teams who have made it possible to try out the experience, to a point. Unlimited trials look a lot like unlimited users, so most trials have a pivot point where the trial forces a conversation with sales. This is usually gated on a desirable feature or the kind of behavior associated with active, paid users.
Signup: the first gate
Which users do you want for your product? Everyone wants business users, and a decent way to identify them is to ask the prospect to enter an email domain for a business email. However, not everyone wants to talk to sales during a trial process. You’ll need to determine how to handle the people who sign up with Gmail and other personal email accounts. My vote: add them to a nurture campaign in your marketing automation system regardless of whether you gate them from your trial process.
The process from signup to activation should go quickly. No one wants to wait to try out a new thing, but a minute or two is not too long to wait.
First Time User Experience
Trying the product for the first time sets the tone for using that product. I think it’s super helpful to have an overview of the terms and definitions of the product, a navigation overview, and a simple task or two that gives you the sense of using the product even if you don’t understand it the first time you try it out. Getting some early success gives you confidence, but it should also be easy to ask for help.
When you get help – either from a bot embedded in the 1xUX process or from an actual person – the expectation has to be that you need to solve that problem in just a few minutes. If you get stuck on the first try using a product, you’ll probably bail out and not come back. (Of course, some great initial marketing content may help out here, but the first experience is critical).
One of the most important use cases of the 1xux is: how to get help.
Another one: was the user able to do something and not get stuck?
The critical moment: did you see value?
What turns a trial user into a successful trial user? The moment when they see value. This could be an “aha!” moment where they are able to complete a simple example scenario in the product; a process of gaining understanding about the problem they want to solve; or simply a cool whizbang moment that makes them feel like they want to come back. Identifying and tracking this moment of value is the whole point of PLG. If you can tie specific user experiences to higher converting users, that’s an engine you can make more predictable.
Value, of course, is a subjective thing. And simply seeing value doesn’t make someone more likely to buy. It does make that prospect a Product-Qualified Lead, and the conversations you have with them are likely farther down the funnel. For the product and engineering teams, it’s critical to understand the feedback from these users because they saw something that made them continue. When some of them buy, we should also be careful of not reading too much into that experience until we see a solid pattern.
What’s the real goal of PLG?
The whole process of product led growth is to drive growth through letting people experience the product. “Product” encompasses more than what you see when you login. It’s the whole experience from end to end for a person trying out your product.
What does that look like, and what can you learn from it? Here are a few ways to get value out of the PLG process, even when prospects don’t always proceed down the funnel as expected.
Getting customers from intent or sources you didn’t see before, and using that to drive marketing efforts
Finding the rough edges of your product, and smoothing them so that subsequent trialers will have a better experience
Understanding more about how people use your product, and making inferences about where they see value
Delivering better, more personalized service so that you can make better relationships with prospects sooner
PLG done right is a forcing function to make your product and the experience around it better with every new user trial, and to learn something at the same time.
What’s the takeaway? The alert that you see when someone tries your product is the tip of the iceberg for learning about prospects. By reviewing the way they act during the trial and making controlled experiments to test the change in user behavior, you’ll get concentrated and compounded learning to improve your product and process.
Links for Reading and Sharing
These are links that caught my 👀
1/ What no one tells you about PLG - Want to read more about PLG? Here are some common pitfalls to avoid. The most important takeaway here? Just because PLG works for some businesses doesn’t mean that it’s guaranteed to work for your business.
2/ On Tall Buildings - You might think of the history of tall buildings as the history of technological advancement. As time goes on, buildings get taller, right? It turns out the economic value of those buildings is a significant factor in limiting the height of the buildings. Even though we could build taller buildings, we don’t.
3/ Questions to open your mind - As you’re thinking about PLG (or any other issue in your business), it’s handy to have a list of questions that assist brainstorming. This list is a good one. Keep Jason Cohen’s list of questions nearby the next time you need to ideate.
What to do next
Hit reply if you’ve got links to share, data stories, or want to say hello.
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The next big thing always starts out being dismissed as a “toy.” - Chris Dixon