Product-led growth (PLG) delivers the best outcomes when it’s integrated with human-powered strategies.
We talked to Peter Zawistowicz, Head of Marketing at StackBlitz, about all things PLG as part of our recent event: PLG playbooks to run in 2024.
Here are three of the top takeaways from that conversation (check out the full recording above).
1. Product sign-ups are only step one
According to Peter, go-to-market teams at companies with a PLG motion are trying to do one of five things at all times:
- Convert: Turn users of a free version of a product into paying customers.
- Retain: Ensure customers continue to use and see value from a product.
- Expand: Increase revenue from existing customers.
- Upsell: Expand customer usage through the adoption of a wider set of products or features.
- Consolidate: Reduce customer costs by consolidating users under a single contract.
But it all starts with customer activation.
You can’t turn free trials into real revenue—or establish long-term customer relationships—if people aren’t experiencing product value.
“Sometimes it’s just a matter of getting people to actually use your product,” Peter said. “This makes enablement hugely important.”
You can only convert users who actually use your product. Equip product users with the content they need—be it documentation, use cases from customers with similar pain points, or customized product walkthroughs—to get them activated.
Once a customer converts, retention should be an equally high priority.
Providing white-glove support to each and every customer is impractical, if not impossible. So you’ll need to find the right balance between low-touch and high-touch retention strategies for different customers.
For example, sending automated emails that summarize product usage and customer value is a scalable, low-touch way to build customer loyalty.
At the same time, if you monitor accounts for major shifts—such as product champions leaving—you’ll know when to give certain customers extra attention.
Common Room’s filters and real-time alerts features allow you to quickly find and stay notified of organization changes across key accounts. This makes it easy to follow up on job changes for both customer acquisition and customer retention purposes.
2. Business model dictates expansion strategy
How you approach expansion will depend on whether your business model is consumption-based or seat-based, according to Peter.
With a consumption-based model, the goal is to inspire users to use the product more. This can be accomplished by introducing new use cases or highlighting helpful features that are being underutilized.
Meanwhile, seat-based models are dependent on the number of users actually using the product. The goal here is to uncover which teams or individuals at an organization aren’t currently using the product but could benefit from it.
In either case, the common thread is value-adding.
Don’t focus on expansion for the sake of expansion. Customers who are consistently getting value from your product will be much easier to retain than those with hundreds of seats but only a few people logging in.
No matter your business model, you can’t depend on the product itself to drive expansions.
“Sales has a huge role to play here as well, whether that's getting additional users of the company by finding out different working groups that might be able to get value [...] or literally working with their existing champions and asking for introductions and referrals,” Peter said.
Common Room’s Prospector feature allows you to uncover profiles and contact details for any non-engaged members of target accounts. This makes it easy to find decision-makers who may be inactive in your product and not tracked in your CRM.
3. Upsell smart and consolidate smarter
While expansions entail using more of the same product, upsells involve additional products.
Beyond driving net new revenue, upsells can also boost customer retention, according to Peter. The more SKUs a customer has, the more likely they are to stick around.
But organizations must make sure customers are in a healthy place before trying to upsell them.
“It's a big mistake to try and upsell a customer if you actually should be focused on retaining them,” Peter said. “You're not going to win a renewal by ignoring the original reason your customer bought and instead trying to sell them something else.”
That said, the same tactics you use to support other plays can be applied to upsells, such as highlighting product add-ons that benefit different teams.
While it may sound counterintuitive, consolidating accounts can also be a great way to grow revenue.
It’s common for multiple stakeholders from different teams to sign up for self-serve products for different use cases.
By consolidating accounts under one roof in exchange for a long-term commitment, you can deliver customers a smaller overall bill while increasing long-term revenue.
“Instead of having a variable monthly spend that might actually sum up to be something higher, you're securing an annual commitment at a lower dollar amount,” Peter said. “So the win-win is you get predictable revenue and the customer gets a lower spend. Most CFOs are going to sign that all day long.”
Sustainable growth is a marathon, not a sprint. A jumble of disparate product users are more likely to churn. A smaller annual spend is more beneficial if you know you can count on it for the whole year.
Keep in mind that consolidation plays can also apply to your competitors.
If your product can serve the same function as another tool in your customer’s tech stack, it’s worth exploring how you can help them cut a line item and save some money.
Common Room’s filters feature allows you to see which tools are part of an organization’s tech stack. This makes it easy to find complementary products as well as potential rip-and-replace opportunities.
Of course, running these and other plays requires human-led initiative and data-driven insights.
Make sure your customer-facing teams have access to the intelligence they need to take the reins.
“One of the challenges that I've had pretty much everywhere where we've had both a sales team and a product-led motion is sales is an afterthought for a lot of the product team and the marketing team,” Peter said. “We forget to or deprioritize making sure our sellers and our customer-facing roles have access to that [information].”
Your product creates opportunities, but it’s your people who pull the levers.
These are just a few of the takeaways from our conversation with StackBlitz.
Watch the recording for the full story.
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