What do some of the most successful PLG companies have in common? How do you build a best-in-class go-to-market model to get to 100mn ARR and beyond?
Iconic PLG companies share how they integrated GTM into their growth strategy to go from single digits to over a billion in ARR.
Lightspeed Partner, Anoushka Vaswani, is joined by Raj Sarkar, CMO at 1Password, Kim Walsh, SVP, Sales, Partnerships and Customer Success at Apollo.io, and Chris De Vylder, CRO at Sentry, to pass along key lessons from their growth journey.
Scaling a PLG company
While it’s great to figure out a PLG model that allows you to scale your revenue with inbound, it cannot stop there. Be proactive about sales and add a sales-assist motion to make the journey frictionless for your customers.
Strategy: To get started, identify playbooks that yield the highest revenue. Look at your install base, do a data analytics exercise, and understand your free and paid customers. Then build your segmentation and sales processes around that.
A customer-centric approach to growth is about serving the customer in their channel of preference—chat box, phone call, or talking to a sales rep.
“Let the customer buy through their preferred channel.” – Kim Walsh
Data: If you’re serious about building a PLG company, you need a robust, unified data platform. The data siloed away in different warehouses (Salesforce, Google Analytics, or Redshift) need to talk to each other.
Team: Similar to scattered data, PLG companies often bifurcate their growth funnel. Marketing, design, and product teams work to optimize one end of the funnel at the cost of the other.
The value of a competent growth team lies in unifying these functions and working with aligned goals.
“Having a growth team that is competent in product, marketing, and design is an essential part of the PLG motion.” – Raj Sarkar
Starting outbound in a PLG model
PLG companies want a lot of inbound—it’s easier and converts at a much higher rate than outbound. Outbound requires that companies identify the customers they want to go after proactively and define winning playbooks to implement and enable the sales teams on.
But when should you start outbound—10 million users? 20 million? When your free and single-paying customers flatline?
Kim argues that it is already too late. If you have product market fit, don’t wait to implement outbound. You can do outbound simultaneously. Start early, put in the drills, and get to know your personas better.
“If you don’t want to rest on your laurels, you’ve got to do the hard thing from day one.” – Kim Walsh
Chris, on the other hand, advocates for getting to $10M in ARR without a salesperson to prove that you have a product-market fit before you start outbound.
Regardless, be furious about outbound and bring an entrepreneurial mindset to your marketing. Outbound fury is about getting customer attention through tactics like viral tweets, fun videos, controversial blog posts, and a constant presence in the media.
Assuming you have the perfect PLG motion, it will eventually settle at an organic growth rate— approximately 30% on average.
“Are your investors happy with your organic growth rate? If not, add sales energy to compound the interest.” – Chris De Vylder
How to define customer success
Selling to enterprises is convincing an economic buyer that your product is the solution they are looking for. To do that, define what success means for you and your customers. Defining customer success comes down to three key things.
- Understand the customer journey. Create a customer journey map with customer sentiment in mind and the functions that need to serve the customer.
- Identify friction points. Take stock of customer satisfaction at each point of the journey—product, engineering, design, growth, presales, support, and post-sales.
- Build a voice of the customer program. Include customers in weekly meetings and key decisions to ensure you’re truly serving them.
“Customer success is no longer a post-sales function. It starts at the beginning when someone interacts with your brand.” – Kim Walsh
Hiring and collaboration for growth
The product marketing team is the first function to hire for. Product marketing takes care of messaging, positioning, understanding the customer and buyer persona, and more. The next hiring focus should be growth marketing. You need someone to focus on the funnel, understand the leaks, and get them fixed.
At the same time, you can start hiring for unpaid channels—someone who understands SEO and how to build a community. Once this is in place, start investing in paid channels.
Collaboration is complex, especially with big teams and multiple functions. For successful collaboration, every stakeholder must align on where they see the opportunity and understand what it will take to chase it. Once that is done, you can build an MVP and align systems and infrastructure to the goal.
As for accountability, ensure that every function has a company-level KPI that they are working towards. Lock in on the four pillars of your strategy and ensure that each function’s KPIs tie into that.
- Experiment with sales early and sharpen your product narrative.
- Keep focusing on the PLG motion, let your core tenets be your north star, and evolve your sales team around it.
- Figure out how your customers want to buy and meet them there. A proactive sales team that minimizes customer friction is the best-kept secret to a healthy PLG engine.
- Invest in a unified data platform. Hire a CTO and unify the entire data function.
- Hire a competent end-to-end funnel growth team. Don’t bifurcate the funnel between the different functions.