Jul 31st, 2023

What the fastest-growing PLG companies have in common: patterns from Keyplay and PeerSignal

Product-led growth (PLG) is now the norm in the B2B SaaS world, but it’s not enough to let your product do the talking.

Today’s fastest-growing PLG companies have a big bag of tricks that goes well beyond self-service sign-ups, as evidenced by the 2023 PLG Rising 40 Awards.

Common Room’s COO Jake Randall talked about that and much more with Adam Schoenfeld, CEO and co-founder at Keyplay, and Camille Trent, Director of Content & Community at PeerSignal, in our recent event: Putting the "G" in PLG.

Here are three of the top takeaways from that conversation, including:

  • Why product-led growth doesn’t mean getting rid of your sales team
  • How community throws fuel on the PLG fire
  • Which PLG strategies market leaders rely on

1. PLG leaders invest in sales pros

There’s a common misconception about product-led growth companies. Namely, that they don’t have salespeople.

The truth is, while many PLG companies start as strictly self-service, they tend to invest in sales teams as they grow.

Image of chart showing sales headcount versus number of employees

Here’s why: Credit card transactions don’t bring in enough revenue to power sustainable growth (not to mention the fact that PLG products actually have lower conversion rates than sales-led products).

It turns out a human touch (that is, sales reps) are still the best way to reel in enterprise deals and scale revenue.

“Generally, as [PLG companies] get bigger, they invest more in sales,” Adam said. “They're bringing in a few reps even really early on.”
What it means for PLG companies: Users adopt software, but the companies they work for buy it. Exactly when you begin to build out a sales team—and how much headcount you need—will depend on a number of factors, but sales professionals are key to selling to organizations instead of just individuals.

It’s common for PLG companies to use sales teams to convert product-qualified leads into opportunities and deals, especially at the enterprise level. Research reveals that 69% of the fastest-growing PLG companies have an enterprise offer to complement their product-led growth motion.

“If you have a single-player mode where an individual inside of a company can sign up and swipe their card, that's great,” Adam said. “But a lot of times what they want to do is parlay that into a CIO-, CMO-, or company-level purchase, and a lot of times it’s just impossible for that to happen on its own.”

2. Community powers PLG

PLG companies are more likely to have user communities than other SaaS companies. That goes triple for the fastest-growing ones—they’re 3.5 times more likely to have a community than their peers.

Image of chart showing owned community programs among companies
“It's such a powerful flywheel if you get it working,” Adam said. “It doesn't just impact acquisition, it can help at every part of the journey.”

But it’s important to understand what “community” means. It’s not just a company-owned Slack forum—it’s everywhere your customers (and potential customers) are.

“I think we get stuck on, ‘A community is this structure—it's a Slack group,’” Adam said. “But if you think of community with a capital ‘c’, it's the people you want to serve. Or the community already kind of exists, and then it's like, what are the mechanisms you're going to use as a company to get involved in that?”
What it means for PLG companies: Owned communities are a great way to educate and enable product users, but don’t forget about the community activity you don’t control. PLG success is fueled by an ecosystem of fellow product users. You need visibility into those digital interactions across channels in order to influence them and maximize their impact.

In many ways user communities are a complement to search engine optimization—they’re how modern buyers discover and research products.

“A decade ago, it was HubSpot saying inbound marketing, and it was primarily SEO that you could do if you're bootstrapped,” Camille said. “You couldn't do paid ads, it was too expensive. And I think this is just another way to do inbound, if you think about it that way.”

3. Free trials and freemium products aren’t mutually exclusive

PLG is synonymous with free trials and freemium business models. The question many companies face is: Which one should I choose?

“I really think that you have to go from first principles about who is your buyer, what's the complexity of your product, and what's the way that it gets used and bought,” Adam said.

Free trials are popular because they create a sense of urgency. They also make sense from a unit economics standpoint.

But if your product is complicated, a free trial may do more harm than good. With a freemium model, users have more time to learn your product and understand its value.

On the other hand, if you have a product that’s expensive to run, you might not be able to justify a freemium model. Not many companies can afford to ride out a freemium business model that costs more than it makes for extended periods of time.

Many PLG companies use a reverse trial, which is essentially a hybrid of a free trial and freemium product.

“You have a free forever plan, but when you sign up on the free tier, you get put into premium on a trial,” Adam said. “So instead of it just being a trial that ends and you upgrade, when your trial ends, you revert back to the free tier. Which is a really nice way to give people the full power of what you do and try to convert them on that.”
What it means for PLG companies: When deciding how to approach your PLG strategy, consider what makes the most sense for your buyers (and your bottom line). It’s not just a matter of collecting sign-ups, but also converting them into paid customers. Don’t be afraid to think outside the box.

Today’s PLG leaders don’t view their business strategies as binary choices. They mix and match models and switch between user-led and sales-led tactics.

“A recurring theme with modern PLG companies is that they're not thinking one or the other,” Camille said. “They're thinking about the full buyer journey and how they can cater to that. [...] It's really this holistic thinking that seems to be the common theme between the winners.”

Product-led growth isn’t a set-it-and-forget-it strategy. It requires human-led touch, supporting ecosystems, and informed experimentation.

Make sure you have the right tools for the job.

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