PLG Motions Framework: The 3 Product-Led Motions
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5 Things I’ve Learned From The State Of PLG, 2023 Edition

Usha Vadapalli
July 4, 2023

Product-led growth is implemented differently by each company. We wanted to know how successful PLG companies are doing it and surveyed a bunch of them to gather insights. We recently published The State of Product-Led Growth 2023 report summarizing our findings.

Here are my top 5 learnings from the report.

Who Owns Net Revenue Retention (NRR)?

Net Revenue Retention (NRR) is one of the most important metrics to chase for a sustainable growth graph, and the State of PLG survey respondents agree. It is a focus for a majority of B2B SaaS businesses, product-led or not. But, interestingly, when asked if NRR is a focus for their role more than half of the respondents said NO.

Many more PLG companies as compared to a few years ago are seeing NRR as a star metric to chase and it is perceived as a shared organizational goal. But, it is yet to trickle down to individual level KPI for team members.

The Big Opportunity

More than two-thirds of the survey respondents believe that landing new customers is their big opportunity to grow this year.

While expanding revenue from existing accounts is a more sustainable growth strategy, focusing on acquiring new customers can seem like a viable strategy in B2B SaaS due to reasons like

  1. Expanding accounts requires a deep understanding of the customer's needs, goals, and intent. Building relationships with existing customers and offering them tailored solutions can take more time and effort. However, this is a worthwhile investment in the long term, as it can lead to deeper and more profitable relationships with existing customers.
  2. Compared to expanding, acquiring new customers can be perceived as a faster and easier way to grow revenue, particularly if the company has a strong sales team and effective marketing strategies. So, it serves short-term revenue goals.
  3. Focusing on new customer acquisition can be appealing if the existing customer base is limited or saturated and if you are in a highly competitive market.

It may be tempting to prioritize new customer acquisition, but it is essential to consider the long-term benefits of account expansion by building a deeper understanding of your customers’ product behavior.

User Communications

NRR is one more reason to consider expanding revenue from existing customers. Let me explain.

The State of PLG 2023 report shows that companies with high NRR are more likely to communicate with more than 75% of their database every month. Communicating with almost the entire database of users is one thing PLG companies with high NRR are doing differently compared to the low NRR businesses.

Customer communication at scale is a prominent growth opportunity that is overlooked by the majority of low NRR companies. It is generally easier to expand revenue from existing customers rather than acquire new ones. Because these customers are already using the company's product and therefore more receptive compared to those who simply download content.

For a more detailed commentary on this topic, check out the State of PLG webinar with the industry stalwarts.

What Do Growth Teams Look Like?

Marketing is the dominant function in cross-functional growth teams and a majority of the growth teams surveyed report to the same department.

This makes a lot of sense since acquiring new opportunities is seen as the big opportunity by PLG companies this year. Marketing teams are traditionally tasked with acquiring net new pipeline. And, the State of PLG report indicates that growth teams have more marketing professionals channeling their efforts into acquiring users and engaging customers.

Seeing Product as a close second to Marketing function in this chart is no surprise. Soon after acquiring new users the ownership of onboarding and product adoption is with the product team in the majority of the PLG companies surveyed.

PQLs - Definition and Scoring Model

Product Qualified Leads (PQLs) are important to define, track, and optimize for any product-led business interested in monetizing their PLG motion. It is surprising to see that 18% of the State of PLG survey respondents are not tracking PQLs.

The chart shows that the majority of the survey participants are not happy with their current definition and scoring model of PQLs. As expressed in the State of PLG webinar by Francis Brero, VP of Product at MadKudu, the secret lies in understanding the customer journey in your product.

If you are still thinking about maximizing business value from your PLG motion, you should check out inflection.io. We built Inflection - a customer communication platform for the modern data stack to help PLG businesses with quicker onboarding, better adoption, and get more revenue and pipeline. See a demo.

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