PLG Tactics

Mindset matters: Driving efficient growth with PLG

The biggest PLG myth is that it’s only relevant for SMB. People are people. They want to touch, feel, and understand the value of a product on their own time.

Phil Corson

October 13, 2022
·
 min read

Rapidly changing macroeconomic conditions inevitably bring shake-ups to the status quo. What this means for the Product-Led Growth (PLG) community is greater opportunity, especially as the mindset among businesses and investors shifts from “growth at all costs” to an emphasis on efficient growth.

Solving business and customer problems with efficiency and speed over the past eight years led me to PLG, where I make trade offs between building for speed or to scale every day. Based on this experience, here’s where I believe a PLG methodology can help you deliver incremental gains—leading to even bigger wins—in our new world focused on efficient growth.

Fluid and ever-changing, PQLs will evolve as you grow

The very definition of efficient growth, PLG is a user-centric business model that drives customer acquisition and growth via continuous product iteration and evolution. It’s designed to deliver enhanced product experiences across all touchpoints of the user journey, thus driving sticky user adoption. In this way, it’s similar to Agile Development—a software development approach based on iterative collaboration.

PLG is a state of continuous adaptation, which means your product qualified lead (PQL) milestones will similarly evolve as new features and experiences are built into the product. Because unlike marketing qualified leads—where conversion happens at a single moment in time—PQLs aren’t meant to be static black-and-white, hard-and-fast engagement metrics. 

What this means for driving efficient growth is two-fold:

  • First, while marketing teams optimize for a single moment of conversion, your product team must continually optimize for customer value. In other words, where and how can you eliminate friction, guiding users to value faster on an ongoing basis?
  • Second: Ever-changing and always fluid, PQLs exist as a spectrum of behaviors. As your product evolves, where and how can you glean regular insight into user behavior to identify behavioral changes, tweak different PQLs, and drive increased growth?

With this in mind, it’s not necessary to agonize over picking the perfect PQL because it should be constantly evolving. If you’ve picked an activity or behavior that conceptually makes sense, you can iterate on it (sometimes using AI/ML) based on changes in usage patterns and your product. 

Case in point: Oyster has a cost calculator that breaks down withholdings, taxes, pay, and subscription fees by hiring location. If someone hasn’t used this feature, we know they’re not ready to hire. If they do use it, it’s the tipping point to all sorts of other key engagement activities. So, we initially defined our PQL with our cost calculator before factoring in other behavior patterns as we uncovered them. Eventually, we learned that using our cost calculator in combination with another key feature—our benefits tool— indicated that someone is more likely to activate, which in our case is to submit a new hire.

Think about monetization as a series of small wins

Monetization is another PLG growth lever without a standard set of rules. When it comes to trying to solve any problem with software, starting out with an agile mindset is what’s most important. Pricing and packaging are intimidating for a lot of folks, and there are endless monetization plays you can take. To this end, I recommend using it as an opportunity to make incremental gains and build a more iterative muscle. For example, if you’re a massive organization trying to roll out more productive growth pricing, start simple with charm pricing—try out $99 instead of $100. If you’re a smaller company and new to the PLG journey, consider seat-based pricing as your starting point. Then iterate again and again as you better understand your value moments in your product.

I think about pricing as a team sport. Like it or not, everyone in your organization has an opinion on two things: your brand and your price. Collaborating with a cross-functional group of folks, such as sales, partnerships, finance, product, and marketing, is an easy way to get the creative juices flowing. Someone might suggest an idea for a new pricing page, or ways to visualize or position packages differently. Or perhaps you discover a small tweak that dramatically improves the checkout flow. As long as you remain customer-focused and iterate small enough with a high enough velocity, you’ll eventually right the monetization ship in the best direction for sustainable growth. 

Oyster is an example of how monetization can vary wildly across the PLG ecosystem. A lot of PLG business models attract and acquire users via a free plan, activating and converting them into paying customers (often with room for expansion!). Oyster’s approach is a bit different. Its platform is entirely free to use but we monetize hiring events, such as a U.S. employer hiring a candidate in France. I’ve also found that our customer behavior patterns between hiring cycles are also quite unique—nearly identical to when a user first enters the platform. So, how we evolve Oyster’s monetization strategy will differ greatly from someone whose product is subscribed to once with more linear customer usage patterns, whereas a customer at Oyster subscribes again and again every time they hire. 

The right PLG approach holds universal appeal

The biggest PLG myth is that it’s only relevant for the Small-Medium sized market segment (SMB). This couldn’t be further from the truth. People are people. They want to touch, feel, and understand the value of a product on their own time. This is a universal truth across all enterprise, mid-market, and SMB companies. What’s different across these companies is the basket size and how many people are involved in a purchase decision. In other words: the bigger the basket size, the more people involved, and the more nuanced product-led needs to be integrated into the value realization and the mental conversion decision for a buyer to purchase. 

Navigating this perception and these nuances have been my biggest learning curve. It’s also where I lean into PLG as a methodology the most, adapting its principles to better fit more complex or complicated GTM strategies. For example, PLG isn’t as simple as offering users a 14-day free trial when moving mid-market. The complexity of how mid-market customers gain approval and buy software often requires some sales involvement. Here, PLG needs to be deployed strategically so it’s complementary to a mid-market move and the buying process for those stakeholders. 

It’s true some enterprise products can’t actually deploy a true PLG model just by the nature of the product, where it cannot be truly end-user centric such as healthcare software (not everyone has a collaboration product like Notion or Zoom!). In a more traditional enterprise play, I see PLG as an opportunity to trigger human behavior that leads to new, larger deals for Sales either through expansion to an enterprise subscription as a customer grows, or when for example, say seven people from the same enterprise signed up and created their own team accounts in your product. This is the kind of data-driven insight PLG helps uncover so Sales can strike up the right conversations with the right people, and pursue those larger enterprise deals while maintaining a healthy CAC and payback than if Sales was going at it alone.

Ultimately, the beauty of PLG is it means different things for different folks. Pairing it with an agile mindset makes deploying new tactics much easier—supporting healthier sales motions and driving more efficient, sustainable growth.

Ready to see a product-led sales motion in action?
Turn your self-serve funnel into a revenue engine.
Get a demo

Company Update - An End to this Journey

Calixa is winding down January 1st, 2024

Thomas Schiavone

June 27, 2023
·
 min read
Advice for Growth

5 Marketing Leaders Share How to Drive Product Adoption

Marketing leaders from across growth, ops, and product marketing share how they activate and retain their user base.

Cassie Pallesen

June 20, 2023
·
 min read
Product Updates

Run sales plays in Calixa’s Deal Inbox

Learn how sales leaders drive repeatable success by running plays out of the Deal Inbox. Reps save time with guidance on how to act on their best accounts.

Joanna Huang

June 16, 2023
·
 min read
Advice for Growth

Mindset matters: Driving efficient growth with PLG

The biggest PLG myth is that it’s only relevant for SMB. People are people. They want to touch, feel, and understand the value of a product on their own time.

Phil Corson
|
Director of Product Growth
|
Oyster
High Intent Logo

Your PLG roundup in 5 minutes.

October 13, 2022
ReadTime

Rapidly changing macroeconomic conditions inevitably bring shake-ups to the status quo. What this means for the Product-Led Growth (PLG) community is greater opportunity, especially as the mindset among businesses and investors shifts from “growth at all costs” to an emphasis on efficient growth.

Solving business and customer problems with efficiency and speed over the past eight years led me to PLG, where I make trade offs between building for speed or to scale every day. Based on this experience, here’s where I believe a PLG methodology can help you deliver incremental gains—leading to even bigger wins—in our new world focused on efficient growth.

Fluid and ever-changing, PQLs will evolve as you grow

The very definition of efficient growth, PLG is a user-centric business model that drives customer acquisition and growth via continuous product iteration and evolution. It’s designed to deliver enhanced product experiences across all touchpoints of the user journey, thus driving sticky user adoption. In this way, it’s similar to Agile Development—a software development approach based on iterative collaboration.

PLG is a state of continuous adaptation, which means your product qualified lead (PQL) milestones will similarly evolve as new features and experiences are built into the product. Because unlike marketing qualified leads—where conversion happens at a single moment in time—PQLs aren’t meant to be static black-and-white, hard-and-fast engagement metrics. 

What this means for driving efficient growth is two-fold:

  • First, while marketing teams optimize for a single moment of conversion, your product team must continually optimize for customer value. In other words, where and how can you eliminate friction, guiding users to value faster on an ongoing basis?
  • Second: Ever-changing and always fluid, PQLs exist as a spectrum of behaviors. As your product evolves, where and how can you glean regular insight into user behavior to identify behavioral changes, tweak different PQLs, and drive increased growth?

With this in mind, it’s not necessary to agonize over picking the perfect PQL because it should be constantly evolving. If you’ve picked an activity or behavior that conceptually makes sense, you can iterate on it (sometimes using AI/ML) based on changes in usage patterns and your product. 

Case in point: Oyster has a cost calculator that breaks down withholdings, taxes, pay, and subscription fees by hiring location. If someone hasn’t used this feature, we know they’re not ready to hire. If they do use it, it’s the tipping point to all sorts of other key engagement activities. So, we initially defined our PQL with our cost calculator before factoring in other behavior patterns as we uncovered them. Eventually, we learned that using our cost calculator in combination with another key feature—our benefits tool— indicated that someone is more likely to activate, which in our case is to submit a new hire.

Think about monetization as a series of small wins

Monetization is another PLG growth lever without a standard set of rules. When it comes to trying to solve any problem with software, starting out with an agile mindset is what’s most important. Pricing and packaging are intimidating for a lot of folks, and there are endless monetization plays you can take. To this end, I recommend using it as an opportunity to make incremental gains and build a more iterative muscle. For example, if you’re a massive organization trying to roll out more productive growth pricing, start simple with charm pricing—try out $99 instead of $100. If you’re a smaller company and new to the PLG journey, consider seat-based pricing as your starting point. Then iterate again and again as you better understand your value moments in your product.

I think about pricing as a team sport. Like it or not, everyone in your organization has an opinion on two things: your brand and your price. Collaborating with a cross-functional group of folks, such as sales, partnerships, finance, product, and marketing, is an easy way to get the creative juices flowing. Someone might suggest an idea for a new pricing page, or ways to visualize or position packages differently. Or perhaps you discover a small tweak that dramatically improves the checkout flow. As long as you remain customer-focused and iterate small enough with a high enough velocity, you’ll eventually right the monetization ship in the best direction for sustainable growth. 

Oyster is an example of how monetization can vary wildly across the PLG ecosystem. A lot of PLG business models attract and acquire users via a free plan, activating and converting them into paying customers (often with room for expansion!). Oyster’s approach is a bit different. Its platform is entirely free to use but we monetize hiring events, such as a U.S. employer hiring a candidate in France. I’ve also found that our customer behavior patterns between hiring cycles are also quite unique—nearly identical to when a user first enters the platform. So, how we evolve Oyster’s monetization strategy will differ greatly from someone whose product is subscribed to once with more linear customer usage patterns, whereas a customer at Oyster subscribes again and again every time they hire. 

The right PLG approach holds universal appeal

The biggest PLG myth is that it’s only relevant for the Small-Medium sized market segment (SMB). This couldn’t be further from the truth. People are people. They want to touch, feel, and understand the value of a product on their own time. This is a universal truth across all enterprise, mid-market, and SMB companies. What’s different across these companies is the basket size and how many people are involved in a purchase decision. In other words: the bigger the basket size, the more people involved, and the more nuanced product-led needs to be integrated into the value realization and the mental conversion decision for a buyer to purchase. 

Navigating this perception and these nuances have been my biggest learning curve. It’s also where I lean into PLG as a methodology the most, adapting its principles to better fit more complex or complicated GTM strategies. For example, PLG isn’t as simple as offering users a 14-day free trial when moving mid-market. The complexity of how mid-market customers gain approval and buy software often requires some sales involvement. Here, PLG needs to be deployed strategically so it’s complementary to a mid-market move and the buying process for those stakeholders. 

It’s true some enterprise products can’t actually deploy a true PLG model just by the nature of the product, where it cannot be truly end-user centric such as healthcare software (not everyone has a collaboration product like Notion or Zoom!). In a more traditional enterprise play, I see PLG as an opportunity to trigger human behavior that leads to new, larger deals for Sales either through expansion to an enterprise subscription as a customer grows, or when for example, say seven people from the same enterprise signed up and created their own team accounts in your product. This is the kind of data-driven insight PLG helps uncover so Sales can strike up the right conversations with the right people, and pursue those larger enterprise deals while maintaining a healthy CAC and payback than if Sales was going at it alone.

Ultimately, the beauty of PLG is it means different things for different folks. Pairing it with an agile mindset makes deploying new tactics much easier—supporting healthier sales motions and driving more efficient, sustainable growth.

Phil Corson

Director of Product Growth

,

Oyster

With nearly a decade of experience in B2B SaaS and Product Management with a specialization in Product Growth, I have found my passion of solving problems for businesses and customers. I make trade-off decisions daily to build for speed vs. build to scale, with a proven track record for growing multi-million-dollar software products in diverse industries.

LinkedIn | Oyster