GTMF Nuances by Strategy:
Top tips, common mistakes & KPIs

This approach takes the best from the B2C playbook. In PLG businesses, customers can discover, test and buy the product directly, without necessarily requiring direct input from your team, therefore making the product itself a source and driver of revenue.

​

Top tips to succeed with this approach:

​​​​

• Think carefully about the roles of product, marketing and growth teams - how they interact, what their KPIs and responsibilities are. Generating ARR in a PLG business is very much a team sport!

• Put the end user, not the buyer, first – it's absolutely necessary for product managers and designers to focus on the end user, to create a product that’s intuitive and simple to use.

• Consider organic and viral acquisition – because the ARR of each individual new account is generally low in this GTM model, implement strategies to foster word-of-mouth acquisition.

• Don't gate product features - make sure users can see and experience the full value of your product, but for only a short period of time, for a limited number of users/transactions/data etc. 

• Sales has a role, eventually! – PLG inside sales teams shine in identifying and upselling high-growth potential accounts within the customer base, but avoid layering this on too early. Also note that certain buyer groups (such as developers) are often resistant to heavy-touch sales processes and prefer exploring themselves.

• Ditch some of the classic SaaS metrics – when CAC is artificially low because it doesn’t incorporate R&D resourcing, you need different metrics to understand the efficiency of your GTM motion.

 

​

Is PLG right for your company?

 

PLG has become very popular in the past few years, but is it right for all companies? We believe all companies can benefit from core elements of the PLG philosophy: remove manual steps in the buying process, design the product for the end-user, and share responsibility with the product team for growth targets. But fully adopting a user-led acquisition, conversion and retention strategy isn’t for all companies, and that’s okay. We commonly see three cases where it’s particularly hard:

 

1. Companies selling into industries that have scarcely begun to adopt SaaS as a business model.

2. Companies defining a new product category without any comparables.

3. Companies whose products' core value can’t be appreciated if adopted only at an individual user or team level.

 

What about the traditional SaaS metrics?

 

Because of the presence of R&D team costs in ‘customer acquisition’ activity, many of the traditional SaaS metrics that rely on S&M costs now under-reflect the true cost of revenue generating activities. Just as the optimal PLG team structure and interaction between product, marketing and growth is currently being discovered, there’s also no clear consensus on the next generation of standardised SaaS metrics that are as pervasive as LTV/CAC and CAC payback, for example. Some similarities are present compared with a traditional analysis. Cohort analysis is still important, as are funnel conversion metrics (with Product Qualified Leads or PQLs). Also, user engagement has increased in importance as it's no longer just a measure of customer health but core to driving revenue. But some new metrics such as natural rate of growth (from OpenView) and ROIIC (from Insight Partners) are emerging, and some traditional metrics are resurfacing in importance, such as burn multiples.

​

Whilst these metrics and benchmarks are being developed, we encourage detailed tracking of everything around 3 key areas:

 

1. Discovery – including PQLs, funnel conversion rates, activation rates, time to value

2. Conversion – from free to paid, including initial revenue per customer/user and classic engagement statistics

3. Expansion – net revenue retention, user/team expansion, NPS and customer satisfaction