PLG is a journey, not a place.
It seems PLG is a relatively intuitive process, but it is pretty complex once you consider how the entire marketing infrastructure, operations, and teams must adapt to serve the customers. To better understand the process and turn product usage into pipeline, we met with Minami Rojas, Head of Growth at Endgame. After a candid and insightful conversation, we learned that one of the most simple yet ignored ways to improve PLG is to put ourselves in the shoes of our users.
Note: Before you continue reading, we know this is an oversimplified version of PLG systems. Depending on your product, customer, vertical, etc., there is much more complexity and nuances to consider.
PLG is about providing value, not about being pushy…
Digital marketing traditionally has had a role of filling a healthy pipeline for sales teams. The warmer the leads, the easier it was to close. To do so, marketers followed a set of patterns that included gating content, capturing emails, and qualifying leads (among many others), to ensure only the people who were ready to buy could talk to a sales rep. This was done to both - make the best user of sellers time & also ensure product/ prospect fit.
This paradigm still holds today if you sell to particular segments/types of users. But in the PLG world, however, a couple of essential things push this structure a bit to let the users be at the center and control what and how they want to buy digital products. How did this happen? There are plenty of reasons, but here are a couple of fundamental changes to keep in mind to understand PLG:
IT departments are no longer in control: having a great product is just an element of the equation. Other areas (Customer service, Marketing, Sales, etc.) in a much more mature tech market with many options are gaining more traction and agency within organizations.
Building a company that sells to other YCombinator/startup-like companies is absolutely possible: People in these markets, with tons of experience buying/building products online, are tired of having to talk to sales. They want to “try” and “do” things by themselves rather than going through a long process before being able to buy the product.
In a PLG scenario, given that no “traditional sales teams” can “convince” you to buy the product, there has to be an incentive built within the product to let users try to upgrade from your basic plan. Sure, everything leads to an upgrade, but instead of stopping you from using the product, the pricing experience becomes an informational section to determine whether or not upgrading is worth it .
Product teams in this scenario have multiple challenges, but primarily there are a couple of tensions/contradictions they must address:
Building a good but not a great product: Building a good enough product to solve a concrete problem while simultaneously ensuring it is not so great that no one ever wants to upgrade to a paid plan. This is where Evernote found its demise. Their free plan was so generous that no one ever felt the need to upgrade.
Thoughtful tracking, not surveillance: Building a way to track and understand signals (behavior / product events) from several types of users to make sure they upgrade to a paid plan without becoming unwanted emails in their inbox.
And now, let us show you a couple of PLG scenarios:
Hypothetical SMB case study: Audiograms.
Rana just joined the marketing team at a small local shop in Toronto. Her first task is to help repurpose old podcasts into audiograms. She has some experience in video editing and has played around a bit with audio in the past, but audiograms are a new challenge for her.
First, she gives it a try using the Adobe suite. Sure you can create audiograms, but after spending a couple of hours creating the initial template, she realizes there must be a more straightforward way to do them. She does some research and arrives at multiple video editor SaaS solutions with affordable pricing for the organization. Naturally, she creates a couple of free accounts and tries them out.
Option A: Frustration without fulfilling JTBD (bad PLG)
Rana finds a promising option after spending some time on Google checking the category and searching for solutions to her problem. Rana creates a "Free account" with her corporate credentials and adds the video as well as a couple of templates the design team created for the audiogram. She is gladly surprised that the app automatically makes the captions.
Once she is ready to export, however, something terrible happens.
"To export, please upgrade to our paid plan here."
"What a waste of time." She thinks and moves forward to another option.
A couple of days later, she goes back to check her email and finds a message from the same company, inviting her to log back in to finish her project. They even offer a "limited time" package where for a dollar, she can export up to 10 audiograms per month.
It is almost tempting, but unfortunately, given that she has already figured out how to solve the problem with another tool, she skips the offer. Not only that but the following week after receiving more emails, she decides she has to either unsubscribe from these messages, close the account or move the messages to the spam folder.
Not a great experience for Rana. And definitely a missed opportunity for the app that could have allowed her to download a "trial audiogram" for free on her initial experience.
Why is this a bad PLG experience?
As we discussed on our podcast with Emily Kramer, one of the most critical actions a good PLG motion must allow users to accomplish is to show it solves the use case. In this case, Rana isn't looking for an online app to do audiograms; in reality, she is looking for a way to save time and get the audiogram ready to be posted.
Blocking her from downloading the audiogram made the app's value unclear.
Rana cannot get her job done; she can potentially see it as an option, but unfortunately, in a crowded category where your competitors allow free exports, this is not competitive nor functional. It becomes worse once her email gets flooded with messages inviting her to use the app again - she already found an alternative solution; why would she find these comms valuable?
Once your product leads the interaction and potential purchases with users, the focus on sales shifts from a "gated" mindset (limiting audiogram exports) to a "useful but limited" scenario (possibly allowing exports with a watermark or only having three free exports per month, etc.)
Instead of Rana having the possibility or time to talk to sales and possibly receive a free export, she went through a negative experience where it was clear the company did not understand her JTBD.
Option B: Frustration in volume but fulfilling JTBD (Better PLG)
Rana already knows this "trick" that forces her to purchase before exporting. This time, she only looks at options that allow her to export the audiogram (even if she has to work a bit harder by adding the captions or tweaking the design).
She finds three solutions. Then, she filters them by the number of exports available. Finally, she finds the most promising solution, and just as before, she creates a free account, adds all assets, makes sure everything looks perfect, and exports.
Unlike in the bad PLG scenario, Rana can export the audiogram and quickly notice how much time she would save using this app rather than going at it manually. She goes back and finds that in the premium app packages, she can both export more videos + improve the quality of the export from 720 to 1080.
Later that week, she shows the final product to the team, and after a couple of light adjustments, they love it. Rana then explains there is a limitation in terms of volume, so the team decides to buy the basic package to make sure they can create enough audiograms at the speed they require while helping Rana save time.
A couple of weeks later, the audiograms are a massive success. Contrary to the unwanted emails from the first audiogram app she tried, she receives a message from this company inviting her to purchase the premium package with more features and unlimited downloads. She talks to her team about potentially buying the plan, and given the great results, and the price, they decide to move forward and purchase the premium plan at a reasonable price (30 dollars per month). Not only that but apparently, she is getting a fabulous tote bag they will send for "free" to her home in Boston.
Why is it good PLG
Rana had a specific use case she could achieve using this app. She was not doing market research on the capabilities of audiogram apps or exploring how difficult it was. Instead, she needed to create an audiogram quickly, and the app solved that issue. The time to value was accelerated, and the experience was positive.
There is thought from the product team behind what people need to do in the app. Unlike in the first scenario, export limitations happened after being able to experience everything the app could do. In other words, the people behind the product thought about Rana and built a flow that feels ad-hoc and timely (yet limited).
Instead of having a negative experience finding out how the app blocked her from achieving what she needed (previous option), this app helped her feel "surprised" with great additional features. Finding out the captions could be created automatically and that when upgrading to a premium plan, you get a physical tote bag are small details that go a long way. The experience becomes more memorable and enjoyable.
The emails the company sent Rana after using the app were timely and helped her move forward on her journey to become a paid user. It was not spammy, pushy, or unhelpful. Instead, it helped her visualize how using this new tool daily would improve her workflow.
In conclusion, the experience with the second app was successful because it allowed the company, through their PLG motion, to build a good experience (not a great one) while thoughtfully interacting with Rana (instead of sending her unwanted emails).
PLG is a different game.
As we already discussed in our PLG: One-Act Play in Three Scenes essay, there are five PLG principles that are crucial to succeed:
Data capturing that is sorted and works.
Properly identified growth loops.
Embracing a startup-like philosophy (check out the full essay in the link above if you want to learn more).
Whether or not your org sells a 30 dollar per month product or a higher ticket type of product (think corporate longer sales cycles higher ACV), the equation remains the same in PLG - the product leads. This means your sales team probably is nonexistent, and even if it exists, the role has evolved from leading sales to ensuring the product experience is flawless.
Be sure you understand how to build a product that isn't great while thoughtfully tracking user behavior to help them accomplish their goals. Your product succeeds insofar as your users succeed with it.
Your users are the story's heroes; your product gives them wings (and they are even better in the paid plans).
Illustrations by Alejandra Céspedes - Be sure to connect with her on LinkedIn / follow her on Instagram.
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