A Product-Led Growth Strategy for Enterprise

Product-Led Growth Strategy for
Enterprise
Bullish Candlestick
Patterns
Neutral/Basic
Patterns
Bearish Candlestick
Patterns
Yea
r 1
Yea
r 3
Yea
r 2

What is Product-Led Growth
Strategy?
Product-led growth is a methodology and
strategy that positions the product as the
primary driver of growth for a company.
Rather than investing massive funding
and resources into advertising, the goal is
to create a sublime experience so that
users share the product with others, thus
increasing the Word of Mouth coefficient
and spurring organic growth.
PRODUCT-LED GROWTH
Source: ProductLed
THE PRODUCT IS
THE EXPERIENCE
Loyal
Customer
Customer
Product Team
Sales Team
Customer Success Team
Paid
Others
Content
Visits
Sign up / Trial
Marketing Team
Time to Initiate Value Value Path / Realized Value
PQL

What is a Product-Led Growth Strategy?
“Growth in a PLG business comes from consistently fine-
tuning the product experience to optimize the rate at which
new users activate, convert, and expand in the product.
Ideally, these improvements start to compound over time,
allowing PLG businesses to accelerate growth as they scale
(unlike traditional SaaS businesses). Customer feedback is
critical to prioritizing the areas that will make the biggest
difference to your customers.
- Kyle Poyar, Market Strategist at OpenView

What Started With SaaS Has Evolved
The theory here is that by paying only for
what they use, the customer is then better
able to clearly see the value exchange for
that product and in turn, replace
traditional software with it for their needs.
Rather than looking at features and
integrations, more organizations are
looking towards how likely a platform is to
be adopted. That adoption is rooted in
value, which has led to an increase in
value-based pricing.
A SHIFT IN CONSUMER NORMS FOR
THE SOFTWARE INDUSTRY
Cloud
Source: OpenView Advisors LLC
Infrastructure
Executive
CIO
Data
Center
Large upfront
purchase
Sales-led
growth
Marketing-led
growth
Product-led
growth
Recurring annual
purchase
Start for free -
pay later as usage grows
End User
Executive
Connecte
d Cloud
Buyer
Pricing
Distribution
1990s 2000s Today

Product-Led Growth for Enterprise
Let’s make something clear — while there
are certainly many SaaS product-led
growth companies out there, this strategy
can extend well beyond the SaaS industry.
Now, these lines are blurring as
enterprise-level organizations realize the
benefits that product-led growth can
deliver beyond the SaaS world. New
consumer behaviors and norms are why
many companies now adopt a pricing
structure that centers on value rather
than a standard tiered approach.
PRODUCT-LED GROWTH COMPANIES DEPLOY VALUE-
BASED PRICING
I
Best judgement
24%
10%
27%
39%
Competitor-
based
Cost-plus
Value-based
Source: OpenView 2021 SaaS pricing survey
Approach to setting pricing

Adopting Value-Based Metrics
value metrics vary wildly depending on
factors, such as usage, users, or other
criteria. Over time, using metrics like these
means that the LTV ratio becomes
shorter, making the metrics ineffective.
That’s often because the data being
collected around those metrics is only a
small piece of the equation.
But, customer feedback is only part of the
product-led growth equation.
THERE ARE MANY POTENTIAL USAGE METRICS THAT
YOU COULD USE IN YOUR PRICING
Company Usage-based value metric(s)
Source: OpenView Advisors LLC
Number of SMS messages
Compare resources
Volume of data
Number of external active users
Number of tasks automated through platform
Number of Zaps
Number of marketing contracts
Number of hosts (infrastructure monitoring)
Amount of ingested or scanned GB (log management)

What Product-Led Growth is Not
Product Manager Led
All departments must be
involved.
Led by User Experience
Product must become
intertwined with customer
experience.
Everything is Botted
Correlating LTV with a human
touchpoint builds word of
mouth coefficients.
Death of Marketing
There are many growth levers
an organization can pull.
It’s much more about process
than code.
The hierarchy of decision-
making is shifting.
Exclusive to SaaS
A Top-Down
Approach

Tesla’s Product-Led Growth Approach
0
468
2984
1186
454
394
878
664
784
1063
Source: Brand Total-30 day analysis, 3.26.19 - 4.26.19.
Source: Statistia
62%
46%
38%
32%
14%
34%
52%
55%
0%
7%
18%
2%
33%
54%
18%
47%
39%
Instagram
32%
18% 1% 2% 1%
13%
1%
1%
6%
1%
40%
27%
8%
20%
40%
39%
14%
Twitter
YouTube
Facebook
Budget Allocation for Paid Media Among Major Car Brands Total expenditure on advertising & research &
development per car for select manufacturers in 2020
Ad spend per car sold R&D spend per car sold
Tesla Spends $0
on advertising

Product-Led Growth for Enterprise is Hard
Enterprises don’t have time to make
mistakes, nor do they have the ability to
be as agile as startups. Every fix takes
longer. You must anticipate changes in
the market because adjusting your
strategy takes longer.
With that said, there are ways that
enterprises can adopt a value-based
pricing model that aligns with what the
startup world often uses. Value-based
pricing allows you to package and price
your products more flexibly.
GIVE CUSTOMERS THE ABILITY TO SCALE USAGE WHILE
STAYING GROUNDED.
Source: Zuora Subscription Economy Benchmarks Report
Companies with usage-based pricing that made up 1-50% of their
revenue grew at 28% YoY - almost double of companies with no usage
based pricing offering. A little dose of usage is extremely healthy.
1-50% of revenue comes from usage
JUST RIGHT

The Product-Led Process
Discovery Solution Development
1-2 Sprints 1 Sprints per Iteration n Sprint(s)
PM + Designer + Dev(s) + QA
PM + Designer + Dev(s)
PM + Designer
Problem
Identification
User Club
Survey
Personae
Workshop
Ideation
User
Tests
Tickets &
Backlog
DEV
Front
Lean
Feedback
Prototype Lean
Feedback
Design Spec User
Tests
DEV
Back
Customer
Journey
User
Interview
Experience
Map
User
Research
Benchmark
Product
Brief
GO
No Go
Iterations
Iterations

Product-Led Growth Starts With Employees
The major differentiator between startups
and enterprises is this — you must start to
think about how you build word of mouth
coefficients into your products by using
product-led growth in your customer AND
employee experiences. When those
experiences are aligned, you’re able to
deliver something so sublime, the market
can’t help but take notice.
PENDO SOFTWARE GETS IT

Mapping EX and CX for Product-Led Growth
Product-led growth strategies for
enterprise require that you dig deeper and
get into the behavioral nuances around
how people are using your products both
internally and externally.
Rather than building rigid sales journeys,
you can build workflows and use cases to
meet customers AND employees wherever
they’re at on their journey, and see how
that directly impacts the product you’re
creating.
LOOKING AT LIFETIME VALUE HOLISTICALLY

Convergence/Divergence in Experience
For product-led growth companies,
convergence/divergence bands can shine
a light on potential trouble in your internal
paradise among your team, or potential
friction points within your product that
can cause your users to bounce.
Once the organization identifies a specific
area of friction, the team can then
leverage the data to create new paths
specific to each cohort.
IDENTIFYING PATTERNS WITH
CONVERGENCE/DIVERGENCE BANDS
Year 1 Year 2 Year 3
TOUCHPOINT
SPEND

Finding Your Baseline is Crucial
Often, many people assume that a
baseline is automatically 50%. Anything
below 50% signals problems. Anything
greater than 50% is smooth sailing.
That’s too superficial of a level to look at
these indicators though. Instead, it’s all
about how you construct, formulate, and
weight your data that will determine
where the baseline goes.
The way you weight your
scores allows you to
determine your baseline,
which is a crucial part of
predicting important
outcomes in a product-led
growth enterprise.

Convergence/Divergence in Experience
There are a variety of ways to pinpoint the
areas that matter the most when it comes
to LTV. To get there, I like to look at this
candlestick approach when analyzing the
EX and CX scoring.
These various candlesticks show how the
patterns in data can relate to the bigger
picture.
IDENTIFYING PATTERNS WITH CONVERGENCE /
DIVERGENCE CANDLESTICKS
Bullish Candlestick Patterns Neutral / Basic Patterns Bearish Candlestick Patterns
Two Candle Pattern Candlestick Basics Two Candle Patterns
Three + Candle Patterns
Three + Candle Patterns

Understanding the Employee Experience
By addressing the employee’s experience at a macro level, organizations can
get team members more vested in their role.
LOW LIKELIHOOD
Falling price of
automation
Source: Deloitte
Universal
basic income
HIGH LIKELIHOOD
LOW
IMPACT
HIGH
IMPACT Economic Legal Social & Demographic Technological
Big data
Productive years
lengthen
24-hour everything
Lifelong
learning
Rise of freelancers
Mobility: working
wherever, however,
whenever
AI reduces number &
changes nature white-
collar jobs
Human-machine
collaboration skills
Crowd-
sourcing
Economy of
good deeds

Meshing EX With CX for Product-Led Growth
The entire goal of a product-led growth
company is to create word of mouth
coefficients and viral loops through word
of mouth. That only happens when the
product itself is the experience, which is
what spurs those higher word of mouth
coefficients and viral loops.
If you don’t align experiences with
something as warm as a human element
or personal touch, your product will suffer.
User Experience Layer
Life Cycle: 1-3 Years
Change based on user sentiment
Data Layer
Life Cycle: 5+ Years
Tech Stack
Life Cycle: 4-5 Years
Change based on EX turnover

The 3Ps That Matter Most in Product-Led Growth
Melding these 3 Ps together will create a sublime employee and customer
experience.
Attract prospects, gain leads,
and ensure that customers
become loyal advocates for
your brand.
People Proces
s
Platform
The strategies and
workflows that actually
run the engine.
Software systems, social
channels, and other tools to
create efficiencies of scale.

Creating an Employee Retention Strategy
it's clear that your people matter and
directly contribute to a product-led
growth strategy. In seeing all the many
touch points involved between your
people and your customers, it's clear that
retaining your top employees should
become a high-priority.
The first step towards building that
retention is understanding why
employees submit their resignation letter
in the first place.
10 REASONS WHY EMPLOYEES ARE LEAVING
Work-Life
Balance
Compensation &
Benefits
Job Characteristics
Management
Behavior
Involuntary
Career
development
Work Environment
Retirement
Relocation
Well Being
6%
11%
7%
9%
12%
8%
8%
8%
9%
22%

Misconceptions of Employee Experience
So often, enterprises simply go through
the motions when gathering employee
survey data collection. They get feedback
and determine employees want one of
three things — more money, more
opportunities or more of an opportunity to
complain about the managers, leaders, or
vision.
The companies that invest in employee
experience — outperformed companies
that don’t invest by over 4%.
COMPANIES THAT INVEST IN EMPLOYEE EXPERIENCE
ARE FOUR TIMES AS PROFITABLE
Employee Growth (%)
Amount by which companies that invest in employees
outperform those that don’t.
1.0x
Companies that
don’t invest
Source: The Employee Experience Advantage by
Jacob Morgan (Wiley 2017) | HBR.org
Employee Pay
Average Revenue
Average Profit
Revenue Per Employee
Profit Per Employee
1.5x
1.5
2.1
4.2
2.8
4.0

Surveying for Product-Led Growth
● Which employees should receive the poll you’re about to send?
● How many simultaneous polls should you have running on
autopilot? Are there any that should be done in person?
● Do each department’s survey results carry the same weight, or do
some employees and department’s responses carry more weight
depending on the subject matter?
● What’s the weight given to each department if weights aren’t
equal?
● Who will be in charge of processing the data?
● How does this data sync with HR initiatives?

Democratizing Survey Data
A lot of sensitive information is shared
during a survey process. To help your
respondents feel more at ease when
offering their responses, you must have a
clear data governance plan specific to
your surveys.
This gets a little hairy on the data science
side because of how many hands that
data passes through, and how it’s mined,
modeled, and analyzed by various
departments.
Data
Quality
Data
Governanc
e
Data
Architecture
Data
Modeling
& Design
Data
Security
Data Integration
& Interoperability
Documents
& Content
Reference &
Master Data
Meta-Data
Data Storage
& Operation
THE IMPORTANCE OF DATA GOVERNANCE WHEN
CONDUCTING EMPLOYEE SURVEYS
Data Warehousing
& Business
Intelligence

Visualizing Survey Data for Product-Led
Growth
As you’re working to gain buy-in among
senior executives, being able to show
specific areas where things went wrong
will empower you to course correct,
fueling the product-led growth strategy.
When visualized in a dashboard format
like this, everyone, regardless of
department or skill level in data science,
can interpret the survey results and start
to understand what’s happening on the
team.
COMPANIES THAT INVEST IN EMPLOYEE EXPERIENCE
ARE FOUR TIMES AS PROFITABLE

A Product-Led Growth Strategy for Enterprise

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