How Can PLG Reduce My Need for Salespeople?

Meet Host, Mary Grothe

Mary Grothe is a former #1 MidMarket B2B Sales Rep who after selling millions and breaking multiple records, formed House of Revenue®, a Denver-based firm of fractional Revenue Leaders who currently lead the marketing, sales, customer success, and RevOps departments for 10 companies nationwide. In the past year, they've helped multiple 2nd stage growth companies between $5M - $20M, on average, double their MRR within 10 months, resulting in an average ROI of 1,454% and an average annual revenue growth eclipsing $3.2 million.

Don't Have Time to Listen, Read The Full Transcription.

[Theme music plays]

Mary Grothe: Hey everyone, this is Mary Grothe — Founder and CEO — and you're listening to the Revenue Radio® podcast brought to you by House of Revenue®. Each week, we'll talk about common revenue challenges and how to get past them, share real-world experiences, and get a glimpse into my life as a CEO scaling my own business. If you're a struggling entrepreneur, or just an entrepreneur looking to be inspired, this podcast is for you. I'll give you honest, unfiltered, and practical insights into growing your business and getting past your revenue plateau.

[Theme music ends]

What is PLG? I had a prospective client meeting last year, and the CEO said, "I need your team to embrace PLG when working with us. He was so matter-of-fact, direct, and saying PLG. It was the first time I had heard of it. Like any good salesperson, I just switched over to Google said, "What is PLG?" while talking to him. Of course, saying, "Yes, yes, we do that." We'll figure it out. We can bring forth a PLG strategy. What's interesting is some methodologies have been around for a long time. It's just they haven't been named yet and widely adopted. That's how I view PLG.

I know a lot of companies rely on their product as the main point of attracting people to the brand. Then getting it to be the main driver of acquiring that customer, getting them to convert. Then, of course, expand that land and expand thought. That's what product lead growth is when you have a technology that is so powerful and so strong that people want it. There's good demand gen here. They want it. They will convert themselves. They find out about the product, typically through another user's word of mouth or great search rankings. They can say, "Oh, I can. I have a very low barrier to getting this product. Then they convert themselves.

We're going to break down PLG. Today, I'm bringing this up because we have another client now. It has revenue that's saying, "Hey, we need to embrace a PLG strategy." We're just finding that this is overwhelmingly common now. This is a strategy that needs to be understood, learned, embraced. I also am excited about how it impacts the sales organization. This is something I've been talking about since 2020.

I noticed in 2020 that the reliance upon BDRs and SDRs could be lessened if you took a portion of that investment, put it into your inbound marketing campaign, and created not just lead generation but some demand generation. The way that you, in my personal view, get to demand generation is when you have that customer advocacy component. They start sharing, talking about the product and how amazing it is. You create demand for it, people.

The other way you can create demand is that you've done such a phenomenal job, your go-to-market of innovation, being so rooted in customer need, and doing something that your competition doesn't do. I believe that's the equation to creating demand. We noticed this in 2020.

When the pandemic hit, we had to help the nine-line loyal clients that stayed with us how to compete in a way that their competition wasn't it. It was a great opportunity. Our clients who stuck with us decided to really double down some of them, quadruple down on their investment to take advantage of the market conditions where their competition was taking their foot off the gas.

Really powerful back in 2020 with those clients. What we started to hypothesize, and the test was that if we took a fraction of what you would invest in a BDR, an SDR team import that into inbound marketing and customer marketing through the flywheel delighting customers, creating incentive programs for customers to refer and just really investing in the product or service. It was so undeniably better than what else was out there. Just ensuring that the marketing and brand messaging wasn't aligned with that. If we could accomplish all those, could we not create so much inbound that we wouldn't need the person who's hammering the phones now?
I'm not saying outbound goes away completely. It also depends on the type of company you have and how you're going to market. It also depends on the stage of your business because there will be growth periods and growth stages. Additionally, if you have a new product launch as an example that really leapfrogs you, you might want to double down. Make inbound and outbound efforts to truly capitalize and take market share in a heavy growth or scale plan. Anyway, back to the story here. With PLG, we hypothesized that if we could put the buying power into the buyer's hands, how much more could we achieve in sales. A lot of the stats you'll hear I've said it multiple times.

Buyers now take themselves 80% of the way through the funnel before they want to talk to a salesperson. With PLG, they can take themselves 100% through the process without talking to sales. It's quite brilliant to put the power in the consumer's hands or the businessperson’s hands. Everybody's a person buying but either on the consumer side or the business side. So we have if you look at the flywheel, which HubSpot uses for attracting customers and winning them delighting them. You can look at the same flywheel for PLG.

There are tools at each stage of the flywheel, so that first would be find and discover, then try and buy, then use and expand. On the find and discover, this is where buyers are finding you. They are discovering if this will be the right solution for them. You got to remove the barriers, no barriers. People should be able to sign up for this product and use it. Then, through automation and great marketing messaging, you're automating a lot of the sales funnel because you can communicate right there inside of the product.

With the FAQ knowledge base, you can put a chat function there. You can also have marketing messaging be dripping to the person who just signed on within the find and discover stage. You're looking at offering premiums, free trials, incentivizing referrals, or simple low-touch onboarding. What are you using to attract them and reduce the barriers when they get into the try and buy phase? This is self-service. You can do a data-driven upsell. Have you ever used a technology that says this feature is only a part of the next tier of service like premium? You must buy up to unlock this feature. There are ways that you can get in there and upsell right within the technology. You don't even need a salesperson. This is where you can significantly reduce your reliance on sales. The overhead is in the find and discover. In the try and buy phase, you're attracting people to it.

You've got a phenomenal brand. We talked about go-to-market and brand strategy last week. In last week's episode, now you're talking about this find and discover. This is specific for PLG premium, free trial, instead of referrals. How are you getting people onto the platform and wanting to try it? Incentivize referrals. Think like a consumer.

I bought some shampoo a year ago. It was a custom formula. You took a quiz. Then, they custom-built a formula, like $80 shampoo. It was great. It came, and it had my name on it. Everything was super personalized, a very cool experience. Well, guess what they do? They don't waste that. You get an email saying that you can get a discount on your next order if you refer a friend. You refer enough friends; you might even get a free product.

Well, I love it. It's been a great experience, and the product works. I'm incentivized to refer because $80 shampoo, you realize I can get Herbal Essences for 399 just about $80 on shampoo. Okay, I'd like to save some money. So yes, I'm incentivized. Then I go start blasting about how great this product is. I invited five of my friends. That's incentivized referral. When you're in that find and discover stage, what are you doing to get people excited about the platform and bring them on board?

In the try and buy, we have a couple of clients who said they want PLG. But one of the biggest factors was they didn't have self-onboarding. How are you supposed to have PLG if you require humans to onboard? Can't do it. You need self-onboarding. What do you need to do inside of the technology to self-onboard?

Okay, let's talk about the third phase in this bot flywheel: use and expand. This is where you are potentially engaged in a sales team. This gets me excited because I'm all about efficiency. I'm all about results. In use and expand phase, you have customers using the technology. Hopefully, your technology is built to monitor the usage on the back end and look at analytics where they're spending time, or they're not.

You can also engage in surveys and communication with the customers. But ultimately, this is where you want to have a conversation between a salesperson and the customer. You've been using our product. They should have all of the customer health scores. They should know how long they've been using it, their average usage, how it has grown over time, and more adoption factors. They should understand how many users have grown on the platform. Did it start with just one at that company?

Let's say they brought on 10 or 15 other contacts at their company or whatever it is. They're looking at the usage and adoption of the technology. Then, a salesperson can do some pre-call planning. They can look up the company, research profile before they call, research the company, look at trends and usage, and see like, "Well, this company has 1000 employees, and we only have 20 users. What about the other 980 users?" They could go through develop the use cases come prepared with pricing and economies of scale way that they can come prepared to the conversation. I have any follow-up items like "Well, let me go get you a quote, or will let me schedule a demo with a sales engineer, or let me go get that information for you." They should come prepared.

What do they think all the possible outcomes of that meeting could be? They need to begin with the end in mind and map to the finish. They need to pre-write their questions for the meeting based on all the data they've uncovered, which will get them the answers they're looking to achieve at the end of the meeting. All right, they go prepared to have the call. If they're running the meeting with the right agenda, that buyer should feel that. Customers should feel engaged in the conversation, and collectively, the two can co-create what the next stage of the relationship is going to be.

Whether it's needing more time, as the current services are, planting seeds, and having a follow-up date. Whether it's progressing right now into building out more feature functionality, adding new users, increasing transaction volume, whatever it is. That's where I believe a sales team can come in as on that use and expand something to ponder, something to think about. I love that you can use such a targeted paid media campaign, leverage SEO in your content strategy, leverage social media partnerships, and do so much to get the initial growth happening to where people are using the product.

Once you have enough base, you want to get into conversions and move them through. Just sign up, and there's one step that I didn't bring up where a sales team might be beneficial. That's on free trial conversions. It depends, I believe, on the complexity of your product and the stage that your business is in. Ideally, your free trial converts should be automated. You've done enough, you have enough data and a customer feedback loop to know the right amount of time for a free trial. You should have the right drips in the banner on the page. Your free trial expires in X number of days.

Also, people who build out more in the technology during the free trial period are more likely to convert. So what are you doing from a customer education standpoint, in self onboarding, when they start the free trial, to make sure they're building out as much as possible? There's just so much that you can do an automated communication that doesn't rely on people to be there every step of the way. But for some companies, depending on the growth stage, is there benefit in the complexity of the technology? Well, it's a benefit to have salespeople that can convert free trials. It just depends. I don't think that you always need that. So something to consider there.

When you start digging further into your analytics, in your data, in the find and discover stage, you're able to look at your activation rate, and product qualified leads the time to value. When you get into try and buy, you're now moving into that average revenue per customer, average revenue per user, and developing your calculation for the customer lifetime value. When you get into use and expand, my favorite thing is expansion revenue, cross-sell, upsell.

Then you also have important factors like customer satisfaction scores or net promoter scores. I just saw an article about the Net Promoter Score (NPS). They're saying it runs its course in B2B. It's fine for consumer brands, but they're saying it's highly flawed in the world of B2B. I couldn't agree more. I've always thought it was more of a consumer score. I was reading an article that I found to be quite interesting.

Moving on. One last part here is on the land and expand. I said this is where I am passionate about having salespeople. Some of the areas of land and expand that I think are overlooked are in the expand. It's not just expanding revenue but expanding the customer relationship. Most likely, the technology your company has that you've gone to market with it's probably in a crowded space. For example, if you look at MarTech, holy, moly, crowded space. Look at this space you're in and figure out how much competition there is, their trajectory and path forward, who's raising, who's going to leapfrog, and what new innovation is coming out.

Ultimately, the land and expand you need to have people focused on equal parts relationship and revenue expansion. You'll often see Customer Success broken apart from account management, not opposed to, or even customer support broken out from customer success or account management. If someone is really solely dedicated to the relationship, retaining, being that first-line support, and ensuring they have a great client experience, then you have this separate person who's more sales-minded, that can grow revenue. I'd love for you to find somebody who can maintain, augment a relationship, and increase revenue simultaneously. They are out there.

Historically, many salespeople who have been in full-cycle roles or more prospecting or hunting-heavy roles do far better in the Retention and Expansion side of the conversation. They've just been in roles where they've had to work super hard to make up for their shortcomings, which is the lack of passion or ability behind prospecting. They've been in a role where they've had to do it. So funny enough, I'm one of those people. I could do prospecting, kind of like it, cold calls. I haven't done those in a long time. I can do it. I can man up, woman up and get it done. But it's not where I thrive. I thrive on people who have already qualified. They have a pain or problem. They're looking, exploring, and how to solve that.

In my first two years in sales, we're in land and expand role. Well, the Expand part of it. I loved it. I loved getting involved with these customers, identifying how they've used the product to this point and where the room for opportunity was. So we could grow the relationship. But it wasn't just about selling. I was there for their every need. I felt like that allowed me to build such substantial relationships. I'm still friends with some of those people. That was a long time ago.

I had clients back when I started selling in 2008 so, we're talking about 14 years ago. These people are my friends. That's amazing. That's what I mean about those impenetrable relationships. These people are more than a customer. They're a human. They build a relationship with the salesperson that can transcend multiple companies without working for one of them. It's amazing what happens when you can build the Rolodex to that level. It's pretty extraordinary. I feel like I lead and expand. There's just so much. It's not just expanding revenue, and it's expanding relationships.

What are you building in your playbook? Your processes and methodology for your salespeople to retain business at that level. It's just such a typically a highly competitive space. You don't want your customer leaving for the next flashy Silicon Valley product that's promising to do more than what your technology does. I think that that is pretty darn important.

All right, I'm putting a bow on today talking about PLG, Product-Led Growth. That's what it is. It's the same thing when you're leveraging this strategy for your company. There can be some significant benefits you can reduce overhead, headcount, and the structured importance that you need around the sales department, which is brilliant. You can't just rest on "Oh, our products are going to sell itself." People need to know about it. You need to have the right brand strategy. Well, let's back up. You need the right go-to-market, the right brand strategy, and marketing attraction methods. You have to remove all barriers from the client signing on to the product. From there, you can determine when sales get involved; how many people do you need? Ultimately with the right PLG strategy, you should be able to have a pretty low overhead compared to a traditional sales organization. Hope this was beneficial for you.

[Theme music plays]

Thanks for listening to today's episode. If you're interested in being on our show or want to learn more about how we can help you scale your company, connect with us at houseofrevenue.com or with me Mary Grothe spelled G-R-O-T-H-E on LinkedIn, Twitter, or Instagram.

Connect with House of Revenue® on LinkedIn, Twitter, and Instagram.

[Theme music ends]