Product Analytics + Product Led Growth = A Partnership for Success - with Ken Fine, CEO Heap Analytics
Product Analytics + Product Led Growth are critical partners for success.
Ken Fine, CEO of Heap Analytics recently joined me on the Metrics that Measure Up podcast to discuss the inextricable linkage between these two concepts.
PLG currently exists in a continuum of maturity, with some companies managing the entire customer lifecycle using a product-led motion, while the majority still using a traditional sales led motion
Ken believes the dominant Go-To-Market model in the future will be an artful combination of both a product-led and sales-led motion with a key focus on reducing friction across customer acquisition, expansion, and retention.
Some products are better suited for PLG, and others that require more configuration, integration, and implementation assistance will be better served with a combination of product and human assistance.
Ken highlighted that PLG is applicable across every stage of the customer lifecycle.
PLG requires developing a hypothesis, testing the concept, then using data to determine the efficacy of the experiment, and then continuously iterating to optimize the performance metrics.
Activation is the point in a journey where a user finds value from using a product in a PLG motion. Often, activation is referred to as the “aha moment” for a user.
Identifying the “activation point” is a blend of art and science, with a strong focus on data that directly impacts company value impacting metrics such as new customers, revenue, share of wallet, etc.
Ken’s experience includes being the CEO of a company that deploys Product Led Growth in combination with a Sales Led motion.
When asked about the “predictive” data they found to predict conversion to paid, Ken highlighted that when users progressed to using their query tool "x" number of times, conversion rates are higher. In addition, when users leverage their integration feature, that provides a “step level function” in conversion rates.
The number of times a PLG company reaches out to a free trial or freemium during free product utilization is an evolving process. Based upon a user reaching an “activation” point, they have a product specialist resource reach out, and are still developing a global heuristic using a “test and learn” approach to determine the number of outreaches that optimize the conversion rate.
When asked about the best “resource” to reach out to free or freemium users, Ken highlighted that “it depends”. In their model, a solution consultant with deep product knowledge is the initial resource to reach out to provide product-centric assistance but also are trained to identify sales opportunities.
Product Qualified Led’s (PQL) is a new metric that highlights when a free trial or freemium user has reached an activation point and is in a position to convert to a new or expanding customer. PQL’s are scored on different levels of qualification, similar to an MQL, though much more qualified based upon actual product usage and engagement. PQL’s go beyond hypothesis and use proven product usage analytics that are predictive of conversion.
In summary, Ken shared that if you have traditionally had a sales-led model, that change management is a critical, yet often overlooked element of deploying a PLG model. In short Ken shared - “NAIL IT BEFORE YOU SCALE IT”!
If you are considering or recently started your PLG journey, Ken and Heap Analytics are a great follow.