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Ramli John:
Yeah, I just want to introduce Mickey. He's on LinkedIn, co-founder of Gainsight and were really, really champion of product-led growth. Mickey, how are things with you this afternoon, right?
Mickey Alon:
Fantastic, and thank you for having me. Yeah, I'm the CTO and co-founder of Gainsight PX. Gainsight offers broad experience management platform, which I helped co-found in the past, and also co-author of Mastering Product Experience and how to use product-led growth to really drive and turn your product into a growth engine.
Ramli John:
Yeah, so much questions around that. For anybody who's here, Paul, Mike, Deepa, if you have any questions, feel free to drop it, but I'm going to jump in with a question from Deepa around ... Well, let's go knee-deep into product-led growth and talk about PQLs. Somebody told Deepa that one of the challenges with PQL and tracking that is around analytics, and it seems like you have some suggestions around tracking things. And I want to know, I'm curious how that works for you, and how does Gainsight fit into that, and how people figure out their PQLs?
Mickey Alon:
Yeah, PQL is a concept that I wrote about a few years back. I came from Marketo, where I led the global engineering team for three years. At Marketo, our mission was to deliver better customer experience. And we were focusing on the top of funnel, so to speak, and digital marketing. Then I saw how the landscape of SaaS is just changing very quickly and the experience is changing and moving into the product itself.
Mickey Alon:
Also, the fact that we know that customers want to try before they buy, or even back then at Marketo, where trials and freemium were not that common, we still had those statistics saying most people prefer to learn about the solution before interacting with sales, and try to educate themselves using peers or social media. And now, they actually want to educate themselves using your product.
Mickey Alon:
So we're seeing more and more of that combination of understanding your persona, as product managers, we are being told, "Understand and go deeply around the persona, and the objective, and the problem they you're trying to solve." And I think it's a lesson also for marketing to start pitching that as well, understand the persona, what is the messaging around the problem and how can your solution be differentiated? And then, driving those sign-ups.
Mickey Alon:
The big difference between NQL, NQL was limited and still is useful to see these touchpoints and optimize your content, but the PQL is helping you to really get the intent. The biggest gap I saw at Marketo was the intent was not necessarily a positive one. The fact that you've done all the white paper doesn't really mean you're ready to buy, and doesn't matter how scoring can do. It's always for sales to come in and say, "Let me qualify the NQL," and you saw the drop between NQL to SQL. And still, we're seeing it with companies.
Mickey Alon:
Even in the board meetings, marketing is saying everything is great. They see the NQL graph is going up and still saying, "No, SQL is pretty low. The pipeline is not converting." So that are things that are the limitation of NQL. And PQL is actually showing you that someone is now investing time in evaluating your solution. That gives you a strong indication of intent as opposed to download content. On that other part, you do bring from the NQL part the [inaudible 00:03:52], [inaudible 00:03:53], tech stack, all that stuff is still very relevant.
Mickey Alon:
So what we're adding is those magic moments that a user might experience with your product, that will signal both trial or intent of a trial, conversion or intent to buy, or upsell and cross-sell. We're seeing that even more, because at Gainsight, we are dealing with really enterprise customers as well, like Adobe and others, and B2B product. In B2B product, the journey is pretty long, and then you have upsell and cross-sell is very significant. How can you know, how can you arm your sales to engage with the right people without building a PQL model? So they kind of try to touch base with their peers.
Mickey Alon:
In some, you have 1,000 customers, so yeah, you can't really do anything effective if you are not seeing their outcome, or touchpoint, or what are they doing through the adoption? When's the right time to engage? What's the sentiment of the customer right now? So PQL is becoming relevant both in trial, to help marketing better qualify, and then both in upsell and cross-sell, because it's just, today, measured that sales are flying blind and they have no way to say, "Hey, this is actually a good moment. This customer is ready for a conversation," and the reason is you know the customer, you know the objective, and you know that right now, it looks like they're experiencing outcome and ROI with your product.
Ramli John:
Great question. I'm going to pass it off to Deepa if you have any other question. This is everybody's time here, so if Mike, Paul, anybody else wants to jump in, feel free to ask.
Deepa:
Yeah, so I do have a few follow-ups. Mickey, thank you for explaining PQL. So we are early in our PQL journey, and we have sort of identified what our PQL should look like. However, there was this conversation in the PQL community that it's very difficult to track PQLs in your traditional Salesforce CRM, because not all product attributes are mapped.
Deepa:
The PQL journey's not mapped in Salesforce. So a lot of them are finding it difficult, and then someone said Gainsight PX actually helped them to visualize this journey better, and that's what I was mentioning to Ramli, or he basically reframed my question to ask what PQL is. But I want to know what the follow-up is in terms of how you effective show that data, or is there any perspective you can provide in terms of how Gainsight is helping capture that journey or that intent?
Mickey Alon:
Yeah, absolutely, great question. So first, the challenge is to really get the usage data. One of the things we saw with Gainsight PX is to reduce friction in collecting user data. In the past, it used to be engineering effort, long cycles, you never got that in a meaningful with. With PX, as soon as you drop the tracking code, PX will instrument your product and will show you those magic moments. That data, we also realized that should exist also in Salesforce for example, because this is a sales tool.
Mickey Alon:
So we also built a push mechanism that is going to push those usage data, those magic moments, into Salesforce, as well as PX collects feedback, so it can collect NPS, or customer effort score, or other multi-question [inaudible 00:07:28] type of solution. That also is being pushed to Salesforce. In Salesforce, you can build an addition view for your salespeople to identify customers that are ready for a conversation. You can build a scoring model.
Mickey Alon:
So PX will show you a visualization of what's going on. It can show you individual users in account, trends, a lot of feedback to product managers. But when it comes to PQL, you can see it in PX, but it's also advised to push it to Salesforce, because sales folks wants to see it just next to their account, and they want to prioritize their discussion or be prepared for the next meeting as well.
Deepa:
Yeah, we are currently using Looker to sort of get that data, but it's not mapped in Salesforce yet, so I think it's a heavier lift in terms of getting a Salesforce admin, the engineering and the product teams together, so that we can map this fully in Salesforce. So yeah, thank you for that perspective.
Mickey Alon:
Yeah, you can always, again, Looker is visualization. With PX, you're able to both see those leads or accounts and then build this view, but traditionally, we realized that we want to copy that view also into Salesforce, just for accessibility.
Deepa:
Yeah, we do use Gainsight, although I'm not sure it's ... We might be using a different version of Gainsight. I'm not fully familiar with Gainsight. I use Marketo at my end. I do use Salesforce, and Segment, and Looker, and various tools, but I know that our customer success team has Gainsight. So I'll dig deeper into this.
Mickey Alon:
Yeah, they might be using the customer success platform, and we are the product experience management platform, so it's PX and CS.
Deepa:
Got it, thanks.
Ramli John:
I want to get more ... Thank you for asking that question, Deepa, I really do appreciate it. I want to get more specific around which ... And this is something that I've been talking to Andrew Capland, Head of Growth at Postscript before that, with [inaudible 00:09:34], is that there's this tendency to quote/unquote be "data driven" and measure everything. "Let's measure every single thing." And my discussion with Andrew and other folks is like, "That's actually a terrible idea, because ahh, it becomes an overwhelming situation."
Ramli John:
So making my question to you around is how do you know what to measure? Where should they focus at in terms of, "Hey, this is some of the top things that you should ..." And this could be totally related to ... I know you've talked about North Star Metrics before, but that's all tied back to what are the core things that some product team, or engineering team, or a team in general, a product-led team should be looking at in terms of tracking product engagement?
Mickey Alon:
Yeah, it's a great question, because I see a lot of companies or teams that are trying to collect a ton of KPIs that are trying to boil the ocean, and then it becomes very cumbersome and not really actionable. So I think pure, product-led growth companies with, I would say, simple products that is very easy to use, like [inaudible 00:10:42] and others, I would say they have a clear North Star Metric, number of meetings and so forth. In B2B, and when you're building a solution like B2B, normally it's a platform. It's operational solution.
Mickey Alon:
In that scenario, you're seeing a couple of more metrics. So starting from the business metric, we're seeing that growth retention rate and net dollar retention are becoming very, very important, and should be the North Star for the business. So I think when you're coming with any type of model, PQL or any KPIs on the product side, you want to align with the business goals.
Mickey Alon:
Net dollar retention is becoming the North Star for a subscription business because of many reason: It shows that your product is actually provide a very ... Your product is basically sticky, and you're able to even cross-sell and upsell in a more effective way. So if you're using your product as a sales tool, it shows up in your net dollar retention, because it means that you're adding more customers an you're offering them more capabilities, but it doesn't cost you as much as gaining a new customer in.
Mickey Alon:
So net dollar retention is a business North Star which becoming very, very important, and impacts valuation of companies. Look at the stock exchange, what happened last year and this year. The net dollar retention, companies like JFrog, it's 140%. This is becoming really powerful growth companies because they lead with a product, and they're winning business, unit of economics that's much stronger. So I would say that that's on the business side. On the product side, we do recommend looking at two elements. One is key features, sticky features based on the customer journey.
Mickey Alon:
What is the number one or critical set of features I need to experience during my trial, or during my onboarding, or during my adoption, based on who I am? So a classic dashboard will have three to five key magic moments that kind of ties to customer value. Did they create a project? If they share with other users, if they submit a report. Those type of key magic moments should be your KPIs, and in addition, we also recommend collecting the user sentiment. As soon as they use this feature, try to collect a score for that feature. You can sample, you don't have to overwhelm your users.
Mickey Alon:
You can sample that, but then you have visibility to how often they use key features and how they feel about that. That is the best prediction to churn, or growth, or customer success in general. So business metric and then adoption metrics in the form of frequency of magic moments and actually sentiment of these magic moments. That will give you a ton of clarity, how to impact, how can you now build better success plan? How can you build better marketing programs? How can you even optimize your roadmap to make sure that customers are happy and then continue that journey with these users?
Ramli John:
I love that. You really broke down exactly, and you said ... Is that what you usually see, seven to eight key steps in that, and would you suggest that if it's more than that, you're maybe ... You said "boiling the ocean", would you say that, if it's more than 10 or 12?
Mickey Alon:
Yeah, because it has to be actionable. If you choose a KPI and it's red, you want to understand what you're supposed to do and what the causation. If it's not actionable and you have 20 KPIs, some are red, some are green, it becomes just useless. So it has to be really tied to actions you can do, and the user feedback is also very important. I do think, I see companies slicing the customer journey in areas of KPI.
Mickey Alon:
So trial will have five KPIs and then onboarding will have additional five, but when you optimize, you optimize for that part of the journey, so the things will be different. Trial, optimization is more marketing growth team, adoption is more customer success team, expansion is again marketing team. So it's those KPIs you choose to optimize the experience.
Ramli John:
Interesting. How do you know where in that journey you should ... I'm guessing you don't want to optimize all at the same time, right? And so the question is what kind of tips or suggestion would you have, or advice, as to where a product-led team should focus in that journey? Do you just look at data to find the biggest gap, or are there other things that you look at to say, "Hey, maybe you should focus on expansion," or, "Maybe you should focus on onboarding activation," or something else?
Mickey Alon:
It's a very interesting question. It really depends what the product life cycle is right now. Early stage, I've built two start-ups, I know how it's early stage. Sometimes even the "forgot password" doesn't exist in your platform. Should you fix that or should you fix the first moment of value? I think, as a rule of thumb, you want to optimize and prioritize for the first mile of product, because you want to get some users into the product, get learning quickly. You want to reach product market fit, so I would optimize even the sign-up, the sign-up process.
Mickey Alon:
Small things make a huge difference. Even if you're offering a demo, for example, offer a [inaudible 00:16:16] link so they can close the loop instantly. When you offer a trial, always optimize that first session so you're able to get these users and at least starting to collect two very important things. One is the [inaudible 00:16:31] and second is the objective, what are you trying to achieve? And then you go from there.
Mickey Alon:
Mature products, it really can be optimized in something else, but again, if you look at the life cycle, it's scarcely a scenario that you'll see strong adoption with bad onboarding, or great onboarding with poor trial. So you want to start from the beginning and just understand that customers have limited attention span when they're choosing your solution. So start from the beginning, at least on data perspective.
Mickey Alon:
See if everything works well, identify friction points, and then focus on the biggest impact that you can make initially, because I see more companies now going to product-led growth. It's different story when your [inaudible 00:17:19] is product-led growth, and you're starting, and it's a simple solution. It's a quick, very focused problem. But all the B2B SaaS businesses are now also transforming to more digital experience, and they realize that adoption is going to impact their revenue even more than just product-led growth company.
Ramli John:
You led me to the next question around, you're right, a majority of ... I'd say 90, 95% of the people who join this program is looking to make that transformation or transition into product led. And I'm sure, you wrote a book about it, you've probably talked to a bunch of companies around this, where should they start first of all? And other advice that you would have to those leaders, they're the champions of product-led growth in their organization?
Mickey Alon:
Yeah, it's a great question, and when I wrote the book three or four years ago, I felt like it's already happening, but still, I saw many companies are just even ... Especially the product team was not there yet. "We are very enterprise, we are not there, we are different," but you see how now they realize either they do it or the competition will. So it's going to be a fact that your competition will try to have their product more accessible, and therefore steal your business because they are able to impact user decisions earlier in the funnel.
Mickey Alon:
So that's definitely coming. Where to start is I think that, because it's a go-to-market decision as well, you want to have buy-in from both the business side and the product side. So from the CPO, they should be willing to go in and really optimize the experience, and make the subscription ready, and focus on the first mile. Usually, product managers, the good ones are always looking on long-term roadmap, differentiation, competitive. They lack sometimes visibility to what's happening in the first mile of product.
Mickey Alon:
So that should be the area you have to first start with. Without a first-time experience, you cannot really do any product-led growth motion. On the other side, on the marketing side, they need to adopt a PQL model. So you want to have some buy-in from them to say, "Hey, we're going to hold you accountable for also the sign-up and sign-up quality. If you're bringing me a Gmail sign-up, it's like bad NQL. Don't give me bad NQL, give me good NQL for the sign-up." So usually, companies start with building a tiger team that has had representative from each area of the business.
Mickey Alon:
Marketing growth, you have customer success understand the adoption very, very well. You obviously have product, and needs to prioritize those first-mile feature and experience, build things to the roadmap that are not strategic, and then you want to also have sometimes the CEO just say, "We need some budget [inaudible 00:20:28]," because you need to balance between long-term strategy, staying with your sales-led, convenient, go-to-market, and just allow that team to start operate.
Mickey Alon:
Down the road, you need to hire specialized people to do it, but you can start completely with a tiger team, with very achievable first-time experience, sign-up, and start experimenting, so you can bring more data to the business and say, "Hey, this is what we're learning. This is what works, what doesn't. Let me have budget." Long term, you want to have ... And we're going to see customer or quality experience teams that they own that.
Mickey Alon:
In the past, it was the same question with Marketo: Who's going to own Marketo? Who's going to use? Who's going to build the campaign? And today, you have demand gen, you have specialization around that topic, and you have full-time people doing that. I see the same profile going to product experience and just twisting, instead of messaging high level to drive leads, they're going to message users for adoption.
Ramli John:
That's exactly what we see with ... You just broke down the playbook. This sounds like another book potentially around building a target team, proving this out, short, little experiments, and then once it's proven, ask for more budget as you scale that up. I guess my follow-up question to that is around who ...
Ramli John:
I'm not sure if you covered it, but I just want to make sure that people really get a highlight on this, is who should be in that tiger team? I'm guessing it's not just the product team, because, "Oh, just because it's product-led growth, it's just the product team." But who do you see usually in that task force or tiger team to run with [inaudible 00:22:19] in the beginning?
Mickey Alon:
That's a good question, so I think you want to pull ... And we do it in Gainsight as well, I lead that team at Gainsight, but we have representation from marketing and demand gen, because we have to drive those sign-ups and leads to the product, and we have customer success. Because we look at product-led growth as a full journey, not just a trial. For us, product-led growth is the end-to-end journey. We have a land and expand motion, and when we expand, we have both expansion with a single product or cross-selling to other product.
Mickey Alon:
So we look at PLG as a very end-to-end type of solution. So customer success leader should be part of the tiger team to give the input, what should be the success path and value path that users should go through, and they should also use the data for them, for accounts health scoring. Marketing are great at messaging. We're seeing that the people actually building in-app experience coming from marketing background, coming from Marketo are great at this.
Mickey Alon:
They understand how to do it the best way. Product managers not necessarily are the best people to write messaging around in-app messaging or user engagement and things like that. So a product manager can definitely understand how to solve the long-term solution for the objective. So product, customer success, product, we have, and marketing are key.
Mickey Alon:
Sales, your job is to actually feed sales with these opportunities, and then sales and customer success are almost converging these days. As customers using the product, the signal is becoming, "I need some assistance with the product," or, "I need to buy more." So sales are, I would say, not necessarily should be part of the first tiger team, but as you mature and you produce PQLs, then you want to have sales understanding how to analyze those PQLs and how to engage customers in more contextual way.
Ramli John:
Okay, thank you for sharing this. I love how you broke it down cross-functionally. [inaudible 00:24:31], this needs to ... We say this all the time, product-led growth is not a marketing strategy. This is a complete business strategy that involves everything that you've talked about, and totally agree with you. We're there and this is exactly what we're seeing is that tiger team is cross-functional. Paul has a question, a follow-up question around this. Paul, did you want to take the stage and ask yourself?
Paul:
Yeah, sure. Thanks. Mickey, great, great so far. Really, really interesting. I've just got a question really, because I own an agency that works with SaaS companies, and we're actually just moving into a product development business model to support services. And I was just wondering, how would you approach this if you're pre-product? We're an inboard agency, HubSpot partner, that bit I'm not worried about. The other bit is that I'm a SaaS fanatic and I'm really interested in how I would approach this and how I can tell the team and drive the team forward in this approach?
Mickey Alon:
Yeah, I think the emerging position and opportunity I see is a product growth function. Yes, usually growth is marketing and product is something else. Product growth function is something that is becoming a new, I would say, a new role, a new position that companies are calling a different name, but eventually it's going to be those people that understand product strategy and understand how to message, exactly like more coming from the marketing area, because in marketing, you think journey, you think goals, you think conversion, and you think how to message and get users to that value.
Mickey Alon:
So I think coming from marketing is a powerful statement and powerful background to do that, but the other blend is to say, "I'm now mapping a different journey, and my conversion might not be a direct form submit. My conversion is actually those magic moments that drive value to customers, and I'm going to be measured based on adoption score, and I'm going to be measured on pipeline that I generate from that cross-sell/upsell or trial conversion."
Mickey Alon:
It's easy, trial conversion is actually easier to start with, but the bigger impact, imagine you go to a B2B company and then you can say, "Let me give you the framework to start mapping that journey and then do messaging inside the product." And I see more frameworks coming from marketing as well. We know that we are throttling out messaging, we're not bombarding people, because [inaudible 00:27:15] they might opt out.
Mickey Alon:
Now, in in-app messaging, you want to do the same thing. You don't want to overwhelm them, and the right message to the right person, at the right time is becoming the right feature at the right time, to drive towards a goal, and it's very data driven. You want to say, "Hey, our goal right now is to drive adoption for that segment of customer."
Mickey Alon:
So you do the ideal customer profile, you're saying, "Hey, I want to help you optimize and improve your growth retention rate, because adoption ties to retention. And I want to help you drive cross-sell/upsell by moving customers to where they're ready to a cross-sell/upsell solution, and then signaling that as leads to your sales." It's two things that you can really help, but the methodology is really coming from, I would say, the marketing. You always have touchpoints in marketing, messaging. You do this boilerplate with messaging, and persona, and objective. They're the same, but you just switch to product value, and features, and outcome.
Paul:
Okay, cool. Thank you.
Mickey Alon:
Yeah, and we're seeing a lot of companies asking for expertise around product growth, both on the trial but also down the funnel, "Can you help me optimize the experiences?" And it's not really a customer success are busy with these [inaudible 00:28:36] accounts and engaging with them, product has the roadmap. The product growth will be the function that will say, "We got you, we understand the journey. Let us operate the system, and automate those things, and collect the signal." Just shifting the funnel from top of funnel to inside of products.
Paul:
Yeah, it's interesting. Thank you.
Mickey Alon:
Yeah, awesome.
Ramli John:
Thanks for asking that question, Paul. Really do appreciate it. I want to take a step back, and one of the things, we were talking about product engagement and how Gainsight sends that to Salesforce. What happens after that? When does the sales team ... Like, "Hey, we got this high score lead," and then, "Let's jump on a call"? For me, I don't know what happens after that gets sent over to Salesforce. Can you shed a little bit of light as to what maybe you're doing at Gainsight or what you've seen other companies, and how to get the sales team involved with self-serve sign-ups once they've been identified as good PQLs?
Mickey Alon:
Initially, they even are overwhelmed with the fact that they know what's going on with the product. In the past it was like, "Hey, we spoke with that prospect back then." They tend to forget the objective or maybe the objective has changed. So first, visibility to the data, then they can prioritize their reach-out to these customers. That's something that is happening as first step, because again, when you use Gainsight, both see a customer success side or product experience side, you want to scale the business.
Mickey Alon:
You want to gain visibility with low friction, you want to have success plans built, and a lot of automation is happening. The sales are there to kind of trigger off those special moments, and we have a thing called [inaudible 00:30:28] CTA that is actually human driven. So if someone is hitting a threshold, we have a tool called Journey Orchestrator. It will actually trigger a CTA, either to customer success, say, "Reach out, it looks like the customer has either a green, or red, or yellow condition based on something," or for sales, "Hey, they're hitting the threshold of the product and it looks like it's time to offer them a bigger package."
Mickey Alon:
Many, many solutions, they have some type of usage-based pricing. So you want to understand when are they close enough to this pricing? Who is really most relevant for these advanced features? So the CTAs are going to sales, and sales can reach out, and obviously when they're reaching out contextually, they're getting way more input. I do see other sales being more accountable for adoption metric recently, like if you look at Google Ads, they have sales teams, but they're not technically pushing you to purchase.
Mickey Alon:
They're there for make sure that you're successful with Google Ads or with Google GCP, and they're measured against also adoption scores, to see that usage going up, and that's a very interesting motion with sales as well. But I think the fact that PQL will give them the right signal, their job is going to be a lot more productive.
Ramli John:
Exactly, and even conversations probably [inaudible 00:32:04]. You're not just like, "Hey, what's up? I want to reach out," and you can be more like, "Hey, I noticed you did X, Y, and Z. Is there anything I can do to help you achieve your goal?" It's a much richer, easier conversation than just, "Hey, I know you're a good fit, but what do I talk to you about?" Right?
Mickey Alon:
Yeah, and I think that one of the area that a company struggles, especially product growth companies, where do they struggle? They do amazing initially, they're getting a lot of customers, the features are great, it's easy, but it's a lot of small accounts, or the ARR per account is pretty low, the volume is just the play here. Now, when they hit amazing growth, at some point they're trying to go upmarket. In upmarket, you do need this human experience as well.
Mickey Alon:
You need customer success, you need different growth patterns, and for that, you need that executive alignment, for example, to understand what is the strategy of that enterprise? How can I now have the salesperson be effective in the discussion? So PQL will say, "Hey, this customer, this is actually a large customer based on the profile, they're getting this threshold. It's time to engage." Over time, when you're seeing more licenses being bought from an account, this is another CTA from the salespeople, saying, "Let me be more strategic with the account now."
Mickey Alon:
So there's going to be always a human touch to tech touch, and PQL is helping with the tech touch. So [inaudible 00:33:36] company are doing great in the initial growth, but then they hit a wall with the enterprise, and vice-versa. Enterprise are get when sales led, but then when they want to scale, their total addressable market is just smaller, and the number of big companies is not as big. So they want to go and double down on the SMB. So it's nice to see the conversion, and at Gainsight we see that we want to help companies bridge those gaps. From SMB, it should be more tech touch automation, and then at the enterprise, you want to have more blend, like tech touch, but also executive strategy.
Ramli John:
I love that. It's like taking the best of both worlds, right? You're taking the sales-led side, and yeah, there's some good stuff there with the human touch. Obviously, some people want the human touch. So long as the product-led side was self-serve, the middle ground is still the best here. I think Paul has another question. I'm just going to straight up ask him, "My understanding of minimal requirement for PQL is a user is live and active after 30 days. Is this still true in terms of PQL? The user still active after 30 days, or are there other things that you occasionally hear?"
Mickey Alon:
Yeah, I think there's MAU or DAU versus MAU and all those metrics which are interesting. What we want to measure is value actions. DAU and MAU are nice, but it might be just measuring bounce user, things like that. They're not using valuable action with the product. So if they sign up for a very impressive and advanced product and all they do is they use the very basic features, so that, imagine you're using Salesforce and you never put opportunities inside. You just put contacts and account manually, you don't ...
Mickey Alon:
So the value action is the key you want to see, and then how often they do that. We look at week over week. Usually 30 days is just the beginning, it depends on the product. Again, maybe if your product is able to deliver ROI in 30 days, great. If not, it might be even two or three months, or 90 days, and then retention based on how many times they're coming back week over week, and how many times are they touching the value action? That would be a good PQL. So above 30, 40% week over week coming back to a value action that the product deliver is going to give you a high score for PQL.
Paul:
Okay, so on that basis, and going back to my previous question, which was more about where should you start if you're pre-product, if you're early in your product, so you're public, you're live, people are using it, but you start getting into this PLG stuff, but you're still half thinking traditional, sales-led methodologies, what should be the approach in order to slowly navigate to a PLG model from the traditional sales-led model?
Mickey Alon:
It's just, I think, education, saying, "Look, PLG or product is one of the values of the company." Eventually, what you're selling to customers is your product. So I think understanding that PLG is not freemium or free trial. It's actually the entire journey, it's actually selling additional value. That is the first step, and I think arming them and maybe focusing on the cross-sell, upsell opportunities with usage data, with scoring, and with allowing them to also promote or have special offers even automated, so they can see, that can be a great first step, because they want to make their money.
Mickey Alon:
And so I think sometimes it's just the existing account executives might be a good place to start. Alternatively, if you're starting with a PLG, you want to make sure your product is ready for that, because it means that your product also needs to be a land and expand type of product. You can start with a low ARR and then grow, and if you have a sales-led model, low ARR means that they're not going to meet their quota. So we are seeing now a new model where you have the inside sales or a more technical sales reps closing the first lens-
Paul:
The sales engineer, yeah?
Mickey Alon:
Yeah, and then the heavier sales and account executives are actually engaging when you're crossing a minimum threshold of payment. So it might be you have to be above 10K, or 12K, or 15K to justify an AE reaching out and then continuing from that point. So the first mile is where you need to automate and sometimes use sales engineers or SDRs to even close the view, and then as the revenue grow enough, then AE brings more value, because they can build a strategic partnership. So it's tactical too, and that's something that many miss.
Mickey Alon:
If they have a very heavy, very expensive solution, they go product-led, and the customer's saying, "Okay, my budget is going to start small," but they're experiencing the initial value, there's a gap. They're suddenly chasing very small deals, and suddenly they're not going to chase that. So you have to realize that PLG is both marketing product but also pricing. Pricing is important, and then set the expectation. You don't want to have very heavy senior, seasoned sales executive closing 5K deals. It's not going to be very, very scalable.
Paul:
Yeah, yeah, yeah. Okay, cool. Go on, Ramli. I'll hand it back, you look like you've got something to say there.
Ramli John:
No, no, no, that's good. This is exactly why we have these great questions. Feel free to keep jumping on. Deepa, it looks like you have a follow-up question. I'll just pass it off to you, you're unmuting yourself.
Deepa:
Yes, I just have a follow-up question to what Paul was asking, is that when you're making a shift to PLG, and educating the sales team and the entire organization, I imagine that there will be some amount of cut down in sales team or sales force itself. How do you navigate those type of changes? Because now you are looking at certain segment to auto PQL and self-serve on their own, but you may have sales teams aligned to close sales for those segments as well. So is there some sort of a cultural shift that needs to occur? Have you seen some examples where this was done more effectively?
Mickey Alon:
Yeah, it's a great question, like what do you do? Because I think PLG is, again, it's everything the company does around customer value, and that land and expand and first-time experience is becoming a key element. So I think realizing that if you do an offer, a simple and cheaper version, and then you grow with revenue, who should be the people that going to close these smaller deals and [inaudible 00:41:20] the customer? What we see is, in many cases, overlay model.
Mickey Alon:
So these are the land type of sales reps that are much stronger on product hands-on expertise, that they can just have a discussion with customer, help them if they need any assistance, and just close the first deal in the first 30 days. Their goal is that. Then, they partner with the AE, and sometimes even report to them, saying, "Yeah, I've landed these accounts." As the expansion happening, and again, in PLG, the expansion is happening very quickly.
Mickey Alon:
A good B2B, the transition to PLG, what you're seeing is a phenomena, they're landing the first ... Let's say you go to an enterprise, you land the first account, you quickly expand within the first quarter, and then the AE is coming. He's already bypassed all the procurement. We have some champions. He can now make the solution a bigger decision for the company, and this is where you need the AE. So I think an overlay model and then actually hiring people for that first mile, as opposed to ...
Mickey Alon:
We still see, again, if the company is seeing an expansion and growing into the enterprise market, you have to have that sales. But they are going to get amazing accounts. Well, it's qualified. They actually know your product and they're ready to have a discussion, so it's actually making the AEs way more productive, and their life are becoming way easier. But still, you need an enterprise alignment. They know how to sell the vision and value at the proper scale, and tie that to the customer ROI. This is what they like to do best, as opposed to pitching again and again in the first mile.
Mickey Alon:
So what they need to do, the big change management, is don't try to optimize for the first big deal right now. Good products have a land and expand, and once you try to optimize for a big deal upfront, you create a big risk. You're leaving a lot of money on the table, because if your product is sticky, you land, you expand, you continue to expand, and within the first year, you'll be able to reach to much higher account contract, versus trying to optimize all upfront, creating a complex decision.
Mickey Alon:
So that's also a shift in understanding. So we've done it also in Gainsight, like, "Hey, don't try to go for a big deal initially. Just let them understand and realize value, do a quick deal." And then even with enterprise, and then start expanding, and expansion should happen within the first quarter. The big surprise for us was you don't need to wait for the first successful implementation, because implementation can take, especially in SaaS B2B, can take three, four, five months. It depends on the solution that you're offering, but you can expand very quickly.
Deepa:
Absolutely.
Paul:
Sorry, sorry.
Ramli John:
All right, [crosstalk 00:44:40].
Paul:
I mean, I've been working with a company, a fintech company that partnered up with Finastra, and they've literally just flipped out from doing the two, three, four, 5K deals, and now they're just dealing with the top-tier banks. Now, that's my background typically, from early days. And I'm looking at their model, and they've just lost their head of sales because he just wasn't picking things up, and I'm really trying to encourage these guys now to open up and look at product-led.
Paul:
But I'm just trying to picture in my head how I'm going to do that, because I understand the conversation, "You should be doing ABM, you want to go look at these account by account." They're not quite there yet, and so looking at that juxtaposition of the triangle of things there, what would you think would be the best way to potentially talk to these guys about transforming into a PLG model?
Mickey Alon:
Yeah, ABM is, again, it's a good strategy, and it's funny that you mention it today. We wrote about this I think nine years ago. I have a blog post on ABM nine years ago, which is really the new framework. I think that today, with enterprise, what we saw is if you have something to offer them as a land, you want to have a dedicated team that is going to do that and put the [inaudible 00:46:09] on that, that's going to feed the sales team. So even large enterprises will start, again, if you're engaging with the director level, the people on the ground level-
Paul:
C-suite, yeah.
Mickey Alon:
... so you can do a quick first win. So as opposed to landing a lead after a very complex campaign, land the first win, basic license, and then have that as part of the ... But it should be a shift saying, "Look, you're going to expand accounts." In the history, you would land an account and with a big, big one enterprise deal, but today, in the new world, you're not landing leads. You're actually landing a first sign for a first, small deal, but you bypass all the hurdles of getting valued or getting recognized as a vendor.
Mickey Alon:
And then the expansion, which can happen within 30 days, is where you're engaging with a user that already is using your product, and you are discussing a bigger deal. So I think it's having that investment. "Okay, let's do a pilot. Let's see that the product can actually fit that. Let's see if we can gain some traction." We also saw, by the way, that even a sign-up to a product and they do nothing still is actually stronger lead score than down on the white paper.
Paul:
Yeah, yeah, definitely, definitely.
Mickey Alon:
Right, so if you got a big account signing up and doing nothing, reach out, use human touch. You know that they actually intended to spend some time evaluating, and they're going to be more responsive. Larger accounts are more responsive because they have more complex questions. For them, it's always, "Do you support security? Do you support this and that?"
Mickey Alon:
So we saw obviously that the sign-up for product is a great conversion page, and as PLG institute that recommends make it a single field, reduce friction, try to skip email activation or leave it as an end step. But having that as a first signal, someone tried your product from your target accounts from your ABM list, that is fantastic closing the loop. If your ABM list went to a trial, go engage, because this is a fantastic signal. So even if your product is empty, doesn't do anything, you got their attention. You got their attention and you know who is going to be the hands-on person that you might want to start with.
Paul:
Cool. Thank you for that, Mickey. Appreciate that.
Ramli John:
Got it. Thank you, Paul. Do you have a follow-up? Go right ahead.
Deepa:
I have a follow-up to what Paul asked. This is a completely different question, but I'm so enjoying this conversation with just four of us, I get to [inaudible 00:49:18] ask all the questions that I have. So just one question that I have is do you have any data that shows a correlation between PQLs and retention metrics in your consulting work or any of your PQL consulting that you've done?
Mickey Alon:
No, we don't have PQL to retention, because again, we are focusing a lot on B2B or longer journeys, but we have absolutely correlation between adoption of key features or really good onboarding experience that led customers to understand and use those key features to retention is the best predictor of ... And we're doing some studies with companies like Adobe. They see a completely direct connection between, "When do they use those golden features?" They are trying to accelerate you to use them, and there is a clear association to retention numbers.
Mickey Alon:
You can really improve, and again, it depends on the size. Early stage, you're going to see a major improvement. Late stage, you're going to see a couple of points, but each point can be multimillion impact, right? If, as a company, you have a 90% [inaudible 00:50:35], so you're losing 10% of your business every year, that is a very painful element. The biggest insight, I cannot share numbers, but the biggest insight is the adoption is the best cure, and those golden features are the one that it makes sense, totally makes sense, but nobody's doing that.
Mickey Alon:
You guys work with companies, it makes sense, nobody's doing that. Nobody looks at [inaudible 00:50:55] feature usage, nobody's engaging or guiding users to the golden feature usage or mapping the customer journey. This is only starting to happen. The biggest assistant you guys can do is help companies map the customer journey, help them understand you're bringing that for marketing. You understand how to do that mapping of the journey, touchpoint, messaging.
Mickey Alon:
Just apply this template into products and then you have a product growth strategy. There's a persona, there's milestone, touchpoint, messaging. Conversion might be just 90 days, might be even a year, because your re-conversion is the expansion, but that's what I think is now becoming more reality. And I think the next couple of years, you'll see that evolve. You'll see the next [inaudible 00:51:40] emerging. PLG is kind of the next [inaudible 00:51:44], and you'll see a lot of permutation of that type of implementation. What I like about PLG and [inaudible 00:51:53], both makes a ton of sense. Just people didn't do it until it was specified.
Paul:
Yeah, yeah. No, it's been amazing. I think all of these different questions are just giving everyone so much depth and you can just keep on going. So Ramli, I'm going to just give you back to the microphone.
Ramli John:
Thank you both. I was just thinking, I'd rather have people who are engaged and asking questions than a quiet room, right? So thank you, both of you. We got two minutes left. Mickey, as we wrap up, if you can share one or two pieces of advice to product-led leaders who are making that transition, what would be one or two pieces of advice you'd like to share, whether that's something we talked about now or something that you haven't talked about yet? What would be your advice to people who are making that transition in their org?
Mickey Alon:
That's a great one. I think number one is to build a plan you can share and get alignment. You want alignment from the business side and from the product side, so building that, plan around this, how we're going to optimize, what I need to be successful. There's [inaudible 00:52:58] from product, there's a list of things that tend to be not really difficult for product to deliver, but important. Those first time, the sign-ups should be different, the invite user should be easy, the provision should be easy.
Mickey Alon:
Maybe addressing the empty state of your product, so asking them to prioritize that and to participate in the tiger group as well. So planning is great, and then the business side, saying, "First of all, we have to go there because otherwise out competition is just going to be that simpler, faster-moving solution, so we have to be there." And just draw the map. Once you have implementation in place, have a path towards how the business side is accepting and collaborating about, "Yes, we're going to start looking at that PQL model.
Mickey Alon:
We're going to have a model that is covering a small deal and a large deal, land and expand." So getting that plan in front of them and getting the buy-in would be great. And then starting with looking at the data, I think that tiger team can help, and you need tools. Obviously, Gainsight PX is one of them, but using any tool to start looking at the telemetry is pretty fundamental, and looking at the full funnel will be great, because you want to feed the team back with the data points.
Mickey Alon:
So the tiger team should update the CEO on a quarterly basis, saying, "Here's what we've done, here's the plan, here's the first signs we're seeing." But you also want to ... The second point would be make sure that your product, and packaging, and pricing also align. So before you start and getting everybody to change what they do, have that plan, because pricing is not triggered to change, product is not triggered to change sometimes.
Mickey Alon:
So make sure that you identify those point that might just cause the project to fail and address them head on, but I think you also want to have the CEO's backing for that, because again, as we see the market, if you don't that now, one day or the other, one way or the other, your competition will and you're going to get someone eating your lunch. So plan and just continuously update the executives on the progress on a quarterly basis is really helpful.
Ramli John:
Really, thank you for sharing that. We are over time, but one final question. Where can people find out more about you? Are you active on LinkedIn? Are you on Slack? If they just have more question, where are you online? Where can they find you?
Mickey Alon:
Both in Slack and also LinkedIn. Mickey Alon, so just look me up, connect. I'm checking my messages there almost on a daily basis. I tend to reply if you reach out.
Ramli John:
Thank you so much. We really, really do appreciate answering all our questions, and for the rest of everybody here. Thank you, Deepa. Thank you so much. Appreciate all the insights and answering all of our question. Thank you. Have a great rest of your afternoon everybody, have a good one.
Mickey Alon:
Thank you. Thank you for having me. [crosstalk 00:56:15]-
Paul:
Thanks, guys. Thanks a lot, it was really interesting.
Mickey Alon:
Thank you, bye-bye.
Ramli John:
Bye, guys.
