What $1B ARR companies have in common
Hint: It's not mass layoffs.
Welcome back, folks! I have one promise for today: No talks of ChatGPT.
Here’s what we’ll cover 👇
🌎 Do.More.With.Less - 6 actionable pieces of advice.
💰 What the $1B ARR club has in common
🚀 The value prop mistake everyone makes
💯 Groupthink: Good or bad for PLG?
🎁 Downloadable cheat sheets, templates & freebies
9 emails to drive conversions using product data
The ultimate LinkedIn cheat sheet
The PLG principles notebook
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🌎 Do.More.With.Less
Belt-tightening is the new vibe for 2023. But how do you actually “do more with less”? Very few offer actionable advice.
Aaron Bird did. The former SVP of Product at Marketo shared how he would keep up with revenue goals with less headcount.
Source: Fred Melanson
Customer Onboarding - The #1 reason your customers' churn is due to failed onboarding and implementation. It's the month-to-month bomb that starts ticking today and is un-savable by your account manager at renewal.
🔑 takeaway: Use product data to switch from “one-size-fits-all” onboarding sequences that customers ignore, to behaviour-based sequences that add value at the right time.
Activate intent data - Your product data in Segment/Snowflake/Redshift is RIPE with intent data showing you which accounts want to upgrade. It's literally ARR sitting on the floor and every morning you decide to walk past it to get coffee.
Two tips:
If you have self-serve expansion capabilities: run an email sequence to the customer reminding them of the benefits of upgrading.
If you have a sales/AM-led motion for upgrades: schedule an email alert to the rep. Turns out they love talking to customers that want to buy.
NRR Booster - Do a little show and tell - send an email to EVERY customer EVERY month highlighting all the great wins they had in your app. Think "Peloton ride summary email but for B2B" or “Spotify annual recap”. They are receiving a ton of value, remind them!
Three tips:
Improve QBRs with real insights via product data - Go grab the last enterprise QBR deck for your top-tier, ICP customer. Maybe that allows you to create a "low touch" mid-tier of accounts in which your CSM doesn't have to create any content.
Good job deploying your shiny new Account Score, now what? What's better than measuring account adoption? Better yet, do it at scale! Nurture your customers through your product just like your marketing team nurture the leads for sales.
Increase your CSMs efficiency with automation - Your CSMs are amazing 1:1, give them the tools to be amazing 1:many. Did you ask your SDRs to type every email? No, you gave them the ability to sequence at scale. Why don't you give your CSMs the same superpower?
💡 Want more? Here’s how PLS improves revenue during economic downturns.
💰 Members of the $1B ARR club have one thing in common
Data from Bessemer Venture Partners and Andreessen Horowitz point to one thing: the fastest companies to $1B ARR implement a hybrid GTM model.
Top-down sales + product-assisted sales = growth dominance.
Source: Bessemer Analytics
Dave Boyce (Winning by Design) and John Piccolo (AWS) engaged in an entertaining discussion this week about this.
Dave’s argument: No public SLG companies over $1B in revenue have the same growth rates (without acquisitions) as PLG companies.
Zoom: $4.1B in revenue, 52% growth.
Twilio: $3.6B in revenue, 29% growth.
Datadog $1.5B, 50% growth.
Okta $1.7B, 31% growth.
Bill.com $857M, 37% growth.
There is not a sales-led company on the planet with $1B+ in revenue, still growing at over 30% (except by acquisition)
What do Datadog, Zoom, Okta, Bill.com & Twilio have in common? Top-down + product-assisted sales.
🔑: The idea to implement product-assisted sales rarely comes from sales, but its execution WON’T WORK without specific organizational changes within the sales function. Changes like shifting customer interactions, cross-functional processes & ownership, reviewing goals, and adjusting sales comp for PLG are necessary for success.
🚀 How to craft your value prop
Imagine you’re selling running shoes. Would you pitch them the same way to a middle-aged man getting into running that you would a marathon runner? No, you wouldn’t. So why is your value prop communicated the same across the customer journey?
Source: Robert Kaminski
Robert Kaminski introduced a framework for crafting value props based on the awareness stage of your users, taking Notion as an example.
⚫️ Problem Unaware: Message Strategy → Lead with Alternatives
Start the conversation by understanding their current way of doing things and then introduce improvements they can make that benefit them - their efficiency, time-to-value, etc.
🔴 Problem Aware: Message Strategy → Lead with Problem
Build credibility by pinpointing their problem in your message. The ‘I get it’ will build trust and is more than likely to garner a response.
🟡 Solution Aware: Message Strategy → Lead with Capabilities
If you hit on meaningful capabilities that are directly relevant to a need, you’ll earn the ability to go deeper into the problem they’re looking to solve.
🟢 Product Aware: Message Strategy → Lead with Features
Your best approach is to lead with your most differentiated features that you know will benefit their use case, industry or selling motion.
One issue worth considering around demand capture: many PLG companies struggle to define when humans should step in. In this case, capture levers (acquisition) can be dictated by LTV.
High LTV potential → sales own capture
Mid-LTV potential → marketing + inbound own capture
Low LTV potential → product (self-serve) own capture
💯 Groupthink: good or bad for PLG?
This week, the brilliant Kately Bourgoin introduced the concept of Groupthink. It’s the tendency for groups to think in harmony, like not sharing doubts or judgments on a decision if the rest of the group agrees that it’s a good idea.
🔑 Takeaways applicable to PLG 👇
Source: Sketchplanations
Part of the herd: It’s human instinct to want to be part of the herd. But when standing up, running, or optimizing PLG, unique preceptives are key. A successful PLG motion is only as good as the cross-functional buy-in and collaboration it has behind it. Avoid the herd mentality when calibrating and remember you have a unique POV specific to your expertise - voice it. It will benefit the customer in the end.
Customer insights to avoid Groupthink: Groupthink can fight against your product adoption. Constant interactions with users drive the right change, campaigns and strategies. PLG is all about data. So don't go with instinct or feedback from a single customer but instead analyze the data and find real trends.
Anti-goals: As Andrew Wilkinson explains, “Instead of thinking through what we wanted our perfect day to look like, we thought about the worst day imaginable and how to avoid it.” Think about anti-goals for your ideal customers. Apply anti-goals in product launches & campaigns.
🎁 Cheat sheets, templates & freebies
The PLG principles notebook
5 questions to fine-tune your Product-Led Sales motion
9 emails that use product data to get 3x replies
🎧 and 📺
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📺 How to use product data in emails to get more replies
📺 Decoding product-led sales
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🎧 How to adapt your sales strategy to current conditions
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Aaaaaaaaaaaaad that’s it for today!
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Appreciate y'all! Have an awesome weekend!
✌️Fred
