#ProductCon LDN ’23: A Realistic Look at PLG by Amplitude Head of Growth MKT, Franciska Dethlefsen

by Grip Team | Mar 13, 2023 | Growth

What is PLG and PLG strategy?

PLG stands for product-led growth, which is a strategy that leverages the product itself to drive customer acquisition and retention.
There are different versions of PLG, including:
- PLG as a set of skills and tools, such as experimentation, pricing psychology, and SEO.
- PLG as a growth motion or motions, which involves an actual go-to-market strategy.
- PLG as a mindset, which is about believing in the power of good products.
It’s important to make sure that everyone in the company is on the same page about what PLG means and which version of PLG the company is focusing on.

As product people, it’s important to take accountability for key metrics like revenue and new signups.
PLG as a strategy involves driving growth across acquisition, retention, and monetization.
Acquisition refers to the ability of the product to drive new users to sign up.
Retention refers to the ability of users to activate and engage with the product without any help or intervention.
Monetization refers to the ability of users to self-serve checkout without any help from sales.
Most successful companies have two or three motions running simultaneously to drive growth.

Amplitude relies on multiple motions to drive growth, including:
- Marketing-led acquisition through the growth marketing team.
- Professional Services and customer success teams for adoption and engagement.
- A sales team for monetization.
Amplitude also uses product-led motions to drive growth, such as:
- A free trial that allows users to experience the product before signing up.
- A self-service upgrade path for monetization.
Amplitude blends product-led motions with its existing sales and marketing motions to create a holistic growth strategy.

In the old business model, all the key business metrics were sales and marketing KPIs.
In a product-led growth world, all the metrics will change to product metrics.
Product people need to understand what an activated user, activated account, retained user, retained account, and driving monetization looks like.
It takes deep analysis and works to figure out these metrics.
Once you find them, you need to share them with the rest of the company.
At Amplitude, they are warming up the business to these new product KPIs.

Retention is huge for Amplitude this year.
Retention is split into two parts, activation, and engagement.
Activation is the big focus for Amplitude this year.
They define activation in two parts – set up and aha.
Set up is when a user connects the data source and creates the first chart.
Aha is when a user either saves the chart or shares both indications of value received from Amplitude.

At Amplitude, they are tackling activation this year.
They have quite the drop-off from a user creating an account to them actually connecting a data source.
They know it’s complicated and technical to set up Amplitude.

Unless your product is as intuitive and simple to use as Calendly, you need support.
At Amplitude, while product and engineering are the ones driving the end-product activation roadmap, they have many other teams who are gold on activation metrics as well.
The growth marketing team works on one-to-many onboarding programs, builds trigger emails to force or create a habit, and works with education teams on building education materials and making it easy to get started with Amplitude.
They continuously improve their documentation and support forums so that when a user has a question during setup, there is an answer right there for them.
They even have sales involved in activation because it shows how important activation is for Amplitude.
While making investments in the product side of the house and activation this year, they are also going to make investments in the product.

Amplitude offers a 60 to 90-day implementation program to its customers.
It helps them with questions regarding events, tracking properties, using the product, capturing insights, and getting value from it.
This program is not available to every customer, especially not those who haven’t paid yet.

For Amplitude, it’s not just about product growth, it’s also about product-led sales.
Product-led sales mean parallel sales, which is a mixture of sales-led growth and product-led growth.
The key ingredient in product-led sales is product usage data.
Activated and engaged accounts drive monetization, which is a good investment.

Pilot sales is a scientific definition of product-led sales.
The rise of free and freemium has popularized pilot sales.
Product-led growth is not new, but it is now more popular.
At Amplitude, 50% of new paying customers every year come from the free plan.
They need to know what their customers are doing in the free plan.
Proactively identifying accounts in the free plan and surfacing them to sales has performed much better than optimizing in the product for hand-raisers.
Building a simple model to score accounts and giving the highest score accounts to the sales team has resulted in a 3X increase in conversion from lead to the sales pipeline.
Amplitude has surfaced a lot more relevant data from the product to its sales team.
They embed key account metrics directly in Salesforce for them and build an amplitude dashboard where they can go in and look at their accounts’ usage.
Arming sales with the right data to have the right conversations is essential for product-led sales.

Sharing an actual pipeline target with sales is essential for parallel sales to work.
There’s joint accountability across the journey.
They optimize for quality, not quantity.
They make sure that sales have the right enablement and product usage data to have the relevant conversations they need to close these accounts.
Becoming extremely close with sales is necessary for parallel sales to work.
They share a sales target with sales, and they optimize for quality, not quantity.

Franciska emphasizes that evolution is key in product-led growth (PLG) strategies.
She suggests that if a company doesn’t evolve, its competitors will.

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