product activation rate optimization

Unlocking Time to Value: A B2C Guide to Amplifying Customer Relationships

How clear is our product journey? Are users getting what they need? Do they understand what we’re trying to accomplish?

B2C can be challenging. Once you’ve succeeded in capturing users’ attention, you have to ensure that they quickly understand what makes your product unique. But how do you know how long it takes them to understand it all and how can you optimize it?

This is where Time to Value (also known as TTV) comes into play. Let’s deep dive into what it is, how to measure it and most importantly how can you make it better so your users get the value they came for.

What is Time to Value (TTV)?

Time to Value is a metric that measures the duration it takes for a customer to realize the inherent value of a product or service after their initial engagement. In other words, it’s the span between a customer’s initial interaction or purchase and the moment they perceive its full benefits. 

TTV is a crucial indicator of the efficiency and effectiveness of your product’s onboarding process and its initial user experience. A shorter TTV indicates that customers are rapidly recognizing and reaping the benefits of their purchase, leading to increased satisfaction and loyalty.

How to Calculate Time to Value?

Calculating TTV can vary based on the nature of your product or service, but here’s a basic approach:

Define the ‘Value Moment’: Determine the point at which your customer will perceive value. For a software service, it might be when a user completes their first project. For a physical product, it could be the first successful use.

Track the Starting Point: This could be the time of purchase, sign-up, or when a customer first engages with your product or service.

Measure the Duration: Measure the time it takes from the starting point to the value moment. This duration is your TTV.

For instance, if a customer signs up for a software service on January 1st and realizes its value by completing a task on January 5th, the TTV is five days.

Remember, while this offers a generalized approach, you should adapt the TTV calculation to the specific nuances and expectations of your product or service.

With the understanding of TTV and its significance established, let’s dive into actionable steps to decrease TTV and in turn, enhance your customer’s lifetime value and user retention rate:

Here are 8 ways to reduce TTV for B2C companies

Understand your customer’s journey: What are their needs, pain points, and goals? Map out their entire customer journey, from initial awareness to purchase to ongoing use. This will help you identify areas where you can improve the TTV.

Optimize your onboarding process: Make it as easy as possible for customers to get started with your product or service. This could include providing clear instructions, offering 24/7 support, or providing access to helpful resources.

Make your product or service easy to use: A complex or difficult-to-use product will lead to frustration and churn. Keep your product or service as simple and intuitive as possible.

Deliver immediate value: Don’t make customers wait to see the benefits of your product or service. Offer them a free trial, a discount, or some other incentive to get them started.

Personalize the experience: Tailor the experience to each individual customer’s needs. This could involve offering different features, pricing, or support options.

Measure and track your results:  Keep track of your TTV and other metrics so you can see what’s working and what’s not. This will help you make adjustments to your strategies as needed.

Use technology to your advantage: There are a number of tools and technologies that can help you reduce TTV. These include customer relationship management (CRM) software, analytics platforms, and chatbots.

Get feedback from customers: Ask customers for their feedback on your product or service, including how you can improve the TTV. This feedback will be invaluable in helping you make changes that will make a difference.

By following these  tips, you can reduce TTV for your B2C company and boost your CLTV and user retention.

The Power of Optimizing Time to Value

Time to Value stands as a pivotal metric in the B2C landscape, serving as a reflection of how swiftly customers perceive the value in their interactions with a brand. A short TTV can significantly enhance user satisfaction, loyalty, and metrics such as customer lifetime value and user retention rate. By understanding what TTV is, knowing how to calculate it, and implementing strategies to optimize it, B2C companies can foster stronger, more rewarding relationships with their customers. In an ever-competitive market, refining and reducing your TTV can be the distinguishing factor that sets your business apart. Embrace the insights, put them into action, and watch your customer relationships thrive.

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Perfecting the Process: A Guide to Product-Led Onboarding

Two things remain irretrievable: time and first impressions”, as Cynthia Ozick once said. Even in the online medium, this saying is still quite true. Businesses may help their customers get up and running with a new product more rapidly by using a self-streamlined onboarding approach. Well, this avenue has a significant competitive advantage since it accelerates product adoption and boosts user participation. We have previously covered some essential steps for deciding which product-led revenue model might be right for your business.

Instead of depending entirely on standard assistance from sales or customer service teams, product-led onboarding shifts the emphasis to using in-product experiences. 90% of companies in 2022 said that digital user onboarding caused consumers and users to abandon new products and services, according to the ABBYY State of Intelligent Automation Report.

So, what are the core steps for product-led onboarding? We uncover them in this article:

 

Understand Your Client’s Profile

When you know who you’re selling to, you can create onboarding material that gets them hooked and keeps them using your product for the long haul. 

Having a clear picture of your ideal client allows you to cater to their needs and demands from the start of their relationship with your company.

Gather as much data as you can about them. What industry are they in? What’s their role? This information can usually be found on company websites or professional networks like LinkedIn.

Streamline the Sign-Up Process for Seamless User Onboarding

The initial sign-up process sets the tone for your users’ experience with your product. It’s crucial to keep it simple and hassle-free. Avoid adding unnecessary complexities that can deter potential users.

In short, you enable users to swiftly begin their journey once they are motivated to sign up by minimizing barriers to entry. 

The critical information you should request at this stage is their email address, which serves both as an account identifier and a means of communication with your business.

Get Your Users to the “Aha!” Moment

Product-led onboarding revolves around leveraging your product to guide users through a series of value realizations, commonly referred to as “aha moments.” 

Through an engaging and intuitive onboarding experience, you aim to help users recognize your product’s unique benefits and value. 

To put it simply, the end goal is to not only drive initial purchases but also foster long-term customer retention.

Introduce Product Tours

When new users first log into your product, they may encounter landing pages, dashboards, and workflows that are unfamiliar to them. 

So, how can you help them navigate this unfamiliarity? The answer is – guided product tours and informative pop-ups. As defined by Whatfix, “Product tours are in-app tutorials that guide new users through an app, website, or SaaS tool’s user interface (UI) and key features.”

Thus, these guided tours and contextual pop-ups help users understand the functionality of the app’s most important components and functionalities. Users’ self-assurance and drive to continue using your product improve when you explain its features and how to access them.

Identify & Remove Friction 

Finding and fixing user friction points is essential for a smooth product-led onboarding process. To do this, the onboarding process must be tracked and monitored in real-time so that trouble spots may be addressed.

Also, any product-led onboarding should encourage users to give feedback during onboarding. This can be done through surveys or by providing an easy way for them to get in touch with support.

Data silos are a major stumbling block to this process and may result in inefficient onboarding methods, longer periods to fix app issues, and other negative user experiences.

Provide Comprehensive Support Options 

Even with a seamless product-led onboarding experience, it’s important to acknowledge that customers may still have questions or need assistance. While the goal is to minimize the need for support, having support channels in place is essential.

Offering options such as website chat, support e-mail, and a knowledge base allows customers to easily seek help and ask questions even after completing the onboarding process. 

Eventually, this human touch adds value to the customer experience, can increase conversions, and even generate valuable customer support leads.

Combine In-product and Email Onboarding 

Whereas the initial onboarding experience within the product should be the focus, leveraging e-mails can effectively re-engage users and bring their attention back to your product.

Similar to welcoming users within the product, sending a welcome email with helpful resources for getting started can further enhance their onboarding journey. 

In fact, the email’s content, copy, and structure must align with the in-product onboarding experience, creating a cohesive and consistent user experience. This way, it is feasible to reinforce key information and provide additional guidance to support users in their product adoption process.

Never Stop Onboarding

Onboarding doesn’t end with the initial user experience – it should be an ongoing process even after the purchase. 

As new customers engage with your company, they will require onboarding, and as you introduce new features, onboarding becomes crucial for driving adoption and retention.

Besides, allowing users to re-run checklists or onboarding guides might be beneficial, even if they have completed them. 

Frankly, users may not fully grasp everything during their initial onboarding, so offering the option to revisit onboarding materials can be helpful. 

PLG 101

Product-Led Growth 101: A Glossary of Essential Terms

In 2023, according to Open View Partners, only one-fifth of SaaS companies have seen a growth rate of at least 75% year-on-year. However, PLG leaders have still managed to grow at twice the rate of traditional SaaS companies. The adoption of PLG has expanded across the software landscape, and tracking product-qualified leads (PQLs) or accounts (PQAs) has boosted the likelihood of fast growth by 61%.

By now, you’re likely familiar with the concept of product-led growth (PLG), which was extensively covered in a past article. But to truly master the verbiage of product-led growth and effectively implement its principles, it’s quite essential to be well-versed in the associated terminology. 

Although you may already know some bits about PLG, a little guidance to catch up with the intricacies of product-led growth might help:

 

Understanding the Market

  • Addressable Market : The specific segment or group of potential customers that a product or service can effectively target and serve.
  • Blue Ocean CompaniesInnovative organizations that create new markets and demand, making the competition irrelevant.
  • Red Ocean Companies : Businesses in saturated markets aiming to outperform competitors.
  • Total Addressable Market (TAM): The total revenue opportunity for a product, accounting for potential future expansion.
  •  

User Engagement & Experience

  • Activation Barriers: Obstacles or hurdles that prevent users from fully adopting and engaging with a product or service.
  • ‘A-Ha’ Moment: The point at which a user realizes the value and benefits of a product or service, often leading to increased engagement and continued usage.
  • User Experience (UX): Users’ overall experience and satisfaction when interacting with a product or service.
  • User Journey: The path or stages users go through when interacting with a product, often involving steps like activation, discovery, conversion, and scaling.
  • Stickiness: Refers to the degree of engagement and loyalty that users have towards a product.
  • Time To Value (TTV): The amount of time it takes for a user to derive value or achieve their desired outcome from using the product.
  • Self-Serve: A model that allows users to onboard and use a product or service independently, without assistance.
  •  

Product Development & Features

  • Enterprise Product Development (EPD): The comprehensive process of bringing a product from its conceptualization to its launch within a company.
  • Feature Adoption Rate: The rate at which users adopt and utilize specific features of a product.
  • Workflow: The sequence of tasks and processes an organization follows to complete a specific project or achieve specific goals.
  • Product-Market Fit: The alignment between a product and its target market.
  •  

Growth Strategies & Models

  • Bottom-Up Selling: Emphasizes simplicity and fast acceptance.
  • Marketing-Led Growth: Focuses on acquisition through marketing efforts.
  • Sales-Led Growth: Relies on sales teams and human intervention for growth.
  • Growth Loops: A framework for driving growth by creating a cyclical process for continuously engaging users.
  • Freemium Model: A pricing model with free basic features, but advanced features require payment.
  • Go-To-Market (GTM): Launching and promoting a new product to customers.
  • Value Metric: A measurement companies use to assess the value generated in exchange for their product.
  • Value-Based Pricing: A pricing strategy largely relying on the customer’s perceived product value.
  • Channel: The marketing and distribution channels that are scalable and cost-effective for product-led growth, such as word-of-mouth, content marketing, or low-cost CPC advertising.
  • Sales Cycles: The time it takes for a customer to move through the sales process, from initial contact to making a purchase.

Customer Metrics & Analytics

  • Advanced Analytics: Tools that uncover insights through data analysis.
  • Average Revenue Per User (ARPU): The average amount of revenue generated per user or customer.
  • Churn Rate: The rate at which customers or users discontinue or unsubscribe from a product or service.
  • Customer Lifetime Value (CLV): The predicted revenue a customer will generate over their relationship with the company.
  • Effort Analysis: Quantitative method to understand users’ difficulty navigating through each step of a digital experience.
  • Net Promoter Score (NPS): A metric used to measure customer satisfaction and loyalty.
  • Product Qualified Leads (PQL): Leads that have demonstrated an interest and derived value from the product,  suggesting a higher likelihood of becoming customers.
  • Product Qualified Accounts (PQA): Accounts that have actively used and gained substantial benefit from the product, signaling a potential for conversion or growth.
  • Segment Analysis: Grouping users based on their behaviors to identify patterns.
  • Time-Based Cohort Analysis: Examines user behavior and engagement patterns over different time periods.
  •  

Models & Frameworks

  • Fogg’s Behavior Model: States that Motivation, Ability, and a Prompt must converge simultaneously for a behavior to occur.
  • Hook Model: Focuses on creating strong user habits through triggers, actions, rewards, and investments.
  • RICE Framework: A framework used to prioritize projects or initiatives based on their potential impact, effort required, confidence level, and resources available.
  • Customer-Centric: A strategy prioritizing exceptional customer experiences by placing the customer at the core of products, ideas, philosophy, and operations.
  • SaaS (Software-as-a-Service): Software delivery model where applications are accessed through the internet and provided on a subscription basis.
pql-driven revenue growth

Top 5 Must-Read Books for Product-Led Growth Enthusiasts

Henry Truman once said that “Not all readers are leaders, but all leaders are readers.” No matter how many technological advancements we will live to see, there is one medium that will never become outdated – Books. There is nothing, absolutely nothing, quite like a good book. No matter the wave of technological advancements, one medium will always hold its relevance – Books. Nothing can quite replace the depth and breadth of knowledge that a well-written book can provide. 

Whether you’re aspiring to master the art of PLG or attain the competency to lead growth-focused teams in your organization, these five books are absolutely essential. Each one of them carries a treasure trove of knowledge, lessons, and frameworks that, when applied correctly, will provide a strategic advantage in crafting successful PLG initiatives.

Here is your top 5 must-read list – 

1. “Product-Led Growth: How to Build a Product That Sells Itself” by Wes Bush

Mastering the Art of Onboarding

Kicking off our list is the influential work by PLG expert, Wes Bush. “Product-Led Growth: How to Build a Product That Sells Itself” is a seminal guidebook in the realm of product-centric organizations, offering comprehensive, deep-dive insights into the creation of a product that inherently generates demand. Bush paints a vivid picture of the transformational shifts that modern-day organizations need to embrace, underlining the cardinal role that onboarding, customer satisfaction, and feedback play in propelling a product-led growth model.

In this exhaustive treatise, Bush stresses the importance of elevating the product as the heart and soul of your business. He highlights the significance of captivating customers right from their initial interaction and maintaining that engagement throughout their journey with your product. The power of a strong first impression cannot be overstated. Bush expounds on how successful onboarding can transform a casual user into a loyal advocate. It’s not just about familiarizing users with your product, but also about demonstrating value quickly and creating an experience that’s hard to abandon.

Customer Satisfaction as a Growth Driver

Equally noteworthy is the book’s exploration of customer satisfaction and its undeniable role in growing a product-focused business. Bush argues that it’s not enough for a product to meet the needs of a customer. It should go a step further, exceeding expectations and providing delight with every interaction. In this way, the product itself becomes a driver of growth.

The Cardinal Role of Feedback in PLG

The critical role of feedback in the PLG paradigm is also examined in-depth. Bush asserts that a PLG company is always listening, constantly collecting user feedback to refine and improve its product. By incorporating feedback loops, organizations can create products that evolve along with the needs of their customers, ensuring long-term user engagement and loyalty.

“Product-Led Growth: How to Build a Product That Sells Itself” is not just a book but a rich repository of knowledge, strategies, and actionable insights that are indispensable to constructing a thriving, product-focused business. By the time readers turn the last page, they are equipped with a deep understanding of PLG and the practical knowledge needed to implement its principles in their own organizations. This book is not just a masterclass in PLG but a blueprint for building a business that is capable of driving sustainable, customer-centric growth.

2. “The Product-Led Organization: Drive Growth by Putting Product at the Center of Your Customer Experience” by Todd Olson

Leveraging Customer Feedback for Growth

Todd Olson’s insightful work, “The Product-Led Organization: Drive Growth by Putting Product at the Center of Your Customer Experience”, elucidates a structured approach to transforming into a product-led organization. The book underscores the criticality of placing the product at the core of the customer experience and propounds efficient methodologies to realize this ambition. Drawing from a wealth of personal experience, Olson offers invaluable insights into embracing a product-centric mindset, deeply understanding customer needs, and synchronizing various organizational teams around the central premise of the product.

An important aspect Olson explores in his book is the power of customer feedback. He elaborates on how product-led organizations leverage feedback not just for remedial action, but also for continuous product improvement. He believes that customer feedback, both positive and negative, is an essential ingredient in the process of refining a product and creating an offering that hits the mark every time.

Importance of Data-Driven Insights

The book further stresses the significance of data-driven insights to enhance the customer journey and foster growth. It offers advice on establishing effective metrics, tracking user behavior, and using these insights to make informed decisions that elevate the user experience. Olson explains how data can be a powerful tool for improving user experience and delivering a product that effectively solves customer problems and fulfills their needs.

“The Product-Led Organization: Drive Growth by Putting Product at the Center of Your Customer Experience” is more than just a book; it is a well-crafted guide and a vital resource for anyone aiming to adopt a PLG approach. With its practical insights and actionable strategies, this book lays the groundwork for building and nurturing a truly product-led organization.

3. “Onboarding Matters” by Donna Weber

Donna Weber’s “Onboarding Matters” is an enlightening read, particularly for SaaS businesses looking to leverage a product-led growth model. Weber, through her years of experience and expertise in customer success, articulates the critical role of effective onboarding to the success of freemium products and businesses. She strongly believes that successful user activation largely relies on excellent onboarding procedures, and that a seamless and engaging onboarding experience is the linchpin of converting free users into paying clients.

Customizing Onboarding Experiences

One of the unique aspects that Weber covers in this book is how different user personas may require tailored onboarding experiences. She sheds light on the intricacies of onboarding for B2B SaaS solutions, arguing that they are more complex than those for consumer-oriented services. She contends that there is no one-size-fits-all onboarding method and hence, emphasizes the need for a flexible and adaptable approach to onboarding that caters to the unique needs of different user personas.

Weber’s Orchestrated Onboarding: A Game-Changer

Weber goes a step further to introduce the concept of “Orchestrated Onboarding,” a recurring theme throughout the book. According to her, a well-orchestrated onboarding process not only facilitates seamless internal communication but also provides an open channel for engaging with customers. The ultimate goal of orchestrated onboarding, as Weber suggests, is to deliver a unified customer experience by eliminating the silos between departments.

Weber’s ability to weave her experiences into practical advice makes this book an invaluable resource for B2B growth teams, particularly those in the SaaS domain. Her detailed explanations, clear-cut strategies, and the emphasis on putting the customer at the center of the onboarding process make this book a must-read for those looking to improve their onboarding process and, consequently, their customer retention rates.

Furthermore, Weber highlights the role of a smooth onboarding process in allowing new customers to realize the return on their investment. She underscores that the perceived value of your product is directly related to how effectively new users are onboarded and integrated into the product experience.

This nuanced view on the role of onboarding in driving customer satisfaction and product success is what sets Weber’s “Onboarding Matters” apart, making it a must-read for anyone looking to delve deeper into the intricacies of customer success in the realm of product-led growth.

4. “Monetization Innovation” by Madhavan Ramanujam & Georg Tacke

The Undervalued Power of Monetization and Pricing

Madhavan Ramanujam and Georg Tacke’s “Monetization Innovation” is a must-read for anybody involved in growth, especially those working in the B2B SaaS and Product-Led Growth (PLG) industries. Despite being critical components of the business model, monetization and pricing often don’t receive their due attention. However, in the context of B2B SaaS and PLG businesses, the pricing structure and strategy bear even more significance.

To stimulate customer acquisition and minimize entry barriers, it is essential to offer a free version or trial of your product. However, this necessitates the formation of precisely calibrated price tiers and compelling feature bundling to incentivize upgrades. 

Pricing Strategy as a Catalyst for Customer Acquisition

The authors articulate that the success of PLG can largely be attributed to its dual focus on easing entry points and facilitating upgrade inducements.

Monetization Innovation” does a stellar job at dissecting and laying out the fundamentals of pricing and monetization. It walks the reader through an expansive spectrum of topics: devising strategy, blueprinting a model, conducting customer interviews, interpreting quantitative data, and much more. Aspiring to harness newer avenues of revenue generation, this book serves as an essential reservoir of knowledge.

Ramanujam and Tacke also stress on the importance of understanding and leveraging this dual emphasis for RevOps and sales executives. By aligning their sales strategies with well-defined price tiers, they can effectively shepherd prospects through the sales funnel. This alignment, prioritizing customer experience, yields increased conversion rates and cultivates loyalty among existing customers.

Thus, “Monetization Innovation” emerges as an imperative read for individuals and organizations that aim to thrive in a product-led business environment, equipping them with the crucial understanding of the monetization dynamics and the prowess to execute successful pricing strategies.

5. “The Lean Product Playbook” by Dan Olsen

Bridging the Gap between UX Design and Lean Methodologies

Dan Olsen’s book, “The Lean Product Playbook”, stands as an invaluable guide to constructing products that customers truly appreciate. Offering a systematic approach, Olsen outlines the process to attaining Product-Market Fit. The book serves as a thorough manual for applying lean methodologies in the realm of product development, propelling the readers to deeply understand customer needs, create a compelling value proposition, and grasp the importance of validated learning through progressive product enhancements.

Achieving Product-Market Fit: A Lean Approach

By combining user experience (UX) design with lean startup methodologies, Olsen paints a comprehensive picture of ideation, prototyping, user testing, and analytics. He places a strong emphasis on data-driven decision-making and evidence-based adjustments, establishing the book as an indispensable resource for anyone striving to create a product-led organization.

Leaders and entrepreneurs will find in “The Lean Product Playbook” the knowledge and practical guidance they need to navigate the intricate paths, avoid common pitfalls, and maximize the promising opportunities in the product-led growth landscape. This book equips its readers with a broad understanding of lean product development, preparing them to propel their business towards substantial growth.

With its focus on combining UX design with lean startup methodologies, it covers essential topics such as ideation, prototyping, user testing, and analytics. This book is an indispensable resource for those looking to create a product-led organization, providing the knowledge and practical guidance needed to navigate the challenges and maximize the opportunities in the world of PLG. By investing time in this book, leaders can equip themselves with a holistic understanding of lean product development, preparing them to drive their business to new heights.

In conclusion, all these books are uniquely beneficial in providing insightful guidance to build a successful product-led organization. They cover a range of aspects from the fundamental understanding of PLG to practical strategies, monetization, customer onboarding, and achieving product-market fit. Each book offers different perspectives, which when combined, provide a comprehensive understanding of PLG. Reading these books can significantly enhance one’s knowledge and skills in the PLG domain, preparing them to drive their organization towards becoming truly product-led. However, it’s worth noting that while these books offer valuable insights and guidance, it is the diligent application of these learnings that will ultimately pave the path towards success.

Leveraging User Behavior for Better Lead Scoring in a PLG Model

Leveraging User Behavior for Better Lead Scoring in a PLG Model

Without analytics, tech teams rely on insufficient demographic data or vanity metrics, hindering their ability to personalize services and understand customer preferences. So far, Openprise estimates that only 35% of revenue operations leaders possess full confidence in their capability to score leads accurately.

 

User behavior insights in a product-led growth (PLG) model lead to more accurate lead scoring, better resource allocation, and increased revenue generation. Adopting PLG strategies and aligning investments with user needs and market goals drives sustainable growth and profitability. Analyzing user behavior enables businesses to make informed decisions, enhance the user experience, and maximize their data’s potential for success.

 

How to Deploy User Behavior & Analytics?

 

User behavior denotes all the actions a user performs on a website or mobile app. It includes factors like time on the page, the number of pages visited, how people interact with different features, and also friction they encounter while using the product, etc.

 

Behavioral analyses help companies gain detailed metrics and segmentations to identify bottlenecks within their software or service, gauge customer reactions to investment messages, assess satisfaction with feature changes, determine the effectiveness of ads, analyze the conversion journey timeline, and improve the overall success of their product for customers. However, utilizing behavioral analysis effectively can be challenging, often due to the company’s lack of clear vision.

 

Exploring the Advent of User Data

 

McKinsey estimates that businesses capitalizing on customer data insights enjoy 85% greater revenue growth and over 25% higher gross margin than their competitors. As a result, businesses have begun to utilize behavioral data, ushering in a period of hyper-personalization in which firms compete to get a more nuanced knowledge of customer interactions.

 

Measures of user behavior on a website or mobile app, such as the amount of time spent there, the number of pages seen, the number of times a feature is used, and the amount of difficulty experienced by the user, are all considered part of user behavior. In a product-led growth (PLG) paradigm, organizations may improve their lead-scoring procedures by analyzing and understanding user behavior, resulting in more precise identification and prioritization of new customers.

 

ProductLed found that 91% of B2B SaaS businesses have already adopted the PLG strategy and want to boost expenditures in PLG efforts this year. This exemplifies the increasing appreciation for the value of exploiting user behavior inside a PLG framework.

 

Deploying User Behavior Data for Lead Scoring & PLG

 

Although various factors beyond your product alone influence user behavior, Lead scoring is improved as businesses learn how customers interact with a product. The possibility of a lead becoming a paying client may be estimated using data on user behavior as signs of interest, engagement, and intent. Considerable insight into a lead’s interest and propensity to buy may be gleaned from their use patterns, feature preferences, and engagement with marketing material.

 

Hence, pursuing better data-driven choices and more efficiently deploying sales resources is possible by analyzing user behavior in a PLG model. Sales teams may increase their conversion rate and revenue creation by focusing on the leads with the highest potential of converting into customers.

 

Leveraging behavioral data is a critical but overlooked component for measuring the effectiveness of Key Performance Indicators (KPIs) and making necessary adjustments. In PLG companies, the product serves as the primary source of data collection, w essential for driving growth and generating revenue. By analyzing this data effectively, companies can uncover valuable insights that guide their expansion and success.

 

3 Pillars of Efficient Product-led Growth

 

Gainsight outlines that “product experience data combines a wider data set, such as user sentiment, that allows teams to pull insights about intent, quality of user’s customer journey, and effective ways to expand each user’s product adoption.” 

 

Hence, forward-thinking businesses may learn more about a lead’s potential for conversion based on their activities in using a PLG model to score leads based on their behavior. Particularly in sectors where customer interactions can be tracked and analyzed in great detail, this method enables more efficient prioritization of sales efforts and improved decision-making. According to Open View Partners, 3 pillars empower viable PLG:

 

  • Pillar 1: Design for the end user – 
  • Designing for end users means prioritizing their needs and understanding the problems they want to solve. Successful product-led growth businesses put the needs of real people first and commit to continuously improving their products to effectively address those needs. Companies can create a user-centric experience that drives satisfaction and loyalty by listening to users and making consistent enhancements.
  • Pillar 2: Deliver value before capturing value – 
  • In a give-and-take relationship with users, providing value upfront before expecting anything in return is essential. Product-led companies focus on delivering value quickly, often through free trials, freemium models, or open-source offerings. The key is for users to experience the product’s value first-hand, either by solving their problem quickly or by reaching a pivotal “aha” moment. By simplifying the initial product experience and removing barriers, companies ensure users can easily access and recognize the product’s core value.
  • Pillar 3: Invest in the product with go-to-market intent – 
  • The upfront investment in creating software can yield substantial long-term benefits. PLG companies understand that the cost of delivering value to additional customers is significantly lower than that of professional services. This includes gathering comprehensive product data to track user behavior, establishing a growth function that enhances distribution and value capture, and conducting go-to-market experiments to optimize the user journey. Companies can drive sustainable growth and profitability by aligning product investments with acquisition, conversion, and expansion goals.

Bottom Line

 

Acquiring clarity on the desired user path, a clear product roadmap, achievable goals, understanding market demands and product change requirements, and specific objectives such as revenue generation or increasing customer satisfaction are essential. 

 

Thus, those interested in leveraging user behavior data to improve lead scoring companies must define their expectations and ideal user paths before analyzing data, as generic data alone cannot magically solve unidentified problems. With predefined expectations, teams can identify deviations from the ideal path and make necessary adjustments to enhance the user experience and lead scoring, improving the PLG model.

Free trials, when used effectively, help users understand the potential benefits of a product or service without any initial financial commitment, thereby reducing entry barriers and making the decision process smoother. From a business perspective, free trials can significantly drive user growth and conversion rates.

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Optimizing Free Trial Strategies: A Blueprint for SaaS Businesses

The significance of free trials in SaaS-based businesses is immeasurable. As a compelling strategy in the toolkit of a product manager, free trials serve a dual purpose: They act as a customer acquisition tool and as a solid building block in establishing long-lasting customer relationships.

Free trials, when used effectively, help users understand the potential benefits of a product or service without any initial financial commitment, thereby reducing entry barriers and making the decision process smoother. From a business perspective, free trials can significantly drive user growth and conversion rates.

Free Trial Benchmarks

For SaaS businesses to effectively acquire customers and generate revenue, free trial benchmarks are crucial. In order to evaluate the success of your own trial initiatives, you must understand the typical conversion rates and performance metrics associated with free trials.
Typically, in the dynamic SaaS industry, free trial conversion rates ranged from 1% to 10% a decade ago, with most businesses falling within the 2%-5% range. As this industry has evolved in recent years, benchmarks have gone up to 20%, 40% and even higher.
Which shows why it’s important to recognize that the landscape of the SaaS industry is constantly evolving, and customer expectations are evolving alongside it which means your company can’t just set and forget free trials and must evolve with it as well
It is crucial to acknowledge that the SaaS industry is in a constant state of evolution, accompanied by evolving customer expectations. Because of this, companies cannot afford to adopt a “set it and forget it” approach to free trials. In order to remain relevant and meet their customers’ needs, they must proactively adapt and evolve

Choosing the Right Free Trial Type

There are primarily three types of free trials, and choosing the right one depends on your product, your goals, and your audience. 

Time-Limited Trials

The first type, time-limited trials, provide full access to all features for a specific duration, usually between 7 to 30 days. This model gives users an immersive experience of the product, with the aim of showcasing its full potential and driving the users towards a purchase decision.

Feature-Limited Trials

Feature-limited trials restrict access to certain advanced or premium features while giving free access to the basic ones. This approach works best when your product has unique features that distinguish it from competitors.

Usage-Limited Trials

Usage-limited trials, on the other hand, offer unlimited time access but limit the usage, for instance, the number of projects that can be created or the amount of storage available. This model can be effective in products where long-term usage is crucial for realizing the product’s value.

Cracking the Code: Free Trial Metrics

Next comes a critical component of a free trial strategy: metrics. Monitoring the right metrics helps businesses understand user behavior, gauge the trial’s effectiveness, and make data-driven decisions to optimize the trial process.

Key Metrics to Monitor

When it comes to tracking performance, there are three free trial key metrics to keep a close eye on:

  • Number of Sign-ups: This metric provides a snapshot of how many users are interested in trying your product. It serves as the starting point of your funnel.
  • Activation Rate: This percentage measures the users who take a meaningful action (like completing a project or achieving a milestone) during the trial period.
  • Conversion Rate: This is arguably the most crucial metric. It measures the percentage of trial users who become paid customers, thereby directly impacting your revenue.

How to Calculate These Metrics

Calculating these metrics is straightforward yet essential as tracking any other key KPIs . The activation rate can be calculated by dividing the number of users who achieved a meaningful action by the total number of users who signed up for the trial.

The conversion rate is calculated by dividing the number of users who converted to paid customers by the total number of users who signed up for the trial. This key metric helps you understand the efficacy of your free trial in converting users to paid customers.

Essential Aspects Often Overlooked

There are often-overlooked aspects in managing a successful free trial strategy:

Smooth User Onboarding

Ensure user onboarding is as smooth as possible. The easier it is for users to get started, the higher the chance they will explore your product in depth.

Guidance for Achieving Outcomes

Provide users with guidance on how to achieve meaningful outcomes with your product. This could be via email, in-app messages, or a dedicated support team.

Monitoring User Engagement

It’s not just about sign-ups and conversions, pay attention to user engagement during the trial period. This can give insights into potential roadblocks or opportunities for improvement.

Best Practices for Optimizing Your Free Trial Strategy

Maximizing the impact of your free trial requires a strategic approach that extends beyond simply monitoring metrics. Below are some tried-and-true best practices to optimize your free trial strategy:

  • Personalize the trial experience

Tailor the free trial experience to match the user’s needs, preferences, or use cases.

  • Communicate value constantly

Regularly highlight the benefits and value your product brings to the user during the trial period.

  • Use a combination of trial types

Depending on the user persona, you may want to offer different types of trials (time, feature, or usage-limited) to cater to different user expectations and requirements.

  • Test and iterate

Regularly test different aspects of your trial strategy (duration, type, communication, etc.) and iterate based on the results.

  • Proactively engage with the users

Don’t wait for the user to reach out. Proactively ask for feedback, provide support, and address any potential issues the users might face.

Wrapping Up

Free trials are a pivotal part of any SaaS business. It’s not just about offering a glimpse of your product, but about fostering a relationship with potential customers. From choosing the right trial type to closely monitoring metrics and fine-tuning the process, a well-executed free trial strategy can drive user growth and revenue while setting the foundation for long-term customer relationships.

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Navigating the Shift From Sales-led to product-led

The world of business is filled with paradigms, models, and frameworks, each promising a path to success. But few shifts in thinking have been as transformative as the one from sales-led to product-led growth. It’s not merely a change in focus or a new buzzword; it’s a foundational alteration in how B2B companies approach growth, where products become the primary drivers, reshaping strategies, customer interactions, and even the cultural fabric of organizations.

While product-led growth (PLG) has captured the imagination of many and has become a dominant model, it is essential to underline that it is not a universal solution. The decision to adopt PLG or a hybrid model integrating both sales and product-led strategies must be finely tuned to the unique needs, strengths, and goals of a company. The path to PLG may include leveraging sales teams for upsells or handling complex deals, recognizing that traditional methods still have their place in the modern business landscape.

Since 2020, Pendo found that 89% of product leaders perceive their companies as being product-led. Gartner predicts that by 2025, 75% of SaaS providers will implement product-led growth techniques to foster growth and expansion among their existing customer base. This revolution places products at the forefront, serving as the primary growth driver within these organizations. It signifies a fundamental change in perspective, highlighting the critical role that products play in shaping the overall success and trajectory of the company.

Product-led Growth versus Sales-led Growth

We already discussed that different models fit different companies, but to understand the shift from product-led growth towards sales-led growth, we should assess the main differences between these two major growth avenues. 

Emphasizing Product Experience 

Product-led sales prioritize the product experience as the primary driver of sales, whereas traditional sales methods focus on relationship-building and outreach efforts.

Sales Processes

Product-led growth follows a product-centric and often self-service sales process, whereas traditional sales methods emphasize face-to-face interactions and sales pitches.

Sales Cycle Time 

Businesses with a product-led approach have a significantly shorter sales cycle, as customers can use the product to understand its value and make informed buying decisions. In contrast, traditional sales methods often involve a longer sales cycle due to the need for relationship-building and decision-making.

Lead Generation

Lead generation for product-led sales relies on the product itself. However, traditional sales methods mostly rely on external lead sources like events, cold calls, and email campaigns.

Exploring the Benefits of Product-led Growth

Quite frankly, product-led growth empowers businesses to unlock new possibilities, seize opportunities, and deliver exceptional value to customers at every stage. Why should the most innovative businesses consider product-led sales? Well, these benefits make the case for its unprecedented potential:

Diminishing Customer Acquisition Costs (CAC) 

All product-led growth organizations have lower CAC since they don’t need to invest much in marketing and advertising. As word-of-mouth promotes your product, new people will sign up for the free or low-cost versions and eventually upgrade to the paid versions.

Enhanced Product Feedback 

Listening to the customer experience will lead you to spend more time gathering feedback now that your product will be front and center.

Improved User Retention 

Users who try a product and don’t like it tend to quit using it. However, product-led businesses aim to provide user-friendly solutions to actual issues. Therefore, your firm will retain more customers if it prioritizes the product above everything else.

Greater Median Enterprise Value 

OpenView reports that “the median enterprise value (EV) of PLG companies is 2X higher than the public SaaS index as a whole.” Companies with a strong focus on their products tend to create solutions that better serve their customers. Customers will return and may even tell others about your goods if you do a good job.

Faster Revenue Growth 

According to Bain, companies that primarily rely upon PLG have a higher success rate in exceeding the Rule of 40 and the more ambitious Rule of 50. The Rule of 40 states that a company should have a combined revenue growth rate and EBITDA margin of at least 40%. Similarly, the Rule of 50 sets a higher bar with a combined rate of 50%.

Challenges of Implementing Product-led Sales

Notwithstanding the possibilities introduced by product-led sales, several challenges prevail:

Addressing Implicit Biases

When analyzing usage data, it’s essential to acknowledge and address the implicit biases that product teams may have. By fostering a culture of self-awareness and encouraging diverse perspectives, you can ensure that interpretations and actions are based on objective observations rather than preconceived notions.

Embracing User Unpredictability

Users can be unpredictable, and their behavior may not always align with your expectations. Free trial experiences may introduce randomness into the data, with varying engagement and conversion levels. By anticipating and accounting for these variations, you can better understand user behavior and tailor your strategies accordingly.

Leveraging Human Elements

Whereas PLG primarily accentuates data integration and automation, it’s essential to recognize and leverage the human elements of intelligence, experience, and behavior. Hence, most enterprises should incorporate the expertise and insights of their team members to complement the data-driven approach. Subsequently, this synergy of human intelligence and data-driven insights will drive PLG success.

Strategies for Implementing PLG

Without a doubt, embracing a product-led approach entails a bold transformation, redefining every aspect of your business strategy, organizational structure, infrastructure, and policies. These four PLG strategies mandate a paradigm shift in mindset, paving the way for innovative ways of operating and collaborating throughout the entire product life cycle:

Growth Loops 

Growth loops are replacing traditional sales and marketing funnels. Funnels create silos and one-directional flow, while growth loops emphasize cross-functional collaboration and continuous growth over time. They leverage existing customers to bring in new customers through low-effort referrals and viral strategies.

Hook Model 

The Hook Model focuses on creating habit-forming products. By understanding triggers, actions, variable rewards, and investments, you can design products that engage users and keep them returning. This model addresses emotional needs and patterns, allowing your product to become a part of users’ everyday lives.

BJ Fogg Behavior Model

This type emphasizes the importance of onboarding, engagement, and product design. It considers three factors: ease of use, value proposition, and prompts. You can drive user behavior and foster long-term engagement by making your product easy to use, communicating its value effectively, and providing timely prompts.

RICE Prioritization 

RICE is a framework for prioritizing product launches, updates, and experiments. It evaluates ideas based on Reach, Impact, Confidence, and Effort. Quantifying these factors allows you to make data-informed decisions, reduce bias, and effectively prioritize your backlog. RICE helps ensure that both product improvements and PLG strategies receive appropriate attention.

Considering the Shift: Is Product-Led Growth Right for You?

The shift from sales-led to product-led growth is more than a strategic reorientation; it’s a complex transformation that may fundamentally alter the way your organization operates. Before embarking on this journey, carefully evaluate whether your product can become the centerpiece of your growth strategy. Consider your target market, the nature of your offerings, and your organizational strengths. Assess how PLG aligns with your long-term vision and how it might interact with existing sales strategies. Engage with stakeholders, including sales and product teams, to gauge readiness and alignment. Most importantly, recognize that PLG is not a one-size-fits-all solution, and the hybrid approach may present an appealing middle ground. Whether fully embracing PLG or blending it with traditional sales efforts, the decision should be deliberate, informed, and tailored to your unique business landscape.

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Mastering the Growth Game: A Guide to Diverse Sales Strategies

James Cash Penney, JCPenney’s founder, once said, “No company can afford not to move forward. It may be at the top of the heap today but at the bottom of the heap tomorrow if it doesn’t.”

To propel their expansion and drive revenue, companies employ various growth motions. From sales-led growth to product-led growth, founder-led growth, and marketing-led growth, each strategy offers unique advantages and challenges. Let’s delve into the particularities of these strategies alongside their benefits, challenges, and best use cases.

Sales-led Growth

Sales-led growth is a strategy emphasizing sales processes and people to increase revenue. In a sales-driven growth strategy, the sales staff takes center stage, and their efforts significantly influence the company’s overall success. Although the marketing department still has some say in how the brand is portrayed, the sales division ultimately determines the company’s success or failure. 

SFE Partners indicates that “With a sales-led go-to-market strategy, salespeople can target specific accounts or segments of leads to find change-makers in an organization.” In contrast to product or marketing-led approaches, salespeople may give high-value information to best fit prospective customers much sooner using this method.

Advantages of Sales-led Growth

Usually, businesses prioritize acquisition, transaction closure, and revenue development when sales teams are in charge. This approach empowers the sales force to steer company results and build lasting customer connections. According to Substack, “The sales team can help customers understand the product better and provide personalized solutions.”  Companies like Oracle and Microsoft have taken this strategy to heart by maximizing their sales force’s impact.

Challenges of Implementing Sales-led Growth

Most enterprises may have internal divisions if sales are the driving force behind expansion. Potentially neglected by this approach are customer service and customer success, both essential to expanding a firm. When departments work in silos, it may dilute the quality of leads and the sales funnel’s effectiveness and reduce the likelihood of deals being closed. There has to be harmony between the sales, marketing, and support departments.

Best Use Cases for Sales-led Growth

Sales-led growth is most efficient when the sales force is heavily involved in generating revenue and client acquisition. It works effectively for companies that depend on consultative selling strategies, complicated sales cycles, or a high volume of one-on-one customer encounters. Sales-driven expansion is generally successful in sectors where human relationships and networking are crucial, such as corporate software and high-value B2B products.

Product-led Growth

Gainsight found that a majority 58% of companies already embrace this innovative growth motion. It’s not just limited to a specific size or product type, as organizations of all scales have jumped on the PLG bandwagon, with 40% having an annual contract value (ACV) exceeding $25K. Besides,  91% of these companies plan to further invest in PLG, with an ambitious 47% aiming to double down on their existing investment. 

Product-led growth is all about making a great product people love using and spreading the word about using viral loops to expand your business. The focus is on the product rather than promotion or advertising, which may save costs. Products like Slack, Netflix, and Zoom have found success because of the way their users interact with the platform.

Advantages of Product-led Growth

It has been demonstrated that PLG companies grow 25% quicker than their competitors and are more likely to double their year-over-year revenue growth, as per the findings of Openview Partners

Companies can acquire users organically through viral loops, such as inviting users or being part of online communities. Once the viral coefficient takes effect, the product’s scalability and automation reduce reliance on traditional marketing and sales distribution channels. In addition, PLG offers lower customer acquisition costs (CAC) by leveraging the product’s inherent virality.

Challenges of Implementing Product-led Growth

Although PLG has great potential, it might still require some early marketing to find the right audience and boost visibility. Putting all of one’s faith in the product alone may be questionable to spur expansion since additional marketing and sales assistance may be required. In addition, it might be difficult to strike a balance between promoting product self-service and offering comprehensive assistance to business clients.

Best Use Cases of Product-Led Growth

SaaS businesses of all sizes, as well as collaborative or communicative software, may benefit greatly from PLG. It does well in markets where a superior customer experience significantly impacts new customer acquisition and business expansion. PLG works best for products that have the potential to become viral, in which consumers may spread the word about the product in an organic way and generate a network effect. Often, a PLG approach is useful for start-ups and enterprises who want to shorten sales cycles, expedite user onboarding, and emphasize product experience.

Founder-led Growth

Peculiar in its reliance on the personal brand and influence of the company’s founder or CEO, “founder-led growth” is a unique growth strategy. When a firm or product becomes successful due to the founder’s name recognition and reputation, the company or product is said to have experienced “founder-led growth.” Steve Jobs and Elon Musk are just two business leaders whose charm, vision, and hands-on approach helped their firms explode in success. 

Purdue’s Krannert School of Management’s research highlights that S&P 500 companies where the founder remains actively involved as notable public figures generate 31% more patents than their counterparts. Founder-led companies demonstrate a fearless attitude towards risk-taking by making bold investments to revitalize and adapt their business models, showcasing their commitment to shaping the future through inventive strategies. 

Advantages of Founder-led Growth

Founder-led growth capitalizes on the personal branding and reputation of the founder, which can attract attention, investments, and customer loyalty. The founder’s influence creates a unique selling proposition and can generate trust and excitement around the company and its products. The founder’s vision and leadership can inspire and align employees with the company’s goals.

Challenges of Founder-led Growth

As the name outrightly suggests, successful founder-led expansion is highly dependent on the founder’s persona, connections, and reputation. Thus, it may be quite difficult to duplicate this approach if the founder’s influence is diminished. Unforeseen risks may arise if the founder departs or suffers a reputational setback since the company’s success may become reliant on them. Besides, expanding a company beyond the founder’s capabilities is difficult and calls for good delegation and a solid leadership team.

Best Use Cases of Founder-led Growth

When a company’s founder has a substantial personal brand and influence in their field or niche, they are in a prime position to drive growth. Start-ups and technology-based businesses where customers share the founder’s vision and drive are common examples. This may be effective for companies dependent on the founder’s experience and reputation, such as consulting firms, coaching enterprises, and those that rely on the founder as a thought leader.

Marketing-led Growth

Marketing-led growth is driven by marketing efforts, where customers are acquired through various marketing channels and strategies. Examples include content marketing, videos, blogs, eBooks, and other forms of engaging content. In other words, the overarching focus is on attracting customers through valuable content and building a differentiated brand narrative.

Accenture indicates that the key to achieving marketing-led growth lies in the seamless collaboration and integration of diverse customer data. The foundation of this process is built upon four layers encompassing client experience, work orchestration, ecosystem connectivity, and data & applied intelligence. Organizations can optimize each layer to enhance customer experiences, streamline internal workflows, foster connections with external partners, and leverage data-driven intelligence to fuel their marketing-led growth initiatives.

Advantages of Marketing-led Growth

With marketing as the core engine of expansion, businesses can update their brand stories, set themselves apart from competitors, and provide customers with valuable content. Without a doubt, it arises as a great tool for being noticed by customers, increasing brand awareness, and bolstering your reputation. Upgrades, social shares, recommendations, and customer reviews may all improve with this tactic.

Challenge of Marketing-led Growth

There are two main problems with marketing-driven growth. First, for efficient lead nurturing and customer understanding, seamless lead sharing between the marketing and sales departments must be seamless. Second, there is the risk of putting too much emphasis on client acquisition and not enough on customer retention.

Best Use Cases of Marketing-led Growth

Marketing-led growth is well-suited for service brands aiming to establish themselves as market leaders through organic growth. It is particularly effective in businesses with sustainable models that prioritize customer retention. Marketing-led growth is beneficial for sectors where customers seek quick self-help solutions and where content-driven engagement can effectively showcase the product or service’s value.

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Mastering Sales Metrics: Decoding PQLs and PQAs for a Winning Sales Strategy

The sales environment today is constantly changing, so it’s important to stay informed and adaptable. In order to ensure your sales team succeeds, understanding key concepts such as Product Qualified Leads (PQLs) and Product Qualified Accounts (PQAs) can be critical. Rather than being methodologies, PQLs and PQAs are essential elements of the sales process. This post explores PQLs and PQAs, their relevance in different scenarios, and their relationship to your sales team’s work. Knowing the differences between them and knowing when to use them will help your sales team succeed.

PQLs and PQAs vs MQLs and SQLs

Understanding MQLs and SQLs

To fully grasp the value of PQLs and PQAs, it’s important to compare them with other widely-used concepts in the sales world: Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). MQLs are prospects identified by the marketing team as having the potential to become customers based on their interactions with marketing materials. SQLs, on the other hand, are leads that the sales team deems ready for a direct sales approach based on their level of interest and intent.

PQLs and PQAs: A Different Perspective

While MQLs and SQLs focus primarily on the level of engagement with marketing materials and sales readiness, PQLs and PQAs take a more product-centric approach. PQLs are prospects who have actively engaged with the product or service itself, while PQAs are organizations with multiple PQLs, signaling a high level of interest and potential for conversion.

Defining PQLs and PQAs

What are Product Qualified Leads (PQLs)?

Product Qualified Leads (PQLs) are potential customers who have demonstrated a clear interest in your product or service by engaging with it in a meaningful way. Examples of PQL engagement include signing up for a free trial, using a freemium version of your product, or attending a product demonstration. PQLs have shown a higher likelihood of conversion compared to traditional leads because they have firsthand experience with your offering.

What are Product Qualified Accounts (PQAs)?

Product Qualified Accounts (PQAs), on the other hand, are entire organizations or business units that display a strong potential for conversion. PQAs often consist of multiple PQLs within the same organization, indicating a high level of interest and engagement with your product or service. By targeting PQAs, you can focus on nurturing relationships with key decision-makers and stakeholders, increasing the chances of closing a deal.

Identifying the Relevance of PQLs and PQAs

When to Focus on PQLs

PQLs are particularly relevant when your sales team is dealing with individual users or smaller organizations. In these cases, it is essential to identify and engage with prospects who have shown genuine interest in your product. By focusing on PQLs, your sales team can prioritize high-quality leads and allocate resources more effectively.

When to Focus on PQAs

PQAs become more relevant when targeting larger organizations or enterprises. In these scenarios, your sales team needs to consider multiple stakeholders and decision-makers within the same account. Focusing on PQAs allows you to engage with an entire organization, ensuring you address the needs and concerns of all relevant parties, which can lead to more significant deals and long-term business relationships.

Integrating PQLs and PQAs into Your Sales Team’s Work

Developing a PQL and PQA Mindset

To successfully integrate PQLs and PQAs into your sales team’s workflow, it’s essential to adopt the right mindset. This involves understanding the differences between PQLs and PQAs, recognizing their value, and knowing when to prioritize each one.

Aligning Sales and Marketing Efforts

Both PQLs and PQAs require close collaboration between sales and marketing teams. Marketing efforts should focus on driving product engagement and identifying PQLs, while the sales team should concentrate on nurturing these leads and converting them into customers. In the case of PQAs, both teams need to work together to engage with multiple stakeholders and decision-makers within the organization.

Leveraging Technology and Data

To effectively identify and manage PQLs and PQAs, your sales team should use technology and data to track engagement, monitor progress, and make informed decisions. Customer Relationship Management (CRM) systems, marketing automation tools, and data analytics can help you collect and analyze information about your leads and accounts, allowing your team to prioritize their efforts and optimize their strategies.

Utilizing Product-Led Revenue Platforms for PQL and PQA Management

Product-led revenue platforms can play a crucial role in helping your sales team adopt the PQL and PQA mindset, align with marketing efforts, and make data-driven decisions. These platforms consolidate essential information, enable you to track product engagement, and identify PQLs and PQAs. Additionally, they provide customized scoring based on product usage and other factors, allowing your team to prioritize leads and accounts more effectively.

By integrating a product-led revenue platform into your sales and marketing processes, you can ensure that your team has a centralized system to manage PQLs and PQAs effectively. These platforms not only streamline workflows through playbooks and automation but also promote better communication and collaboration between sales and marketing teams, leading to a more efficient and successful sales process.

Conclusion

Understanding the distinctions between PQLs, PQAs, MQLs, and SQLs is essential for sales success. By adopting a product-centric mindset and knowing when to focus on PQLs or PQAs, your sales team can better prioritize their efforts, allocate resources effectively, and ultimately drive more conversions. Utilizing product-led revenue platforms can significantly enhance your team’s ability to identify and manage PQLs and PQAs by fostering alignment, encouraging data-driven decision-making, and promoting seamless collaboration between sales and marketing teams. Additionally, these platforms offer customized scoring, playbooks, and automation, streamlining your workflows and further optimizing your sales process. Embracing these concepts and strategies will ensure long-term success and growth for your organization.

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Product-Led Revenue Models: Which One is Right for Your Business?

To maximize revenue growth via user engagement and adoption, product-led revenue models have grown more popular in recent years. The premise behind these models is that firms may attract a huge user base by providing free or low-cost versions of their goods and then monetizing that user base via various revenue sources. OpenView Partners indicate that product-led adoption across tech firms grew from 45% in 2019 to 55% in 2022.

Seeking to explore the intricacies of product-led revenue strategy, this article uncovers the main product-led revenue models as well as some guidelines around how to decide which one of these might benefit your business.

Exploring the Different Types of Product-led Revenue Models

Overall, there are four main categories of product-led revenue models:

Freemium Model

This paradigm entails releasing a free basic, feature-limited version of the product, charging more for access to advanced settings or more use. Products with a low marginal cost of production often benefit from the freemium model since it encourages consumers to try the product before making a purchase decision. Businesses may gain a huge user base by providing a free version and converting a portion of those people into paying subscribers. Dropbox and Evernote are examples of organizations that have successfully embraced the freemium model. 75% of product-driven businesses select either a free trial or freemium approach, according to StatHeap.

Premium Model

Premium, which is central to this business strategy, encompasses an upgraded, more expensive version of the product. This pricing strategy is well-suited to items that substantially benefit their consumers. To attract customers who are prepared to pay more for a higher level of service, many companies now provide “premium” or “upgraded” versions of their products. Spotify and LinkedIn are examples of organizations that have effectively used the premium model. 

Pay-as-you-go Model 

As opposed to a flat rate, consumers are charged depending on their actual usage under this approach. This pricing strategy is convenient for items with irregular consumption since customers pay only for what they consume. Many consumers are hesitant to sign up for a service on a monthly or yearly basis, and companies may win them over by providing a pay-as-you-go option. Companies like Amazon Web Services and Twilio demonstrate the viability of the pay-as-you-go model. 

Subscription Model

Last but not least, the subscription model involves charging customers on an ongoing basis to continue using the product. Products like software and content services provide consumers with continuous value and work well under this paradigm. Businesses may attract and retain customers in the long run by using subscriptions. Netflix and Microsoft Office are two examples of subscription-based business models that have found success.

Start by Looking at the Competition

It is important to evaluate your competition and see their revenue models. This can give you ideas and help you differentiate yourself from the competition. For example, if your competitors use a subscription model, you may want to consider offering a pay-per-use model instead.

Bain & Company recently surveyed 176 top executives in the North American business-to-business software industry, and they discovered that roughly 75% are worried about competition from PLG businesses.

Deploy A/B Testing

A/B testing may be a great avenue to examine the effect of changes to the price structure, but it’s vital to avoid testing the dollar amount as the variable. Alternatively, organizations may test multiple value measures or price tiers to find which resonates best with consumers. This may help a corporation determine the best price structure that optimizes income while simultaneously giving value to the client.

Assess Your Pricing Strategy

When considering your pricing strategy, it’s important to determine what your users are willing to pay for your product. Conducting user research or surveys can help you gather this information. When determining your pricing strategy, you should also consider factors such as customer acquisition costs and customer lifetime value. Overall, you may consider a freemium model, where users can access basic features for free and upgrade to premium features for a fee. This can be an effective way to attract new users and generate revenue from existing users.

Define End-User Success

The success of product-led business hinges on how well it solves a problem for its users. To ensure that your product meets your users’ needs, it is important to start with an end-user success statement. This statement should outline what success looks like for your users and what value your product provides them. 

Unlike a sales-led company, where success is closing a deal, in a product-led company, success is defined by user success. In a product-led growth (PLG) model, the company’s success depends on whether users can see the product’s value. The company’s bedrock should be set up to support user success since it is the foundation upon which the company’s success is built.

Review Your Product-led Model

Once you have chosen a product-led revenue model, it is important to test and iterate. Start by testing the model with a small group of users and gather feedback. Use this feedback to iterate and improve your revenue model. Continuously testing and iterating your revenue model can help you identify new revenue streams and improve the overall user experience.

How to Implement a PQL Scoring System

How to Implement a PQL Scoring System

Arising as a cutting-edge solution for innovative enterprises, the PQL scoring system is a powerful tool to help your business streamline its lead generation and sales process. Accenture indicates that PQL usually generates 5x higher conversion rates than MQLs. However, according to Open View Partners, only 25% of companies have deployed a PQL strategy.

Deploying the Advent of PQL 

Overall, the Product-Qualified Lead (PQL) scoring system effectively identifies leads most likely to convert into paying customers. This system uses a scoring mechanism to evaluate leads based on their engagement with your product, including their product usage and behavior. By analyzing this data, you can identify leads more likely to purchase and focus your sales and marketing efforts on them.

Businesses that employ a PQL framework will utilize a scoring system to evaluate and rank PQLs. After that, they utilize the use of that rating system as a single source of truth to prioritize the time and efforts of the sales team in addition to those of the other departments. Automating the lead qualifying process is essential for businesses to effectively identify and prioritize the most promising leads. Defining a PQL is the first step, but implementing a scoring model for each action is equally important. The scoring model allows businesses to evaluate the activities of each lead and assign a score based on their level of engagement with the product or service.

Manual lead qualification can be a time-consuming and challenging process, especially for businesses with many leads. However, with the advancement of technology, several lead qualification software options are available in the market to make this process easier. These software options use artificial intelligence and machine learning algorithms to analyze and score each lead’s actions automatically.

Uncovering the Types of PQL Scoring

As highlighted by Clearbit, the PQL scoring process entails the calculation of two distinct fit scores, namely, the domain score and the persona score, to provide a comprehensive overview for the sales team. This approach is particularly significant for product-led companies transitioning upmarket, as product champions may not always be the decision-makers.

The domain score serves to evaluate whether an account has the potential to become a top 100 customer in the future. Additionally, typical personas, such as decision-makers, billing contacts, power users, and community champions, are identified within each domain based on available data. The sales team then utilizes the resulting information to update Salesforce and send out notifications through a product like Census, thus enhancing the quality of leads for sales development representatives.

Exploring the Process of Implementing PQL

When implementing a PQL scoring process, it is important to integrate it into your CRM or marketing automation platform. This allows for the efficient tracking and management of PQLs, ensuring that sales and marketing teams are equipped with accurate and up-to-date information.

Integrating the PQL scoring process into your CRM or marketing automation platform involves setting up a scoring model that assigns scores to leads based on their level of engagement with your product. This can be achieved by tracking user behavior and product usage, as well as other relevant metrics, such as the number of users, frequency of usage, and level of engagement with support and training resources.

Taking a systematic and thoughtful approach to defining the criteria for a qualified lead is essential to developing an effective PQL scoring process.

Step 1: Defining the Criteria for a Qualified Lead

Overall, the PQL scoring should start with determining the specific factors that make a lead a PQL in your business. This could include factors such as product usage, feature usage, user behavior, referral sources, or account data.

Step 2: Identify the Target Accounts for Your Ideal Customer Profile

This phase involves analyzing your current customer base and identifying common characteristics such as industry, company size, and revenue. By identifying these target accounts, you can focus on leads most likely to convert into paying customers.

Step 3: Segment Target Accounts

Next, you should categorize these target accounts into domains based on shared characteristics such as use case, vertical, or product suite. This allows you to develop a more focused and targeted approach to marketing and sales.

Step 4: Develop Buyer Personas

Within each domain, it is essential to identify the personas or stakeholders involved in the purchase decision, such as decision-makers, end-users, and influencers. Developing a deep understanding of these personas and their unique needs and challenges is critical in crafting effective marketing messages and sales strategies.

Step 5: Assign a Score for Each Domain & Persona

Establish the scoring system that assigns a score to each domain and persona based on their fit with your ideal customer profile and PQL criteria. This can involve considering factors such as company size, industry, and level of engagement with your product. Developing a robust and accurate scoring system allows you to prioritize leads and focus your sales and marketing efforts on the most promising opportunities.

Step 6: Monitor & Update

It is essential to ensure that the PQL scoring process is regularly updated based on changes in usage and engagement. This means the scoring model must be flexible and adaptable to user behavior and product usage changes. For example, if a user’s engagement with your product decreases over time, their PQL score may decrease, and they may no longer qualify as a PQL. Conversely, if users’ engagement with your product increases, their PQL score may increase, making them a more valuable lead.

Growth Matters: Zahi Malki

Growth Matters – Key B2B insights. Zahi Malki, VP of Customer Success & Professional Services @ WalkMe

In an age of constant innovation and fierce competitiveness, companies invest major resources to gain even the slightest advantage.


That’s why we started the Growth Matters series of interviews, where experienced industry leaders share key insights everyone should know in the domains of revenue, customer success, sales, and product.

In this installment, we have Zahi Malki, who’s been in the tech industry for over 20 years, and VP of Customer Success & Professional Service at WalkMe for the last (almost) 4 years.

Check out his thoughts on the role, challenges, and responsibilities of the modern CSM.

You’ve been in the customer success game for a long time! How has the role of the CSM changed over the years?

Over the past 10 years, the role of the Customer Success Manager (CSM) has undergone significant changes. It evolved from a reactive, support-focused function to a more proactive, revenue-generating one. Today’s CSMs are expected to drive adoption, upsell and cross-sell, and build strong relationships with customers.

In the past, the CSM was primarily responsible for ensuring customer satisfaction and reducing churn. However, today’s CSMs have a much broader mandate that encompasses the entire customer lifecycle.

One major change has been the increased focus on revenue generation. CSMs now play a critical role in driving upsells, cross-sells, and renewals. They work closely with the sales team to identify opportunities for growth and with the product team to ensure that customer feedback is incorporated into product development.

Another important shift has been the increased use of data and analytics. CSMs are now expected to have a deep understanding of customer behavior and to use this knowledge to proactively identify and address potential issues. They use data to track customer engagement, measure success metrics, and develop targeted outreach programs.

In addition, the role of the CSM has become more strategic. CSMs are now providing insights into the customer experience and helping to shape the company’s overall strategy. They work closely with senior leaders to develop customer-centric initiatives and to ensure that the company is delivering on its promises to its customers.

 

What are some industry trends, when it comes to technology, that you’re excited about?

One industry trend that’s particularly exciting is the increased use of artificial intelligence (AI) and machine learning (ML) to improve customer experiences. With these technologies, companies can analyze customer data and behavior to gain insights into their needs and preferences, predict potential issues before they occur, and provide personalized support and recommendations. 

Additionally, the use of chatbots and other automated tools can help provide quick and efficient support to customers, freeing up human agents to focus on more complex issues. Overall, the adoption of these technologies is expected to lead to better customer satisfaction and retention rates, as well as increased efficiency and cost savings for companies

 

What KPIs do you measure your team with and why did you choose these in particular?

The KPIs for measuring customer success teams can vary depending on the company’s goals and priorities. 

Some of the most commonly used key performance indicators (KPIs) in the customer success world are customer retention rate, customer satisfaction score, net promoter score, NDR, and churn rate.

They are widely recognized as important indicators of CS, and they provide valuable insights into the health of the customer relationship. 

Customer retention rate, for example, measures the percentage of customers who continue to do business with a company over a certain period of time and can be used to gauge the effectiveness of a company’s customer success efforts. 

Customer satisfaction score and net promoter score are both measures of customer satisfaction and loyalty and can provide valuable feedback on areas for improvement. Finally, churn rate measures the percentage of customers who stop doing business with a company over a certain period of time, and can be used to identify areas where customer success efforts may need to be improved. By tracking these KPIs, companies can better understand how well they are meeting customer needs and identify opportunities for improvement

 

What are some common challenges that your team faces when working with enterprise customers, and how do you overcome them?

Working with enterprise customers in the customer success world can be challenging, as there are several factors to consider, including communication, alignment of goals, and handling complex customer needs.

One of the biggest challenges is communication, as enterprise customers often have multiple stakeholders and decision-makers. Effective communication is key to understanding the customer’s needs and expectations, as well as ensuring that everyone is on the same page. 

To overcome this, customer success managers should establish regular touch-points with customers, develop clear communication channels, and make sure that all parties involved are aware of the project’s progress.

Another challenge is aligning goals between the customer and the vendor. Enterprise customers often have complex needs and may require customized solutions, which can make it difficult to align goals. To overcome this challenge, customer success managers should work closely with the customer to understand their needs, establish clear expectations, and create a plan that aligns with the customer’s goals.

Lastly, to overcome the customized solutions challenge, CSMs need to dig deep into understanding the customer’s needs, collaborate with product and engineering teams to develop customized solutions, and provide ongoing support to ensure that the customer is satisfied.

Overall, customer success managers should prioritize effective communication, alignment of goals, and flexibility to handle complex challenges.

 

As VP CS, which other departments do you work most closely with and how do you manage the cross-department alignment?

As VP of CS, it’s important to work closely with sales & presale, marketing, professional services, support, finance, and product development teams, to ensure cross-department alignment and collaboration. 

The most important cross-department alignment for CS is between the product teams, presale, and support teams. This alignment is critical for ensuring that customers have a seamless and positive experience throughout their journey with a company.

Establishing open and clear communication channels between these teams can be achieved with regular meetings, shared documentation, and various collaboration tools.

Additionally, avoid conflicts and misunderstandings by figuring out clear roles and responsibilities for each team, so that everyone understands how they fit into the overall customer success strategy. 

Overall, fostering strong alignment between companies can ensure that they are providing the best possible customer experience, which is critical to driving long-term success and growth.

 

How do you prioritize different accounts? Is it just a matter of focusing on the biggest fish?

Prioritizing accounts is not just about focusing on the biggest customers. It’s important to consider factors such as customer value, growth potential, strategic fit, and resource availability.

Prioritizing the right accounts is crucial to ensure that resources and efforts are utilized efficiently to achieve the best outcomes.

Customer success teams typically consider several factors such as the revenue potential of the account, the level of engagement, the customer’s needs and goals, the complexity of the customer’s business, and their overall fit with the company’s product or service.

Customer success teams typically provide different levels of support based on the type of customer (segmentation). For instance, premium or high-value customers may receive more personalized attention and dedicated support, while lower-tier customers may receive more self-service or automated support.

To ensure that all customers have the best experience, regardless of their payment level, customer success teams may focus on providing consistent communication, clear and concise documentation, and easy-to-use tools and resources. They may also offer training programs and educational resources to help customers maximize the value of the product or service. 

Ultimately, CS teams strive to build long-term relationships with customers and help them achieve their desired outcomes, while also driving business growth for their company.

 

What are some major misconceptions you see about the role of customer success?

One major misconception about the role of customer success is that it is solely responsible for customer satisfaction and retention. While customer success teams do play a crucial role in these areas, it is important to recognize that every department and individual within a company contributes to the customer experience.

This misconception may have arisen due to the increased emphasis on customer-centricity in recent years, which has led to a greater focus on customer success as a discipline. However, it is important to remember that customer success is a collaborative effort that involves everyone from product and engineering to sales and marketing.

To change this misconception, companies need to ensure that all employees understand the importance of customer success and are aligned around a shared customer-centric mission. This can be achieved through regular training, communication, and incentives that reinforce customer-centric behaviors and attitudes.

There may be differences in the way companies approach customer success depending on their size and stage in the industry. For example, smaller startups may have a more hands-on approach to customer success, with founders and early employees directly engaging with customers to ensure their needs are met. On the other hand, larger enterprises may have more established customer success teams and processes in place but may struggle to maintain a customer-centric culture across all departments. Ultimately, regardless of company size or stage, a strong customer success focus is critical for long-term business success.

 

From your experience, what can SaaS companies do better to reduce churn?  

To do better at reducing churn, SaaS companies must focus on providing excellent customer support and creating a product that meets their customers’ needs. They must also regularly communicate with their customers to understand their pain points, address their concerns, and offer solutions.

In the short term, focusing on customer success can lead to increased customer satisfaction, loyalty, and revenue. And the long term, it can help the company establish a positive reputation and attract new customers through word-of-mouth referrals.

Some actions that SaaS companies must take today include investing in customer support, creating a user-friendly interface, regularly monitoring customer feedback, and incorporating customer feedback into product development. They should also provide training and resources to help customers make the most out of their products. 

 

How to Improve Your Product Engagement Funnel for Better Results

How to Improve Your Product Engagement Funnel for Better Results

By systematically presenting potential buyers with products and services tailored to their specific needs, a well-developed “product funnel” may increase the likelihood that these individuals will make a purchase. Attracting new clients is just half the battle; a successful product funnel also has to provide them with a satisfying buying experience that encourages them to become loyal to the company. Salesforce indicates that more than 50%% of customers consider that companies must fundamentally transform their engagement. Furthermore, 64% of the customers expect tailored engagements based on past interactions.

As a business owner or marketer, you must clearly understand how your customers engage with your product or solution at each customer journey stage. In this pursuit, a product funnel is a powerful tool that helps you visualise and understand the different stages of your customer journey and the interactions at each stage. Emeritus estimates that more than one-third of businesses believe that increasing the level of engagement with their customers is the best method to boost sales.

Phases of the Product Engagement Funnel

At the top of the funnel, you have your potential customers or leads. These individuals have expressed interest in your product or solution but may not be ready to purchase yet. They become more engaged and likely to purchase as they move through the funnel.

The middle of the funnel is where you convert leads into customers. This is where you provide more in-depth information about your product or solution and begin to build trust and credibility with your prospects. At this stage, you may offer a free trial, a demo, or other incentives to encourage them to take the next step.

Finally, you have your loyal customers at the bottom of the funnel. Adobe highlights that retargeted visitors are 70% more likely to convert than non-retargeted visitors. These individuals have purchased and are now repeat buyers or brand advocates. It’s important to continue nurturing these relationships and providing excellent customer service to keep them returning.

Utilise Customer Data & Product Engagement KPIs 

Defining your target audience is a crucial first step in improving your product engagement funnel, and it starts with data. You can collect demographic information, behaviour patterns, and customer feedback to understand your ideal customer comprehensively. This data can be obtained through surveys, customer interviews, social media analytics, and website analytics.

Product engagement KPIs help firms assess product health and identify areas for product enhancement, such as retention rate, conversion rate, and customer happiness. They enable companies to focus on issue areas in the product engagement funnel. To explore this, a poor conversion rate might mean that firms need to concentrate on giving more information or incentives to convert leads into consumers. In a similar vein, a low retention rate may indicate that a company’s efforts might be better directed at enhancing the experience provided to its most loyal clients. Organisations may improve the efficiency of their product engagement funnel by monitoring and evaluating key performance indicators.

Integrate Social Proof

Social proof, defined as the influence of other people’s actions and opinions on our behaviour, can be essential to building trust and credibility with potential customers. By incorporating customer testimonials, user-generated content, and case studies on your website and social media channels, you can showcase the positive experiences of previous customers and provide evidence of the value your product or service offers. 

Ultimately, this can help to increase engagement and conversions by reducing perceived risk and uncertainty and demonstrating social validation. Encouraging your customers to share their experiences with your product provides valuable feedback that can be used to improve your offering and serves as a form of word-of-mouth marketing, which can be incredibly effective in building brand awareness and credibility.

Improve Your Copy

Getting people interested in your product and using it requires compelling product copywriting that attracts and retains your target demographic. If you want to create content that gets people to take action, consider the following suggestions. Instead of emphasising your product’s qualities, stress its advantages. 

Furthermore, it is important to highlight the beneficial effects your product will have on their daily life. Moreover, deploy storytelling to your advantage in your product copy; readers will relate to your words. Use a narrative to illustrate the issue your product addresses or to provide a personal account of how your product has benefited a customer. 

Implement Customer Feedback

Continuously modifying your product based on customer feedback is crucial for keeping your customers engaged and satisfied. Listening to customer feedback can help you identify areas for improvement, feature requests, and pain points that must be addressed. By acting on this feedback and making changes to your product, you can show your customers that you value their input and are committed to delivering a product that meets their needs. It is feasible to acquire customer feedback through surveys or user interviews. 

This avenue can help you understand how customers use your product and what features they want to be added or improved. In addition, you can monitor social media and online forums to see what customers say about your product and address any issues or concerns. Finally, making product modifications doesn’t have to be lengthy or complex. Simple changes like adjusting a button’s placement or improving your product’s speed can greatly impact customer engagement.

Unravelling the Importance of PQAs in a Product-Led Growth Strategy

Unravelling the Importance of PQAs in a Product-Led Growth Strategy

As businesses constantly seek ways to drive growth and gain a competitive edge, the product-led growth strategy emerges as one of the most popular paradigms for forward-thinking enterprises. However, this can only be accomplished if companies are aware of and able to track the most important factors contributing to product-led growth. This is where PQAs, or Product Qualified Accounts, come in. 

In a PLG framework, PQAs play a crucial role since they reveal whether or not a product is successfully meeting the needs of its target audience and whether or not those target consumers will ultimately become paying clients. Considering the PLG market grew from $21B in 2016 to $687B in 2020, it’s something you just have to consider. 

Deploying PQA in Different Phases of the Customer Journey

In both onboarding and expansion scenarios, PQAs can aid in accurately targeting upselling and cross-selling campaigns, which can be critical in driving growth and success for a product-led growth strategy.

When it comes to onboarding, it is important to consider both user-level and company onboarding. A key aspect of this is determining if the account has added teammates, which is a simple yet essential question to ask. PQAs can be particularly effective in onboarding when an account has reached a certain PQA score and is ready for more personalized onboarding by Sales or CSM. Factors such as firmographic information, including company size, can significantly determine if a custom onboarding experience is warranted.

Similarly, PQAs can be leveraged in expansion efforts, with different variables factoring into the scoring model. For example, the frequency of adding new users to the team may be considered in scoring an expansion PQA instead of the time the team takes to complete onboarding for an onboarding PQA.

Achieving Better Product-led Growth with PQAs

By leveraging PQAs, businesses can identify areas where their product is falling short and take action to improve the user experience, drive engagement, and increase conversion rates.

Higher Conversion Rates

Since PQAs have previously experienced the product’s advantages, they are more likely to convert into paying customers. They are conversant with the product, comprehend the value it provides, and have already entered the deliberation phase of the purchasing process. Hence, their conversion rate is greater than that of conventional leads, who are still in the stage of the purchase process known as awareness. 

Improved Customer Retention 

PQAs are already pleased with the offering, which results in higher client retention rates. Customers who are pleased with a product are more likely to continue using that product, renew their subscriptions to it, and gesturing that product to others. This will increase client loyalty, leading to more revenue for the firm. 

Faster Sales Cycle

Since PQAs have previously used the product and are familiar with its benefits, their sales cycle is significantly shorter. They have a higher propensity to make a purchase choice quickly and go farther down the sales funnel as a result. This results in a more rapid revenue increase and a more effective sales procedure. 

How PQAs Enhance Capabilities for Product Development 

PQAs are responsible for providing the product development team with insightful input. The product development team may enhance the product and produce a better user experience by first understanding how consumers use it and what they find useful. This results in a product that is more likely to satisfy the wants and preferences of the consumer, which in turn boosts the client’s satisfaction and loyalty to the brand.

Using first-party product data to identify strong customer interest and intent signals, OpenView Partners prioritized their sales efforts and allocated their resources more effectively. This allows them to focus on the accounts with the highest potential value, which in turn can lead to greater customer acquisition and retention rates. Their approach involved splitting accounts into high and low-fit categories based on firmographics (e.g., company size, industry) and product signals or intent (e.g., how frequently a customer uses a particular feature). In this manner, the reps were able to prioritize their efforts by identifying the accounts with the best fit and highest signals, allowing them to focus on those accounts first.

Bottom Line

When deployed effectively, PQAs provide insightful input to product development teams, resulting in better products that satisfy the wants and preferences of consumers, boosting client satisfaction and loyalty to the brand. PQAs also lead to higher conversion rates, improved customer retention, faster sales cycles, and enhanced capabilities for product development.

NRR vs GRR

Why Net Revenue Retention is More Important Than Gross Revenue Retention for SaaS Companies 

As SaaS companies grow and mature, it becomes increasingly important for them to track their revenue retention, which is the percentage of revenue that a company retains from its existing customers over a certain period of time. This metric is essential for measuring the health of a SaaS business, as it indicates how much value the company is delivering to its customers and how much it is able to monetize that value over time.

Traditionally, SaaS companies have focused on gross revenue retention (GRR), which measures the percentage of revenue retained from all customers, including those who churned and then later returned. However, in recent years, there has been a shift towards a more nuanced metric called net revenue retention (NRR), which only includes revenue from customers who have not churned. In this blog post, we will discuss why NRR is more important than GRR for SaaS companies and how it can help them to achieve sustainable growth.

What is Net Revenue Retention (NRR)?

Net Revenue Retention (NRR) is a measure of the revenue a SaaS company retains from its existing customers after accounting for cancellations, downgrades, and upgrades. Essentially, NRR looks at the revenue generated from customers who are still actively using the product or service. To calculate NRR, you would take the revenue generated from a cohort of customers at the beginning of a period (e.g. a year), and then subtract the revenue lost from customers who canceled or downgraded their subscription during that period. Finally, you would add the revenue gained from customers who upgraded their subscription during the period.

NRR is a more refined metric than GRR because it takes into account changes in the revenue generated by individual customers over time. It allows SaaS companies to see how much revenue they are generating from their existing customers and how much they are losing due to churn or downgrades. By tracking NRR, companies can identify areas where they need to improve their product or service, as well as identify opportunities for upselling and cross-selling.

Why NRR is More Important than GRR for SaaS Companies

While GRR is still a useful metric for SaaS companies, NRR is becoming increasingly important. There are several reasons why NRR is a better metric for measuring the health of a SaaS business.

First, NRR provides a more accurate picture of the company’s revenue growth. GRR can be misleading because it includes revenue from customers who churned and then later returned. Considering your churned users can get to a significant percentage, it’s definitely something you should consider in your calculations. While this may look good on paper, it does not necessarily indicate that the company is delivering value to its customers. NRR, on the other hand, only includes revenue from active customers, which means that it reflects the company’s ability to retain its customers and generate revenue from them over time.

Second, NRR is a better indicator of customer satisfaction. By focusing on revenue generated by active customers, NRR takes into account the value that the company is delivering to its customers. If a company has a high NRR, it indicates that its customers are satisfied with the product or service and are willing to continue paying for it. If NRR is low, it may indicate that the company needs to improve its product or service to better meet the needs of its customers.

Third, NRR provides a clearer picture of the company’s revenue potential. By tracking NRR, SaaS companies can identify opportunities for upselling and cross-selling to existing customers. This is important because it is much easier and more cost-effective to sell to existing customers than to acquire new ones. If a company has a high NRR, it indicates that there are opportunities to increase revenue from existing customers through upselling and cross-selling.

Fourth, NRR is a better indicator of long-term growth potential. While GRR can fluctuate from quarter to quarter, NRR provides a more stable measure of a company’s revenue retention over time. By focusing on revenue generated by active customers, NRR provides a more accurate picture of a company’s ability to generate sustainable growth over the long term.

Fifth, NRR takes into account changes in customer behavior over time. GRR does not account for the fact that some customers may downgrade their subscription or change their usage patterns over time. NRR, on the other hand, reflects changes in customer behavior and allows companies to adapt their strategies accordingly. By tracking NRR, SaaS companies can identify trends in customer behavior and adjust their product or service offerings to better meet the changing needs of their customers.

How SaaS Companies Can Improve NRR

Improving NRR requires a deep understanding of customer needs and behaviors. SaaS companies can take several steps to improve their NRR, including:

  1. Providing exceptional customer service: Happy customers are more likely to stick around and recommend your product or service to others. Providing exceptional customer service can help to improve customer satisfaction and reduce churn.
  2. Offering targeted upgrades and add-ons: SaaS companies should offer upgrades and add-ons that are tailored to the needs of their customers. By offering targeted upgrades, companies can increase their NRR by generating additional revenue from existing customers.
  3. Regularly updating and improving the product or service: SaaS companies should constantly be improving their product or service to better meet the changing needs of their customers and thus, increase customer satisfaction and reduce churn.
  4. Investing in customer success: SaaS companies should invest in customer success programs to help their customers get the most out of their product or service. By helping customers to achieve their goals, companies can increase customer satisfaction and improve NRR.
  5. Track customer usage and satisfaction: From product-led revenue platforms to expensive BI teams, to simple NPS surveys, tracking customers’ activity and happiness is critical for building a solid growth strategy. 

In conclusion, while gross revenue retention (GRR) has been the traditional metric for measuring revenue retention for SaaS companies, net revenue retention (NRR) is becoming increasingly important. 

NRR provides a more accurate picture of a company’s ability to retain its customers and generate revenue from them over time. To improve NRR, SaaS companies should focus on providing exceptional customer service, offering targeted upgrades and add-ons, regularly updating and improving their product or service, investing in customer success programs, and tracking their users’ activity and satisfaction. By doing so, they can improve customer satisfaction, reduce churn, and increase their revenue retention over time.

Unlocking Business Success

Unlocking Business Success: The Crucial Importance of Customer Retention for Maximum Growth

As Robert Half once said, “When the customer comes first, the customer will last.” And this is definitely true for all businesses in the extremely competitive landscape of 2023. For many years, the core question for each business was: “What should we do to acquire more customers?”. Now, more and more companies realize that to enhance long-term growth and thrive, it is imperative to switch towards “How do we retain the customers we already have?”

As the 2022 Twilio Segment Growth Report emphasizes, companies are adjusting their focus from “growing at all costs” to fostering long-term client loyalty in response to the volatile macroeconomic environment and enhancing customer retention. 

Moving forward, we’ll explore the most important benefits propelled by customer retention.

 

What is Customer Retention?

Customer retention encompasses the capacity of a business to retain its existing customers and maintain their loyalty over time. Implementing efficient strategies for customer retention is not just a numbers game; it is about building relationships, streamlining the customer journey, providing value, and creating memorable experiences. 

To truly retain customers, businesses must meet and exceed customer expectations at every turn, building loyalty that will encourage them to return for more.

 

Increasing ROI & Profits

Increasing customer retention rates can significantly impact a company’s bottom line. The expenses of acquiring new customers have climbed by more than 50% in the last five years alone. Research from Harvard Business School shows that even a 5% increase in customer retention rates can lead to a 25-95% increase in profits. 

Existing customers often make up a significant portion of a business’s revenue, with estimates from Small Biz Trends suggesting that they can account for up to 65% of a company’s business. This makes retaining them crucial for long-term success.

Furthermore, when you focus on retaining your existing customers, you won’t need to spend as much money on marketing to attract new ones. This doesn’t mean you should abandon marketing altogether but supplement it with methods catering to customer retention. Doing so can reduce your customer acquisition costs and boost your profits.

 

Enhancing Innovation & Optimization

Without a doubt, customer retention is a complex process that requires a deep understanding of customer needs and preferences, as well as a commitment to delivering the best possible customer experience. 

 

Apptentive have shown that almost all customers (97%) are more likely to remain loyal to a business that considers their suggestions, while over half (55%) are less inclined to do business with a firm that does not.

 

When a business has a laser-sharp focus on its customers’ desires and demands, it can better address them and strengthen its position in the market against competitors. In this way, the value of keeping existing customers may help you spot opportunities for product improvement and refinement in response to market shifts.

 

Converting More Sales

Loyal clients become more valuable assets to your business. Instead of constantly searching for new leads, you can focus on nurturing your existing customers and maximizing their potential value to your business. Several studies highlight that repeat buyers are more loyal and have a higher propensity to try new items (by a factor of 50%) and spend (31% on average) than first-time buyers.

 

In addition, there is a 14-fold greater chance of making a sale to an existing client than to a new one, as indicated by Pearson, upselling and cross-selling to returning customers is like shooting fish in a barrel. These customers already trust and appreciate your brand, so it’s easier to convince them to purchase additional products or services. 

 

Encouraging Word-of-Mouth Advertising

Word-of-mouth advertising is a powerful venue for businesses because it is not only the most cost-effective form of advertising but also the most trustworthy. When loyal customers share their positive experiences with others, they advocate for the brand, essentially providing free advertising.

 

Demonstrating the power of customers’ personal recommendations, Nielsen found that almost half of U.S. consumers rely on their friends and family for brand awareness, and 92% of people trust recommendations from those close to them over any other type of marketing. 

 

According to research by Temkin Group, if a customer has a good experience with a company, 77 %of them would refer that brand to a friend. These “mini-marketers” may work in tandem with your existing marketing and sales activities to help bring in new leads and save time in the process of closing sales.

 

Bottom Line

By focusing on building strong relationships with existing customers and exceeding their expectations, companies can benefit from increased ROI, word-of-mouth advertising, and more sales conversions. 

 

Retaining customers can also provide valuable insights into product innovation and refinement. As businesses focus on retaining their customers, they position themselves for long-term growth and success.


If you efficiently leverage your product data, you can acquire valuable insights into customer behavior and preferences, allowing you to tailor your approach and increase the likelihood of repeat business. If you’re interested in learning more about how to do this, contact us today to book your demo and take the first step toward improving your customer retention and overall business growth.

Group 13

Prioritizing Customers: Proven Strategies for Successful Upselling and Retention

In the rapidly evolving world of SaaS, staying ahead of the competition requires a deep understanding of your customers, product, and market. However, with unlimited data and platforms to choose from, it can be overwhelming to figure out where to start.

To help you get started, empowering product teams with the tools they need to deliver value to their users, increase conversion rates, and drive growth is of paramount importance. Leveraging the power of product-led change with enterprise sales efficacy gives every team a clear understanding of what they need to do to achieve maximum impact.

In this blog post, we’ll explore the key strategies and processes that drive successful upsells and retention. We’ll cover important topics such as defining your ideal customer, building a growth flywheel playbook, and understanding the importance of customer observability.

Whether you’re a seasoned SaaS veteran or just starting, these strategies will help you prioritize your customer base and drive growth for your business.

Product-led revenue: The importance of customer observability

Product-Led Growth (PLG) is a business model focusing on building and growing a product-driven company. It is designed to increase customer engagement and drive revenue through product usage and customer satisfaction. One of the critical components of a successful PLG strategy is customer observability, which allows you to track and understand how customers interact with your product.

Forbes understands the ever-growing importance of PLG, especially for technical products, as the world of AI, sales, and marketing are becoming blurred and combined.

Customer observability provides valuable insights into the customer journey, allowing you to identify areas of improvement and optimize the customer experience. By understanding how customers engage with your product, you can make informed decisions about product development, marketing, and sales strategies. This leads to increased customer satisfaction, higher conversion rates, and, ultimately, increased revenue.

The Benefits of Customer Observability

Improved Customer Experience: By understanding the customer journey, you can identify areas of improvement and optimize the customer experience. This leads to increased customer satisfaction and loyalty.

Increased Conversion Rates: Learning how customers interact with your product allows you to make informed decisions about product development, marketing, and sales strategies, leading to higher conversion rates so that you can be there at the most meaningful moment.

Better Product Development: Customer observability provides valuable insights into the customer journey, which can inform product development decisions and lead to creation of products that better meet customer needs.

The importance of customer observability in driving product-led revenue cannot be understated. AI platforms combine product-led growth efficiency with enterprise sales efficacy, helping every team understand exactly what needs to be done and where their efforts need to be focused on achieving maximum impact. With proper systems and processes in place, you can gain a deeper understanding of your customers and confidently drive product-led growth.

The key to successful upsells and retention

In the competitive landscape of modern SaaS, understanding your customers and what they need is essential to success. By defining your Product Qualified Lead, you can prioritize your customer base and focus on the right customers, leading to increased revenue and customer satisfaction.

A PQL is a crucial component of product-led growth and helps businesses understand who their most valuable customers are, their needs, and how to reach them effectively. By focusing on your PQL, you can make the most of your resources and direct your efforts toward growth initiatives.

Here’s what you can expect from defining your PQL:

  1. Prioritize your customer base: By understanding your PQL, you can prioritize your customer base and focus on the right customers, driving successful upsells and retention.
  2. Drive growth and success: By focusing on your PQL, you can drive growth and success by efficiently and effectively using your resources.
  3. Improve customer satisfaction: You can improve customer satisfaction by understanding your customers and their needs, leading to increased revenue and growth.

Defining your PQL is valuable in unlocking the potential for successful upsells and retention. You can drive growth and success while improving customer satisfaction by prioritizing your customer base and focusing on the right customers.

Growth Flywheel: Build a Playbook for Success

Now that you have clearly defined your lead and sales strategy, you can start implementing your growth flywheel. 

A growth flywheel is a (mostly) autonomous system that drives growth through a series of interconnected actions. The goal of a growth flywheel is to create a virtuous cycle that continually drives development and improvement, allowing your business to scale and succeed. One of the pivotal components of a successful growth flywheel is having a playbook that outlines the strategies and processes that drive growth. 

The Importance of a Growth Flywheel Playbook 

Below are the benefits of implementing a well-put-together growth flywheel for your team. Remember that skill can be trained, with the right processes, regardless of where your staff member starts from.

  • Consistency: A growth flywheel playbook ensures that all teams follow the same processes and strategies, leading to consistent and predictable growth.
  • Alignment: By having a shared understanding of what drives growth, teams can work together more effectively and achieve better results.
  • Scalability: A well-defined growth flywheel playbook allows you to scale your growth efforts, making it easier to drive growth as your business grows.

Constructing and Scaling Your Growth Flywheel Playbook 

Building a successful growth flywheel playbook requires a deep understanding of your customers, product, and market. Start by defining your target customer and the value you offer them. Then, identify the key growth drivers, such as customer acquisition, engagement, and retention. Finally, define the strategies and processes to drive growth in these areas.

A growth flywheel playbook is a living document, constantly evolving as you learn and grow. Continuously monitor and adjust your growth flywheel to ensure it drives the desired results.

By building a growth flywheel playbook, you can drive consistent and predictable growth, align your teams, and scale your business for success.

 The Future of Product-Led Growth

Product-led growth (PLG) is a business model that prioritizes the customer experience and focuses on building and growing a product-driven company. It has proven to be a successful approach to driving revenue, increasing customer engagement and satisfaction, and driving growth. The critical components of a successful PLG strategy are customer observability, defining your ideal customer (Product Qualified Lead), and implementing a growth flywheel playbook.

In the rapidly evolving world of SaaS, staying ahead of the competition requires a deep understanding of your customers, product, and market. With the power of advanced AI technologies, companies can now clearly understand what they need to do to achieve maximum impact. Customer observability provides valuable insights into the customer journey, allowing businesses to make informed decisions about product development, marketing, and sales strategies. Defining your PQL is crucial in unlocking the potential for successful upsells and retention.

Implementing a growth flywheel playbook is also essential in driving consistent and predictable growth. A well-defined growth flywheel playbook ensures that all teams follow the same processes and strategies, leading to better results and scalability as the business grows.

In conclusion, the future of product-led growth is bright. With the right tools and strategies, businesses can prioritize the customer experience and drive growth, leading to increased revenue, customer satisfaction, and success. Companies that embrace PLG and adopt these key strategies will continue to stay ahead of the competition and drive success in the fast-paced world of SaaS.

10 Invisible customer journey

Unlocking the Secret to Product-Led Growth: The Power of Understanding the Invisible Customer Journey

When it comes to driving growth for your business, it’s easy to focus on the obvious metrics, such as website traffic and conversion rates. But have you ever stopped to consider the invisible journey that a customer travels to make their decision to convert? The hidden factors that influence a customer’s decision-making process can be just as important as the obvious ones.

From the first time a customer interacts with a brand, they go through an invisible journey that shapes their perception of a brand and the likelihood of doing business with the company again in the future. This invisible journey is the culmination of subtle cues and touchpoints that ultimately drive product-led growth. 

What is Product-Led Growth (PLG)?

Product-led growth (PLG) has become a buzzword in the business world as more companies recognize the power of letting their products speak for themselves. PLG is about creating an experience-driven product that resonates with customers and drives them through the entire customer journey. This is why a deeper understanding of customer needs and preferences is crucial for businesses looking to optimize their PLG strategy.

Think of it like a game of chess. You may have all the right pieces on the board, but if you don’t understand the subtle tactics and strategies at play, you’ll never be able to outmaneuver your opponent. Similarly, businesses may have a great product and a solid marketing strategy, but without understanding customer behavior and insights, they’ll never be able to optimize their growth potential fully.

Decoding the customer journey

So, what does the customer journey look like in practice? Let’s say you’re a SaaS company that specializes in project management software. While your website may be getting plenty of traffic, you notice that many users are dropping off at the pricing page.

By digging deeper, you discover that many of these users are small businesses that are hesitant to commit to long-term contracts. With this information, you can adjust your pricing strategy to offer more flexible options, resulting in a significant increase in conversions.

But the customer journey doesn’t end at the pricing page. To fully optimize growth, it’s crucial to analyze why small businesses are dropping off at other stages. It could be that the information or resources on the website are insufficient or that the user interface is confusing. To address these issues, you can improve the website’s design and user experience to increase conversion rates.

Consider A/B testing different pricing options and website designs to see which ones have the best impact on conversions. Additionally, reach out to small businesses that have dropped off at the pricing page through email or phone to understand their specific concerns and answer any questions they may have. This will help you enhance the customer experience and foster closer relationships with prospective clients.

Leveraging the Customer Journey for PLG Success

With a clear understanding of the customer journey, it’s time to put this information to work. Here are some ways to optimize your PLG strategy using the customer journey:

Mapping the customer journey

Identify the critical stages of the customer journey, including awareness, consideration, purchase, and post-purchase.

Identifying pain points and opportunities

Analyze each stage of the customer journey and identify areas for improvement in the user experience.

Streamlining the onboarding experience

Ensure the onboarding process is easy to understand and provide resources and support to help customers get started.

Building a feedback loop

Ask for customer feedback at key stages in the customer journey and use that information to iterate and enhance the product.

Optimizing for retention

Recognize the factors that influence customer retention and concentrate on improving them.

Analyzing customer data

Use customer data and analytics to track behavior and identify aspects of the product that are promoting growth and engagement.

Personalizing the experience

Use consumer data to personalize the experience and develop targeted marketing strategies to engage different customer segments.

Use consumer data to personalize the experience and develop targeted marketing strategies to engage different customer segments.

Continuous testing and optimization

Keep testing and refining all aspects of the customer journey, from the onboarding process to the in-app experience. Doing this will help you enhance the overall user experience and drive growth.

 

Unlock Your PLG Strategy with the Invisible Customer Journey

In conclusion, unlocking the power of the “invisible journey” is key to driving growth for businesses. By gaining a deep understanding of customers and their behavior, businesses can improve customer retention, increase acquisition, and enhance conversion rates. By utilizing consumer data to personalize the experience, businesses can develop targeted marketing strategies that effectively engage different customer segments. Continuous testing and optimization of the customer journey is critical, from the onboarding process to the in-app experience. This helps businesses enhance the overall user experience and drive growth.

The customer journey is a complex and ever-evolving process, and businesses need to stay ahead of the curve to succeed. Rather than relying on assumptions and guesses, businesses should embrace the “invisible journey” to make data-driven decisions and adopt best practices that foster growth. Embracing the power of the “invisible journey” will empower businesses to take control of their growth strategy and achieve long-term success.

10 funding

Fueling the future of product-led revenue – Announcing our $8.5M seed funding

We are thrilled to announce the securing of an $8.5M seed funding round led by Eight Roads, TechAviv, and a select group of angel investors, including company co-founder Ariel Maislos.

This funding will allow us to further develop our platform and grow the team as we work to bring you the best tools for converting your customer usage data into revenue.

Our platform allows you to have complete visibility of where your customers are in their customer journey by analyzing their engagement with your product in real-time. We believe that this technology has the potential to revolutionize the industry and make a real impact on the lives of our customers.

“SaaS companies are in a unique position where they can actually measure the value their users extract from their products. By correlating this information with data coming from CS, sales, and support, we create a customer observability platform, which is crucial to generating sustainable and proactive revenue growth. Securing our funding is a huge step toward our platform’s capability to help businesses succeed in a tough and unpredictable market. Especially when KPIs are now more focused on sales efficiency and NRR. As revenue teams need more product insights, we aim to provide an out-of-the-box solution to a problem which companies tried to solve internally until now.”  

Itamar Falcon, CEO of Coho AI. 

We would like to express our gratitude to all of the investors, customers, and employees that joined us on this journey! 

Stay tuned for more developments in the near future! 

Read the full story as it was shared by TechCrunch.

Group 10

From Good to Great: How Customer Health Scores Drive Customer Success

As a customer success professional, one of your primary goals is to ensure that your customers are successful in achieving their desired outcomes using your product or service. This requires a proactive approach to identifying and addressing potential issues or challenges that your customers may face. One effective tool for doing this is a customer health score, which is a quantitative measure of a customer’s overall health and success with your product or service.

In this blog post, we will delve into the importance of customer health scores for customer success teams and how they can be used to drive customer success. We will also discuss some best practices for creating and using customer health scores, as well as how they can be integrated into a customer success strategy.

What is a customer health score

A customer health score is a metric that measures the overall health and success of a customer with your product or service. It is typically a numerical score or rating, with a higher score indicating a healthier and more successful customer.

There are various ways to calculate a customer health score, but it typically takes into account a combination of factors such as usage and adoption of the product, customer satisfaction, and any potential risks or issues that the customer may be experiencing. Some customer success teams may also consider other factors such as the customer’s business outcomes or the value they are receiving from the product.

The purpose of a customer health score is to provide a quick and easy way to assess the overall health of a customer, which can help customer success teams prioritize their efforts and identify potential issues or risks before they become major problems.

Why are customer health scores important for Customer Success teams?

While many companies still don’t use customer health metrics, it’s a missed opportunity that could be a significant growth engine. Here are 4 reason why:

Prioritizing efforts

With a customer health score, customer success teams can quickly assess the overall health of their customers and prioritize their efforts accordingly. This allows them to focus their time and resources on the customers who are most in need of assistance or are at the greatest risk of churning.

Identifying potential issues early

A customer health score can help customer success teams identify potential issues or challenges before they become major problems. This allows the team to proactively address these issues and prevent them from escalating.

Driving customer success

By regularly monitoring and improving a customer’s health score, customer success teams can help ensure that the customer is successful in achieving their desired outcomes using the product or service. This can lead to increased customer satisfaction and loyalty, which can ultimately drive revenue and growth for the company.

Providing a common language

Customer health scores provide a common language for customer success teams to use when discussing the overall health and success of their customers. This can help teams communicate more effectively and ensure that everyone is working towards the same goals.

Best practices for creating and using customer health scores

When creating and using customer health scores, it’s important to keep the following best practices in mind:

Choose the right metrics

The metrics that you choose to include in your customer health score should be relevant to your product or service and should accurately reflect the overall health and success of your customers. Be sure to consider a variety of factors such as usage, satisfaction, and potential risks.

Regularly review and update the score

Customer health scores should be regularly reviewed and updated to ensure that they are accurate and relevant. This may involve adding or removing metrics, adjusting the weighting of different metrics, or making other changes as needed.

Involve the customer in the process

When developing and reviewing customer health scores, it’s important to involve the customer in the process. This can help ensure that the metrics chosen are relevant to the customer’s needs and goals and that the customer is aware of their overall health and success.

Use the score as a starting point for improvement

A customer health score is not a static metric – it should be used as a starting point for continuous improvement. Customer success teams should work with customers to identify areas for improvement and develop action plans to address these areas.

Leverage data and analytics

Customer health scores should be based on data and analytics, rather than subjective opinions or assumptions. This helps ensure that the score is objective and accurate and can be used to drive meaningful actions and improvements.

By following these best practices, customer success teams can effectively create and use customer health scores to drive customer success and improve the overall health and success of their customers.

Integrating Customer Health Scores into a Customer Success Strategy

Incorporating customer health scores into your customer success strategy is an important step in driving customer success and ensuring that your customers are achieving their desired outcomes. 

Set up regular check-ins with customers

Customer health scores should be regularly reviewed and discussed with customers. During these check-ins, customer success teams can review the customer’s health score and discuss any potential issues or challenges that the customer may be facing.

Use customer health scores to guide customer success plans

Customer success plans should be tailored to the specific needs and goals of each customer. Customer health scores can be used to guide the development of these plans and to identify areas where the customer may need additional support or resources.

Use customer health scores to drive cross-functional collaboration

Customer success is often a cross-functional effort, involving teams such as sales, marketing, and product development. .Having a single source of truth can be used to drive collaboration across these teams and ensure that everyone is working towards a common goal.

Leverage automation and technology

There is  a variety of technologies available that can help automate the process of tracking and managing customer health scores. These tools can help customer success teams save time and focus on more high-value activities, such as working with customers to address their needs and drive success.

Takeaways 

Customer health scores are a crucial tool for customer success teams as they help prioritize efforts, identify potential issues early, drive customer success, and provide a common language for teams to use. 

By regularly reviewing and updating customer health scores and integrating them into a customer success strategy, CS teams can build stronger, more loyal customer relationships and drive revenue and growth.

Want to know more about how you can incorporate customer health score into your daily work? Contact us!