How did product-led growth, PLG, help us grow to $50M ARR (Part-2)
My journey with PLG started long before the current trend. PLG helped us grow the business’s revenue to $50m ARR. PLG works.
On Part-1 I shared how we identified the product value messages that helped us to acquire relevant users into the product’s funnel. This part is about how we experimented and measured the product onboarding and the aha moment the user persona had with our product. On Part-3, I’m sharing the sales and operations efforts around PLG. The posts include actual data and charts that we created over time.
Acquiring the user personas and leading them into the product acquisition journey was the first step in our effort. At this stage, we need to lead the user into the product and very quickly demonstrate the value that led the user to come to us.
The “Aha!” moment is the point at which a user meets the proposed value of a product and perceives not only how it works, but also how it will add value to their lives.
The product registration process
For most products, we need users to sign-up first. This can be a straightforward task to complete. However, many companies are using marketing registration forms for product registration, although each should be used for a different purpose.
Marketing registration forms capture contact details about a prospect, as a result of marketing activity — events, whitepaper downloads, surveys, etc. Marketing needs to collect as many details as possible about prospects to qualify them before sharing them with Sales. As Marketing has no purchase intent signals in the contact acquisition process, they must collect data to help them during the contact assessment process. As a result, you can find marketing registration forms with 8–15 fields that prospects are asked to fill before accessing content.
The product sign-up form should be different from the marketing one. You should collect the minimum needed details ( business email, name ) to learn about the identity of the users and get them into the product as soon as possible. You better leverage Single-sign-on (SSO) to speed up the process. Less data collection and fast entry into the product are the goals here. This is how we managed to increase the sign-up rate.
Here is an example of a good product sign-up form that we had.
Snyk is using an even shorter sign-up form based only on SSO.
After the user submits the form we can learn about:
- Country and city the user came from — using the IP address
2. The business name, size, and type — using the email domain
3. Using the name and email domain — find the user on LinkedIn to identify the role.
4. We embedded different UTMs to the URLs to track the acquisition channel type and the product value message we used
The metric you should use here is the conversion rate between the number of users who visited the sign-up page and the number of users who successfully signed up. In general, a good SaaS sign-up conversion rate ranges between 2% to 5%.
Remember, the more data items you will ask your users to provide, the lower the sign-up success conversion rate will be. We have seen it on dozens of tests over a long period of time.
The user logged into the product for the first time, now what?
Congratulations, you have a registered user looking to discover your product and experience the promised value.
Landing on a product UX that is rich with features and options can overwhelm users. As they see it for the first time, their eyeballs will start to jump across the entire screen in search of the value they were promised.
As you need to keep the users engaged and lead them towards value, you should design the onboarding experience accordingly. This is easy to say but more challenging to execute, simply because your developers are busy adding more and more features to the product and have no time to experiment with different onboarding experiences.
In PLG, you should have development and product resources dedicated to user onboarding and first experience towards product value discovery — aha moment.
Here is how the user experienced our product for the first time. Where do you start? Although it was a beautifully designed UI, it was overwhelming initially. Most users didn't know how to get the value they expected to find in our product.
One of the main values we expected to provide the user when they first used our product was analytics of their social media page (Instagram analytics).To achieve that, the user had to add their social media page to our product. As you can find below, our first design of this process could not be more complicated than this UI. This was a classic scenario of a product manager and a developer designing a UI, mistake #1 :-).
When we looked at our in-product analytics, MixPanel, we could easily learn how hard it was for our users to add their social media page and get the product’s value quickly. Many users failed to achieve the goal and just abandoned the product.
As we realized the challenge, we searched for a quick fix, mistake #2. We implemented a product tour feature. These are popup tips that appear next to each step you need to follow in the UI. Basiclly, we tried to guide the user to complete the task. As the first tool we used didn't help to improve the success rate, we implemented a second tool, and then a third one. No success. No quick fix. We learned the hard way that we need to have a proper UI.
A few development sprints later, we released a new UI for the most critical step in the user process to get value from our product. Here is what the new UI looked like. At least this time you can notice what a professional UI design looks like. We pushed this new version to the product and started to measure the success rate. We hoped to see a big improvement, but the reality was different. Many users still failed to complete the process and as a result, could not get the product value they expected.
Only after we added the FullStory tool and had video recordings about where users struggled with the UI and why they failed, did we learn where the problem stands and how to fix it.
Here is our final version. It was designed based on data we collected and videos of actual users. We managed to perfect the user experience and finally counted more and more users that completed the process and experienced the product value they expected to have, based on our product value messages.
The aha-moment of our product could be experienced in less than 2 minutes since the user logged into our product for the first time. Yeh!
Here is how you can do it
Use in-product analytics and capture on video how users interact with your product towards the value — aha moment.
Have development and product resources dedicated to optimizing the user journey towards value based on the data you collect.
Measure the time-to-value of the journey. Ensure it is below 5 minutes, as users may get frustrated and leave. Watch the recorded videos to learn where users struggle on the journey.
The more steps needed and the longer time it takes, the fewer happy users you will have.
At this stage, we have a Product Qualified Lead (PQL). PQL is a user who experienced the product value. While with Marketing Qualified Lead (MQL) we usually look at the seniority of the prospect, the company he/she came from, and the acquisition method, with PQL we look for a user who already experienced value from the product.
Usually, PQL has a higher probability of converting into a Won deal than MQL. This is because in PQL the user has already experienced a product’s value and has a better understanding of the product vs. MQL, where the user didn’t experience the product yet. Welcome to PLG.
Depending on your product and use-cases, after the user experienced the value, you should encourage the user to invite colleagues and friends into the product and start collaborating. It can be on content creation, metrics, or project management. The more user personas you will onboard and show the value of your product, the more likely they will decide to purchase it.
By this stage, you should understand how to design and measure the user journey towards a product value.
On Part-3, I will share my experience about the best ways to convert the user into a deal and win business.
