Best practices for operations teams at PLG companies

Palette Team

Transitioning to product-led growth has impacts across the organization, with major strategic and even structural changes to go-to-market and operations teams. The PLG motion is still relatively new, and many companies are evolving their approach as they go along. Follow these best practices to help a smooth transition across the ops function.

Understand the end-user

As ops teams build out the automations, reports, and processes that support the customer, it’s essential for them to re-evaluate their understanding of the customer. With a focus on activating the end-user as quickly as possible, product-led and usage-based pricing companies need to make decisions based on a different set of criteria compared to marketing and sales led teams, which might optimize for other priorities such as convincing key decision makers. 

Think about how customers first onboard or sign up, and then work with the product team to understand their activation points, set the right usage thresholds, and what predictors are associated with higher usage. These signals can be used to design automations and engagement points which push customers to your desired outcomes. 

Shadowing implementations, attending customer trainings, and watching customers use the product can all help ops teams find ways to better serve customer needs throughout the journey. Pay attention to where the most questions are asked, and what interactions spark joy in the customer. These can be clues to helping build effective customer facing automations. Understanding customer priorities can also help ops teams surface the right data to their other stakeholders and guide them in the right direction. 

Re-evaluate the Funnel

A PLG motion requires a complete rethinking of the funnel. With the product leading the charge, the top of funnel is focused on getting customers into the product as quickly as possible, rather than collecting leads or conducting demos. Old metrics may be deprioritized or even eliminated entirely. Ops teams should sit down with other departments, including product and go-to-market teams, to understand what actions to drive first and where priorities lie. Operations teams need to develop a broad view of the customer journey, from first touch down to retention, in order to adapt their processes to create a smooth journey for these customers. In some cases, consolidating ops teams under a GTM ops umbrella, whether formal or informal, can help provide this view. Creating more touch points between teams is important in ensuring a smooth journey. 

Get close to the product 

At product-led companies, operations teams must be close to the product. Ops teams should regularly receive or pull reports on customer behavior in the product; ideally, they should have access to real-time data on product usage in order to optimize all of their work according to actual user behavior. 

Operations teams should also have a stronger voice in the product vision and the product roadmap. With a unique perspective on the customer journey with all of its various touch points and areas of friction, operations teams are well suited to provide insights on how the product team can improve and streamline the customer journey. Operations teams are a valuable source of insight and should have a voice at the table with product strategy. 

Re-think goals and incentivizes for go-to-market teams

As the company transitions to product-led growth, sales and marketing need to transform their goals, KPIs, and incentives in order to fit with the new funnel. Marketing teams, for example, will likely need to overhaul their focus areas. This means a shift from lead generation to getting new users into the product; from there, it's up to the product team to demonstrate value quickly to new users and get them to grow. This requires a shift in thinking as well as a shift in goals and KPIs. Instead of generating MQLs and measuring how much revenue they touch, marketing teams might need to think about how many PQLs they generate and how many of those quickly get to an activation moment in the product. Ops teams will need to help marketing teams create the processes, reporting, and internal touchpoints they need to sync on progress with other teams.

Sales teams, meanwhile, need new incentive models for product-led growth. In many cases PLG companies start new customers off on a free tier, or at a very low price point. With a traditional SaaS incentivization model, this would decimate the earnings potential of the sales team. AEs will be rightfully concerned about how to earn commissions. Ops teams should think about how they can rework the commission model for PLG, for example by rewarding new logos and providing long windows to allow for commissions to be earned after a customer upgrades. For more ideas, check out our blog post on the sales compensation models key to unlocking product-led growth.

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