Notorious PLG (Special Edition)
Notorious PLG (Special Edition)
Weekly update on the most important product-led growth (PLG) companies
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For this week’s edition of Notorious PLG, Pocus CEO and Co-founder Alexa Grabell wrote a tremendous guest blog post on the modern tech stack for PLG companies. We hope you enjoy today’s special edition and we will back to our regularly scheduled programming next week.
The Modern Tech Stack for PLG Companies
It seems like everyone wants to be product-led in the world of SaaS, but if you’ve been on the journey - it’s not easy.
Most of the tools that sales, marketing, and growth teams use today are not purpose built for product-led growth. We’ve shoehorned, manipulated, and frankenstein’d our way into something that works for a modern self-serve go-to-market motion and sales-assisted or sales-led.
Why do we need a PLG tech stack?
You’ve got the most talented product, growth, sales, and marketing talent at your disposal, but they aren’t reaching their potential because they cannot access the right data to inform their go-to-market strategy.
The traditional enterprise SaaS tech stack does not work for product-led growth. The sales / revenue / GTM operations team is forced to cobble together various band-aid solutions.
Take the poor sales operations soul who has to harmonize data between Salesforce, Hubspot, and product data via Segment. Instead of enabling outcomes, your talent is spending hours trying to turn that swamp of data into something actionable for your GTM teams.
The PLG tech stack you need
If you’re on the path to product-led, or maybe you’re a PLG company ready to add a sales team, it’s time to revisit and level up the tools you use. We polled our product-led experts on their current PLG tech stack favorites and future wishlist items to compile this list.
Here are the required tools you must have to build the ultimate PLG tech stack in 2021*:
*Disclaimer: If you’re moving from sales-led to product-led, or maybe you’re an early stage (seed or series A) company, you probably don’t need everything we list below. At the end of this post I’ll summarize the MVP stack you need to be successful at PLG.
1. Data Warehouse
It’s 2021, so you can’t get by without having a data warehouse to store your raw customer data. This is your source of truth for all raw data including user sign ups and product usage. The data science team you’ll eventually hire to create that sophisticated propensity to buy models will thank you.
While CRMs (Salesforce, Hubspot) may still be the source of truth for your sales data, the source of truth for PLG companies has shifted to the data warehouse. The data warehouse is the overall system of record for product, customer, and marketing data. However, a system of record is only half the story: making that data useful should be the responsibility of another tool or set of tools, which we’ll talk about below.
Our experts recommend a few tools in this category:
Snowflake
Redshift
BigQuery
2. ETL and Reverse ETL Tools
How do you get all of that data into your data warehouse? Extract. Transform. Load (ETL) tools help you take data from various sources and pipe them into your data warehouse.
But what if you need to write data back to your marketing automation platform, CRM or other third party tools? Well we now have the luxury of reverse ETL tools that help you do exactly that.
Our PLG expert picks for ETL tool and Reverse ETL:
High Touch (Reverse ETL)
Census (Reverse ETL)
Fivetran (ELT) - ETL vs. ELT vs. Reverse ETL could be its own post, so here’s a great primer on reverse ETL and ELT)
3. Customer Data Platform
A CDP enables your teams to work smarter not harder. Since all of your data can be piped into a CDP it helps standardize what events are utilized across tools and makes distribution of that data seamless.
The top two CDPs our experts recommend are:
Segment (absolutely the category leader but can get a little pricey)
Rudderstack (pulls data from the data warehouse - a must have for some of the PLG experts we’ve spoken with)
4. Product Analytics
You can’t be a PLG company without understanding how users behave within your product and luckily there are a number of very mature and newer tools to help you learn your users' habits inside and out.
A common theme with the best product-led companies is a culture of constant iteration and improvement. If product is your primary channel for user acquisition, you can’t just build it once and hope users will love your product. Your product, growth and marketing teams need to make decisions based on how your users actually utilize the product, what channels do your best users come from, and how quickly they activate within the product. You can’t learn any of this without a range of product analytics tools.
Most PLG companies have either Heap or Amplitude, some have Mixpanel, and then there is a diverse array of secondary analytics tools that some teams love.
Heap
Amplitude
Mixpanel
Hotjar
FullStory
5. BI Tool
Every mature PLG company we talk to has either Looker, Tableau or Mode as their preferred Business Intelligence (BI) tool. A BI tool is a no-code way to slice, analyze, and visualize your data in one place. However, most of the teams we speak to are trying to build a lot more than just data analytics within these tools.
If you’re new to PLG you might be wondering, why does a PLG company need both a product analytics tool and a BI tool? It comes down to use cases. The product analytics tools are highly specialized for tracking typical SaaS product metrics, but it is quite challenging (and expensive) to also analyze and visualize marketing or sales data in those tools.
The BI tool within these companies in many ways is a bit of a stop gap, a band aid solution for a tool that can help identify the best users, prioritize accounts, and help GTM teams make the best decisions when it comes to sales or marketing strategy.
Looker
Tableau
Mode
6. Data Enrichment
A third-party firmographic data tool, like DiscoveryOrg (acquired ZoomInfo) or Clearbit, helps sales teams understand who their prospects / customers are by providing data like industry, geography, company size, role, and more. Pairing this firmographic data with your product usage metrics is the one-two punch sales reps need to know what PQLs are worth chasing and where the best bet expansion efforts exist.
Best third-party data tools:
Clearbit
DiscoverOrg
7. Customer Relationship Management (CRM)
If you’ve worked in sales or marketing you probably have a love/hate relationship with the CRM. It’s the de facto system of record for your teams, but, the most popular CRMs on the market have not been able to adapt to the ways your GTM has changed.
PLG companies that have also layered in sales have unfortunately created two system of records: the CRM that contains sales or account profile data and the data warehouse which contains rich product usage data.
Across the board we’ve seen PLG teams struggle to adapt Salesforce or Hubspot to their needs. But the solution isn’t just a CRM built for the product-led GTM, it’s time for a new platform to empower the entire GTM team - The PLS Platform (more on this below.)
The most common (not loved) CRMs our experts recommend are:
Salesforce
Hubspot
8. Product-Led Sales Platform
Once you have your self-serve growth flywheel locked in, you’ll want to add a sales team to capitalize on revenue expansion opportunities. But how do you know what accounts to prioritize for this new sales team? How do you equip them with the right data and insights about users within that account?
The answer today for many PLG companies is a DIY solution: an assortment of the tools mentioned above connected together with the technology equivalent of masking tape.
I was that person. I’ve been the poor sales operations soul tasked with the unenviable job of cobbling together a solution to bridge the gap between our bottom-up and top-down sales motions. It was not pretty, which is why it is my mission at Pocus to solve this problem for SaaS companies building their product-led sales team.
A product-led sales platform combines sales and product data to equip your sales team with the insights and automations they need to effectively convert your self-serve users into high lifetime value accounts. A product-led sales platform is a must for product-led companies who want to leverage sales to close bigger deals, faster.
So, with Pocus, you can finally ditch the masking taped DIY solution you built in Salesforce or Looker.
9. Product Engagement
Product engagement solutions include in-app guidance for first time users, how-to guides as a user deepens their engagement with the product, or an interactive demo tool to aid onboarding.
Best in-app guidance tools:
Appcues
Userflow
Pendo
Best interactive demo/guide tools:
Stonly (Embed GIFs or videos in your guides)
Navattic (If you don’t have freemium or free trial yet)
10. Marketing & Sales Automation
Now that you have a single source of truth for actionable product, sales, and marketing data insights, how do you utilize it? Use this data to power your automated sales outreach or marketing campaigns. Create data-driven marketing emails, trigger campaigns based on product usage and more.
Our experts recommend:
Marketing automation:
Hubspot
Autopilot
Email tools (best for product data-driven campaigns):
Customer.io
Braze
Sales engagement:
Outreach.io
Salesloft
Conversational Marketing:
Drift
Intercom
The MVP tech stack
The above list can be daunting if you’re a new PLG company just starting out with your self-serve flywheel.
Fear not. In our experience, when you’re starting out it’s important to focus your tooling around your near-term goals and not overcomplicate things.
If you are focused on getting your self-serve motion up and running, prioritize the following categories:
Data warehouse (best to get the source of truth set up correctly from the beginning)
CDP (save engineers time building data pipelines)
Onboarding/In App Guidance tools (before you build onboarding into your app, rapidly experiment with these easy to setup tools)
Marketing automation (figure out how you want to connect with users through non-product channels)
Conclusion
It can feel like there is a tool for everything these days and it’s not always clear what tools and use cases to prioritize first.
If you take away just one thing from this article: start with your northstar and work backwards to the use cases and tooling required. If you’ve perfected your self-serve flywheel and are ready to start focusing your teams on revenue growth, then prioritize tools like a product-led sales platform (ahem, shameless plug - get in touch with Pocus).
Or maybe your priority is figuring out your data infrastructure and source of truth, then you should prioritize the data warehouse & ETL tooling.
Hot tip: Most of the vendors listed have gone through the daunting process of building this PLG tech stack themselves, don’t be shy, ask your vendors for advice and what tools they use themselves.
To learn more about how we think about the PLG tech stack at Pocus or if you want to get your hands on our product-led sales platform drop me an email alexa@pocus.com