AMA Recap: Customer Success for PLG Companies
An AMA with Pocus' Product-Led Sales community
Here’s a recap of my AMA with Pocus’ Product-Led Sales community, originally published here. I’m personally fascinated to see the evolution in discussions on customer success at PLG companies. There’s still much we need to figure out, but I think we’re starting to converge on some best practices.
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In this recap of our AMA discussion, we’ll cover the high points of the enlightening discussion we had with Allison Pickens — former COO of Gainsight, current solo GP, and independent board director at dbt Labs, a product-led, high-growth startup. Allison is also a prolific writer and speaker about customer success and all things related to scaling operations (download the first-ever PLS playbook to see Allison’s awesome insights!).
Continue reading to see how our chat with Allison unfolded as we talked about customer success in the modern PLS motion, including:
The overlap between customers success, sales-assist, and sales
How the role of customer success is not only present but expanding within product-led growth organizations
Choosing the right level of simplicity vs. complexity when building your product adoption and expansion journey
Scalable, self-serve tactics that help supplement customer success
Customer Success at Product-Led Companies: The Traditional Role is Expanding
While the product-led growth (PLG) approach has certainly introduced some new terms and practices to the top-down business model, according to Allison, customer success (CS) does still exist in the PLG world — and it doesn’t look all that different from the CS role with which many of us are familiar.
“I think the first thing to note is that customer success has existed in a traditional form within PLG companies for a while now. I think one of the dirty secrets that you've exposed, Alexa, is that PLG companies actually do have sales motions — and most founders aspire to layer a sales motion on top of their PLG foundation within a couple years of starting the company. I increasingly see this happening earlier than I would think.
“It's normal for the percentage of revenue at a PLG company coming from self-serve to be high in the early years, but then decline over time. For that reason, when founders are layering on sales motions on top of the self-serve funnel, they end up bringing on customer success people. And those customer success people look similar to the ones that have existed for a while.”
Despite the similarities of CS in a PLG approach and CS in a traditional approach, there are, of course, differences. The key one being how the customer success manager (CSM) role impacts revenue in a way that very much overlaps with traditional sales.
“Because many PLG companies have consumption-based pricing models, CSMs are often thinking really actively and implicitly about revenue. It's often the adoption that they're driving that drives the pricing model. There's some adoption-related metric in the pricing model.
“So if you're doing your job as a CSM driving adoption, you're also driving revenue. And for that reason, a lot of CSMs at PLG companies might be responsible for expansion in one way or another.”
In fact, one founder Allison talked to was even considering whether or not his PLG company needed a sales team at all as they layered on their top-down motion! The way he saw it, their customer success team was driving adoption— and therefore revenue — anyway. And while Allison hasn’t seen that approach fully realized at any company just yet, we agree that it’s a provocative notion.
It’s easy to see that a modern PLG approach doesn’t remove the need for a CS team, it just changes where that team exists in the funnel. We talked more about that with Allison.
Where CS and Sales-Assist Fit in the Product-Led Funnel
Allison sees many PLG companies realize that their product-first approach should be thought of as less of a revenue generation engine and as more of a lead generation engine. Instead of the dominant driver of ARR, the PLG motion is often better suited for rapidly bringing people through the funnel so that businesses can expand the size of emerging accounts.
And that creates an interesting place for customer success to exist.
“The traditional customer success team comes in after sales formalizes a corporate-level contract. Sales hands off the deal to customer success, who makes the company even more successful with the product over time, enables the collaboration, maybe drives expansion.
“But in PLG, even before the formalization of a corporate-level contract, there's an opportunity to drive success for customers that have signed up with a credit card and are trying to figure out how to get value. Certainly, if you can accelerate their adoption and help initial individual users get so much value that they become a product-qualified lead (PQL), you can make it faster for sales to come in and formalize that contract.”
Which team is it that is responsible for diving in before sales to drive early value and help round out the PQL roster? For some product-led organizations, that belongs to an emerging role called “sales-assist.”
For Allison, it doesn’t matter what businesses choose to call this role internally. To her, she still sees this job as an element of customer success.
“I hear about the sales-assist role existing to basically help users adopt the product so that they start to qualify as PQLs. It's almost like nurturing to get to PQL.
“From an internal perspective, some organizations are calling this sales-assist. But all the customer knows is they need some help, and that’s what the term customer success communicates to them.”
With All These Roles, How Do We — And Should We — Keep the Expansion Journey Simple?
At this point in the AMA discussion, one of our PLS community members hopped in with a very pertinent point: Especially considering the recent introduction of the sales-assist role, the onboarding and expansion journey is growing in complexity, which can be confusing to customers. Is there an opportunity to go with a more lean approach to solving customer problems, leading to expansion naturally?
And, as another PLS community member added on, are some of the “old school” customer success tasks like onboarding and executive meetings still even relevant in this new world?
Apparently, this is a dichotomy that Allison sees companies confront quite often. In her opinion, there are benefits to specialized customer success teams — and even some of the traditional workflows — as long as your product and customers require them.
When it comes to specialization, it’s hard to find one person for your customer success team who knows everything and can execute on it. More often, there are different people on a team who are knowledgeable about different features and workflows. That means that, ideally, different people should interact with customers depending on where they are in the product and what their question is.
And, aside from product expertise, Allison adds that the type of work that’s required before and after a corporate-level contract is different.
On the user-level side, customer success is helping individual users adopt the product through various means:
Analyzing product usage data to identify friction and reaching out with help or resources
Encouraging team-wide referrals by self-serve users
But post corporate-level contract, customer success tasks look different:
Conducting quarterly business reviews with executives
Creating project/success plans
Aligning stakeholders around implementation plans
Ultimately, there really are multiple roles here. And, ideally, there should be a handoff from one form of customer success to another the moment a corporate-level contract comes into play.
So the question is really more about whether the complexity of your product and the type of customers you have require this level of specialization and assistance in the adoption and expansion motions, or if you can thrive with a leaner, more product-led approach.
In researching for our recent PLS benchmark report, it became clear that only a tiny percentage of companies are successful with an entirely self-serve workflow. Most products will need some assistance or solution selling to get users onboarded to full value. The level of that will depend on the complexity of the product. And even more products will need human assistance in order to expand throughout entire companies.
“As an example, many of us love Superhuman, and they're known to be just obsessive about product market fit. And their product is wonderful. Once you learn it, it's really a seamless part of your workflow. However, Superhuman also became known for having an onboarding call with individual users, which I participated in a few years ago when I first signed up for Superhuman.
“I was talking with one of the Superhuman founders the other day, and they still have that onboarding process. They do it because they found that the half hour that users spend on the phone with an onboarding specialist is incredibly impactful for their retention rate.
“I remember when I was doing it, there was an onboarding specialist on the phone with me. They actually had a UI walkthrough. And the function of the specialist on the phone was to, one, make sure I actually did it. Because, I don't know about you, but I'm super busy and am not sure I would have prioritized doing a 30-minute training on shortcuts. And secondly, she was available in case I had questions.
“Superhuman has found customer success to be lucrative in terms of generating a high conversion rate and retention rate. And they're able to afford it because the lifetime value of customers justifies it.”
In Allison’s opinion, if a company that’s as product-focused as Superhuman relies on injecting humans into the onboarding interaction, then there's probably some use for it in many PLG organizations.
In addition to product complexity, the type of customer you’re targeting should also be considered when you’re thinking about how to build your onboarding and expansion teams and approaches.
“The company that I mentioned earlier that got to $10 million in ARR using purely a self-serve motion, they have a free trial that lasts for 30 days. And when you sign up for it, there's an automated email that's sent to you from a customer success manager that says ‘Hi, saw you signed up. I just wanted to make myself available in case you had questions. You can book time with me here if you want to, no obligation.’ If you don’t use the product within the first few days, they will send another email saying ‘I noticed you didn't activate X, Y, Z. Here's some documentation on how to do that.’ And this process repeats."
“This is an example of automated, scaled support that still offers human interaction as an option. And while many people probably won't want it, you might find it lucrative to offer it for those who do.”
So, like most great answers, the one to the epic question “How do I, and should I, simplify my org’s adoption and expansion workflow?” is that it depends — on your team’s expertise, on your product complexity, and on your ideal customer profile.
Tactics for Supplementing Customer Success in the Product-Led Motion
Another community comment shifted the discussion to how product-led companies can help customers arrive at value outside of the customer success communication loop.
Allison suggests several scalable, embeddable tactics that help customers help themselves:
Build in-app communication like walk-throughs (although she noted that you should be discriminating about when to use these, given pop-up burn-out)
Set up a community around your product
Create detailed documentation that is closely aligned with the product
Give users access to templates created by other customers
To exemplify this last tactic, Allison shares a story from a PLG org she works with:
“Mux, a video API company, thinks of their documentation as being a product in itself, which I really appreciate. It has a release cadence and an update cadence, which is part of the product release cycles. Anytime there's a new feature release, there's an intensive effort to update the docs. They even have Easter eggs in their docs to encourage people to read them. It's something they invest a lot in. The product managers and the developer experience team really take responsibility for it.”
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