But this isn’t just happening at a startup scale…
large public companies are Adopting PLG, too:
What's new
this year:
We put the newest data under the magnifying glass and found some clues for you:
- How to rethink your approach to building a growth-driven product
- What’s the proper sales and marketing approach for your product
- Where you should look for bleeding-edge PLG inspiration
Ready to find out where Your organization excels? Dive on in.
Our partners
we l ve
Enabling the adoption of product-led best practices by providing benchmarks to product-minded founders and operators.
The events of 2020 and the shift to remote work has shown founders and operators the importance of being able to shift quickly. As the product itself becomes a growth lever for your business, the SaaS metric playbook is rapidly changing. Our benchmarks, segmented by company size and market, give you the objective data you need to make those key decisions for your team and your company.
CleanView’s 2021 Product Benchmarks report was written, analyzed, and compiled by:
Sam
Richard.
Kyle
Poyar.
Introduction
Our base of responses grew 70%over last year.
Facts about respondents:
- Most companies are in the expansion stage, with 48% between $1m-10m ARR.
- More large companies responded this year (19% had over $30m in ARR) which represents a growing interest in product metrics and product-led growth.
Growth Rate
- 0 - 50%
- 50%+
- Not Sure
ARR
- Less than $1 m
- $1-$5m
- $5-$10m
- $10-$30m
- $30-$100m
- $100m+
Compary Size
FTEs at the end of 2020
- 0 - 50
- 51 - 200
- 201 - 1000
- 1000+
Product Types
Most Common
- Horizontal App
(Slack, Salesforce, Asana) - Vertical Application
(Jobber, Veeva) - Developer Software
(DataDog, Auth0) - Other/Don't Know
Respondants
Job Title
- Founder/CEO
- Product Leader
- Other Leadership Role
PLG ADOPTION: PRODUCT-LED GROWTH
IS OFFICIALLY THE TREND OF 2021
CleanView is all-in on product-led growth. These models begin with addressing end-user frustrations and providing value before a paywall (think Calendly, Expensify, and DataDog), but also have sophisticated revenue operations requirements on the back-end that differ from the way that software products have been sold in the past.
COVID-19 forced SaaS companies to rethink their approach to growth, and many of them decided to introduce product-led tactics like free products or free trials.
Growth Rate
2020 Free/Trial
2021 Free/Trial
| Low | 41% | 44% |
| High | 49% | 49% |
"Product leads who are talking a product-led approach-measuring usage, experimenting with new ideas and providing value for their users at low to no cost-end up building high-growth, enduring business."
Jason Williams,
CEO of The Abigali Company
Jason
Williams.
The Key Takeaway
PLG is Hot Right Now.
BUT ADOPTERS CAN
STILL BE IMPOSTERS
AND NOT EVEN KNOW
IT
PLG adoption is certainly growing at the surface level, but when you dig a bit deeper, the operational requirements aren’t there yet.
Free products aren’t just set-it-and forget it. To support them, you need a whole new toolset of SaaS metricsto help your team navigate the new user journey. Many of these new metrics measure the efficiency of your product as an acquisition tool. To understand how quickly your audiences are finding value in your product, we recommend measuring activation.
Activation is not “new” per se, but it’s finally getting the attention it deserves. Activation is the percentage of users that reach a specific “aha” moment in your product. That aha moment should be:
- Easy to achieve by most users quickly: around half of users should be able to get to this point in less than a month after signup, preferably, within a week or so
- Correlated to positive business performance. Users and accounts who activate should be more likely to convert, be retained, and expand their spend with your product.
The metrics that don’t quite meet the activation standard, but have some correlation with business success should be leveraged as Product-Qualified Leads—PQLs for short.
Businesses aren’t using Activation and PQLs as a KPI any more than last year
Yikes!
Not much movement for these metrics.
The Key Takeaway
Core operational requirements like measuring activation and PQLs aren't mainstream yet
PLG IS A REQUIREMENT
IF YOU’RE SELLING TO DEVELOPERS
Developers are a tough crowd. To capture their attention and provide them with value, developer-focused companies have learned that you have to do this quickly, with open, free models. In the past year, we’ve seen a dramatic increase of freemium and free trial adoption.
Developer focused models are considerably more likely to take a free-offering approach than other B2B offerings
- Dev-Focused
- SaaS
The Key Takeaway
When it comes to developers, speed and simplicity win. Get them in the product quickly and work from there.
THE TALENT CRUNCH IS LEAVING PLG COMPANIESBAMBOOZLED!
Since Product-Led growth is still a very new frontier for B2B SaaS, companies are still experimenting with how the teams created to support free products look. As a result, Growth teams have shifted from being subsidiaries of sales or marketing and are reporting more to Product or directly to the CEO. As more and more companies see the value in hiring these experts, the talent pool is growing increasingly thin.
Growth teams are rapidly moving away from reporting into Sales and Marketing and into the Chief Executive, instead.
The Key Takeaway
PLG teams are a relatively new group for B2B SaaS and companies are rethinking how these look, individual practitioners are still honing their craft and those with experience are in demand.
DITCHING MARKETING
IS A BAD IDEA
When the product itself becomes an acquisition machine, marketing is still desperately needed, just at different parts of the customer journey.
Think of traditional SaaS models as front-loading commercial activities, and product-led teams as placing those resources during strategic discovery moments as users unlock value in the product itself.
User acquisition comes from very different places for product-led companies.
PLG
- 50% Mediun Organic
- 24% Median Paid Sales Generated
- 26% Median Other
NON-PLG
- 25% Median Paid Sales Generated
- 50% Median Organic
- 25% Median Other
As organic traffic becomes front-and center, marketing is tasked with finding scalable ways to build brand awareness. Snyk, for example, does this with programmatic SEO. As PLG becomes more mature I expect we’ll see marketing flexing their creative muscles to competitively capture our attention.
The Key Takeaway
Just like PLG-focused teams are changing, we’re going to also see marketing flexing new muscles
CONVERSION IS
A TEAM SPORT
Say it with me: Product-led doesn’t mean no-sales.
Self-service conversion is the dream right? Build a great product, and people will discover it organically, fall in love with it, and buy it. Well, for most, self-service conversion is in hatchthe minority. About half of all conversions were self-serve, according to respondents.
Product-led means you can expect sales to engage with users further down the funnel, after they’ve gotten the opportunity to try the product and have questions about their specific use-case.
Sales is most likely performing the initial outreach to engage with free users
Feel overwhelming for the team? Download our full report to better understand the tools that Growth pros use to automate this outreach and qualify free users.
