In a Product Led Growth (PLG) business, your product is a primary driver of how you acquire, convert, and expand your customers.
But who actually owns “growth” at a PLG company?
Is it Product, since they’re responsible for building a product that users fall in love with, decide to purchase, and want to share with their friends?
What about Growth, which has the benefit of having the word “growth” in the name and has a strategic view of the company’s unique growth loop?
Or could it be the Marketing team, which builds messaging and runs campaigns which should drive growth?
In this newsletter, I’ll take a stab at defining what Product, Growth, and Marketing should *ideally* look like in a growing PLG business. Plus, I’ll cover where to draw the lines around each team, what skills to look for when hiring, and the main areas of collaboration.
Keep in mind that org structures and roles inevitably evolve as a company matures. It’s influenced by company funding, existing skill set, the product category, and much more. Please take this advice as directional rather than prescriptive.
This is a topic that practitioners are grappling with everyday. To help inform the post, I enlisted the help of outside experts including Naman Khan, CMO at Zeplin; Kevan Lee, Head of Marketing at Polly; Sam Richard, Sr. Director of Growth at OpenView; and Andrew Capland, Head of Growth at Postscript. Andrew also founded DeliveringValue.co, professional development for growth leaders, which is a great resource for folks looking to level-up their PLG skills. The information presented here adapts and builds on frameworks from the experts at Reforge.
What’s the role of Product vs. Growth vs. Marketing?
Let’s start with what’s the same across each of these functions:
ARR is a team sport - everyone contributes to ARR; teams can share accountability as a GTM function
Everyone has a responsibility to consider the entire customer journey
While growth will inherently be collaborative, it can be helpful to carve out team responsibilities so that there’s clear ownership and accountability throughout key parts of the customer journey.
“All three functions are driving toward ARR as the highest-level KPI, and from a PLG perspective, all teams should be thinking about reducing friction at every point of the customer journey, from pre-signup to post-signup.” - Kevan Lee, Head of Marketing at Polly
Product = Builds something that delivers value and/or solves a specific problem for a specific group of people
Your product is the foundation of your Marketing and Growth efforts. It must provide real, sustaining value and solve a specific problem for users. And it must solve problems for enough users so that you can build a large business.
The Product team owns the development of new capabilities that increase the overall amount of value delivered to customers. They’re regularly soliciting feedback from existing users, scanning market trends, and evaluating potential improvements. They will always be resource-constrained, which means they constantly need to prioritize, manage scope, and make trade-offs.
Marketing = Attracts an audience that’s interested in experiencing that value provided
Marketing attracts an audience of people who are interested in what you’re solving. Their main objective is sign-up volume, which you might call leads, free users, trials, or installs. PLG marketers maximize organic acquisition first and foremost - think SEO, content, social, word of mouth, and referrals - ahead of paid activities.
The secondary objectives extend Marketing’s role to include responsibilities before and after a user signs up for the product.
Before sign-up: Attracting an audience that engages with your brand and gets them interested in experiencing your product, i.e. website traffic, subscribers, and/or brand engagement across channels.
Post sign-up: Marketing plays a supporting role throughout the customer lifecycle spanning conversion, expansion, and retention. They’ll own all relevant messaging, content-related initiatives as well as 3rd party channels outside of the app (email, paid channels, LinkedIn, App Store listings, and the like).
In order to attract the right audience, Marketing needs to own user-based segmentation and insights from a firmographic and behavioral perspective. They’ll know what specifically motivates the target user to discover the product.
As you scale, you’ll eventually want to carve out a Growth Product Marketing capability, according to Naman Khan. This team is a thought partner with Growth Product Management to personalize the user journey based on a rich understanding of user segmentation, use cases, and behaviors. In practice, that means lots of content and collateral that hooks users to act by speaking to their exact motivations.
“The product is an amazing growth engine. Valuable features & relevant content are the fuel. If you put the right fuel in the engine, amazing things can happen.” - Naman Khan, CMO at Zeplin
Growth = Gets that audience to experience the product value as fast as possible
Growth teams are the hardest to pin down. Growth may be a standalone team reporting to the CEO, which we see in one-third of cases per OpenView’s forthcoming 2021 Product Benchmarks. Growth may alternatively roll under the Product org, which we’re seeing more and more given shared dependencies around the roadmap, access to engineers, and product tooling. Occasionally Growth fits under another function such as Marketing, but that is less common and not something we typically recommend for a PLG business. Whichever the case, Growth should operate like it’s an independent function.
Your Growth team has a strategic view into the customer journey (or growth flywheel, if you prefer), and should develop data-driven theses around the top priorities to get better. They should be committed to a process of finding a right answer versus assuming they know the answer or relying on a past playbook to tell them what to do, according to Andrew Capland.
“A Growth team should have a clear understanding of the business impact that is indicated by success for the team, usually through a North Star metric. But I do think it’s easy to over-index on moving a metric as success. From my experience, a Growth team really is successful when its value extends beyond the work that team physically does. It’s successful when it expands into influencing things like strategy, marketing, and product decisions across the company.” - Lauren Schuman, VP Product Growth at Mural (via OV Build)
The top priority for Growth might be user retention early on, since you don’t want to sign up a bunch of users who will inevitably churn. Once you’ve solved the retention problem, you might look at virality/collaboration, driving demand, product activation, catalyzing expansion, or even monetization. Be sure to revisit your customer journey on a regular basis as a leadership team - quarterly is a good starting point - and point the Growth team where they can have the greatest impact.
In practice Growth teams end up running lots of tests and experiments, then hand those off to other teams than can make a bigger impact with more sustained investment. They’re the ones who are questioning outdated assumptions and finding the right answer with data.
“I believe the best growth leaders are skilled at two things: (1) using data to dissect businesses and determine which areas to focus on, and (2) running a process that helps them solve many different challenges related to conversion & scaling.” - Andrew Capland, Head of Growth at Postscript
Where do you draw the boundaries across each team?
Let’s first clarify that these are porous boundaries and teams will need to collaborate closely on their work. That said, there will be inevitable debates about topics like messaging, website hierarchy, sign-up forms, and many more topics both important and mundane. Boundaries help to clarify decision rights - and the accountability that comes with it.
Marketing owns all channels outside of the app including email, social, 3rd party channels, messaging, etc. This includes enablement for the sales-assisted pipeline.
Product owns the in-app experience as it relates to creating and increasing value for users, i.e. product quality, user experience, active usage.
Growth’s purview likely changes over time. That said, they’re *generally* responsible for in-app activation (i.e., getting users to see value in the product) and conversion including in-app onboarding, checkout, billing, and paid conversion experiences. You can think of them as responsible for the in-app experience as it relates to helping users quickly discover and experience the value that Product has created, which then leads to commercial impact.
The biggest sticking point is often the website itself. There’s a natural tension here between the website being (1) a place to learn about the product, read case studies, attend online events, etc. and (2) a fast eCommerce-like checkout experience optimized to get you to try the free offering without any distractions.
For many PLG companies, the website falls squarely in Marketing’s domain given the tight connection with acquisition and messaging. In some cases, however, the website is an extension of the Product and there may not even be a 3rd party CMS that Marketing can access. In my view the website needs to managed collaboratively in a consensus-driven process rather than fit squarely in a single team.
Another area of contention relates to the quality of user sign-ups: is Marketing sending “bad leads” over the fence who never activate or convert in the product? Sign-up quality and activation will require close collaboration between Marketing <> Growth. As a starting point, you’ll want to create a shared dashboard measuring activation rates by acquisition channel.
Finally, you can expect tension around how to prioritize engineering resources for growth efforts versus new product development. Many companies solve for this by carving out engineering pods dedicated to Product Growth (here’s an example JD from Snyk). Growth teams will also be scrappy with finding MVP experiments to test growth hypotheses before asking for significant engineering investment to scale those initiatives.
What Product Led Growth skills should you be looking for?
Proficient with data - in particular the ability to independently identify insights from open-ended or ambiguous data
Comfortable operating at scale - PLG opens up a lot of volume
Expert at experimentation and A/B testing
Strong understanding of user experience — could be from a customer research, data, customer success and/or a design perspective
Tenacity - the vast majority of experiments will fail, and that’s OK. The best growth leaders are motivated by the challenge itself and the learnings they generate from every test
Prioritization (and the ability to bring in frameworks to prioritize)
Collaboration and project management
“A lot of the most successful Growth folks have strong soft skills… You have to be really good at communication if you want to be in Growth. If you’re not a good communicator in terms of sharing what you’re working on and why you’re working on it, you’re going to continuously bump up against challenges in working with other teams and getting access to the resources you want.” - Andrew Capland, Head of Growth at Postscript
What are the main areas of collaboration?
Website - balancing the dual objectives of educating users vs. getting them to try the product as quickly as possible
Pricing & packaging - most SaaS companies don’t have dedicated pricing resources until they approach $50M ARR
Customer research - everyone will be doing customer research and you need to share the insights across teams
Product adoption initiatives - especially new products
Product-based events - for example, email campaigns based on product activity or routing Product Qualified Leads (PQLs) to Customer Success & Sales
New programs - for example making new free tools for acquisition requires help from the core Product team
“Monetization is critical and should be a team effort. You can choose one team to drive the initial effort, but all aspects of the GTM function should be key stakeholders and highly involved.” - Kevan Lee, Head of Marketing at Polly
When I speak with folks at even the best PLG businesses, org structure is the subject of constant discussion, debate, and iteration. There isn’t a right answer that will work for every company, let alone every stage of growth at a company.
I’d love to hear directly from you. Please add a comment or join the conversation on LinkedIn.
I’m putting aside Sales and Customer Success for now. Both play a critical role in scaling revenue at a PLG business; however, these functions usually come later after a PLG business has built a healthy self-service strategy
ARR will likely get sub-divided into self-service vs. sales-assisted as Sales and Customer Success become more important functions
For more insights on the role of Product, I highly recommend “Product Work Beyond Product-Market Fit” by the experts at Reforge
Thanks Kyle. What about forecasting and market sizing? I.e it’s one thing to build something of value (as product), it’s different to predict how many people actually buy it... is this a team sport as well?