#ProductCon LDN ’23: A Realistic Look at PLG by Amplitude Head of Growth MKT, Franciska Dethlefsen

Franciska is currently leading as Head of Growth Marketing at Amplitude, a leading digital analytics platform that helps companies build better products. She has been with the company since 2021 when she started as a Senior Product Manager working on the developer experience.

What is PLG and PLG strategy?

PLG definition

  • PLG stands for product-led growth, which is a strategy that leverages the product itself to drive customer acquisition and retention.
  • There are different versions of PLG, including:
    • PLG as a set of skills and tools, such as experimentation, pricing psychology, and SEO.
    • PLG as a growth motion or motions, which involves an actual go-to-market strategy.
    • PLG as a mindset, which is about believing in the power of good products.
  • It’s important to make sure that everyone in the company is on the same page about what PLG means and which version of PLG the company is focusing on.

PLG as a strategy

  • As product people, it’s important to take accountability for key metrics like revenue and new signups.
  • PLG as a strategy involves driving growth across acquisition, retention, and monetization.
  • Acquisition refers to the ability of the product to drive new users to sign up.
  • Retention refers to the ability of users to activate and engage with the product without any help or intervention.
  • Monetization refers to the ability of users to self-serve checkout without any help from sales.
  • Most successful companies have two or three motions running simultaneously to drive growth.

Amplitude’s PLG strategy

  • Amplitude relies on multiple motions to drive growth, including:
    • Marketing-led acquisition through the growth marketing team.
    • Professional Services and customer success teams for adoption and engagement.
    • A sales team for monetization.
  • Amplitude also uses product-led motions to drive growth, such as:
    • A free trial that allows users to experience the product before signing up.
    • A self-service upgrade path for monetization.
  • Amplitude blends product-led motions with its existing sales and marketing motions to create a holistic growth strategy.

Metrics Matter in PLG 

  • In the old business model, all the key business metrics were sales and marketing KPIs.
  • In a product-led growth world, all the metrics will change to product metrics.
  • Product people need to understand what an activated user, activated account, retained user, retained account, and driving monetization looks like.
  • It takes deep analysis and works to figure out these metrics.
  • Once you find them, you need to share them with the rest of the company.
  • At Amplitude, they are warming up the business to these new product KPIs.

The Importance of Activation

  • Retention is huge for Amplitude this year.
  • Retention is split into two parts, activation, and engagement.
  • Activation is the big focus for Amplitude this year.
  • They define activation in two parts – set up and aha.
  • Set up is when a user connects the data source and creates the first chart.
  • Aha is when a user either saves the chart or shares both indications of value received from Amplitude.

Improving Activation at Amplitude

  • At Amplitude, they are tackling activation this year.
  • They have quite the drop-off from a user creating an account to them actually connecting a data source.
  • They know it’s complicated and technical to set up Amplitude.

Growth is a Team Sport

  • Unless your product is as intuitive and simple to use as Calendly, you need support.
  • At Amplitude, while product and engineering are the ones driving the end-product activation roadmap, they have many other teams who are gold on activation metrics as well.
  • The growth marketing team works on one-to-many onboarding programs, builds trigger emails to force or create a habit, and works with education teams on building education materials and making it easy to get started with Amplitude.
  • They continuously improve their documentation and support forums so that when a user has a question during setup, there is an answer right there for them.
  • They even have sales involved in activation because it shows how important activation is for Amplitude.
  • While making investments in the product side of the house and activation this year, they are also going to make investments in the product.

Amplitude’s 60-90 day implementation program

  • Amplitude offers a 60 to 90-day implementation program to its customers.
  • It helps them with questions regarding events, tracking properties, using the product, capturing insights, and getting value from it.
  • This program is not available to every customer, especially not those who haven’t paid yet.

Product-led sales and monetization

  • For Amplitude, it’s not just about product growth, it’s also about product-led sales.
  • Product-led sales mean parallel sales, which is a mixture of sales-led growth and product-led growth.
  • The key ingredient in product-led sales is product usage data.
  • Activated and engaged accounts drive monetization, which is a good investment.

Pilot sales and product-led growth

  • Pilot sales is a scientific definition of product-led sales.
  • The rise of free and freemium has popularized pilot sales.
  • Product-led growth is not new, but it is now more popular.
  • At Amplitude, 50% of new paying customers every year come from the free plan.
  • They need to know what their customers are doing in the free plan.
  • Proactively identifying accounts in the free plan and surfacing them to sales has performed much better than optimizing in the product for hand-raisers.
  • Building a simple model to score accounts and giving the highest score accounts to the sales team has resulted in a 3X increase in conversion from lead to the sales pipeline.
  • Amplitude has surfaced a lot more relevant data from the product to its sales team.
  • They embed key account metrics directly in Salesforce for them and build an amplitude dashboard where they can go in and look at their accounts’ usage.
  • Arming sales with the right data to have the right conversations is essential for product-led sales.

Joint accountability and pipeline target

  • Sharing an actual pipeline target with sales is essential for parallel sales to work.
  • There’s joint accountability across the journey.
  • They optimize for quality, not quantity.
  • They make sure that sales have the right enablement and product usage data to have the relevant conversations they need to close these accounts.
  • Becoming extremely close with sales is necessary for parallel sales to work.
  • They share a sales target with sales, and they optimize for quality, not quantity.

Evolution is key

  • Franciska emphasizes that evolution is key in product-led growth (PLG) strategies.
  • She suggests that if a company doesn’t evolve, its competitors will.