Touchpoints 13.12.2022

What Is A PLG CRM And Why Do You Need One?

A PLG CRM is essential for scoring and converting free users. Find out what you need to manage the new kind of customer relationship.

PLG CRM cover image made of colorful circles

Customer relationship management. What a thing. We’ve relied on our respective customer data platform for decades now.

It’s the engine of a sales cycle, the almanac of sales engagement history, and the Situation Room for customer-facing teams.

CRMs are a staple for any sales company. Your sales team faithfully logs into that all-powerful master of prospect and customer data daily, tracking every essential customer interaction.

Or do they?

If you’re part of a product-led motion, this supposed single source of truth for the sales process is incomplete.

Traditional CRMs don’t pay attention to a vital product-led growth (PLG) component: product usage data.

Most platforms successfully provide customer activity related to traditional inbound sales and marketing needs but fail to deliver the insights product-led companies need.

Standard PLG procedures like free trial signups and onboarding fall through the cracks, and your customer success struggles to find opportunities in the user journey.

The selling process has developed beyond the traditional CRM’s capacity and structure, which is why we SaaS folks developed the PLG CRM.

What is a PLG CRM, and why can’t I just use Salesforce?

Traditional CRMs help track old-school sales cycles that progress from prospect to lead to sales calls and closed deals. Before PLG, the customer journey would end there with a generic MSA signing.

But what about all the juicy product data you collect leading up to and following the close?

Where are you recording all those upsell opportunities?

PLG CRMs fill the void in your customer journey. It’s a platform that’s zoomed out of the sales journey and into product one.

The gaps in your Salesforce

Sure, the Salesforce lead scoring model is superb in recording and tracking opportunities, reviewing your sales engagement, and managing your existing customers.

But what about the potential customer? PLG shows love to trial users, combing through user behavior signals as a driver of customer acquisition.

Sales teams now focus on identifying the signals of a potential conversion. Keeping a close eye on a user’s product experience allows a sales rep to prioritize hot leads.

Traditional CRMs like Salesforce don’t answer questions like:

  • Which product features are our users getting the most value from?
  • How can we use customer feedback and experience to boost product improvement?
  • How can we better convert non-paying users?
  • Which segments of users are the most valuable?
  • Which users have reached upsell-friendly product milestones?

You don’t get the product insights needed to land new customers with an old-school CRM.

You should be focused on the customer journey through their engagement with your product, rather than the number of sales calls.

Regarding sales calls, PLG heavyweights like Zoom and Slack hoard multiple self-service sign-ups without them.

The conversation between rep and customer only begins when you capture major adoption.

When did PLG CRMs begin gaining traction?

Around mid-2021, emerging industry icons began discussing the perfect opportunity to disrupt Salesforce’s roughly 20-year reign.

Ironically, Salesforce moving work off-premise and into the cloud created the ideal environment for would-be challengers.

The shift to cloud data warehouses has enabled independence and empowerment for businesses that can now store and manage their data directly.

This transformation supercharges SaaS companies and their customers alike, allowing them to develop and onboard products faster.

PLG was a natural development for the SaaS industry

Previously, data was spread throughout organizations across internal databases and SaaS application’s backend systems. Now customer information, billing histories, product analytics data, conversational relationship data, etc. can be moved to a central data store and acted upon. Data warehouses enable new applications to be built.

Astasia Myers, Founding Enterprise Partner at Quiet Capital

As most CRMs don’t capture product data, and the buying journey has advanced beyond traditional sales-led capabilities, PLG companies needed a new base of operations.

The kind they could easily make themselves to suit their needs thanks to modern cloud technology.

Why do I need a PLG CRM?

The product-led growth CRM is a non-negotiable asset for a PLG tech stack. Let’s find out why.

plg crm checklist
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Unified customer and user data

The first and perhaps most important element of a PLG CRM is cracking down on your siloed customer data.

Product data is the backbone of a product-led growth motion, and product analytics tools serve various functions, like:

  • Allowing your marketing team to create an effective and direct inbound strategy.
  • Filling in the blanks in sales conversations for relevant outreach.
  • Tailoring your product for active users according to their jobs-to-be-done.

Let’s expand on that last point.

According to McKinsey, 75% of users are repelled by software companies that don’t tailor to their needs.

Of course, we don’t have the time or patience to make each user experience unique.

This is why Breyta uses a single customer viewpoint. With so many interactions flowing in, our unified customer profile syncs your teams’ insights and efforts.

Breyta product integrations page

Everyone’s on the same page, collaborating on happier customer experiences.

High-touch selling means increased customer satisfaction, lower churn, better retention, and easier upsell opportunities.

You’ll know who your champions are and which users are the ideal candidates for a land and expand strategy.

Streamlining your data lets you to tailor your selling efforts.

Prioritize the right accounts

You might have read various blog posts promoting PLG as a profitable business model.

But what is it that makes this fresh sales motion so lucrative?

It’s several things, which we’ll explore in a bit. However, the binding thread is a focus on the customer journey.

The customer journey is studded with opportunity gems and focused user data lets you mine them.

However, doing so is far more challenging (without the right support) for PLG companies. The sales-led customer journey might be more limiting than the product-led one, but it’s a comparatively easier ride.

Let’s quickly illustrate and compare the sales-led pipeline to the product-led one.

Traditionally, your sales reps feed the pipeline a manageable number of leads and steadily usher them along toward conversions. Your team sizes adequately match your acquisition rate, and your CRM handles most of the scoring heavy lifting.

Conversely, PLG pushes the average CRM to breaking point. When you get it right, PLG opens the floodgates to thousands of signups in a short time, and neither your sales reps nor their CRM can be expected to handle them all.

The sizeable PLG pipeline then begs the question, how do I manage multiple leads with a small sales team?

You need to focus on accounts that have displayed:

  1. The correct firmographics, according to your ideal customer profile (ICP).
  2. The right level of intent.

Breyta handles both of these crucial aspects of a potential customer with a single source of truth:

  • Our Customer Fit score shows you how aligned an account is with your ICP.
  • Our User Engagement score reveals how committed to an account is to your product.

Breyta features with customer fit scores

Know your “aha” moments

Activation is the difference between a free user and a loyal customer. It’s the delivery of your promised value to a user.

With free users, you can expect 40% to 60% won’t become product-qualified leads (PQLs).

I thought this PLG thing was supposed to make everything easier!

It does if you work activation into your product design or selling tactics.

Let’s take a quick look at the average activation rate in the SaaS world:

  • Multi-user tools like Slack and Mailchimp = a 20% activation rate
  • Single-user tools like Dropbox = a 40% activation rate
  • Browser extensions like Grammarly = a 50% activation rate

Knowing where you fit into this range takes a bit of product-led self-reflection. Look at the very nature of your product and ask questions, like:

  • What is the feature usage threshold users need to reach before converting?
  • Which types of positive responses usually result in conversion?
  • How many users in an account need to use your product before converting?

Unified team support throughout the customer journey

Once you’ve established your product's activation benchmarks, you can get the whole team behind the customer journey.

Breyta turns your sales and CS teams into CIA agents when following their latest persons of interest.

Breyta User Engagement scores showing potential churn

Remember to look beyond upsell opportunities.

As you can see in the image above showing our real-time customer health score, the demo User Engagement levels are dropping dangerously low.

Tracking your users’ engagement from the moment they’re added enables you to stay on top of churn signals before they become red flags.

What if I’m not ready to switch?

Despite the vital place of PLG CRMs, we appreciate that replacing Salesforce or HubSpot’s lead scoring limitations is a bit of an operation.

It’s often a case of can’t rather than won’t, especially in the following situations.

When sales-led gets product-led envy

If you’re a sales-led company suddenly investing in a PLG motion, you’ll probably headline this development with a free tool.

Setting up a PLG team seems straightforward until you’re struggling to fit their fancy tools into your current stack. You can’t ditch your CRM, but rather find ways to augment it.

Sales remain your primary growth engine, and you can’t replace it without acquiring a whole new model.

You’re only half-committed to the PLG cause

We’re always excited when companies try new things out, and PLG is something you can test without infuriating your CFO.

Your company can simulate a PLG approach with minimum overheads and low commitment. However, you won’t be ditching your CRM for a new model without solid evidence.

Even if you’re sold, convincing the rest of your teams to take the leap can take time. Still, you’ll need two fields to score your sales and product-qualified leads.

Your solution?

You guessed it: integrating Breyta with HubSpot or Salesforce.

We’ll seamlessly build customer signal lists within either CRM, meaning you can work on the PLG side of your sales efforts in one place.

We can happily offload your free trial or freemium users if that's the case. Let Breyta handle your free user-related housekeeping, so your CRM doesn’t get cluttered.

Integrating Breyta with HubSpot or Salesforce allows you to add product data to existing points.

Enriching your accounts this way gives you insights into customer behavior.

Is a new user in a big account about to hit an upsell threshold? Get CS ready with the ideal upgrade.

Conversely, if a customer’s usage has dropped worryingly low, you’ll be able to support them the way they need to stop them from churning.

This workaround works well, and if you find usage data far more valuable than the classic sales-led metrics, you might be ready to take things to the next level.

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