How to Layer PLG Onto Direct Sales, and Vice Versa

Product Led Growth ( PLG) emerged as a winner during the pandemic, and is primed to keep its title as the global economy weathers uncertain economic times. Navigating company shutdowns, layoffs, and general economic uncertainty means pivoting towards a cost-effective, user-focused strategy to thrive.

Scrambling to Win With PLG

Allowing customers to sign-up with no long-term commitments has become a safe and popular selling motion. Similar strategies include companies offering free trials for the first month, or unlimited free access as long as usage remains under a certain threshold (see Zoom’s free basic offering for meetings up to 40 minutes in length)—also known as the freemium model. Another is allowing customers to self-service upgrades or add seats for an automated expansion motion.

Effective PLG and similar strategies can lead to a massive increase in customers, large number of free trials, and majority of the customer base on month-to-month subscriptions. Users often see immediate product value and ROI.

The scramble to convert high-usage and deep customer adoption into enterprise-paying customers is real. On the other hand, adding a PLG motion to an existing direct sales motion is a boon for acquiring or expanding customers for less.

Going PLG as a Direct Sales Company and Vice Versa: the Challenge is Real

Introducing Direct Sales in a PLG organization can be a delicate transition. Direct Sales focused companies traditionally have a vastly different selling process: longer sales cycles involving negotiation and detailed demos, complex cross-team approvals, and a legal review of order forms, to name a few steps of the process.

The reverse can be just as challenging. A functional Direct Sales team’s processes can be thrown for a loop by the addition of a PLG motion. If your tech stack can’t synthesize this new PLG motion into your existing business structure, you risk a back office nightmare—as well as lack of visibility into entire customer journeys as they transact and potentially level up into a managed relationship.

When companies can’t connect self-serve PLG customers with their Direct Sales channel, questions and blindspots quickly emerge: What did the customer buy? When did they buy it? What is their volume? What can I sell them?

Sales and RevOps teams are often asked by Product to run SQL statements, or else learn how to use a BI tool to “get the data out.”

The Four Key Ingredients to PLG Success

To operationalize a PLG and Direct Sales motions together, you’ll need to keep in mind four key components:

Clear and Complete Customer Visibility
Flexible Pricing and Packaging
Trigger Notifications for Sales Intervention
Sales Compensation that Focuses on Expansion

Let’s dig into what each might mean for your business strategy:

Clear and complete customer visibility

What happens on the website, stays on the website. Well, at least most of the time.
Analytics on who the customer is, what they bought, when they bought it, as well as their adoption and usage pattern is often stored on the website (or a data warehouse that pipes the data from the website).

PLG companies with a dedicated analytics team may have these reports figured out. But, it’s not often that a product-focused company invests precious engineering resources to build a tool to capture subscriptions, changes, add-ons, usage, upsells. And what about MRR, ARR, retention, and churn metrics?

For companies with both a PLG and a Direct Sales channel, having a single, complete view of the entire customer base isn’t just helpful—it’s necessary. This transparency is critical for both executive reporting as well as having a clear understanding of the entirety of your customer base, and helping to discern when it’s most effective to transition a client to a Direct Sales led motion.

Flexible product and pricing

When we consider layering Direct and self-service sales motions, we need to evolve the pricing and packaging process to remove any long, complex, cross-department approvals. Remember, PLG customers have bought, implemented and used your product without any sales, services or support team help.

Direct sales processes have long been bogged down with various approvals, legal wrangling, and order forms for the customer to sign. It’s important to remove these long, complex processes when working with a PLG customer for upgrades, cross-sells or upsells. Automating the approvals, order forms, legal and finance reviews is essential in making everything work efficiently and avoid your customers becoming frustrated.

Sales Reps also need an easy and efficient way to provide creative discounting to finalize an order. Remember, a customer on a contract is far more predictable than a customer on a month-to-month subscription.

Clear trigger notifications for sales intervention

Knowing when to work an Direct Sales motion onto a PLG motion is tricky—no matter which comes first. Companies tend to experiment when a customer is ready for an upgrade—first attempting once they reach the $1000/month spending threshold, then playing with $1500/month as their sweet spot, for example.

As I mentioned, most companies that are attempting to go hybrid between Direct Sales and PLG are basically using guesswork and trial and error to figure out when a customer might make transition into an enterprise offering and a sales-managed relationship.

Sales compensation that focuses on expansion

Another aspect of layering Direct Sales and PLG motions is a compensation model for your Sales team that focuses on expansion, without fearing a complex process changeover.

Sales reps in a PLG company have a different challenge than a traditional direct sales approach: there are a ton of low value leads that need to be filtered out. Accurately identifying the trigger points for high value customers usually means experimenting with different outbound strategies, creating price and discounting incentives, and being comfortable in a ‘developer first’ go-to-market philosophy.

How to Make it Happen

So, we’ve bitten off a lot of food for thought here. But essentially, it comes down to this: enterprise businesses know that PLG is a winner, but the struggle to add it into an existing Direct Sales motion creates a big problem. Namely, the creation of an entirely new system to exist alongside the current one—a system that creates customer journey invisibility, negates your ability to work with flexible pricing, and penalizes your sales reps for identifying upsells from PLG to direct. So, what’s the solution?

There are a lot of ways to rig a tech stack to make a solution work. But the best way to get up and running with PLG quickly and without a ton of headaches is to streamline as much as possible. The best PLG motion is one that can be added in without additional, piece-meal products. So, invest in an optimized, end-to-end tech stack. Then go forth and conquer Direct Sales and PLG.