Product Led Growth Research
Data & Insights Derived From The Practices Of 40 SaaS Organizations
Self Serve Activation
Pre-intro: This section is going to analyze what product-led activation is and how its practices are defined when organizations adopt and deliver a Product-Led GTM approach.
Crowned as the onboarding queen, activation is the set of practices leading to first impressions. Being the lifeblood of new business, on Human Assisted onboarding activation is subject to the Sales organization activities.
Prospects taste a solution’s magic via a series of demos, likely to be followed by a POC (Proof of concept) or “controlled” trial. The involvement of human element guarantees that buyers are fully aware of a product’s capabilities. At the same time, on Self Serve onboarding, the product is accountable for sealing the deal.
In reality, regardless of the execution, activation is the acquisition grasp derived from the product itself.
Being a considerably faster process, the “ideal” activation formula delivers value to trialists, who ideally return to the product and eventually create a habit out of it.
In an effort to increase conversion rates, internal teams strive to shorten trial periods and create a sense of urgency. Speed to implement always needs to come first. In reality, this may not always be the case as products’ complexity, radically affects the learning curve period.
A multifunctional solution like Hubspot, the Inbound marketing leader, cannot fully onboard its freemium users in two weeks time. As intimidating factor the learning curve period can be, users familiarize with the product by following their own pace.
On the other hand, Leadfeeder and Yesware, two overly simpler solutions, successfully shortened the trial period from 30 down to 14 days and increased conversion rates by 18% and 5% respectively.
In addition, it is essential the use case, role, and proficiency level to be defined early on. The internal teams acknowledge that and invest in behavioral aspects when delivering the onboarding strategy. The JTBD framework, with 50% preference from survey participants, helps distinguish the use case a prospect falls under.
Data-driven contextual guidance can now embrace this framework’s results by defining proficiency early on and deliver initial value per user role.
Product-led activation on Self Serve means fast and accurate results, and this is viable when onboarding is laser-focused on the value each user has to derive.
Outreach optimization is the number one priority for every organization as the Sales’ organization involvement leads to tremendous CAC (Customer Acquisition Cost) increase. While this association may resonate for companies serving Mid Market and Enterprise, Sales’ involvement on Self Serve onboarding (40%)* suggests otherwise. The customer experience gap, caused by lack of personalization and involvement of customer-facing teams, is a hassle faced by every organization.
Qualitative data (50%) indicate that the Sales organization relies heavily on data enrichment services, data storage & lead scoring tools, identifying where an account is assigned along with its industry and size.
User Segmentation: The tactics
- Top Segmentation Tactics: Additional segmentation tactics are related with capitalization on CRM (80%), Email (82%) and Live Chat practices (55%) or the use of a Custom Scoring System (49%).
- Product Usage: Only 20% of organizations in favor of Human Assisted onboarding, segment users based on product usage.
- Custom Scoring Systems: Since PLQ Scoring evaluations are considered by 35% of the participants, we can conclude that some of the Custom Scoring Systems may evaluate usage as well.
User Segmentation: The toolset
- Top Segmentation Solutions: Top user segmentation solutions are CRM (80%) and Customer Engagement software (69%). Email Platforms and Marketing Automation software follow with 65% and 51% mean preference.
- Product Management Tools: The research proved that product management services are those least preferred.Product Guidance services are adopted by 26% and 21% on Human Assisted and Self Serve onboarding respectively. Product Experience Platforms are used by 20% on Human Assisted onboarding and 5% on Self Serve.
- Sales & Product Team Alignment: In order for Sales representatives to establish PQL segmentation patterns, it is critical to work in conjunction with the product team. This feedback loop will enable both teams to discover trends indicating why an account showing signs of serious usage becomes dormant or where additional assistance to users should be provided. Acknowledging the reason behind the various drop-offs gives a competitive advantage to Sales reps as they can proactively reach out to prospects with a solution at hand. In the long term, exploitation of historical data will indicate specific trends based on product behavioral insights.
- Segmentation Tactics: The majority of segmentation tactics offer high-level data for prospects’ nature and behavior notions but don’t provide feedback as to where the customer journey’s delights or bottlenecks stand. To balance its involvement in the customer journey, the Sales organization should set standards following PQLs behavior. Capitalization on product data enables adoption of in-app segmentation criteria, and acknowledgment of the route users follow. Usage segmentation draws better results in regards to which features yield more revenue.
- Custom Scoring Techniques: Increased preference for Custom Scoring techniques (50%) show reliance on engineering resources to extract the necessary data. This realization is reimbursed by the user segmentation services participants employ. The exploitation of engineering resources is a secure way to derive necessary product data but not scalable long term. Organizations have tradeoffs as to where engineering resources should be allocated and the continuous product releases lean the scale many times towards product development. Timely access and reliance on product analytics should accompany ongoing releases, to help internal teams effectively map users’
Product Led Activation Use Case: Gainsight PX
Gainsight PX, a leading product experience solution, segment users’ behavior, and usage both during the first-time activation and on new feature release.
On first time activation, milestones track if PQLs complete setup by using key features during trial. When prospects use features more than the freemium version allows them to, internal teams measure conversion rates and revenue generated from the trial source.
On new product release, success is measured in terms of adoption. The product team releases targeted in-app guides to users based on historical product usage. The Query Builder feature, for example, is presented to users who have shown interest in other analytics areas the past 30 days. If the released feature is a paid only module, the revenue is measured by attaching a rate on it.
Activation Key Performance Indicators
- Top KPIs: Sign Ups (Marketing metric) has 66% and 94% preference on Human Assisted and Self Serve, respectively.
- Free Trials: Free Trials prevail among both strategies with 66% preference on Human Assisted and 84% on Self Serve.
- Activation: Activation serves as onboarding KPI both for Human Assisted (42%) and Self Serve (61%).
- Team Activation: Team Activation ranks higher on Human Assisted onboarding (25%), while on Self Serve is limited to 10%. These stats complement those showing a tendency to onboard both teams and sole users*. Only 11% and 33%, of Self Serve and Human Assisted adopters respectively, focus on Team Onboarding (Breadth of use).
- Depth of Use: Feature adoption (Depth of Use) and User Engagement is considered an activation criterion by 13% of Human Assisted adopters.
- Sign Up Ratio: Sign up ratio is a critical measurement, but when standing alone acts as a trailing indicator, emphasizing on acquisition and not activation. Sing up ratio should be considered in conjunction with feature adoption and user engagement to estimate if those users qualify as PQLs.
- Free Trials Ratio: Increased preference on Free Trials Ratio (66%), when targeting high trajectory customers, shows an inclination to abandon traditional sales practices.
- Team Activation: Paramount to retention, Team Activation (Breadth of usage) should become the North Star Metric for every activation strategy.
Product Led Activation: Breadth of Use
To justify the importance of Breadth of use (Team activation) monitoring in the early stages of the customer journey, a joint analysis of its importance and of POE’s execution during the activation stage will follow:
High Trajectory Customers
For Mid Market and Enterprise customer segments, internal buy-in from end users is discouraging onboarding deployment. Heterogeneity on proficiency levels and complicated workflows decrease end users’ willingness to adopt a new solution. Focusing on Team Onboarding (Breadth of Use), historical usage and use case particularities, is an optimal way forward, internal teams can take to overcome this barrier.
Self Serve Customers
Having Self Serve customers inviting team members during trial embrace activation rates. In the absence of Sales and Customer Success guidance, in-app flows can double down on inviting team members and emphasize on how their involvement increases perceived value. Product teams should define which roles may cause various drop-offs on their first-week activation cohorts and iterate flows accordingly. Last, training procedures need an equally concerted focus on the training of each user separately and team training.
Product-Led Activation Stage (When delivering the POE framework)
The product team should be highly involved in the activation process, no matter the onboarding strategy at hand.
The sooner Sales’ decode the messages withheld into product data the better the conclusions drawn, in regards to the harmonization of human-product acquisition activations.
Depth of Use Considerations:
- Whether or not during activation period users can realize initial and true value. This is most likely to occur on high-velocity customers where onboarding in many departments takes place post-purchase.
- Users’ proficiency levels need to be defined early on. An advanced user may explore more key features during trial, but this is also subject to a product’s complexity.
- On Self Serve onboarding, Retention initiation point varies. Thus Depth of Use may not be measured on Activation (during trial) but only post-purchase.
- Reactivation: Email activations classify as top reactivation tactic with 100% and 87% preference on Self Serve and Human Assisted respectively.
- User Segmentation: Organizations segment prospects based on characteristics following their email campaigns. This reflects on both strategies with 90% preference on Self Serve and 73% on Human Assisted.
- Scalability: Email activations rank as top automation tactic with 84% on Self Serve and 73% on Human Assisted onboarding.
- Personalization Tactic: The multivariate email campaigns introduce features gradually, connect prospects with Support, Sales or Customer Success and are considered a personalization tactic both for Self Serve (84%) and Human Assisted (60%) onboarding.
- A/B Consituent: Email practices are under the microscope, in an effort to make prospects activate efficiently. This is mostly true on Self Serve (47%) and not Human Assisted (25%) onboarding.
Email Onboarding Flows: Qualitative Data Analysis
- Eliminate Barriers to Entry: To optimize email activations, SaaS organizations can eliminate barriers to entry, by having sign ups follow rather than lead the activation process.
- Use Case: Typeform: On a recent experiment Typeform, the leading research software, opened its platform and prospects could build a form without signing up. Despite a 20% drop in registered accounts, users that eventually registered activated much better.
- Reactivate Users In-App: Customer facing teams can prevent users from slipping away. Ideally, they should first monitor users based on their role, profession, or any other vital to adoption criterion. Then in conjunction with historic usage analysis, they can indicate when users may lose interest and why.In case users start showing lower usage and before long term churn prevails, in-app guides can prompt users to further capitalize on key features. Pendo, Gainsight PX, and Userlane perform such practices with tremendous success.