Gainsight PX founder Mickey Alon on using your product as a vehicle for growth
As soon as a customer buys your solution, the bulk of the customer journey will be inside the product. Are you taking full advantage of it?
Product-led growth (PLG) has been embraced by SaaS companies of all sizes as a scalable approach to growing a business, but it is especially appealing in times of economic uncertainty and soaring acquisition costs like we’re experiencing today. After all, if you can leverage your product to drive your organization’s growth, there’s no need to rely on an army of marketing and salespeople. When done well, it allows you to do more with less.
Although PLG is usually associated with free trials or freemium models, it’s a holistic strategy that goes beyond acquisition and can impact the entire customer lifecycle by digging into deeper parts of the funnel, tackling retention, expansion, and preventing the dreaded leaky bucket. And for today’s guest, Mickey Alon, that’s the best way to run a sustainable SaaS business.
With a background in computer science and a knack for building products, Mickey co-founded Insightera in 2014, a real-time targeting and personalization platform that was later acquired by Marketo, where he led the global engineering team as a GVP for almost three years. In 2018, he started building what would become Gainsight PX, a product experience management software to help companies better understand usage data so they can message their users at the right place and at the right time. Recently, he co-wrote the e-book Mastering Product-Led Growth, where he wrote about tactics for delivering personalized product experiences.
In today’s episode, we’re catching up with Mickey to talk about how companies can put products at the forefront of their growth strategy.
If you’re short on time, here are a few quick takeaways:
- There’s a big discoverability gap in SaaS B2B. Make sure your customers are aware of the full suite of features your solution offers and know how to take the most value out of them.
- Most touchpoints of the customer journey will be inside the product. Leverage usage data to create better experiences and drive growth.
- Customers prefer to pay for what they use – modular experiences with entry-level packages make it easier to adopt your solution and build upon it as they grow.
- Customers want to be self-sufficient. Improve the product experience by giving them the proper tools to get the job done.
- For PLG to work, you need buy-in from the executives, cross-functional alignment, and an owner responsible for driving that motion.
Make sure you don’t miss any highlights by following Inside Intercom on Apple Podcasts, Spotify, YouTube, or grabbing the RSS feed in your player of choice. What follows is a lightly edited transcript of the episode.
Creating a growth machine
Liam Geraghty: Mickey, welcome to the show. We’re delighted to have you.
Mickey Alon: Thank you for having me.
Liam: First off, could you give me a sense of your career journey so far? Where did it all start for you?
Mickey: Well, it started when I was 12 or 13 and started coding. I fell in love with what the computer can do. When I did Computer Science and my MBA, I realized I actually wanted to build software solutions. I started my own company back in 2012. The first solution I built was a bootstrap company with my best friend from high school, and what we built back then was brand experience. It was an amazing journey to build a marketing automation-type solution and a company.
“We saw that it was much cheaper and more efficient to sell to our existing customers versus acquiring new customers”
I was born in Tel Aviv, Israel, and moved to the Bay 10 years ago. My first company was acquired by Marketo, and I joined Marketo for three years, leading their global product development team, and it was an amazing experience to see how a public company was becoming the leader in market automation customer experience. Then, I realized we took product decisions without a lot of data, and we saw that it was much cheaper and more efficient to sell to our existing customers versus acquiring new customers. We tried to do it the way Marketo did it, which is mostly through email, but it was not very effective. Messaging your existing customers through email is going to be very problematic. And that led me to build a new solution, Gainsight PX, a product experience management software that helps you understand usage data with product analytics and allows you to message your user at the right time to drive adoption, trial conversion, or expansion.
Liam: That’s great. How are you finding the Bay Area at the minute?
Mickey: Pretty good. I’ve been here for 10 years already, but it’s amazing to see how much innovation is going on. Great weather as well.
Liam: I’d love to talk about how to create a growth engine and how customer success marketing and product teams can partner to make that a success. First of all, and I always like to ask this, how do you define product-led growth?
“There’s a big discoverability gap in SaaS B2B. Most of your customers might not know the full extent of your product”
Mickey: That’s a great question. I wrote a book about that and it’s available for free at Gainsight.com. It’s called Mastering Product-Led Growth. I co-authored that book almost five years ago but it’s still very relevant. Product-led growth is a capital-efficient way to deliver a better experience through your product and also drive customer acquisition, onboarding, adoption, and expansion. It’s a full customer lifecycle strategy – it’s not just customer acquisition or freemium, for example. In SaaS solutions, you need to retain your customer in order to thrive, and some SaaS solutions also have a component of usage as part of their pricing model. When you’re driving adoption, you make your customers stick, but you’re actually increasing revenue organically because they’re going to use your solution more. It’s a holistic strategy that basically combines go-to-market with product strategy.
Liam: Where does the B2B customer journey come into this?
Mickey: We’re seeing the consumerization of SaaS, meaning that more and more B2B SaaS businesses are realizing they need to deliver a customer experience at the B2C level. Usability and time to value are becoming critical to chief product officers because guess what? If you have a complex product, customers might not even evaluate your solution. So, B2B is way more aware of how to deliver better experiences, and time to value is tied to that. Usability is tied to that. It becomes a north star for these types of companies. PLG, for them, is making sure they look at deeper parts of the funnel. Maybe not doing a freemium or free trial, but definitely focusing on, “how do I drive stickiness? How do I drive feature awareness?”
“You have to do more with less. And one of the ways to do it is to leverage your product as a vehicle to drive that motion”
There’s a big discoverability gap in SaaS B2B. Most of your customers might not know the full extent of your product. In fact, we know that most of your users might not know around 20 or 30% of your feature set. They might know 60%, but they might not know about or not use the rest. So, in SaaS B2B, the goal is to make sure that you are able to deliver that solution and that your customers are aware and are using your solution because that will drive retention and outcomes for your customer. SaaS B2B is definitely looking for ways to do that at scale. But how do you do it at scale without hiring an army of customer success?
Especially now, with the market’s condition, you can’t hire as much as you’d like. There’s a hiring freeze, but you still need to cater to a growing number of customers or an existing number of customers. You have to do more with less. And one of the ways to do it is to leverage your product as a vehicle to drive that motion. You can use it as a channel to message your users. You can use the usage data to understand what they struggle with. In B2B, the journey is long, and you tend to have different personas. It’s not just one simple app – it’s actually a journey that tends to start simple but ends up being complex. You need to have more and more data-driven approaches to make the right decisions.
Meeting customers where they are
Liam: A lot of the customer experience happens within a product. Is that something that businesses should be paying more attention to than perhaps they are?
Mickey: Absolutely. If you look at what happened historically… Coming from Marketo, the customer experience was all about top-of-funnel. It comes from the perpetual license model. You learn about a solution online, make a decision and then download the solution. It’s kind of a perpetual license model. We don’t need to worry about adopting it or renewing it.
“As soon as they buy your SaaS solution, the majority of the customer journey is in your solution. Most of the touch points are in the product”
But SaaS came, and it created different dynamics. You basically don’t just want to learn, you actually want to try the solution and we need to make sure we retain you. So, customer experience, overall, is becoming critical. You want to meet customers where they are, and we still see companies using extensive email messaging and not paying attention to product usage data or what outcomes customers are driving with the solution. And that is really critical when you think about that. If they don’t use your solution, you have a leaky bucket, and you’re going to discover that you’re spending a lot of effort acquiring new customers but not retaining them. So marketing, for example, needs to get visibility into that customer journey.
If you think about it, as soon as they buy your SaaS solution, the majority of the customer journey is in your solution. Most of the touch points are in the product. So, how do you leverage that data to create that experience for them? And then, how do you look at expansion and upselling through different lenses? Most companies measure the pipeline – MQL and SQL – on the customer acquisition side. Very few are also measuring the pipeline on cross-sells and upsells. Many solutions in B2B did not look at their pricing strategy and say, “Hey, do we have a path for an easier land?” And then expand, which fits better into the customers’ needs. They still sell the house and everything you need for the next five years, but that creates a lot of friction. If you can say, “Hey, I can actually sell you a smaller version of that,” you’re moving the funnel into the second phase. And marketing and customer success are a big part of that second phase because they own that expansion pipeline to make sure you’re actually experiencing the outcome of the product.
Liam: Off the back of that, what advice would you give on aligning the business model with customer expectations?
Mickey: The customer expectation is that, obviously, they want to pay for what they use. They don’t necessarily want to pay upfront for things that they won’t be able to use so quickly, right? It’s going to take time to adopt your solution. So, one of the elements is that the pricing model should be easier to consume and start simple.
“Today, people are actually buying Teslas through the app. And guess what? It’s much cheaper for Tesla than to have an army of salespeople”
Another customer expectation is to be more self-sufficient. They don’t want to reach out to support and customer success every time they need to learn something and do something. They want the power to get the job done. It’s not just about being simple because very quickly, they’ll have expectations for more powerful features, especially in B2B because they have more complex goals. So, from the expectation perspective, things should be simple in your UI, but you also want to give them all the things they can learn and use by themselves to be self-sufficient before they reach out to you. They will want to reach out to you when it comes to expansion, complex use cases, or best practices.
The more you can do for self-service, the better the experience is. Today, people are actually buying Teslas through the app. And guess what? It’s much cheaper for Tesla than to have an army of salespeople. They’re not bounded by any salespeople. You can open the mobile app and buy it, and it’s actually a better experience. When you understand the pricing, you can customize that. You will still go to the dealership, but the first experience is great, and you actually end up buying. It’s a big decision, but you do that with a better experience because it’s a self-serve motion. And I think B2B needs to do the same. With basic stuff, I want to learn, I want to do it myself, I want to master that. And when I have questions, that’s when I value the human touch. But it’s not for basic elements – it’s more around future questions and best practices.
Breaking down silos
Liam: One thing we often hear on this podcast time and time again is the importance of cross-functional teams. Why do you think they’re so vital in this process?
Mickey: Companies are still working in silos… And I think SaaS and PLG cannot be successful if you’re not breaking these silos. Let’s say you’re trying to lead with your product and drive adoption or conversion and everything, but you have this sales process, marketing is only looking at MQLs and they’re not aware of the product usage. They cannot do effective customer marketing because they don’t know what’s going on with the product. They don’t know how many qualified trials there are, or how many people are ready for expansion… So, cross-functional alignment is really critical.
“I would start by looking at the data and deciding what to optimize”
The number one thing is to align around key KPIs and the customer journey and the value for the customer. One way to do it is to start with tiger teams which have representatives from each team – sales, marketing, product, and customer success. Then, you decide what the KPIs would be. For example, if you start with customer acquisition, marketing and sales need to know how many active trials you have and how they are trending. They need to know who they should speak with. You can apply a PQL (Product Qualified Lead) model. If it goes to retention and expansion, what are the key outcomes and feature usages that you want to define so it’s a goal for customer success and for marketing to message around? You can use the usage data to see if it’s working – you can see if adoption is getting up and drive that expansion because sales need to know if this customer is ready for a conversation because they’re healthy and they hit the threshold of usage. It requires cross-functional alignment. What is the customer journey? What are the KPIs in each stage that we are all aligned towards?
Liam: Where should people start if they’re thinking about this when planning the roadmap for growth? Are there any solid steps for creating a product-led strategy?
“A great way to start PLG in a more mature solution is by starting with retention, adoption, or expansion because you know what drives outcomes and what core functionalities you expect customers to use”
Mickey: Absolutely. I would start by looking at the data and deciding what to optimize. If you’re an early-stage company, it’s mostly around product-market fit, and you can start with a trial experience and try to figure out what keeps customers in the product and makes them come back.
If you’re a mature company, starting PLG might mean focusing on the later stages of the funnel because you might be doing okay or well in customer acquisition, and potentially, you don’t want to start changing everything. You cannot start changing pricing and the way sales behave and marketing behave. So, a great way to start PLG in a more mature solution is by starting with retention, adoption, or expansion because you know what drives outcomes and what core functionalities you expect customers to use. So, let’s start by measuring that and see who needs help from customer success and who is ready for a conversation.
You can start from the data; you can start from the area of the funnel where you’re going to get the bigger impact. When you think about the roadmap, if I start with retention, I know I’m preventing a leaky bucket. I can see which customers are using what, and which customers are actually reaching their desired outcome and which aren’t, and I can fix that area of the product or build functionality around that and prioritize that rather than just throwing in new features. Marketing will do better customer marketing if they have the right data in the deep side of the funnel, and sales are obviously always happy to understand how their customers are doing.
“You want to build a sustainable business and strategically, having an owner and getting the buy-in from the executives is really critical”
Liam: Before we wrap up, do you have any strategic advice for this area?
Mickey: Yeah, absolutely. When you start a PLG-first business, you want to put a specific owner. They tend to be from product leadership roles because they need to understand the product deeply, and they should potentially work with the founder or CEO. They should have a background in data analysis and be entitled to drive quicker decisions and run experiments, but they should also be ready to challenge any consensus and figure out what the optimal outcome would be. They should be very good communicators as well. They should lead that team, get cross-functional alignment in place and eventually drive that change toward building a more durable growth motion. Product-led growth is efficiency plus better experience, which to me, means durable.
You want to build a sustainable business and strategically, having an owner and getting the buy-in from the executives is really critical. Start where it really maximizes the outcome. Starting, for example, with adoption and retention – any point you improve in your growth revenue retention or net revenue retention is going to be worth a lot to the business. It’s very impactful. And it’s easier because you’re not changing the way cross-functional teams behave. This is the best way to start. And then, going back towards the trials, multi-products, pricing, packaging, and so forth.
Building modular experiences
Liam: Brilliant. What’s next for you? What’s next for Gainsight? Are there any big plans or projects coming up?
“Our goal is to create more native interoperability. Basically drinking our own champagne and making sure customers are able to start simple”
Mickey: Absolutely. I would say Gainsight has three platforms. We have the customer success platform, we have the product experience platform that is about the product itself, and now we have the community platform that allows you to engage. Our goal is to create more native interoperability. Basically drinking our own champagne and making sure customers are able to start simple. We have a simplified version of the customer success platform, for example – we call it essentials. PX will also have a simpler package to start with. But as you grow and build durable growth in your business, we want to be there to help you. And so, our goal is to make this interoperability very smooth and build that modular experience to support our customers. As you know, that requires a platform strategy, it requires customer success and sales to know all the solutions… It’s a lot to go through, but it’s our goal and we like hard challenges.
Liam: Yeah, that sounds great. Lastly, where can people go to keep up with you and your work online?
Mickey: The best way to connect with me is through LinkedIn. I tend to publish on Twitter and LinkedIn. And we do webinars at least twice a month around product-led growth, durable growth, or digital customer success. We have a lot of content on our website that you can check out, and it’s available on demand.
Liam: Brilliant. That’s great. I’ll make sure to link to all of them in the show notes and the free book, which is great as well. Mickey, thank you so much for talking to me today.
Mickey: My pleasure. Thank you for having me.
