Remember listening to Mark Roberge from Hubspot talking about a pretty unique sales comp plan. I believe it was specifically for their CRM Sales team, a product that was self-serve.
I think at the same time they were really trying to turn around/improve their NRR.
They actually paid sales reps more for expansion than they did for the initial deal. It helped promote revenue growth and expansion rather than revenue contraction. (aka sales reps selling larger land deals that perhaps weren't right-sized for the customer.
Are you seeing that at all Kyle in the PLG world? Thanks and great article!
Thanks, Harrison. It’s an interesting model, but I think that was a short-term move when HubSpot had a very low NDR. My suspicion is that they’ve moved away from that model over time. If anything, more SaaS companies pay *less* for expansion than they do for the initial deal, which is something that overly incentivizes big lands.
I agree that as PLG companies mature, they may introduce more complex sales structures, such as hiring account managers, SDRs, BDRs, and Account Executives. While this can lead to improved customer success and revenue growth, it's essential to consider the potential impact on operating costs.
As PLG companies invest in R&D, marketing, and sales, the operating costs may indeed increase compared to sales-led companies that focus primarily on sales efforts. The challenge lies in finding the right balance between investments and returns.
I'm curious about how PLG companies can maintain profitability in the long run, given the higher operating costs associated with their growth strategies. What measures or strategies do you believe can help PLG companies optimize their operations and achieve sustainable profitability? Can you share examples of successful PLG companies that have navigated this challenge effectively?
Looking forward to your insights and further discussions.
It’s a great question. Many of the best PLG companies are actually extremely efficient / profitable because they blend PLG with sales efforts. Atlassian is one of the top examples, but you can also look at a number of others. My suspicion is that folks made a bunch of non-core bets or investments in 2021, which dragged down profitability and didn’t always lead to efficient growth.
Thank you for this great content! One thing that is not clear to me: relationship between SDR and Product Specialist. Should a new qualified user by SDR go to the Product Specialist for better onboarding before going to the AE? Or should it go straight to the AE?
Remember listening to Mark Roberge from Hubspot talking about a pretty unique sales comp plan. I believe it was specifically for their CRM Sales team, a product that was self-serve.
I think at the same time they were really trying to turn around/improve their NRR.
They actually paid sales reps more for expansion than they did for the initial deal. It helped promote revenue growth and expansion rather than revenue contraction. (aka sales reps selling larger land deals that perhaps weren't right-sized for the customer.
Are you seeing that at all Kyle in the PLG world? Thanks and great article!
Thanks, Harrison. It’s an interesting model, but I think that was a short-term move when HubSpot had a very low NDR. My suspicion is that they’ve moved away from that model over time. If anything, more SaaS companies pay *less* for expansion than they do for the initial deal, which is something that overly incentivizes big lands.
Thank you Kyle for your insightful article.
I agree that as PLG companies mature, they may introduce more complex sales structures, such as hiring account managers, SDRs, BDRs, and Account Executives. While this can lead to improved customer success and revenue growth, it's essential to consider the potential impact on operating costs.
As PLG companies invest in R&D, marketing, and sales, the operating costs may indeed increase compared to sales-led companies that focus primarily on sales efforts. The challenge lies in finding the right balance between investments and returns.
I'm curious about how PLG companies can maintain profitability in the long run, given the higher operating costs associated with their growth strategies. What measures or strategies do you believe can help PLG companies optimize their operations and achieve sustainable profitability? Can you share examples of successful PLG companies that have navigated this challenge effectively?
Looking forward to your insights and further discussions.
It’s a great question. Many of the best PLG companies are actually extremely efficient / profitable because they blend PLG with sales efforts. Atlassian is one of the top examples, but you can also look at a number of others. My suspicion is that folks made a bunch of non-core bets or investments in 2021, which dragged down profitability and didn’t always lead to efficient growth.
Thank you for this great content! One thing that is not clear to me: relationship between SDR and Product Specialist. Should a new qualified user by SDR go to the Product Specialist for better onboarding before going to the AE? Or should it go straight to the AE?