B2B SaaS: Going Down Market to PLG
It's never as easy as it looks.
In my career I have had my fair share of experiences with PLG. I love PLG and I love sales led, I especially love dual funnels. But going down market from Enterprise to PLG presents a unique set of problems than going from PLG up market to Enterprise. And, like everything else, it is never as simple as it seems.
Here’s what I’ve learned:
PLG means different things to different people and there are multiple models for PLG: freemium, free trial, paid, open source, hybrid model with limited features, viral loops (where users share your product, thus promoting your product to others)
PLG takes time to get the motion right and for it to take off.
PLG is entirely dependent on the ease of use of your product (think UX) and the price point (think time to value)
PLG presents a brand and pricing perception problem for marketing to conquer whether going up or down market.
Examples of going down market
When you already have a foothold in a particular market, whether it be MM or ENT, going down market is extremely tough. There’s both a brand and pricing perception problem you’ll need to correct unless it was due to an acquisition (that’s the exception).
For example, when I worked at SparkPost we were mostly Enterprise and high end mid-market. Then we acquired Port25 which was mostly for SMB. So now we had a boat load of customers in each market segment and had a hybrid sales gtm motion.
But when I was at Intellimize, we were perceived as Enterprise and mid-market, even though we had quite a bit of SMB clients (quantified as less than $100M in revenue). We launched a PLG product but had already spent years turning people away because they were too small. So now we had a brand perception problem and a pricing problem because the SMBs thought we were going to be too expensive anyway.
Questions to ask when enabling PLG going down market:
How will we handle existing customers who just signed? What’s the talk track?
Should we include all features or feature gate in order to upsell?
What should the pricing tiers be?
Should we do a free trial?
How long should a free trial be? Would we extend it? If so, is there a limit?
Will we offer monthly and annual plans?
What should the discount be on annual plans?
How will we take payment on the website?
What payment processors should we evaluate?
What’s our cancellation process going to look like? Will CS handle or can it be done in the app or via email?
How will we handle refunds? Will they be prorated?
Specifically, who are we targeting for this product? Redefining the ICP, positioning, and messaging for just the PLG motion.
How will we handle demo requests from those who are actually PLG prospects?
How will we get the word out once PLG is available? What’s the GTM plan for this product launch?
How do we onboard people efficiently so CS does not get overwhelmed?
How do we onboard them so they become sticky?
Will we offer them knowledge base only support? Or will we allow them to pay for human support?
How will we encourage feedback about the product with the Product team?
How will we get them to upgrade to a bigger/better plan?
How do we get them time to value quick enough so they tell their colleagues and peers?
….and so many more questions to answer.
PLG for growth
Starting out with PLG is great, however, when you decide to go from Enterprise down market, it’s just like starting over. Just like when you pivot a product roadmap and you’re starting over, that’s what it’s like for marketing in this case, too.
PLG is a very different GTM motion than Sales led. The acquisition tactics are different, the messaging is different, the upsell is different.
This is why I really love hybrid sales models/dual funnels. Some PLG + Sales led, makes it easier for everyone to buy from you. However, this sort of thing just doesn’t happen over night. SparkPost, for example, was in business for 15 years before they acquired Port25 and went down market to SMB and PLG. Intellimize, now Webflow Optimize, was in business for 7 years before they offered PLG.
If you liked this post, you may also like
’s recent post on why reverse trials work in PLG.