Product led growth (PLG) as a go to market strategy is hitting its stride today, and we’re not surprised. Who wouldn’t want a growth model that relies solely on the product to acquire, convert, and retain customers, without sales and marketing intervention?
Ever since Dropbox launched their infamous referral program over 10 years ago, SaaS companies of all sizes and industries have attempted to replicate and adapt the strategy for their own growth.
However, we noticed a huge gap in most discussions around the topic. Having worked with dozens product-led B2B SaaS companies, we’ve seen the significant impact that integrations can have on a successful product-led growth strategy. That’s why we put together this guide on the proven strategies and tactics that will take your product-led flywheel to the next level by leveraging 3rd party native SaaS integrations.
Product Led Funnel
But first, what makes a product led strategy succeed?
A seamlessly orchestrated user experience throughout each stage of the user journey - from acquisition, conversion, expansion, through to retention.
Acquisition - While traditional go to market strategies primarily rely on marketing and sales to drive user acquisition, PLG inherently requires more collaboration with the product team. In order to create a PLG flywheel, you must create product-led experiences that simplify and drive referrals and invites.
Conversion - Regardless of how optimized your acquisition strategy may be, generating revenue growth requires your product to convert users. While marketers talk about conversion rate optimization from a landing page/website perspective, PLG requires product teams to be diligent in monitoring and optimizing the % of users who become paying customers.
Expansion - Beyond the initial conversion, building in layers of expansion opportunities is necessary in order to drive your business towards net negative churn. If you have an enterprise product offering, traditional sales tactics can also be an approach for deal expansion, using the individual product-led user as a champion/wedge.
Retention - When it comes to PLG, it’s important to look at ‘free user’ churn and ‘paying user’ churn cohorts separately. Simply put, reducing free user churn requires optimizations at the acquisition/conversion tages, whereas paid user churn requires a deeper analysis of the end-to-end product experience.
In this guide, we will cover how customer-facing integrations play a key role in each of these 4 stages of the product-led growth user journey and flywheel, and how you can build a robust integration strategy to drive your product to the next stage of growth.
In contrast to the typical funnel however, we will start with conversion - you’ll see why in a second.
Improving Product-led Conversions with Integrations
The holy grail for success in the conversion stage of the product led user journey is 3 words.
Time to Value.
The quicker you can get your users to experience the value of your product, the more likely they are to convert.
The worst case scenario consists of users who do not experience the benefit your product offers in the session where they first sign up for an account. If that is the case, once they leave your app, there is very little chance that they’ll give your product a second shot.
From our experience, there are 2 common route cause that can lead to this outcome:
- Users are not guided through a proper onboarding flow, and get confused/lost in the product.
- Deriving value from the product requires data from their other apps and systems.
While integrations cannot address the first root cause, our friends at Userpilot have an entire suite of in-depth resources that cover user onboarding extensively.
In any scenario, unless your product solves such a niche problem that it can exist in a vacuum, data is generally a barrier to providing immediate value, or sufficient value. Just imagine a BI or CRM tool without data - the user wouldn’t get to experience any of its benefits.
While it may be straightforward to offer users an option to ‘upload a CSV’ of their 3rd party data, that immediately consists of a minimum of 5 steps before they can even remotely experience the ‘Aha’ moment.
- Go to 3rd party data source
- Export CSV from 3rd party data source
- Format CSV properly as per the requirements of your app
- Click ‘Upload CSV’ on your app
- Map the columns to the proper fields
- Import data
Now that’s the best case scenario, which excludes how often users get stuck and frustrated because they’ve formatted their data improperly before uploading.
Conversely, if you offer your customers a native integration with the apps that contains their data, the experience would look like:
- Click on the relevant integration
- Login with their credentials for the 3rd app
This is possible because with customer-facing integrations, you will be pre-defining how the data from the 3rd party app should map to your schema. This ensures that there will be no errors or effort required from the end-user, and also provides the option for real-time bi-directional data sync such that everything maps to a source of truth.
Beyond the initial data import however, this also enables you to create deeper integrations with more complex logic. In many cases, it is simply not possible to rely on a CSV import to achieve the desired result.
Here a few common example of workflows that would be unfeasible with CSVs, at least not in a consistent and timely cadence:
Driving users to the ‘Aha’ moment and reducing the time to value in that first session is paramount to improving your conversion rate, and helping them visualize how your product fits into their workflow increases the likelihood of product adoption.
Now before we get into the upselling strategies, here's one piece of advice. Make sure to provide users in their free trial access to all of the integrations - it will maximize the likelihood of them falling in love with your product.
Driving Expansion / Upsell Opportunities
In a product led growth model, it is especially important to create multiple tiers of expansion opportunity for your users, as base tiers should have a low enough point of entry such that the user can make a purchasing decision on their own without involving others in the organization.
While upselling on the number of seats is a common and effective expansion strategy, integrations can serve as an additional revenue lever. However, there are multiple approaches to doing so effectively, and you may need to test and see which method performs the best for your product.
Upselling by integration audience
One of the most common approaches is to provide certain, or all integrations only in the premium tiers.
To approach this strategically, you need to segment out the 3rd party app based on the firmographics of their user base.
If you are providing integrations reactively based on current customer/prospect demand, you can segment out the companies that request the various integrations based on their annual contract value (ACV).
However, if you are providing integrations proactively, identify the target market of the 3rd party SaaS apps, especially from a sizing perspective.
Using CRMs as an example, you can segment each platform out based on their core user base:
- HubSpot, Zoho, Agile CRM → SMB/startup oriented, with free tiers
- Salesforce, Dynamics, SAP → Enterprise oriented
In that example, you could choose to include integrations with the SMB/startup CRMs in the base tier, and leave the enterprise CRM integrations for your premium tiers, since users of those CRMs are more equipped to pay for it.
Below is how email marketing tool, PersistIQ, used this strategy to price their integration and upsell Salesforce users into their higher tier.
Upselling by workflow value
Another method for segmenting your integration offerings is not based on the integrated apps themselves, but rather the complexity/value add of the integration workflow.
For example, you can provide simple, notification oriented integrations with Slack/Teams as an out-of-the-box feature with every plan, whereas deeper integrations with accounting systems, CRMs, or marketing automation tools can be made available only in the higher tiers.
By treating integrations like any other core product feature, you should be able to tell intuitively whether an integration should be considered a premium or standard feature.
As a side note, some companies price this way primarily because complex integrations require more engineering resources upfront to build and maintain indefinitely. The benefit of working with a platform like Paragon is that we save engineering teams 70% + of the time it takes to build an integration, and fully manage the API maintenance so your team doesn’t have to. This inherently increases the return that our customers receive by upselling their users on integrations.
Upselling by # of integrations or per integration
Alternatively, you can also upsell users on a per-integration basis. This can be a more straightforward approach, as it would allow your users to only pay for the integrations they need, without being forced into a higher tier.
For each tier, you can include a specified number of included integrations, and allow them to choose which ones they want to use.
In its simplest form, all integrations can be treated as equal, or you can specify a set number of ‘standard’ and ‘premium’ integrations for each tier.
This is exactly what one of our customers, Mainstem.io, has done with their pricing model.
You can also provide an a la carte option - however, this would require you to put more thought into the value and price of each integration. Strategically, the guardrails around this model are two-fold:
- Your product must function and deliver value without the integration - otherwise this will come off as a forced add-on which none of your customers would be happy about
- The integration must deliver sufficient value to justify the price tag you are putting on it. One method to scale this up or down is to have a price/seat for each add-on integration.
Here’s an example with Autopilot, who has included most integrations as part of their out-of-the-box offering but decided to specifically provide Salesforce as a separate add-on. Strategically, this makes a lot of sense, as companies that would use marketing automation in conjunction with Salesforce are most likely to be in the mid-enterprise stage, and would be willing and able to pay for the integration.
Supporting seat expansion
Integrating with your customers’ other apps also provides opportunities for you to gain exposure with their teammates and/or cross-functional teams.
While this does not apply to all integrations, this benefit applies to most integrations with collaborative tools, such as:
- Slack/Teams integrations that sends notifications to shared channels/chats in your users’ instances
- Task/project management integrations that creates/updates tasks automatically based on events in your app - assuming the board is shared by multiple teammates
If your product focuses primarily on optimizing your users’ individual workflows, this benefit will materialize in the form of organic referral acquisition.
On the other hand, if you adopt a product-led to enterprise expansion strategy, providing the necessary integrations for the users’ cross-functional teammates will help accelerate enterprise sales cycles and improve close rates.
Impact of Integrations on Retention
While the importance of reducing churn is fundamental to any SaaS product for achieving sustainable growth, it is especially important for product-led businesses.
As most product led businesses price and bill customers on a monthly basis, this means that users can churn even within the first month of using your product. That’s why beyond a product-led acquisition strategy, you also need to be intentional about having a product-led approach to retention.
A study by Profitwell of over 61,000 SaaS customers demonstrates that providing at least one integration will improve your product’s retention by at least 10%.
For users that activate 4 or more integrations, retention further increases by an absolute of 3-7%!
All in all, the easier you make it for your customers to experience the benefits of using your product, the less likely they will churn, even if it means they never have to visit your platform.
The more seamlessly integrated you can be with your customers’ workflows, the less likely they are to stop using your product.
Optimize your product-led flywheel today
Now that we’ve shared how to strategically leverage integrations to skyrocket your product’s growth, it’s your turn to take action and scale your integration roadmap.
If you are still finding it difficult to prioritize engineering resources on integrations, you need to check out Paragon. We enable B2B SaaS companies to save 70%+ of their engineering resources on every integration, not to mention the offloading of 3rd party API maintenance.
