Introducing Engagement Led Growth (ELG)

David Bromberg at Lantern proposing Engagement Led Growth as the successor framework to Product Led Growth (PLG). The thesis is one sentence: the more a customer interacts with a product, the more value it provides, the more likely they are to expand their contract. Point every customer-facing function — sales, success, product, marketing — at a single metric: engagement.

The diagnosis is the more useful half, because it names why companies can’t do this today:

1. Data is siloed across SaaS tools, so there’s no single view of the customer.
2. Qualitative data is lost. Customer-facing teams take notes irregularly and sync them to different places — Salesforce, Productboard, or a local copy. So preparing for a meeting means not knowing how the customer actually uses the product.
3. Resourcing follows contract size. Rational for preserving current revenue, but it systematically neglects mid-tier customers who would grow if cultivated.

The operating implication: in most SaaS products a few core features carry most of the value, so the job is to find those, deepen them, and train users into them — rather than to service accounts by how much they already pay.

Notes

• Engagement Led Growth (ELG): a thesis on the future of Enterprise SaaS sales and a new framework to scale a SaaS company.
• The thesis is simple: the more a customer interacts with a product, the more value a product provides, the more likely a customer is to expand their contract.
• Regardless of GTM motion, successful SaaS companies are able to provide more value to customers each year. Net Revenue Retention
• In most SaaS products, there are a few core features that provide a majority of value to the customer. The goal of customer facing teams should be to identify what features provide the customer the most value, enhance those features, and train users to take advantage of these features.
• The first issue issue is that data is siloed between different SaaS tools and we don’t have a single view of the customer.
• There is also an issue with qualitative data. Customer facing teams (Product, Sales, Success) have irregular note taking patterns. They tend to sync notes to different platforms (SFDC, Productboard, etc) or keep a copy locally. As a result, qualitative data is scattered as well.
• When preparing for a meeting it is difficult to get the full context on how the customer interacts with the product, and the various customer facing teams at the company.
• Operating without full visibility, most SaaS companies choose to allocate resources by the size of the customer’s contract. This is an effective strategy for preserving current business, but it neglects mid-tier customers who if cultivated have the potential to expand to large accounts.
• In an Engagement Led Growth organization, every customer facing function of a company (Sales, Success, Product, Marketing) is centered around a single metric: increasing customer engagement with the product.
• In an ELG organization, success, sales, and product must work together to identify and accelerate the product behavior that leads to revenue opportunities.