Drive Adoption and Scale Net Recurring Revenue without PQLs with Mallory Lee

Nylas has sidelined Product Qualified Leads (PQLs) in their strategies. But what does this mean?

Mallory emphasizes the importance of users trying the product before making a purchase.

Instead, it focuses on user engagement and identifying high-return users to drive enterprise-level adoption. A growth strategy that revolves around product usage.

This approach is particularly relevant for developers who prefer to experience the product firsthand rather than talk to sales.

Main Takeaways:

• Moving away from relying on traditional PQLs, Nylas focuses on engaging every user directly with the product.
• Mallory recognizes the importance of building a strong user base through personalized interactions and experiences to encourage customer retention and expansion.
• NRR is a critical metric for ensuring that existing customers find value in the services, expand their usage, and contribute to sustainable revenue growth.
• Leveraging agile and flexible marketing tools and solutions allows adaptation to meet customers’ needs.
• Traditional marketing tools in the emerging PLG landscape may not work, requiring adaptive and nimble solutions to support marketing strategies.

Tools Mentioned in this Episode:

• Nylas: A powerful email, calendar, and contacts API to integrate email functionality into applications.
• Woopra: Provides real-time customer analytics and insights, helping Nylas understand user behavior and make data-driven decisions.
• Segment: Enables Nylas to capture product touchpoints across various platforms and devices, allowing her to analyze user interactions and improve user experiences.
• MadKudu: Calculates a score to identify meaningful touchpoints, helping prioritize and personalize customer interactions.
• Inflection.io: Provides targeted messaging at the opportune moment to drive activation, retention, and expansion, resulting in valuable aha moments and increased customer revenue.
• Gong: Gong provides conversation analytics for sales teams, helping them gain insights from customer interactions and improve sales performance.
• Fivetran: Fivetran automates data pipeline workflows to collect and analyze data from multiple sources.
• Vitally: A customer success platform that tracks and manages customer health, ensuring long-term satisfaction and retention.
• Salesforce: Used to manage customer relationships, track sales activities, and drive business growth.
• Drift: Drift is a conversational marketing platform that helps engage and convert website visitors into customers through personalized messaging.
• Marketo: Marketo is a marketing automation platform Mallory uses to streamline and optimize her marketing campaigns, driving lead generation and customer engagement.

Why You Might Not Need PQLs in Product-Led Growth

Despite being a commonly accepted practice in sales and marketing alignment, Product Qualified Leads (PQLs) might not be the golden ticket to growth in all scenarios.

Mallory challenges this by advocating for universal user engagement, treating every user as a potential qualified lead.

Our goal is to get you into the product no matter what. So everyone should be a PQL. I don’t care how we met you, I don’t care when or why. My goal is to get you to come use the thing because I know if you use it, you’ll buy it.

Adopting this approach ensures the entire product experience is designed to convert and retain users. This strategy has enabled Nylas to tap into a larger pool of potential customers, even those who might not meet traditional PQL criteria.

The Net Revenue Retention (NRR) Revolution

As emphasized by Mallory, NRR is more than just revenue; it’s a barometer for customer satisfaction and future growth.

At Nylas, the dedication to NRR is not just lip service; it’s a dynamic, ongoing strategic endeavor.

Mallory’s approach to NRR involves meticulous tracking and analysis, predicting customer expansion and retention over a significant time horizon.

Paying attention to the customer’s journey, anticipating their needs, and scaling with them is vital. We closely monitor each customer’s product usage and successes, which allows us to predict when they’re ready for an upsell and when to engage proactively.

By aligning various departments towards NRR objectives, Nylas ensures that its products evolve to meet customer needs, fostering loyalty and maximizing revenue potential.

The Role of Rhythms in Revenue Operations

Rhythms are important for efficient operations but are often overlooked. What is an Operational Rhythm?

Operating rhythms are the set of repeating tasks a company uses throughout all its departments to communicate and ensure smooth operations. The term “rhythm” originated from Six Sigma.

For Mallory, they are not just weekly check-ins; they are deeply ingrained in Nylas’s operations. Weekly KPI meetings have become essential for the leadership team to stay connected to the business.

Mallory approaches these meetings with discipline and adaptability. While she emphasizes reviewing familiar metrics for stability, her team embraces agile adjustments based on the changing market. Incorporating rhythms into your business strategy can create a productive work environment.

The key is initiating these rhythms and ensuring flexibility and responsiveness to external changes. Mallory’s insights are valuable for businesses adopting scalable and adaptive operations.

The Keys to Growth-Driven Operations

• Defy traditional PQL metrics: Challenge the conventional use of PQLs in favor of a fitting-based approach. Consider demographics and whether the potential lead is an ideal customer profile (ICP). Focus resources on the most promising leads for business growth.
• Emphasize universal user engagement: Every user engagement can convert into a sale. Target a broader audience and optimize the product experience for conversion and retention, not just for a subset of users.
• Forecast KPIs regularly: Stay aligned with the company’s objectives by forecasting weekly KPIs. Predict the company’s performance and make informed decisions to drive growth.
• Prioritize Net Revenue Retention (NRR): Prioritizing NRR reflects customer satisfaction and potential for future growth. Ensuring customer success is at the heart of the strategy, as it helps retain customers and increase lifetime value.
• Monitor customer product usage: Recognize patterns in customer product usage to understand where customers are in their feature rollout. This will help you provide timely support, increase product utilization, and enhance customer satisfaction.
• Identify upsell opportunities: Determine which customers can scale their service to maximize sales opportunities. Engage with customers for upselling and cross-selling.

The Evolving Martech Landscape

What used to be considered industry standards, such as Marketo, are now being questioned for their lack of adaptability within a product-led growth (PLG) framework. Companies, especially those focused on PLG, must reevaluate their technology stacks to support their growth ambitions.

Mallory suggests Marketo’s dominance may end, highlighting the need to shift towards more responsive platforms.

As the martech ecosystem evolves, companies must carefully choose technologies that align with their dynamic PLG strategies, prioritizing tools that offer real-time adaptability and responsiveness.

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