Product-led growth and signal substitution syndrome: Bringing it all together
A few years back, my former colleagues and I at SiriusDecisions introduced what we called the Intent Data Framework (IDF). About a year ago, we updated the model to include non-behavioral signals and called it the Buyer Signals Framework (BSF).
Already, it’s clear we left something out of the IDF and even BSF: product-led growth.
Signal substitution syndrome
Both versions of the framework were attempts to address a misunderstanding that was, and still is, so rampant in B2B that I have a name for it — signal substitution syndrome. The nature of this syndrome is simple: In B2B, both marketing and sales practitioners tend to see each new source of information about their potential buyers — each signal type — as a substitute for the last one that didn’t work.
If people are using the product, the need is not prospective or theoretical, it is actual.
The history of B2B could be written in the successive failure of these signals to be what we all hoped for. Whether it was people showing up at trade show booths, people filling out bingo cards from the back of magazines, the people and bots filling out website forms, webinar registrations, syndicated content leads, third-party intent signals, review site users, etc.
The misunderstanding that underwrites signal substitution syndrome is that any of these signals should be considered as sufficient — or even halfway decent — signals of buyer intent unto themselves. To be sure, by happenstance, some leads have occasionally turned into business in a way that can be seen and understood.
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But if there’s one thing that my time as an analyst taught me, it’s that leads are a depressingly high failure rate (95%-99%) signal. Intent data by itself is worse. However, they are both better than whatever we had before. In fact, none of these signals are, by themselves, actually expressions of intent. Expressions of interest? Sure. Intent, not so fast.
How product-led growth fits in
Along comes product-led growth (PLG) with the idea that we’ll offer a free or very low-cost version of our solutions and use adoption of them as the new signals that will lead to enterprise deal generation. Of course, not every product is amenable to a PLG motion. It’s pretty hard to imagine Oracle PLG-ing their manufacturing cloud, for example.