Hi everyone and welcome to the first episode. I'm your host, Vincent Jong, and today we're kicking off a fresh season with five or six episodes to come. This season is part of a book about Product-Led Sales that's coming out soon, but more on that at the end of the episode. First, let's get to our guest for today. I have the pleasure of having Franciska Dethlefsen with me. Franciska is the Head of Growth Marketing at Amplitude, where she's leading the charge on new user acquisition, activation, and monetization. Prior to that, she was the Head of Growth at Iteratively, which was acquired by Amplitude, and she built out the marketing function at Snowplow Analytics. All in all, she's been doing growth for product analytics companies for the past 6 years and also advises startups in the data and infrastructure space on their growth. After starting her career in Copenhagen, she's nowadays based in New York, and when not working, you'll find her outside in nature, riding horses, or scuba diving. On today's episode, we'll talk about the self-serve plan Amplitude introduced last year and how it affected their existing go-to-market.

Alright, hi Franciska, thanks for joining us today. Thanks for having me. Um, yeah, so today we're going to have – I'm quite excited about this – we're going to have a behind-the-scenes kind of look into how the latest Plus plan at Amplitude came to life. And why I think that's interesting is because a lot of companies that are considering doing PLG are actually doing something else today, often sales, right? So, you know, I’d love to learn more about how did that decision come to be, how did the sales organization, the revenue work, back the idea, and some of the intensities around that. But before we get to that, can you start by giving us a bit more context of this new self-service plan that you introduced? I mean, you had a free trial already. How was this different and why did you do it?

Yeah, great question. So, Amplitude has had a free plan for many years and that has been a big part of how we've been driving sales pipeline. So, a lot of our customers start on our free plan, use it for a few weeks, a few months, a few years, depending on who they are, and then we've been using that free plan to help sales look for the right opportunities at the right time. But as we've been doing that for the past few years, we learned a lot from our customers around their needs and also our sales process. So, we heard from our customers that Amplitude was somewhat expensive. Going from paying zero to paying $30,000 or more a year is kind of a big jump. And simultaneously, internally at Amplitude, we also continuously went down-market, especially for the SMB segment, and started selling our plans at a lower cost to meet the customer where they were. And so, from a sales perspective, it also didn't make so much sense to have humans in the process selling these lower-priced plans that were hovering around $10,000-20,000 a year. So, that was a big part of the motivation for introducing a self-serve plan. It was what the customers wanted, and it also would drive efficiency internally at Amplitude so we could have our sales team focus on the higher price points. So, that was kind of the main motivation internally and externally.

Besides that, we also made some significant changes to our pricing and packaging more broadly. We've been expanding our suite of products and so we actually have more of a platform offering now, and we wanted to bring that to our free and self-served customer base as well. So, with the introduction of this self-serve plan, we also made some fundamental changes to what we offer. We're actually giving away a lot more for free now as well as on the self-serve plan. So, we want to give our customers what they need to be successful across experimentation, analytics, and customer data management. So, we're giving away small increments for free so they can get started with what they need as an early-stage startup or early-stage company. And then as they mature and can grow with our Plus plan, we give them access to even more, following the classic good, better, best pricing model.

Interesting. And those reasons that you mentioned though, they wouldn't have been new when the original plan was put into place. I'm sure that people would have considered, well, there's this segment of customers that wants to buy at this price point, but that was a decision, right? So, what had changed that made the company reconsider?

Well, that's a good question. I mean, we had different people in the company, including myself, that were advocating for this. We’ve seen in the market some of our competitors offering it. So, it was really about internal pressure. We had Elena Verna, our interim Head of Growth, who was a big champion of this, myself and others, looking at what was going on in the market, what our customers were saying, and we were just really putting this idea forward with the leadership team and slowly convincing them that this was the right approach. You know, lots of conversations, slide building, and model building around the opportunity we had in front of us if we introduced this free plan, this self-serve plan, and the efficiencies we could drive as well. So, I don’t know if there was a single point in time, but I’ve been working on this personally for over two years now. So, it’s been through many different phases of testing and discovery, experimentation, and many different phases of leadership buy-in and convincing that this was the right approach.

They got more and more bought in and so we were able to, with some feedback on pricing and packaging, release a V2 of this plan and release it to all customers in the product—no more sales exclusions or restrictions on who could see it. We still weren't able to promote it or put it on our website or anything like that; it was still only in product. And so, slowly but surely, we showed that again, having it in the product, having more people have access to it, means we have more people purchasing it. And we kept iterating on that version for quite a while, and then we had some sort of strategic changes or changes around pricing and packaging more broadly, going to market more as a platform. So we had the opportunity to make a V3 of the offering, which is what it is now, that includes more features from our additional products, combining them into that self-serve platform that we have today. And then from there, we set up an official launch date and got it out the door. We had a soft launch from that as well, making sure everything was working as expected, so we slowly rolled this out again without a big splash. And then on October 17th is when we officially launched this in market, made a big splash about it as well from our marketing perspective, got pricing up on our website, and kind of officially brought it out. But yeah, that was almost a year and a half after the first version of the plan was conceived in the product. So, a really long journey, which shows how much convincing, testing, and how many iterations we had to go through before we felt good about what we were officially launching.

Yeah, sounds like a diligent release process indeed. The objections that came initially, you touched on them a bit already. In my view, they're always very valid concerns, but it doesn't mean they can't be overcome. Can you talk a bit about what were the concerns that were coming from the revenue organization, for example, or from other parts of the organization? And how did that change? What were the real tipping points there during the tide?

Yeah, I can speak to that and also in relation to the model building and forecasting, which I kind of didn't touch on earlier, but we spent a lot of time on building out sort of the revenue opportunity of introducing the self-serve plan with very realistic numbers based on the data that we were gathering through our alpha and beta versions of the plan. And also, with that same lens, what kind of impact the plan had now that it was in the product on our sales pipeline to ensure that we weren't cannibalizing sales pipeline in a negative way. We wanted Plus to be additive, not a cannibalization of what we were making through the sales motion already. We knew that there would be some cannibalization, so that was okay. We actually do want sales to not sell the $15K-a-year plan; we want them to focus on those more lucrative deals and have the product sell that $15K plan. So, understanding cannibalization was a big concern, right? We're going to, you know, at a lower price point, sell this plan, which is great for customers, but we're not going to make the revenue that we need to grow at the rate we need to. So in all the models that we built, we focused a lot on cannibalization and mapping out what cannibalization could be from net new customers that we wouldn't land that would now go on a self-serve plan, as well as existing customers that we have that would potentially downgrade to this new plan as well. And we were able to level-set with leadership and the sales org that while some cannibalization would happen, net-net this would be additive and show, over time, how this could become a significant part of our revenue streams—a healthy self-serve business that runs 24/7, not relying on humans to be out selling or on vacation or whatever else. This is going to be an engine that will power the business for the long run and help the sales team become way more focused and efficient.

You mentioned you wanted to talk a bit more about the model as well, still.

Yeah, it was part of that; it was really the main thing. But I can talk about the levers we have in the model. So, it was kind of a big workstream that we're still fine-tuning as we get more data, which is great. As we learn more about how the plan is acting out in the real world, we can continue to fine-tune what the forecasting will look like at the end of next year, end of 2025. So, the main inputs we're thinking about in this model are really sort of the full PLG journey. So, we can influence how many new users come to our website every week, every month. We can influence how many of those users sign up for our free plan, so how many of the visitors that we have end up signing up. Can we increase that conversion rate? That's a lever in itself. Once they've signed up, how many of them activate? So, how many of them actually get started with Amplitude? Amplitude is a relatively difficult product to get started with. You generally, not always, but you generally need engineering resources. It's not a single-player tool unless you're an engineer. If you're a PM, you’ve got to ask your engineer for help. If you're a growth person, you also have to ask an engineer; maybe you need permissions to other tools where the data is. It's not easy, so our activation rate has been hovering around 20%-25%. And so already there, that's a huge lever, right? Can you improve the number of users who activate in your product? That's something that will have downstream effects on monetization. You also have to keep these users engaged over time. So, as they activate and start using the product, do they continue using the product? And do we have what we need to keep them engaged? So that's another lever. And then there's monetization, right? How many of the customers that are active in our product or our total customers will buy the Plus plan? There will always be a big percentage that won't buy, and so how can we improve that percentage? You know, we're looking at best practices around a 3% conversion rate of the total customer base, which we're not quite at just yet, by any means, but, you know, working towards that and having that as another lever in the model. And then we have our existing free customer base, which is a big part of our user base today.

We have been having this plan for years and years, so what percentage of our existing customers can we convert? Can we attract with this new offering as well? So those are some of the main levers we had, or we have still, that we can apply different levels of conviction in and investment in. So that's also how we're structuring our teams to go and focus on these various levers and improving the conversion rates between each stage in the journey.

That's really interesting, and I can imagine that when you're talking, for example, about the setup rate, where it might require multiple people and systems, you might even also consider the other way around again. Maybe it needs people here to drive a certain part of them to get four. Is that something you've thought about as well?

Yeah, so I mean, we're always balancing it. I think there's generally a sentiment from the company that when we say self-serve, we mean self-serve. But my teams are always looking for ways that we can use humans in a scalable way. So this would be things like we run one-too-many implementation office hours, where it's not a one-to-one experience, but we get lots of people in, and they can ask their questions and have a forum to have some time with a specialist who will guide them on how they get tracking started.

We also have a big investment in education as a company, so Amplitude Academy is a big resource where we have lots of courses and education resources. So that's another way we try to scale humans in a way. And then we have our community efforts as well, where we run a lot of how-to-style webinars to show how you use Amplitude, how you expand your use cases, how you use the product essentially, and what the best practices are.

We're also considering other experiments with what if we introduced a 30-minute call when you buy the self-serve plan, or a check-in, or anything like that we can do to ensure that you are adopting the features in the Premium plan that you pay for so you will see the value and continue to pay us for that plan.

Very interesting. One thing you mentioned as well that I wanted to ask you about is you mentioned that, even though you've been testing this for one and a half years already, you only really went out with it recently, right? So in that sense, it's only been a few months, I would say, that the market truly knows about it. So what have you learned since then? Is there anything you can share so far?

Well, having it be officially out makes a huge difference. I think that's a good learning. Maybe that's obvious, but having it in the product and finding ways to surface it in the product is good, but having it out in the world and on your marketing website, on the pricing page, front and center, definitely makes a huge difference in terms of people signing up in the first place. But also, how many end up buying it. We actually have a good amount of customers that get started and immediately upgrade to this new plan, which was also another thing that was surprising to us. We thought everyone was going to start on the free plan for a while before reaching one of our limits and then upgrading to the paid plan.

Another learning we've had so far is that we were quite well—some of us, I wouldn't maybe say I personally was in that camp, but a lot of sales leadership and leadership at large were skeptical around us being able to sell a product with $20K, $30K price points. $20K a year, putting that down on a credit card seemed like a big investment that people would want to talk to sales or human-to-human to do those things. But once we launched the latest version of Plus, we increased the tiers that you were able to purchase, and we've actually seen a decent amount—north of 10%—of customers buying higher-tiered plans that some of us were skeptical anyone would go and do. So that was really proof that this works, even in the tier where sales potentially could still operate.

Obviously, there are benefits to self-serve; you can pay monthly versus yearly. And also, a lot of people just don't want to talk to sales. They just want to go on their way and use the thing. Maybe they've used EML before, they don't need a demo, they don't need help, they just want to get started. So that was another big learning.

The other learning, and muscle we still have to build out really, is around retention and churn. Monthly payments, a monthly schedule, and very low-priced items—we go as low as $60 a month—also increase the chances of customers turning. They're just testing it out, or maybe they didn't like it, or maybe they didn't see the ROI. So churn is something we anticipated to be high but are still navigating and figuring out how to best address it. How do we make sure that when someone starts paying us, they feel that it's worth it and continue to feel that it's worth it? So this is really about education and making sure that our customers adopt this new plan, which is not something we've done in the past because we didn't have the plan and we didn't invest a lot of resources in that part.

That's an area of opportunity for us to make sure that we retain these customers at a higher rate. So I think those are some of the main highlights.

Great, great. Well, thank you so much for walking us through some of these experiences. I think it's a great way for other companies to see what can happen during this process. A lot of the things you mentioned sound very familiar, and I think many B2B companies will face the same challenges, the same objections, and the same things that need to be proven.

I mean, I'll give the floor to you for a second. Is there anything you want to say to the people listening?

Yeah, I think maybe one thing I didn't touch on is when you go from sales-led to product-led in the way that we've done, at least, I think you can apply it to other companies. We've had an amazing sales team that has been able to sell our product and platform. They've been talking to free customers every day, convincing them that they should upgrade to our paid plans for these extra features, added benefits, etc. They've done all the selling; the product hasn't had to do any of this selling. It's just had to be there and do its thing—being useful.

So as you move into the product having to do the selling, that's a massive thing. It's a massive project, a massive workstream that you need to deploy dedicated resources to. You can't just release the thing and expect that people will find it, use it, and pay for it. You have to educate them, make it visible to them, show what the feature is, maybe even give them access to the feature in some way, shape, or form.

That whole stream of paid feature awareness, discoverability, and education cannot be underestimated. It cannot be too separate from releasing a self-served plan because you might release it and then not get the results that you want. That's definitely something we saw in the early days. We weren't really making a huge increase in free-to-paid conversion, but we also hadn't invested in that paid feature discoverability or awareness.

So that's something I would recommend to anyone who is out there exploring this route, going from adding product-led to a sales-led monetization motion. You need to invest in this. You need dedicated growth marketers, engineers, dedicated product managers, maybe even dedicated data analysts to understand the user journeys and what works and what doesn't. You need to continuously optimize this experience because this is going to be a key lever for you as you grow.

It's not that you're going to require fewer salespeople and that it's going to be more efficient for you, but it's an investment nonetheless. We've added more engineers in our teams, we've added more growth marketers, so it's an efficient investment, and there are compounding effects that you don't get with sales teams.

But that would be a huge learning and an area to double down on.

Yeah, I could not agree more. So thank you for highlighting that. It's so important to actually make it work—it doesn't do it by itself.

Great, well, thank you for going through this with us. So, the Amplitude Plus plan, do you want to say anything about that before we close off?

Yeah, the Plus plan is great; our free plan is great as well. The platform offering we have in market now doesn't include only analytics but also experimentation and feature management capabilities, as well as data management and data integration features. We're going to market with an offering that's kind of a platform—a suite of products that you need to get started. You don't need to go add all these point solutions as you're getting started with your business.

So go check that out, and also check out all the particular programs we have for startups. We have added benefits if you're just getting started.

Alright, fantastic. Well, thank you, Francesca.

Thank you.

And that brings us to the end of the first episode. Many great insights today on how to build internal support for a product-led approach and how to make sure your product is actually ready to sell when you want to make the switch. I hope you enjoyed it. As I mentioned in the beginning, the interviews in this podcast season are part of a book on product-led sales, which is coming out within a few months from now. If you want to get early access, then go to www.plgsales.com and join the waiting list. There's a first release coming out soon, and I'd love to get your feedback.

Thanks for listening, and I hope you'll tune in for the next episode, in which I'll be talking with Kyle Poyar about pricing challenges when introducing PLG in a sales-driven business.

Thank you, and see you there!