The Hidden Trap of Product-Led B2B Growth: User-Level Optimization

It makes sense that B2B product teams building self-serve experiences for product-led growth tend to focus on individual users. The thinking seems straightforward: “This one person has this one job to do, and I’m going to help solve it.” 

But no organization is going to spend hundreds of thousands of dollars on a solution that only helps one person. So if you want to leverage your B2B product to close enterprise deals, you should never optimize for individual use. Ever.

Individual solutions don’t land enterprise deals

In self-serve B2B products, people start using your platform because they want solutions to their individual problems. In fact, many B2B brands are content with “prosumer” success when they’re starting out and measure their product-market fit on their ability to solve individual problems.

But I’ve rarely seen a B2B company that was content without an enterprise base in the long term. The only exception is B2Bs that are exclusively focused on SMBs and freelancers—but even they usually get pulled into the enterprise market eventually.

Why the push to enterprise? Because the price you can charge for products that solve individual problems caps out at a couple of hundred dollars. Enterprises don’t place a high value on individual solutions because they only benefit a select few in their organization.

If you’re solving the problems of multiple people or an entire organization, the perceived value goes up, and you can charge a higher price. You show that you’re helping the company as a whole to achieve its goals rather than simply helping out an individual.

You might be able to acquire many users within an organization through individual plans. But that doesn’t mean you’ll be able to transition them to an enterprise plan.

Take SurveyMonkey, for instance. I was there for seven years, and we built successful individual prosumer products. People logged in, created surveys, and collected responses. And even though we had many instances where multiple people in the same company were using the tool, we failed over and over again to sell enterprise deals. The users had no reason to change their plan because they were fully satisfied with being able to do the job they needed in their isolated unit. They went as far as being internal detractors of our enterprise efforts because the enterprise plan imposed more limits on their experience (data retention, SSO, roles and permissions, etc). Self-serve product usage capped out and failed to drive enterprise demand, as there was no enterprise problem to solve.

Now, I would never advise a company to eliminate individual experiences. But there’s a difference between allowing a behavior and encouraging that behavior. Allow individual experiences to exist within your product, but optimize for team-level experiences.

How to optimize for teams

To optimize your B2B product for enterprise deals, you must bridge the gap between individual jobs to be done and company-wide problems and position yourself as a solution for teams.

Bridge the gap between individual and organization-level problems

Within each product use case, there are multiple levels of complexity. Your product needs to solve for an enterprise level of complexity. Otherwise, it’ll only be useful for a few people in an organization.

We can always view a product’s use case—the problem it’s trying to solve—at a personal level, a team level, and an organizational level. Take Amplitude as an example:

• The personal level: I’m a user. I’m frustrated by how long it takes me to get info from my analytics team. I want to access that information right now.
• The team level: I’m a manager. I want my team to be more data-driven and be able to make data-backed decisions faster. I care about how we share reports and how we use data to make decisions on a team level.
• The enterprise level: I’m a leader of a company. I want to be able to scale my analytics better. I don’t just want to have to hire unlimited analysts. I want people to be able to access analytics self-serve across the entire company.

Many products, especially those that leverage a product-led growth (PLG) strategy, attract individual users. There’s a job to be done, a user problem, and the product solves that. As a B2B product, your challenge is to transition from that individual solution to a company-wide solution around your core value proposition. In other words, to create an escalator that takes users from “I can solve this problem” to “my team can solve this problem” to “my entire company can solve this problem.”

Let’s look at how some successful B2B PLG companies build that escalator:

Promote network effects within your product

To land enterprise deals, many people within the organization should be using your product and, crucially, realizing the value of using it together. The best way to do that is with network effects, where employees directly benefit from everyone using the product—even if that’s just a perceived psychological benefit.

A network effect is where having other users increases the value of a product or service. There are different types of network effects you can create within your product:

• Psychological. Users benefit from feeling connected and collaborating with others (Miro, Canva).
• Content. Users benefit when there are other users creating and publishing content (Pinterest, Instagram).
• Data. The more users, the more data you can gather to give recommendations or personalize your platform (Netflix, Spotify).
• Platform. User growth makes your platform more valuable (Facebook).

Often products provide very individualistic experiences. Instead, focus on driving users to cluster together within your platform. Leverage jobs to be done that they can do together so they experience the benefits of being on a team while in your product.

Even if people don’t directly collaborate with others on your platform, create a psychological team experience. In Miro, for instance, you can work individually. However, you get to see that other people on your team are in the tool working on boards, so you don’t feel alone in the product.

For some types of products, direct network effects aren’t possible. But you can promote enterprise deals with indirect network effects. Take MongoDB, a database platform. Perhaps only one person in an organization uses the platform to set up a database, but MongoDB is involved in running the entire application. It indirectly impacts the whole organization, and as a result, everyone depends on it.

Only create team plans

Perception is everything. To ensure users think of your product as an enterprise solution, position it as something whole organizations can leverage. That means allowing individuals to benefit from your product but skipping individual plans in favor of team packages.

When a new user signs up, ask them to join an existing team or create a new team (even if it’s a team of one to start with) rather than creating an individual account as default. Similarly, in your pricing, only offer team plans rather than individual plans.

Define metrics at a team level

To truly optimize for enterprise deals, you need to focus your product metrics on teams and organizations rather than individuals. Track acquisition, activation, engagement, and monetization at the team level.

In B2B acquisition, for example, there are two main acquisition metrics you can use: new users or new teams/organizations. New user growth is still important. However, you shouldn’t use it as an acquisition metric.

The more people you have happily using the product, the more likely you’ll be able to monetize and retain whole organizations. So set your acquisition goals on new organizations or new teams, and use new user growth as a retention or monetization KPI.

Track accounts, not just users

Amplitude Accounts enables you to track key account-level metrics. Designed to help B2B product and growth teams drive enterprise adoption, the add-on integrates with Salesforce to draw on information gathered during sales cycles and allows users to easily drill down on account health and trends. Request a demo today.