Is there any risk with hybrid growth models?
How do you reduce the risk with hybrid growth models?
What SaaS Metrics are essential when executing a hybrid motion?
Everyone is talking about the hybrid growth model in the world of B2B SaaS.
As growth strategies in SaaS have evolved, so has the conversation around balancing product-led and sales-led approaches to drive scalable, sustainable growth. Increasingly, B2B SaaS companies are recognising that relying on one approach alone may limit growth potential or leave untapped markets on the table.
The hybrid growth model, which blends PLG and SLG (Product-Led Growth and Sales-Led Growth), has proven to be an effective approach to this challenge. For companies aiming to stay agile and resilient in uncertain times, a hybrid model offers a flexible framework to reach more diverse markets and respond to changing customer needs.
In a recent webinar, we spoke with Niclas Lilja, CEO and Founder of Younium, about the emerging hybrid growth model in B2B SaaS. Here’s what he had to share:
"The reason is simple: The more varied the growth options, the greater the likelihood of your business thriving despite the funding winter that persists in 2024! Combining product-led (PLG) and sales-led (SLG) growth is what will offer your business a real chance to stay lean and agile."
“But this SaaS growth trend is also the most unexplored”, he added.
Since there aren't yet any silver bullets or best practices for running two growth strategies parallelly, he believes that rather than adhering to rigid workflows, businesses must adopt non-linear, feedback-driven processes.
“Today, companies are still finding their footing when it comes to the ideal mix of the two growth motions that is most effective for them. The “balance” may be different for different companies or perhaps not very easy to define. This is what makes the ability to run data-backed experiments, that allows for continuous improvement and evolution, a powerful paradigm for driving growth.” he added.
A subscription management solution can guide you in ensuring that your subscription management decisions and hybrid growth model pivots are always backed by data.
Younium, for example, provides a single source of truth for your business data and helps you grow your hybrid model.
Image via Younium
But, is your business ready to make the big plays with the hybrid growth model? What are the associated risks? And how can data help overcome them?
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While Niclas believes in an iterative and experimental hybrid approach, he also warns that simultaneously running two growth motions comes with its own set of risks.
He went on to explain, “When trying to bring about a balance between PLG and SLG, there can be a fear of conflict with your existing models. This is why it's important to identify your main source of growth. Then, instead of changing what is working, identify the areas where it's possible to do better.”
So, when done right, the risk posed by adopting a new growth model is worth it. 100%.
He further pointed out that, especially if your sales efforts are not enough to keep pace, in this dynamic marketplace, combining the strengths of both the product and sales teams is the best way forward.
And it's definitely more cost-effective and opens up a bigger sales target pool (SMBs and high-value targets), he added.
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SaaS metrics are great yardsticks to measure how successful your hybrid growth strategy is and how to circumvent risk.
Niclas identified the following three KPIs, for the hybrid model:
Interestingly, from a commercial standpoint, these KPIs are similar to the ones tracked in the case of a stand-alone product-led growth (PLG) or sales-led growth (SLG) model.
It's still all about SaaS churn and gross and net retention figures, with the hybrid motion, but the distinction lies in how you interpret and work with the usage data.
For example, in general, product-led growth (PLG) models tend to start with a smaller ticket size and the expectation is to grow from there. Whereas, with a sales-led growth motion, you start with a higher ticket size and may not scale much afterward.
To harness SaaS metrics and ensure the success of hybrid motions, the following steps are suggested:
This is where a subscription management solution can significantly aid your efforts. By collating subscription data (from different sources) in one place, allows you to justify what is working, identify what is not working, where to invest more, go faster, and go slower. "As a result, it becomes possible to really analyse the data and draw conclusions from it,” he added.
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Niclas shared that while the bifurcation is possible, just hiding some fields that exist in an enterprise-grade product doesn't automatically make for a product-led solution. Instead, he encourages SaaS businesses to:
1. How can businesses transition to a hybrid growth approach
Start by analysing current PLG and SLG efforts, identifying overlaps, and integrating tools like Younium for centralised data management. Additionally, training teams to understand both strategies can help ensure a smoother transition.
2. Why should a SaaS company consider combining PLG and SLG?
Combining PLG and SLG would allow SaaS companies to capitalise on the strengths of both approaches. PLG can efficiently attract a large user base, while SLG can convert high-value customers who require more personalised engagement. This hybrid approach can lead to increased revenue and market penetration.
3. What are the main challenges when implementing a hybrid PLG and SLG model?
Implementing a hybrid PLG and SLG approach presents several challenges, including:
4. Which SaaS metrics are useful for evaluating PLG and SLG success?
Tracking key metrics, such as Monthly Recurring Revenue (MRR), customer retention rates, and Average Revenue Per User (ARPU), is important. Since PLG often starts with lower ticket sizes and SLG typically involves higher initial contract values, tracking KPIs segmented by PLG and SLG motions can help optimise the hybrid growth strategy.
5. How does subscription management software support PLG and SLG strategies?
Subscription management platforms like Younium act as a central hub, consolidating data from PLG and SLG activities. This unified view enables teams to measure performance accurately, run experiments, and make data-backed decisions to refine growth motions.
If you are actively thinking about creating that perfect mix of PLG and SLG, you need smart technologies to support data tracking, analysis, and management.
A robust subscription management solution, like Younium, can help tackle the challenges of a hybrid growth model, data management, and metric tracking.
Younium is a one-of-a-kind subscription management ‘hub’ built to support B2B SaaS companies. Here’s how Younium can support your strategy:
Ready to hop on the latest SaaS growth trend? Accelerate your hybrid growth strategy with data-driven decisions. Discover how Younium’s Next-Generation Insights provides the visibility and real-time KPIs needed to confidently balance PLG and SLG, simplify your SaaS metrics, and make smarter, faster decisions.
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