While we’re all talking about adding AI to product roadmaps, a potentially larger – yet still untapped – opportunity is to leverage AI in your internal operations. In theory, AI should set a new standard for ARR per FTE as companies are able to take manual work and offload it to smart AI agents. This thesis is already playing out in AI-driven customer support as well as in AI-driven outbound prospecting.
3. Product-led, Sales-assisted, and Incremental
Earlier this year, the data showed that companies with PLG characteristics were far less profitable than their SaaS peers. These businesses had outsized spend in both R&D (which makes sense given investments in product growth, UX, analytics, etc.) as well as sales & marketing. While companies might’ve appeared to be product-led from the outside with free trials, public pricing, and the like, the reality is that PLG efforts weren’t core to their business models.
Today we look for PLG investments to drive incremental growth as well as to efficiency by taking work that would usually be done by people and replacing it with product-based solutions. One emerging metric to assess PLG performance is product-influenced revenue: how much net-new revenue is from customers who start with a meaningful product interaction before ever talking to sales.
Product-influenced revenue is highest among SaaS companies with a self-serve freemium offer, representing about 90% of total revenue. That said, offering a freemium plan is not enough. Product-influenced revenue can swing from 28% at the bottom quartile to 100% at top quartile companies.