Pleo’s Haresh Bajaj on How PLG + Sales Put the Company on the Path to Crossing €100M ARR

August 29, 2023

Pleo is a European business spend management solution (think: digital receipts, expenses, invoices). Founded in Copenhagen in 2015, Pleo serves 16 markets across Europe and works with companies from startup to the midmarket. Some quick stats on Pleo:

  • ~€100m ARR and growing 80% year-over-year
  • Valued at $4.7 billion, making it one of the top SaaS/FinTech startups in Europe
  • Generates revenue from two sources: a SaaS fee and interchange on card spend

Since inception, Pleo’s commercial efforts have been sales-heavy. They’ve recently turned to a combination of bottom-up PLG and top-down sales plus customer success. Their embrace of PLG has clearly paid dividends for the business – more on that later.

Haresh heads up Pleo’s SMB segment – responsible for all of revenue, distribution, growth and product-led efforts – and has been instrumental in spearheading PLG. Keep reading for his insights into how to combine PLG with a top-down motion, how to build a product-led org structure, and the secret sauce to increasing the ROI of PLG. (Oh, and you’ll get plenty of tactical examples.)

Making the case for PLG at Pleo

All selling at Pleo for the first five to six years was driven by sales and marketing. Most of the acquisition was from paid social campaigns in particular.

But Pleo kept hearing from customers that they wanted to self-serve for most rather than having to speak to a Customer Success Manager or Account Manager (AM). They heard that from new leads coming in, too. “We were just not built for that. All of our flows were set up with a commercial representative having to speak with them,” Haresh recalled.

Meanwhile, in the last 12-18 months, SaaS companies have been pushed to focus on efficiency rather than growth-at-any-cost. Pleo wanted to achieve a world-class CAC payback of ~12 months and was looking closely at how much they spent to acquire customers. “PLG became a way to create efficiency and effectiveness in everything we did,” Haresh said.

Internally, Pleo set targets around when they want to be profitable, and PLG was a big pillar in how they planned to get there.

Thinking about the customer journey as an infinity loop, not a funnel

Haresh sees Pleo’s customer journey as a Bow-Tie (as made popular by Jacco) or infinity loop rather than a classic funnel. There are five distinct stages at Pleo:

  1. Creating Demand: finding potential customers, making them aware of our proposition
  2. Educating & Selling: helping them assess if Pleo is right for them
  3. Guiding & Onboarding: once selected, helping set them up for success
  4. Adopting & Advocating: once setup, helping them get the most out of the Pleo solution, towards the most relevant features based on their needs
  5. Growing & Expanding: helping them spread to more users, teams, departments

Traditionally, marketing drives awareness and demand → sales converts demand into paying customers → onboarding or CS teams set customers up for success through feature adoption and product utilization → account management drives expansion/growth.

Pleo infinity loop

Product-led growth (PLG) requires a different way of thinking. Haresh see PLG as a distinct distribution motion that relies on the product being consumed as the primary driver of customer acquisition, onboarding, adoption, retention and expansion. It’s layered across the entire customer journey through all stages and not only the early stages (as is championed by the average PLG company), and sits alongside Sales-led distribution motion and not instead of.

“Fundamentally, PLG is about two main beliefs: (1) giving customers a choice and meeting them where they already are, i.e., in the product flows. (2) hyper personalization to make it super relevant for a customer’s unique situation, setup and needs. All of this translates to great customer experience and stickiness, and is good for the business too through higher retention and much stronger unit economics across the entire customer journey.” – Haresh Bajaj

Pleo’s go-to-market org used to look like a traditional SaaS company. Go-to-market was an assembly line (pipeline = marketing, converting pipeline = sales, etc.) and the commercial org worked separately from the product org. When Haresh joined, he restructured the team towards a domain model, inspired by Spotify, Klarna and others. He explains that in a domain model, you look at the most pertinent customer problems you want to solve, then organize teams to solve those problem spaces, decentralizing accountability and decision-making to the teams.

One of the problem spaces was everything around the SMB customer (Pleo’s bread-and-butter) with the goal of efficiency. From there, Haresh broke down the SMB problem spaces further (creating demand, etc.) and aligned product teams to each of these problem spaces or KPIs that they were going to drive. That’s how PLG became embedded across the go-to-market motion.

It wasn’t all as smooth as it sounds on paper. Some hits and misses during the transition:

  • Originally tried to do product-led sales on the side. They got pushback from sales that PLG would ‘take away their leads’ or even their jobs.
  • They changed direction and created a product team for sign-up & onboarding and paired that team with sales. Haresh realized that if Pleo could do this well without hurting people’s purpose, the team could make a case for extending it elsewhere.
  • They found ways to make sales’ job easier. One quick win was to take some basic questions that sales was asking and instead put those questions in the sign-up flow. This let sales focus on problem discovery rather than basic qualification.
  • They avoided affecting sales compensation. Sales would own a book of business and be responsible for all deals (even self-serve ones they don’t touch). This would lead to a transparent view across how all deals are progressing and would give sales peace of mind that they don’t need to “touch” each one. (Over time, they’d collectively hope to tackle higher targets through these efforts.)

Embracing cross-functional teams to drive PLG 

The key ingredient in making this work was to bring the right multi-functional teams together and align on their primary KPI, said Haresh.

“It’s like when your body encounters change, the antibodies reject it. At first, everybody in your organization is used to doing things a different way. So you have to carve it out. Put dedicated people on it until it’s big enough that the antibodies can’t reject it and force it out, and it becomes your business. And then you merge everything back together. And that’s what we have done – we have assembled this into the same business unit, under a single-threaded accountability with me.” – Haresh Bajaj

Across the five stages described earlier, Pleo has combined traditional go-to-market teams with product, content, and product marketing teams.

  • Product-Led Acquisition: Growth Marketing supports new user acquisition, i.e., bringing high quality traffic to the website, and then works in conjunction with the Website team with a Conversion Rate Optimization (CRO) focus to convert that traffic to paid sign ups. They also ensure Pleo’s marketing messaging aligns with what users will experience on the website. KPI = pipeline value (with a close eye on CAC payback).
  • Product-Led Sales: Product Sign-up & Activation team helps qualify and nurture leads for Sales through top-of-funnel signals, industry, source, ICP fit, customer intent, product trial usage data, external enrichment, etc. This helps increase conversion, velocity, deal size, and customer satisfaction. Pleo now also does sales forecasting based on how well customers convert in the product across certain plays. KPI = new ARR (with a close eye on conversion and customers without any human intervention). 
  • Product-Led Onboarding & Adoption: Customer Success works with Product Adoption & Engagement teams to leverage customer intent, ICP and product data in order to help customers get to value quicker. For Pleo, it’s mostly through accounting integrations or doing custom exports of their transactions for bookkeeping purposes. Similarly, the team flag customers who need help with the setup, with low usage or bad experience (at risk) or customers coming up for renewal to drive proactive churn mitigation plays, and also flag enthusiastic customers who derive value from Pleo but may need some help to capture the full potential of the Pleo offering. KPIs = time to value, sticky feature adoption, and churn ARR.
  • Product-Led Expansion: Account Management works with the Product Growth team to identify champion customers who consistently drive usage, and are most qualified for upsell. The teams also work together to drive bottoms up growth, e.g., empowering decision makers to trigger growth and feature adoption from user adding flow, better communicating value of paid features, enabling limited experience of paid features, empowering non decision makers to trigger user growth, etc. KPI = expansion ARR (with a close eye on Average Revenue Per Account (ARPA) and # of users per customer).

Reflecting on the secret sauce for PLG

“It’s very simple actually,” Haresh said. “You need strong buy-in from the C-level and it needs to be part of the company strategy.”

Ok, maybe not so simple after all! Haresh emphasized that as PLG becomes trendy, it’s key to figure out if you have the right necessary conditions to bring in PLG.

  • Are your users motivated to solve the problem?
  • Can users drive to value in a self-serve way?
  • Do they have permission or influence within the organization to solve the problem?
  • Are your current go-to-market motions forecasted with a certain level of accuracy?

He pointed out that any new motion will naturally create friction. You need to first be aware that this will happen. Second you should think about tackling it at the system-level so these friction points can take care of themselves versus whack-a-moling them at an individual level.

Finally, make an intentional investment in data and commercial operations (aka RevOps). One of the biggest pitfalls that Haresh sees is that go-to-market teams are bombarded with data, but they aren’t told how exactly to use it.

There needs to be not only data, but data along with a messaging framework and playbooks for folks to follow. “For me, my best friend in this endeavor is our RevOps lead.”

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Haresh is hiring. Reach out to him on LinkedIn or check out Pleo’s careers page.

Kyle Poyar

Partner at OpenView

Kyle helps OpenView’s portfolio companies accelerate top-line growth through segmentation, value proposition, packaging & pricing, customer insights, channel partner programs, new market entry and go-to-market strategy.