Who Owns Growth in SaaS? It Depends. Here’s What the Data Says.

September 7, 2023

Who actually owns “growth” at a software company?

  • Is it product management? Product-led growth is a popular strategy.
  • Is it marketing? They build messaging and run campaigns which should drive growth.
  • Is it growth? Growth is in the name after all…
  • And what about sales? They’re closest to the customer.

Rather than simply opine, I wanted to investigate what the data had to say. I combed through the OpenView and Pendo Product Benchmarks report, which featured survey data from 1,000+ companies ranging from pre-revenue to $50M+ ARR.

Here’s what the data shows 👇

Sales-led Companies

Sales Led Companies_KPIs

  • Sales is the power player. The team owns sales-assisted revenue — aka nearly all revenue at a traditional SaaS company — and is highly influential across other KPIs.
  • Customer success owns retention – no surprise there. They also tend to own onboarding and activation (39% of the time) with an assist from product. 
  • Marketing owns new sign-ups/leads (>50% of the time) with exceptions being among outbound-focused companies or early stage businesses lacking a mature marketing function.
  • Growth teams often aren’t really a thing at a traditional SaaS company. If they do exist, these teams can be all over the map in terms of their KPIs and reporting structures.
  • Product management doesn’t tend to have clear growth KPI ownership, which I think is a missed opportunity even if a company doesn’t see itself as product-led. Of course, even without “owning” a growth KPI, product teams (and the product itself) are highly influential for achieving all KPI targets.

You might notice that we didn’t include expansion revenue in the dataset. In my experience, expansion revenue tends to live in either sales (via Account Managers) or customer success (with less complex expansion motions).

Product-led Companies

Product Led Companies_KPIs

  • Product management is much more of a powerhouse, owning product activation (45% of the time) and self-serve revenue (36% of the time). Similar to sales in a non-PLG company, product teams are highly influential across other KPIs like retention and free-to-paid conversion.
  • Growth plays a more important role, but it’s all over the map. While growth teams arguably have the broadest mandate of all teams, they’re rarely the primary owner of any single KPI (with the possible exception of free-to-paid conversion.) Our data shows that today growth teams tend to report to either the product leader (most common) or the CEO (second most common).
  • Marketing continues to own sign-ups/leads with an assist from growth. They may own a self-service number; that’s typically at a PLG company with a mature paid acquisition function. Marketing teams also play a supporting role throughout the customer lifecycle by owning all relevant messaging, content-related initiatives, as well as third-party channels outside of the product (email, paid channels, LinkedIn, App Store listings, etc.)
  • Sales continues to own sales-assisted revenue and supports free-to-paid conversion.
  • Customer success continues to own retention in partnership with product.

My Reactions to the Data

  • Growth is a notoriously tough team to hire for and manage. It’s asked to improve KPIs across the funnel, but lacks clear ownership or resources to have that level of impact. Being successful is all about prioritization and influence. (Elena Verna and Andrea Wang have a great rundown of all-things growth teams in Lenny’s Newsletter.)
  • Let’s elevate the role of the product team in driving growth. Even if companies don’t see themselves as PLG, growth-minded product leaders can contribute to results in a variety of ways: (a) more product usage, which might connect directly to expansion revenue depending on the pricing model, (b) higher adoption of sticky features that are correlated with retention, (c) in-app upgrades or trials of new products, (d) smarter packaging & pricing.
  • If product owns a revenue number – as they do in some PLG businesses – will we start seeing PM comp look more like sales comp? I don’t expect product managers to immediately shift to a 50% base + 50% bonus compensation model. But this might look like setting soft revenue “quotas” to level set about the expected contribution of the product growth team, along with letting folks share in the upside in cases of over-performance.

People + Technology → Growth

People need the right tools to efficiently achieve these KPIs. Thankfully, the number of tools to turn your product into a growth engine has exploded in the last couple of years.

You might wonder: what tools do I need today versus what can I save for later?

We unpacked that question using the same dataset.

PLG Tools

1. Product analytics (think: Pendo, Amplitude)

  • Think of this as the CRM for what happens in your product. How can you grow if you can’t see how your product is being used?
  • 66% of folks use a third-party tool.
  • Widely adopted among early stage startups and late stage companies alike.
  • Used by both PLG-native companies and those that aren’t focusing on PLG.

2. Product onboarding (think: Pendo, Appcues, Userflow)

  • Think of this category as a low-code/no-code way to help users adopt more of your product on their own.
  • 35% of folks use a third-party tool.
  • This is the only category that’s MORE widely adopted among folks who aren’t focusing on PLG. I suspect that’s because PLG companies view this as a core part of the product experience (and resource it accordingly).

3. Experimentation (think: Optimizely, VWO)

  • PLG native companies often grow faster as they scale. Why? They can run more experiments, more quickly and then ship the winners into production.
  • 16% of folks use a dedicated third-party tool.
  • It’s more common among PLG-native (25%) and later-stage ($10M+ ARR) companies.

4. Lifecycle marketing (think: Braze, Customer.io)

  • PLG isn’t solely about what happens in the product; you want to engage users outside of the product with contextual communication.
  • 16% of folks use a third-party tool for lifecycle marketing. This figure is again higher for PLG-native and later-stage companies.

 5. Interactive demos (think: Navattic, Reprise, many more)

  • Your product can be a selling tool even if users can’t self-serve. Interactive product demos are all the rage as we look for ways to blend PLG and sales.
  • 14% of folks use a third-party tool despite this being a fairly new category.
  • As companies like Pleo adopt interactive demos and see 🔥 results I suspect this category will continue to grow.

6. Product-led sales (think: Endgame, Pocus, Correlated)

  • If you’ve invested in great product analytics, you then want go-to-market teams to be able to see and act on that data.
  • Only 7% of folks currently use a third-party tool.
  • This is popular among the sophisticated PLG crowd – i.e. PLG native companies with >$10M in ARR – but hasn’t gone mass-market just yet.

More Resources

This article first appeared in Growth Unhinged. You can subscribe to get content like this delivered to your inbox here.

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.