how to use your product as a revenue machine?
“The future of growth is product led. Data shows that companies leveraging a Product-Led Growth strategy perform better on average – faster growth, higher margins, lower burn and stronger valuation multiples. Product-Led Growth will soon become the norm, making it table stakes for SaaS companies that want to win in their markets.”
– Blake Bartlett, Partner, OpenView
With the advent of Product-Led growth, a very existential question arises among the SaaS world. What’s to happen to the sales teams?
In its purest sense, this very specific go-to-market strategy (PLG) relies on a self-service customer acquisition channel. As such, some may even wonder if sales teams are to disappear plain and simple.
We’re here to prove otherwise.
Product-led companies still have to close deals.
And it’s much easier to do so once you can experiment first-hand what your users are doing with and within your product.
In order to fully benefit from Product-Led Growth, sales teams must reinvent their approach and processes.
Here is how.
The basics of Product-led Growth
Product-led growth was initially coined and described by SaaS expert VC firm OpenView as “the go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.”
Does it work? Yes. With a median enterprise value (EV) 2x higher than the public SaaS index as a whole – as far as growth strategies go, product-led does seem to make wonders.
But why is that? As pointed out by product-led pioneer advocate Wes Bush in his seminal book “Product-led Growth: How to build a product that sells itself”, the increasing relevance of the approach is triggered by 3 market shifts impacting all SaaS:
⇒ Startups are much more expensive to grow (with customer acquisition costs on the rise)
⇒ Buyers now prefer to self-educate
⇒ Product experiences have become an essential part of the buying process.
Looking closely, these 3 shifts do indeed impact the most important stages of a SaaS life: Acquisition, Expansion, Retention. And build a strong case for people to see that SaaS magic actually happens in the product!
Thankfully, this reality has shed some light on many of today’s most successful organizations, providing us with a wide array of product-led success stories.
In most cases, product-led sales teams created new processes to enhance their actions with product usage data.
Start focusing on the right leads with PQLs
SaaS companies are increasingly offering free trial periods or freemiums.
Considered as the cornerstones of Product-led Growth, these offers are used as acquisition channels – and are proven to be very efficient – as it widens the top of the funnel.
To unleash the potential of these offers, Product Qualified Leads (PQL) are paramount.
If your product or solution is great and has virality – or at least does not solely appeal to a niche market – signups may be numerous.
As a result, prioritizing the sales team conversion efforts to the users most likely to do so isn’t just logical – it is a necessity.
And this can be a challenge… Thankfully there are solutions 🙂 And Product Qualified Leads (PQL) is definitely one of them.
What’s a Product Qualified Lead (PQL)?
A Product Qualified Lead is a user who matches your target customer profile and has experienced the value of your SaaS product through his actions and completion of key events.
Obviously, a user who matches all the above criteria and thus falls into the PQL list is someone that is much more likely to convert to a paid plan than any other user.
By uncovering this perfect fit, PQLs help sales teams to focus on the biggest opportunities.
Pulling out your Product Qualified Leads is a process that requires a deep dive into your product usage data.
Leveraging the PQL Matrice to reach out to the right users
To reveal an actionable Product Qualified Leads Matrice, Salesmachine automatically combines 2 essential qualifying scores – the Customer Fit Score and the Product Adoption Score.
While doing so you’ll probably be surprised to discover that no more than 20% of all your trial or freemium users make the cut.
But focusing on converting these 20% super qualified users is evidently much more worth it than dissipating efforts to all your user base.
Connect The Dots Between User Behavior And Sales Opportunities
As a general product-led conversion and expansion rule, the key point to master is leveraging free users’ data in order to close contracts.
Selling a deal is all about convincing the buyer of your paid solution’s value. What better way to do that than by showcasing what the buyer’s free users are already getting!
It’s the best way to introduce a new set of KPIs that could be unlocked with a paid plan.
With Salesmachine, you can score your users’ health, satisfaction and usage in real time. Using this data will give you valuable insights that you can integrate into your sales pitch.
In addition, start surfacing the best opportunities for expansion in your customer base. See what top accounts and users are doing in your product, how far along their journey they’ve come, and whether or not they need your team’s involvement or additional products to reach maximum value.
Salesmachine will sharpen your eye to ensure you detect the customers that need that extra value provided by an up-sell or a cross-sell based on customer behavior and action what is needed to close the deal – so that you’ll keep customers satisfied and no revenue potential unattended.
A richer approach to sales
Contrary to popular belief, selling is not dead. It’s very, very alive and most buyers still make their business purchases through some level of sales experience.
But the traditional approach to sales is shifting, driven in part by advances in product-led growth, unfettered access to information, and a buyer who wants to take control of their own journey through research & exploration.
Product-led sales is a customer-centric method of reducing friction in the sales cycle. It can accelerate the funnel by creating well-qualified prospects no matter where they are in their buyer’s journey.
Product usage data and scores are used to enhance the sales team knowledge and power actions that have more impact. Depending on the company type and organization, product-led sales may vary a little – but should be seen as a very enriched sales process.
Two types of sales winning strategies are fostered by the product-led sales approach:
Sales on top of product-led
Eventually, most of the native product-led companies such as Dropbox and Slack will layer-in a sales team. That’s because good sales people can tremendously accelerate expansion, sell higher and wider into enterprise organizations than a sole product.
Product-led growth is a bottom-up motion where users choose the product and the customer base grows organically from invites to colleagues & friends, sharing and natural virality that comes with an easy-to-use product that solves a problem or makes lives easier.
A sales organization can help drive the transformation from users choosing the product to the organization choosing the product centrally, which further solidifies the relationship between company and product.
In this case, the sales team adopts a consultative approach with their users and potential customers, working at revealing the benefits of a company-wide paid plan.
In this case, product usage is paramount to the strategy. Sales must approach enterprise decision makers with the knowledge of individual users’ usage and argue the benefits of a paid plan for each user and the company as a whole. Ultimately, this will create qualitative 1:1 relationships that will increase customer lifetime value and NPS scores.
Salesmachine’s event-triggered Playbooks are the ideal tools to conduct this strategy. Product-led sales teams can define key product usage milestones and build a playbook to automatically trigger alerts, tasks and emails.
Product-led on top of Sales
Depending on the company, its processes, product and legacy, a more traditional sales-led approach may still prevail. Fair enough.
It would however be a shame not to take advantage of the user’s product usage data to make a good assessment of its needs and increase its product adoption prior to sales involvement.
With the elements of a product-led funnel in place, sellers will find themselves talking with new prospects who are virtually sold on the product and just have a few questions. These are prospects who shouldn’t be pushed into the typical sales steps of qualification, evaluation, and negotiation that will only serve to slow down the sales cycle.
Salesmachine enables product-led sales teams to better qualify cold prospects, assess their usage and engage with them at scale to increase product adoption. With automated Workflows, sales teams are able to create automated educational campaigns that will drive your users right where they need them to be in order to convert them.