A reoccurring theme of conversations I’ve had lately is what types of sales-motions fit best at a product-led company, and how to get an inside sales machine set up to complement product-led growth.
Many product-led companies start out purely product-led. There may be some light sales assistance, but the bulk of new customer acquisition comes from a self-service online channel.
And then at some point in the company’s evolution, the potential for significant growth via a sales team becomes too obvious to ignore. I think this is an important step in the product-led growth continuum and we’ve seen it help boost infamous successful product-led companies like Slack, Dropbox, and Atlassian.
But there is not a playbook for how to add sales into a product-led company and I think that’s because there isn’t a one size fits all. When considering how to layer sales into an existing product-led company it’s important to be thoughtful and specific about the type of sales motion that will be best fit the company, the market, and the customers.
Many product-led companies get to the sales fork in the road and scratch their head wondering where and how to start building their sales machine. It’s entirely new for them and the path forward isn’t always clear.
To start, it’s important to understand the types of sales motions that may or may not fit a specific product-led situation. I outline them below to help you consider which are right for you.
New customer self service
The classic product-led motion is self-service where new users sign up (often for a free trial first, or on a freemium product tier) online and begin using the product. In self-serve, the customer never interacts with a person—they discover, try, and purchase the software online, on their own.
Existing customer expansion self service
A true product-led company also has a path for users to expand (usually by adding more seats) or upsell into a higher-priced tier completely online. This is a natural extension of self-service.
New customer sales assisted
Many product-led companies have prospects who are “ready to buy” inbound leads. These are leads who want to purchase but for whatever reason, they can’t, or won’t buy online. For these leads, salespeople aren’t needed, because a sales or finance assistant can facilitate the purchase.
A common mistake PLG companies make is not recognizing these sales-ready leads for what they are. The company may just not be selling to them at all because they force everyone to an online transaction. Or, the company may be pushing sales-ready leads to the sales team where they either enter a qualifying process the prospect doesn’t want or need, or the sales reps are just taking orders (and receiving commission).
Existing customer sales assisted
Similar to new customer ready-to-buy leads, existing customers often self-identify that they want to expand or upgrade and they simply need assistance to do that because they aren’t able, or don’t want, to expand online. These customers can be expanded by a customer success, sales or finance admin who simply helps them complete their expansion in a sales assisted manner.
New customer inbound
If a company is doing any type of online marketing it is likely generating leads.
You can think about marketing lead generation in two categories. There are marketing-generated leads (MGLs) which are warm (or lukewarm) potential prospects, and there are marketing-qualified leads (MQLs) which tend to be hot leads who indicate they want to speak to sales or are somehow qualified enough to be worth sales effort on them. The exact definition & criteria used for MGL and MQL varies by company.
A typical inbound sales motion is to have sales reps, or sales development reps, call and email the marketing leads in order to make contact, and qualify them as prospects.
Many product-led companies are generating leads, but haven’t yet built a sales machine to work them. An inbound sales machine can be highly effective and a great first step into evolving beyond pure PLG.
Existing customer inbound
Another category of inbound sales is inbound demand for expansion and upsell from existing customers. This sales motion can be managed either by sales or the customer success organization. In existing customer inbound there are likely three types:
- Hot customer leads who contact the company looking to upgrade or expand.
- This type of existing customer inbound expansion is similar to the sales-assisted expansion previously described. They are likely ready to expand or upgrade and just need assistance to do so.
- Warm leads from a customer account that have converted from a marketing campaign.
- Individual user accounts detached from the main customer account. For example, a single user who signed up for a trial with their company domain, but did not join the existing customer account (often in a different department or business unit).
New customer outbound
Outbound is a sales strategy to prospect into companies that are not yet customers, and not yet leads. Of the various sales options, it is the least efficient in that it can take significantly more effort to make contact with cold leads who are not yet aware of the company or product.
Although outbound sales is usually the least efficient option, it can be used very effectively to target specific types of ideal accounts that may otherwise be hard to reach with marketing alone, especially large enterprises.
Outbound sales (high sales effort to highly specific targets) are on the opposite end of the spectrum of product-led (no to low sales effort). It normally takes longer to get an outbound program built and optimized.
Existing customer outbound
There are three categories of outbound sales motions to existing customers.
- Existing account expansion. Some customers will reach out to expand organically, but others require proactive nurturing. The effort to break through existing customer accounts can be owned by customer success, customer development or sales.
- New lateral team expansion. In many organizations, purchasing is decentralized. Different teams have their own budgets, so although Division X may already be a customer, Division Y is not and they have their own purchasing process. Outbound sales to lateral teams can be very effective because there is already a precedent to purchase inside the account.
- Top-down customer development. In product-led growth groups of individuals choose a product and then expand across the organization, which is sometimes called “bottoms-up growth”. That can be different (and less stable) than a centralized, corporate purchase decision which is top-down. A top-down sales initiative can help secure large accounts and forge enduring, significant customer relationships.
Consider the right mix of sales for product-led growth
Sales teams sometimes spring up rather haphazard in product-led companies in order to handle incoming customer & prospect demand. Initially, that works to handle early sales, but at a certain stage, it becomes important to be more intentional about building and scaling the sales organization.
Every sales motion listed here doesn’t fit every product and every market, so it’s important to be thoughtful about what type of sales machine you are building. In addition, you can’t build it all at once. Start with one sales motion, get it to a predictable, scalable place, and then add in another motion. These are specialized sales efforts and require specialized teams to execute them well.