Product-led growth, in the most classic sense, is a very specific approach to go-to-market that relies on a self-service customer acquisition channel—where people can try, buy, expand and renew without ever talking to a person from the company.
“A very specific approach to go-to-market that relies on a self-service customer acquisition channel—where people can try, buy, expand and renew without ever talking to a person from the company.”
Product-led growth is an inherently efficient go to market strategy, but it requires an alchemy of elements, not the least of which includes:
- A product so good that solves an obvious need.
- A product that has clear, easy to see value.
- A product that is so delightful that people just want to use it to be part of the tribe.
- A product that makes people rave—something they are compelled to share and talk about.
- A product people can easily understand and connect with.
- A product people can try or experience on their own even if they can’t buy on their own.
- A product has to be easy to use without support, set up, training, etc.
- A product with a customer acquisition model has to be intentionally created—it’s hard to retro-fit a sales-led product into a self-service model.
Clearly, it’s all about the product.
The rapid growth that comes from this model is rare air…think Slack, Zoom, Atlassian, Dropbox, Calendly.
Possible? Yes. Common? No.
There are many good reasons why companies can’t just switch on a product-led growth spigot. Some of those reasons may include:
- There is no self-service free trial or freemium option.
- There is no self-service purchase option.
- The pricing strategy excludes the bottom of the market.
- The product has a clunky user experience.
- The product is complex and requires setup, configuration & training.
- The product wasn’t initially designed to have a self-service customer acquisition mechanism.
But even when the elements of product-led growth aren’t in place, companies can expand the way they think about product-led strategies.
While not every company can have a true product-led growth model, every company can (and should, IMO) be thinking about creating a product-led funnel. A product-led funnel uses a go-to-market strategy that helps to create a more ready-to-buy, self-qualified prospect.
“A product-led funnel uses a go-to-market strategy that helps to create a more ready-to-buy, self-qualified prospect.”
You can spot a product-led funnel with some or all of these characteristics:
- Looks more Sales-Assisted than Sales-Led.
- Prospects have heard about, seen, or experienced enough of the product that they have self-qualified and know they probably want it by the time they come into the sales funnel.
- Increasing inbound organic demand coming from a flywheel motion.
- “First-call” hot inbound leads who:
- Ask for a free trial.
- Ask for wiring instructions or where to send a PO on their first call.
- Close in one call.
- Inbound customer demand for account expansion.
And what about sales in this product-led world?
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-led sales is a customer-centric method of reducing friction in the sales cycle.”
The most common approach to software sales has been in play for at least 20 years—pioneered at companies like Salesforce and cemented with books like Predictable Revenue. It’s prescriptive. It’s run from a playbook. It follows a process. As it should. But it’s probably time the software sales playbook & process get a make-over.
Product-led sales offers you a way to create a more modern buying experience based on how customers actually want to buy, not on how you want to sell to them.
There are two different paths into product-led sales coming from completely opposite ends of the spectrum.
Product Led Growth + Sales
Many of the most well-known product-led companies eventually layer in a sales team to drive revenue growth. That’s because a sales organization can help accelerate expansion and renewal revenue, selling higher & wider into an enterprise organization than a product can alone.
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.
With product-led growth + sales, you may see some outbound cold selling, but not much. The emphasis will be on expanding and growing the customer base through a top-down approach that complements the bottom-up growth that’s already occurring.
Sales + Product-Led Funnel
In a traditional sales-led environment the focus will be on targeting ideal customers, making contact with them, and then working to qualify, find a need, create interest…all before we get to the nuts and bolts of product-talk. In fact, in some sales-led organizations, the emphasis is pumping the brakes on product and pricing conversations until after discovery & qualification entirely.
It’s a top-down motion to acquire customers.
A sales-led organization may be increasingly finding itself come up against a more product-led competitor. In these cases, it is useful to create a product-led funnel that helps accelerate the sales cycle and create a more frictionless experience for the buyer. A key to success is also to create a more buyer-centric approach to selling that meets the buyer where they are in their journey and doesn’t prescribe a rigid sales process.
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.
Sellers may also find themselves receiving eager pressure from buyers who want pricing & free trials very early in the sales cycle, “before they are qualified”. This is an example of where more sales skill needs to be used in order to give the prospect what they want & expect, without losing total control over the buyer experience.
Degrees of Product-Led
Whether you fit the classic model of product-led growth already or are just starting to think about a product-led funnel, considering how sales fits into your go-to-market strategy is a key part of accelerating results.
This article was originally published on ArthurVentures.com