In a product-led company, initial growth is usually driven by a self-service channel. Potential customers find, try, and buy the product without ever interacting with a person from the company. These same customers can continue to expand and renew on their own, making for a highly efficient, predictable revenue machine.
As a product-led company continues to scale, a sales-driven motion is often added to further accelerate revenue growth. There are several ways sales can be layered into a product-led model:
- Expansion & renewal sales
- Inbound sales
- Outbound sales
Expansion & Renewal
Expansion and renewal sales is usually the first, and easiest, motion to add to product-led growth. This involves engaging customers that you’ve already acquired via the product-led self-service channel in order to build business relationships, understand their needs, help them achieve success, and ultimately expand & renew their account.
Separate from trials, if marketing is generating lots of leads (from content, webinars, events, etc), applying an inbound sales motion to those leads can be the next step in the progression of sales. Rather than waiting for marketing to warm the leads to turn into trials, sales reps reach out to follow up with leads in order to accelerate the buyer’s journey and convert their interest into a purchase. In some cases companies have Sales Account Execs do the reach out, and others use Sales Development Representatives (SDRs), depending on the contract value and the most efficient model.
And then there is outbound sales. There can be different definitions of outbound, but for this discussion, I am referring to traditional, cold outbound—reaching out to companies who are not already in your lead database.
Of all the various sales-motions that can be adopted, cold outbound is usually the most challenging for product-led companies.
Why Outbound Can be Challenging for Product-Led
If you think about it, outbound sales is the opposite of product-led.
- In product-led growth, potential customers find, try and buy without ever interacting with a person. They discover your product through one or more channels like word-of-mouth, events, advertising, partners, press, organic search, customer reviews, etc. They are propelling themselves through their buyers journey. Think: Red hot.
- In outbound sales, sales reps conduct targeted outreach to potential customers via a cadence of emails, calls, and social media. The goal of the outreach is to convert a cold lead who has likely never heard of the company or product, into a paying customer through a sales process. The potential customer is being pulled into a buyer’s journey, instigated by the efforts of sales. Think: Ice cold.
So…why is it sometimes hard to add outbound to a product-led model? The answer sounds pretty obvious but is often missed. Outbound can be challenging for a product-led company because the two motions are so very different.
The strategies, initiatives, and tactics that work to attract product-led buyers (who have strong buying intent when they come into the funnel) might not work for sales-driven buyers (who have little to no pre-existing intent). The messaging and content might need to adapted or even created entirely from scratch. There may even be a different Ideal Customer Profile or vertical for product-led versus sales-driven.
How to Add Outbound Sales to Product-led Growth
If and when you decide to try an outbound sales motion, there are some ways to increase your odds of success. The right approach to implement outbound for a product-led company includes:
- A long-view. Outbound isn’t something you just turn on like a faucet to fill your bucket with loads of qualified leads and pipeline. Be realistic in your expectations of what outbound can deliver and how long it will take to create a high-performing outbound machine. It’s probably going to take longer than you think it should, and require lots of trial and error as you learn what works and what doesn’t. You might get lucky and find outbound works quickly…but don’t bank on it. Expect the worst and hustle like he!! to far exceed those expectations.
- A clear definition of success. Create a clear charter for what the outbound program is responsible for, why it exists, and how success will be measured. Set targets for pipeline creation, customer wins, and bookings. When setting targets, assume the worst. Review industry outbound benchmarks for activity, meetings set, opportunity conversion and win rate. Assume you won’t be as effective as those benchmarks when you create your goals (and be happy if you do hit or exceed them ahead of time).
- A test & learn mindset. When you start your outbound prospecting you probably just want to pick up your product-led playbook—same messages, content, market segments, roles, etc. That’s a good place to start. But what works for product-led may not work for outbound (in fact…it probably won’t). Be prepared to test & tweak entirely new messaging, content, ideal customer profiles, segments, etc. That’s on top of the standard things you need to test for any outbound program—sources of leads, cadences, etc. Think of the whole thing as an experiment and seek to find things that work while you learn from things that don’t work.
- Rigor & accountability. To really understand how outbound may be able to impact your growth you will need to commit, create a plan, follow-through, and focus on it. You’ll need to hold yourself, and your outbound team, accountable for delivering real learnings and results. Outbound works, but it doesn’t work overnight, and it doens’t work by just trying it on the side. It’s a full-fledged initiative and needs to be staffed, funded, managed, and measured.
Do You Even Need Outbound Sales in a Product-led Company?
Maybe. Maybe not.
Even in today’s world where product-led increasingly becomes the norm, outbound works. But the degree to which it works depends on an alchemy of the market, product, prospective customers, targeting, hiring & training, and how well the overall program is executed. Depending on how those elements converge, outbound will have varying degrees of efficiency.
This article was originally published on ArthurVentures.com.