Product-led growth is considered by many as the next logical step for majority of Saas companies to move forward and scale faster. Plenty of contents are available on Internet explaining the pros and cons of each method and the reasons behind such adoption of GTM strategy.
In the following article, we will provide you everything you need to know to get started with Product-led sales.
Understanding the shift from Sales to Product-Led
Back a few decades ago, companies were mainly leaning on Sales teams to drive the revenues. They were responsible of building their pipeline of opportunities on both new business and existing business scopes.
A first shift appeared with the Internet democratization: marketing teams have been able to provide tangible metrics regarding their lead generation efforts, and softwares have been moved from an on-premise stand point to a cloud version, accessible by everyone directly through their browser, allowing the subscription economy to raise.
A third one is actually happening, the Product-Led motion.
With all the content available online, people are able to understand way more easily why they should use your product and want to try it by themselves before talking to anyone.
It means that after tracking interest, we can now track something even more powerful, intent. Rather than downloading guides and white-papers, your leads are trying your product, checking if it can work for them.
This is a huge shift as it completely deletes the risk they were supporting by committing with you on paper, with a promise, not being 100% it will be good fit.
Why and when Product-Led?
Let’s be clear. The Product-led approach is not a good fit for everybody.
Some industries as still used to purchase softwares the “old fashion” way, comparing different vendors (usually very big companies). The good news here is that these companies are used to purchase solutions and run proper benchmarks that your marketing and sales teams are used to handle.
The magic of the Product-Led mindset is more dedicated to SMBs and Mid-market companies, actively looking for a solution and able to move forward fast.
As these companies are actively looking for a solution to help them fix the issues they are facing, they already have a budget in mind, and forecasted some time and resources to make it work. Besides of their experience trying your product, the only remaining question will be related to your pricing: does your price requires an escalation to their management for validation or not.
When dealing with monthly subscriptions of 3 digits prices, it is usually a no brainer and companies already have credit cards dedicated to these types of payments.
When dealing with 4 to 5 digits, some will be ok with credit cards but after validation by their financial team, others with prefer a wire transfer with a more classic approach (purchase order, etc.).
For more than 5 digits invoices, you can be sure you will have to deal with an other process than “just” a trial and agreement. You may actually wonder in which world a Product-led approach can end up with a 6 digits invoice. Well, you will quickly understand that the Product-Led approach, in addition to easing the conversion of your signups can be an amazing lead generation source for your Sales team!
How it looks like
Let’s try to picture the shift we just discussed.
An old-fashion sales pipeline looks like this:
After the first shift with marketers in the loop, the funnel looks like this:
With leads moving from Marketing Qualified Lead to Sales Qualified Lead statuses.
In both cases you can have a list of leads from less to more educated, interested, etc.
In the freemium and trial conversion focus, theses ways of working will very quickly become a nightmare as you should have a certain volume of daily signups which will be hard for your team to keep track of.