Only 1/3 of Companies Utilize This Revenue-Boosting Strategy
2/3rds of businesses are squandering a crucial expansion revenue opportunity, leaving easy money on the table. And it’s a strategy that has been around for decades. Think about try-before-you-buy, free trials, test drives… trying on your back-to-school clothes or the N64 at Blockbuster.
But over time, and especially with the advent of SaaS and Subscription, we’ve iterated on product led opportunities that go beyond self serve.
The smooth onboarding that comes alongside PLG companies like Slack, Miro and HubSpot leads to amazing conversion numbers as users enjoy the benefits of trying out and engaging with the product on their own terms. In fact, according to CMSWire, these days 53% of customers prefer a buying process that avoids sales altogether.
But how can you address opportunities for expansion like cross sells and upsells? The answer lies with product-led sales. By finding those high-intent leads to upsell and send to your sales team, you can develop a powerful product-led sales strategy and fully reap the benefits of your customers who are willing to upgrade and pay more.
Today, we’re breaking down companies that are doing product-led sales the right way, benchmark data and actionable takeaways to get you on the right path.
But first, if you like this kind of content and want to learn more, subscribe to get in the know when we release new episodes.
Case Studies
So who do we look to as champions of this strategy?
One such example is Figma - a freemium collaboration product that had a massive growth spurt last year. The company reportedly grew 100% year-on-year, utilizing this formula until its eventual acquisition by Adobe in 2022 for 20 Billion dollars.
That growth is in part due to their former growth strategist Jesus Requena, who broke down their product-led sales strategy for us in detail. Requena says “As we acquire new users, that will bring their teams, who will upgrade to our self-serve product tiers and from there sales will reach out when the account is a good fit and has the right product behavior indicating they are ready to upgrade.” By identifying indicators in their customers behavior, 95% of Figmas pipeline came from existing users. By looking through all of these active accounts and their intent, product-led sales enabled Jesus sales team to make smart, informed sales decisions with an extremely high success rate.
Takeaways
But how can you get started with product-led sales? And once you do start, how can you ensure success?
First, you need to show product value immediately. We’re talking in minutes. The longer you wait to demonstrate the value of your product, the more likely users are to lose interest and fall out of the target demographic for a product led sales motion. If a customer is turning to you for a solution to a problem they are having, you need to solve that problem in minutes to fully demonstrate your value and keep them around for the long term. In our Benchmark study breaking down hundreds of companies, we found that only 34% of businesses are making this a priority. That number will need to increase to see the full potential of product led sales.
Second, your sales team needs to have accurate and informative data about your customers. Figuring out which customers are the target for your cross sells and upsells will vary from product to product, however it needs to be well thought out and informed by data. In Figma’s case, Requena would “surface all the users in an account and highlight the ones that are either a champion (top users based on actions) or an influencer or decision maker (based on titles or roles within the product). The sales rep will decide who to reach out to, when, and with what message.” This could also be a great way to incorporate artificial intelligence into your operations and help increase efficiency as well. Check out our video on AI for a ton more on that.
Next, a hard sell won’t work as well on customers in a product led sales pipeline. There shouldn’t be a barrier in front of the user that’s preventing them from accessing your product. Instead of a hard sell, your sales team should pivot towards helping enable users to get value from the self-serve product by improving stickiness and the product's credibility. From there, your sales team can introduce the user to the more advanced features that provide deeper value. When that value gets monetized, your helpfulness pays off.
Benchmarks
Lastly, knowing your metrics and benchmark data like the ones we highlight in our Benchmark Report can give you a ton of insight into decisions around your product-led sales strategy. For example, we found Product-influenced revenue is highest among SaaS companies with a self-serve freemium offer, representing about 90% of total revenue. That said, offering a freemium plan is not enough. Product-influenced revenue can swing from 28% at the bottom quartile to 100% at top quartile companies. Offering a hybrid of both product and people seems to be the most effective strategy for growth.
When it comes to product-led sales, it's crucial to understand both your customers and the value that your product provides them. Think back to a time when you test drove a car, when you played that video game demo, when you tried on those shoes… The information gap between you and the salesperson diminished and helped you understand the incentives of upgrading or going with a similar product.
There’s nobody in the world who knows you better than your existing customers and by giving them the agency that comes with self-serve and the knowledge and personalization that comes with a sales team - you can create a winning product led sales strategy. Make sure to check out our 2023 Benchmark Report for a ton more insights on everything from AI to operational efficiency and see where you stack up as we head into 2024.
If you like this kind of content and want to learn more, subscribe to get in the know when we release new episodes.
00;00;00;00 - 00;00;05;13
Kyle
Two thirds of businesses are missing out on crucial expansion revenue, leaving easy money on the table.
00;00;05;13 - 00;00;08;19
Kyle
And it's a strategy that's been around for decades.
00;00;08;19 - 00;00;16;03
Kyle
Think about try before you buy free trials, test drives, trying on your back to school clothes or the N64 at blockbuster.
00;00;16;16 - 00;00;24;17
Kyle
But over time, and especially with the advent of SaaS and subscription, we've iterated on product led opportunities that go beyond self-serve.
00;00;24;17 - 00;00;37;26
Kyle
The smooth onboarding that comes alongside PLG companies like Slack, Miro and HubSpot leads to amazing adoption and conversion numbers as users enjoy the benefits of trying out and engaging with the product on their own terms.
00;00;37;26 - 00;00;46;06
Kyle
In fact, according to CMS Wire, these days, 53% of customers prefer buying process that avoids sales altogether.
00;00;46;06 - 00;00;50;25
Kyle
But how can you address opportunities for expansion like cross sales and upsells?
00;00;50;27 - 00;01;06;19
Kyle
The answer lies with product led sales. By finding those high intent leads to upsell and send your sales team, you can develop a powerful product led sales strategy and fully reap the benefits of your customers who are willing to upgrade and pay more.
00;01;06;19 - 00;01;15;05
Kyle
Today, we're breaking down companies that are doing product led sales the right way, benchmark data and actionable takeaways to get you on the right path.
00;01;19;08 - 00;01;22;13
Kyle
So who do we look to as champions of this strategy?
00;01;22;13 - 00;01;39;03
Kyle
One such example is Figma, a freemium collab product that had a massive growth spurt over the last year. The company reportedly grew 100% year on year utilizing this formula until its eventual acquisition by Adobe in 2022 for $20 billion.
00;01;39;03 - 00;01;46;25
Kyle
That growth is in part due to their former growth leader Hazel for Kenya, who broke down their product led sales strategy for us in detail,
00;01;46;26 - 00;01;58;29
Kyle
where Kenya says as we acquire new users, that will bring their teams who will upgrade to our self-serve product year and from there sales will reach out when the account is a good fit and has the right product behavior indicating
00;01;58;29 - 00;02;08;00
Kyle
that they're ready to upgrade by identifying indicators in their customers behavior. 95% of figments pipeline came from existing users
00;02;07;29 - 00;02;18;11
Kyle
By looking through all of these active accounts and their intent product led sales and able to segment sales team to make smart informed sales decisions with an extremely high success rate.
00;02;18;12 - 00;02;24;08
Kyle
But how can you get started with product led sales? And once you do start, how can you ensure success?
00;02;24;11 - 00;02;47;16
Kyle
First, you need to show product value immediately. We're talking in minutes. The longer it takes to demonstrate the value of your product, the more likely users are to lose interest and fall out of the target audience for product led sales. If a customer is turning to you for a solution to a problem they're having, you need to solve that problem in minutes to fully demonstrate your value and keep them around for the long term.
00;02;47;19 - 00;02;58;20
Kyle
In our benchmark study, breaking down hundreds of companies, we found that only 34% of businesses are making this a priority. That number will need to increase to see the full potential of product led sales,
00;02;59;00 - 00;03;03;17
Kyle
Second, your sales team needs to have accurate and informative data about your customers.
00;03;03;18 - 00;03;09;01
Kyle
Figuring out which customers are the target for your cross sales and upsells will vary from product to product.
00;03;09;04 - 00;03;12;01
Kyle
However, it needs to be well thought out and informed by data.
00;03;12;07 - 00;03;13;03
Kyle
Rihanna says
00;03;13;03 - 00;03;17;28
Kyle
In famous case growth marketing with surface all the users in an account and highlight the ones that are
00;03;17;29 - 00;03;25;00
Kyle
either a champion, the top users based on actions, or an influencer or decision maker based on titles or roles within the product.
00;03;25;02 - 00;03;29;14
Kyle
The sales rep will decide who to reach out to when and with what message.
00;03;29;13 - 00;03;36;08
Kyle
This could also be a great way to incorporate artificial intelligence into your operations and help increase efficiency as well.
00;03;36;07 - 00;03;39;20
Kyle
Check out our video on AI for a ton. More on that.
00;03;39;18 - 00;03;43;29
Kyle
Next, a hard sell won't work as well on customers in a product led sales pipeline.
00;03;44;04 - 00;03;48;15
Kyle
There shouldn't be a barrier in front of the user that's preventing them from accessing your product.
00;03;48;15 - 00;03;54;28
Kyle
Instead of a hard sell, your sales team should pivot towards helping enable users to get value from the self-serve product
00;03;54;28 - 00;04;04;04
Kyle
by improving stickiness and the product's credibility. From there, your sales team can introduce the user to the more advanced features that provide deeper value.
00;04;04;06 - 00;04;07;13
Kyle
When that value gets monetized, your helpfulness pays off.
00;04;07;25 - 00;04;27;06
Kyle
Your self-serve also doesn't have to be your main source of revenue for a product led sales motion to work. Even if you don't get much direct revenue from self-serve, you can still use it as a powerful tool for collecting sales leads depending on the product you're selling. Users on a variety of plans with a variety of behaviors could be looking to upgrade.
00;04;27;05 - 00;04;49;26
Kyle
Lastly, knowing your metrics and benchmark data, like the ones we highlight in our benchmark report, can give you a ton of insight into decisions around your product led sales strategy. For example, we found product influence revenue is highest among SaaS companies, with a self-serve freemium offer representing about 90% of total revenue. That said, offering a freemium plan is not enough.
00;04;49;29 - 00;05;03;01
Kyle
Product influence revenue can swing from 28% at the bottom quartile to 100% at top quartile companies offering a hybrid of both product and people seems to be the most effective strategy for growth.
00;05;03;05 - 00;05;31;13
Kyle
Think back to a time when you test drove a car, when you played that video game demo, when you tried on those shoes, the information gap between you and the salesperson diminished and helped you understand the incentives of upgrading or going with a similar product. There's nobody in the world who knows you better than your existing customers, and by giving them the agency that comes with self-serve and the knowledge and personalization that comes with the sales team, you can create a winning product led sales strategy.
00;05;31;13 - 00;05;35;21
Kyle
Make sure to check out our 2023 benchmark report below for a ton.
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Kyle
More insights on everything from A.I. to operational efficiency and see where you stack up as we head into 2024.
00;05;42;23 - 00;05;46;22
Kyle
Check out this video right here to learn more about the report.
