Kate Ahlering
Between the changing tides of the economy and digital buying preferences, SaaS companies are under tremendous pressure. Many of these companies understand that 80% of their interactions with buyers occur on digital channels. At the same time, they need to drive profitability to meet investor expectations.
The question is: How do they appease customers who want self-service while accelerating profitable growth?
While product-led growth (PLG) is a successful strategy, many companies will complement these efforts with sales-led growth (SLG), or an enterprise sales motion, to move upmarket or into a specific customer segment. With the right go-to-market (GTM) architecture in place and effective use of data, companies can make the most of both strategies to accelerate revenue growth.
When does it make sense to complement PLG with SLG?
Typically, companies follow three patterns when it comes to their GTM approach:
- Product-led: Focusing on the user and their experience with the product as the primary path to revenue.
- Sales-led: Leveraging traditional marketing and sales methods to reach the buyer or economic decision-maker. This approach may be supported by selected PLG techniques to drive user advocacy.
- Hybrid: Combining the best of both worlds, with PLG techniques generating awareness and making inroads into prospect accounts, and sales activities driving most of the revenue.
With PLG, the product needs to make an impact on the user — and do it quickly. After all, the product is the primary vehicle for user acquisition, retention and expansion. While PLG works best for products with some level of virality, in many cases, you do not have to choose between SLG and PLG.
As an example, Calendly’s sales team often talks to customers about how we can help scale the platform to create an even deeper impact within their organizations. We follow a hybrid GTM approach, where PLG provides a critical access point into prospect accounts, and sales drives enterprise expansion and revenue. While PLG feeds the funnel, sales targets end users with influential titles inside the core use case we serve (e.g. VP of sales), where we can drive the most value and business outcomes.
If a hybrid GTM strategy makes sense for your organization, here are some tips on how to execute it effectively:
Build the right operations infrastructure for your sales team
Think about the processes that will help your sales team operate seamlessly in a PLG environment. Even if you have a steady pipeline of promising leads, a lack of infrastructure can hold you back from meeting your revenue growth goals. While it may sound like a no-brainer, in reality, the infrastructure needed for an effective enterprise sales team is rarely in place at most fast-growing PLG companies — it must be created and implemented intentionally.
Some critical and foundational tools include sales methodologies and playbooks to guide representatives on how to uncover value for key prospects. These are not only effective training tools, they ensure that your team is consistently conveying your key value propositions. These materials also address common questions and objections that prospects may raise, and provide competitive intelligence.
Other critical parts of your operations infrastructure might include territory assignments and compensation plans. These will help keep your team organized and motivated, and make goal-setting much easier to achieve.
Leverage unique PLG data to create inroads for the sales team
As mentioned above, PLG can serve as an amazing funnel for qualified leads. You can convert users best when you’re smart about how you leverage product data to work with them. Here are a few examples:
Product qualified lead (PQL)
A PQL requires product usage data or firmographic data for an individual. For example, product data may tell you that a customer signs up and activates a trial, invites team members, and initiates a key integration. If they also fit your ideal customer profile (ICP), you need to route that lead to the right enterprise account representative. You can accelerate that process through intelligent scheduling automation.
Product qualified account (PQA)
If the ICP is right, you can extract firmographic data from your product on a team or subset of users that have completed enough key actions in your product. PQAs often lead to a valuable conversation where a representative can figure out how to break in, land and expand into a key account. Tracking back to my previous point about operations infrastructure, ideally, representatives have a set of prioritized accounts based on certain actions within the product.
Position product value to the target cohort instead of features
In the early stages of PLG, it makes sense to position your features for your users. Many companies lead with features to create excitement around a product and acquire their first few customers. However, as you grow and move upmarket, you need to talk to your customers about the business outcomes and value you’re driving.
Rely on the PLG data, as described above, to find the right opportunities. From there, you can discuss driving additional value beyond the day-to-day usage of the product. It’s important to make sure your pricing and packaging is differentiated between your individual, team and enterprise plans. Pricing creates enough of a wedge for the sales team to be able to communicate the value of an enterprise plan without losing or isolating your core user base.
Align success metrics with your core use cases
In addition to tracking top-of-the-funnel metrics (e.g. volume, velocity and value), track cohorted conversion rates for specific types of accounts within your ICP.
Some key questions to ask your team might include:
- Are the accounts within our ICP converting within 30, 60 or 90 days?
- If an ICP is in a free trial, are they expanding?
- What are the net revenue retention rates for our top cohorts?
From there, you can determine more effective success metrics for your sales organization.
Tap into the best of both worlds
Many of the top public PLG companies rely on enterprise sales for a significant part of their revenue (e.g. Snowflake, Asana, DataDog). Keep in mind that starting an enterprise sales team is a commitment. It involves people and an overarching shift in organizational mentality from the early-stage PLG acquisition mode.
It will take a concerted effort to build an upmarket sales team and you’ll need to align sales, marketing and customer success. But with the right go-to-market infrastructure and effective use of data, you will be able to crack open the total addressable market for your product and drive bottom-line revenue.
Comment