Product-led growth (PLG) was the thing ten years ago in B2B SaaS, but companies are still trying to figure out how to make the most of the strategy when it’s applied to their product. Stephen Moock, Head of Sales & Success at Calixa, shares some of the trends in the B2B SaaS space–and some may surprise you!
When product-led growth first came onto the scene, thought leaders predicted sales would no longer be a viable career path in B2B. People believed that when customers became accustomed to making in-app purchases, a human-led sales process would be an unwanted nuisance. All purchases would need to evolve into something more closely resembling scores of consumer products.
In reality, not all products are product-led growth compatible, and even the B2B SaaS products that are well-suited to in-app sales still benefit from a human touch. The more business leaders try to shoehorn a product that isn’t ready into PLG, the poorer the buying experience.
Experts shouldn’t be surprised that complex products that are less than easy to use or serve many purposes often benefit from a salesperson who can manage a lengthy sales process. They’re usually better at connecting the researching buyer with timely resources and can help speed up time-consuming processes (like security reviews). It also, for better or worse, allows negotiating with a procurement specialist–a process that is now mandated by many organizations.
But what about all PLG for products that are simple to use?
Even easily adopted products are upgraded more often when the right kind of selling method is applied. When companies monitor product usage and are diligent about seeking and recording feedback, they can identify features that users don’t discover for themselves. Salespeople can approach customers from a consultative approach, offering one-on-one training with product experts. People also appreciate hearing about options that will help them save money, like bulk license discounts. Establishing a relationship with a likable face of the company makes products stickier.
B2B SaaS leaders have realized that product upgrades happen at a lower frequency when they exclusively depend on their product to wow their customers into a sale. Sales teams that understand how to approach a customer from a consultative stance are being folded back into their corporate structure.
Back “in the day,” the B2B go-to strategy for growth was scaling the sales team rapidly and conquering the market through brute force. Cold outbound calls, emails, and drop-ins were rote in sales. They still are but are much less effective.
According to Forrester, 68% of buyers don’t want to talk to a sales rep and want to do all of their research online. People don’t trust what salespeople say and expect them to exaggerate a product’s capabilities. Buyers are more comfortable consuming content and verifying it with third parties.
A change in buyer behavior doesn’t mean “sales is dying.” Selling methods need to evolve to match the preferences of the buyer. This means that instead of hiring those with the gift of smooth-talking, hire according to what consumers value: Honest salespeople who spell out a product’s limitations and warn off a buyer when a customer’s use case is not a fit. This shows empathy for the buyer and the ability to appreciate that unhappy customers never stick around long.
There’s a nuance that goes beyond overall market trends with PLG. People want to be seen, which means making the most out of your product insights and using that data to help dictate your sales team’s strategy. For example, if there are many highly engaged users from a single company on your platform, perhaps they’d appreciate hearing about your group discounts. If one or two people are highly engaged, but they’re paying for several licenses, perhaps customized group training is in order.
The salesperson's job is still demonstrating value to the prospect and customer, but their resources have improved, and their approach must evolve to match customer needs.
And if your product team hasn’t developed the reporting necessary to support customer success and your sales team, they better figure it out soon.
Traditionally, B2B SaaS companies have adopted the demand waterfall model to measure marketing and sales performance. A few factors, many of which we’ve already discussed, are making this model problematic:
Even if you can define stages and map things out linearly, a funnel may not be worth setting up in your CRM. Depending on the number of resources you’ll need from your engineering team, it may not even make sense to track the consumer-led purchases and only focus on the enterprise funnel.
It’s not that conversion rates and funnel stages are useless in PLG. Far from it. Companies should measure which marketing tactics lead to free trial signups. They should also further isolate which subset of tactics are most impactful at attracting users who eventually upgrade. A form of funnel data can also help companies narrow down their ideal customer profile and isolate use cases that deliver the most value to their customers.
What we are saying is that these metrics will probably need to be tracked in your product or a customer data platform that can normalize your contact and account data across a timeline, particularly if your sales are in-app.
These PLG metrics should also be framed differently than what funnel metrics were historically used for. We no longer have clear lines of responsibility between teams, which makes using funnel stages as a proxy for a team’s effectiveness nonsensical.
Consumers have very high expectations for any online experience–and that includes cloud-based B2B SaaS products. This makes it more important than ever for marketing, sales, customer success, and product to all be in lock-step.
So, are we seeing this happen in the market?
Unfortunately, not often. Not even close to as often as we should.
We also don’t see companies interacting enough with their customers. With fantastic products on the market like Chorus and Gong, it should be easy to review interactions already taking place with customers. Marketers and product teams should also collaborate to set up client interviews and churn reviews.
Customers rarely buy a product for the reasons executives assume.
Asking customers for feedback is the shortest path to understanding what they enjoy, what they dislike, and how they use your product to solve their problems. Those findings should kick off an action plan to solve product gaps, round out your go-to-market motion, and modify existing messaging.
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