By Michael Fisher, OpsRamp
Following the lead of B2C vendors that sell through the product is a smart way to grow faster.
Slack, TikTok, Netflix, Spotify, GitHub, Miro: what do these popular SaaS companies have in common? They are all evangelists of the product-led growth movement. This go-to-market strategy is common for business to consumer (B2C) vendors and means that all major sales, marketing, and support activities are driven by and through the product. This may begin with a free trial or free version of the product, but that’s not the full picture. Product-led growth companies focus on ease of access, ease of use, and quick time to value.
According to product-led growth expert Wes Bush: “Unlike sales-led companies where the whole goal is to take a buyer from Point A to Point B in a sales cycle, product-led companies flip the traditional sales model on its head. Product-led companies make this possible by giving the buyer the “keys” to use the product and helping them experience a meaningful outcome while using the product.”
Ideas For The B2B Software Company
In our digital-first, COVID-19 world, this model makes great sense. It’s more agile, self-service, and convenient for the prospect. For vendors, it can result in a leaner operating model and faster market expansion. Even though product-led growth has had most of its traction in consumer product companies, there’s no reason why B2B software companies can’t take relevant ideas and put them into play. Some well-known B2B players are already doing this: take Google Cloud. This service is easy to get started on and use, even as a non-engineer. Making the difficult tasks simpler and focusing on user time to value are principles that should crosscut both B2B and B2C software.
Here are a few ideas to consider:
- Provide a way for prospects to easily conduct their own proof-of-concept or demo, from your website.
- Invite prospects to visit your website where they can fill out a short form qualifying them for a free 30-day trial. Prospects should be able to easily download and get started using the trial product on their own, without assistance from implementation teams.
- Segment your product into a scaled-down free version (freemium), which can help a prospect realize a limited set of immediate benefits or outcomes and provide a runway for sales to get in front of the IT executive when the time is right for a full product demo.
- Make it singularly simple to get basic support questions answered immediately from your website (such as through a chat or bot) and an equally easy method for starting a ticket with a more complicated request. Give the customer more than one way to interact with you: through email or form on your site, a chat tool, and via a mobile app.
- Deliver ticket and support updates (including product updates or fixes) proactively to customers through their preferred contact method. Don’t make the customer wonder what’s going on.
Workforce And Operating Considerations For Product-Led Growth
The product-led growth market strategy revolves around the user and is best geared toward engaging with smaller accounts rather than large enterprise companies. This bottom-up approach requires repurposing of the workforce in several core areas:
Product: Products must be designed and/or segmented into small modules that are appropriate for free trials and “land and expand” customer acquisition. The focus of the new user experience in a free trial or freemium model should not be to provide them a harbor tour of all your product’s capabilities. Instead, the product team should become maniacal on accelerating the user’s time to value for the job or task they are looking to solve within the product. For the product manager, this means understanding what value metric is king. In an eCommerce application, this might be the average time to find the desired product online or the window of time from order to receipt. Optimizing, accelerating, or eliminating the “in-between” steps should be the focus of all product teams looking to adopt a product-led model.
Development/engineering: Delivering a modular product and brilliant UI/UX for users demands a smaller, more iterative software release strategy. In a product-led model, customer feedback will be abundant and ensuring that your software can meet the needs of users is critical. Smaller, more frequent updates to product means that development teams will need a highly agile process centered around CI/CD tools and processes. Dev teams are also tasked with digitizing the POV, demo, and procurement/acquisition processes – moving to a self-serve, web-based environment. Designing freemium and free-trial products also requires an effortless onboarding process.
Sales: The sales force in product-led companies moves from being primarily account closers to being account managers. Although there still might be strategic sales teams focused on larger/ strategic accounts, the primary growth vehicle will come through the product and organic growth. With a product-led growth strategy, sales teams with a large enterprise sales organization will find their teams mainly focused on closing the deal after the user has seen value with the free-trial or freemium product. This means that the countless demos and prolonged “proof-of-concepts” convincing executives of the value will be significantly reduced or eliminated. In this model, sales will focus more on keeping customers happy and upselling or cross-selling them over time. In some companies, the need for a BDR or inside sales team will go away.
Marketing: In a product-led company, marketing organizations will need to work hand-in-hand with sales and product like never before. These teams may now share responsibility for lead generation and classifying them into MQLs or SQLs. Efforts should combine on identifying how to reach potential prospects/users online with a focus on viral or influencer marketing and engaging in relevant tech communities, rather than traditional lead generation tactics such as sending emails, analyst reports, and white papers. Equally important is customer satisfaction: delivering in-app tips and tutorials to help users get more out of the product and increase their engagement.
Conclusion: Transitioning to a product-led growth model requires a lot more than changes to the product. You will need discipline across the entire organization and a keen understanding of who the target persona is, and the value they are looking to receive. Employees not accustomed to that level of focus may question if the product is not broad enough, or if the total addressable market is now smaller. This is a natural line of reasoning, especially if the product being transformed into this model is extremely broad and wide-ranging in functionality.
Ultimately, the answer to these questions will depend on the product strategy and the company’s vision. A strong leader will be able to navigate the internal disruption this new approach will entail and quell concerns among the troops regarding the potential risks. When transitioning to a product-led model, it’s important to ensure that communication and transparency are the guiding principles of the initiative. This way, everyone is prepared for the changes affecting their team and can see the longer-term benefits of delivering a customer-centric experience to acquiring software products.
About The Author
Michael Fisher is a group product manager at OpsRamp.