Creating Product-Led Buyers in a Sales-Led Funnel
Last year I presented at the Product-Led Summit about product-led companies adding a sales motion into their go-to-market strategy. Many well-known companies have done this, including Slack, Dropbox, and Atlassian. This year, I tackled the opposite concept—evolving a sales-led model toward product-led.
Of course, it’s common-sense that a product-led company might layer in a sales organization to expand usage, broaden adoption, sell to the enterprise and assist buyers. That’s much easier than the inverse when a sales-led company wants to transition to a more product-led model.
Transitioning towards product-led from a purely sales-led model is infinitely more complex than the PLG + Sales approach. That’s because a product-led model is built from day one around the concept that customers will be able to try, buy, renew and expand without talking to a person. It’s foundational. But, a sales-led model doesn’t typically have a product that’s built that way. It often requires demos, proof of concepts, training, and customer-supported onboarding or implementation.
Let’s dive into how companies can lean into product-led, even when they are firmly entrenched in the sales-led approach.
First, What Is Product-Led Growth?
ProductLed themselves define it as “a go-to-market strategy that relies on using your product as the main vehicle to acquire, activate, and retain customers.”
In a true product-led model, the product is so useful to the end-user that customers tend to spread the word to their friends and coworkers. It starts bottom-up—from one user to another—which leads to organic growth as adoption spiders out across a network.
When I’m defining whether or not a company employs product-led growth, I ask myself, “Can someone try, buy and adopt this product without ever talking to a person from the company?” If so, in my view, that’s true and classic product-led growth.
Product-Led Growth vs. Sales-Led Growth
What exactly is the difference between product-led growth and sales-led growth? Well, in the sales-led model, you have a sales representative pitching the product to a centralized buyer or buying committee within an organization. That buyer then decides to purchase the product and pushes it out across the company.
Some employees may like it, and others may not. Regardless, the decision is made for them in a top-down manner.
With product-led growth, however, the process is bottom-up and organic. The software is usually discovered by a single person or a small group of people. As they start using the product, others join in naturally as product adoption fans out across an organization or peer network. Think Slack, Zoom, Dropbox.
Can Every Software Company Be Product-Led?
Product-led growth is a fantastic strategy for growing your customer base without friction, but it isn’t easy. Think about all the software your company uses to operate. How many were you truly able to consider, evaluate and purchase without talking to a sales representative? Probably not that many—it’s rare air.
To pull off pure product-led growth, you need:
A product that solves an obvious, pressing need.
A product that has clear, easy-to-see value.
A product that’s easy to understand and use without support extended set up, or training.
A product that has such strong brand affinity that it becomes a gravitational pull—people want to be part of the user tribe.
A product that makes people rave to their friends and colleagues about how great it is.
A product that can be experienced before a purchase decision is made.
A product that has a customer acquisition model that’s intentionally created to be product-led (it’s tough to retro-fit that feature into an existing product).
Yes, the product is absolutely central to product-led growth. It’s not just that you have a product people can buy online. It’s that you have a product so great people get pulled into it, and word spreads. You can’t have product-led growth without the right product. It’s all about the product. And also the product.
So, what does that mean for sales-led companies hoping to move in a product-led direction?
It may be a tricky shift to make for software that didn’t start specifically designed for product-led growth from its inception. But it is possible. Although some products just won’t ever be capable of no-contact customer acquisition, that doesn’t mean you can’t create a product-led funnel. It helps to think about “product-led” as a continuum.
The Product-Led Continuum
True product-led growth means that customers are trying, buying, expanding, and renewing the product without directly interacting with the company.
But a Go-To-Market strategy can be product-led across a spectrum. Even if it isn’t possible for you to be fully product-led, you can still take advantage of some of its benefits.
We call this a product-led funnel. It’s when ready-to-buy customers regularly enter your funnel without ever having talked to a person at your company. They may not be able to buy the product online or without some hand-holding, but by the time they speak to a sales representative, they’ve already decided to purchase or are at least seriously considering it.
How to Create a Product-Led Buyer in a Sales-Led Funnel
When people ask me how to be more product-led, my response is that you have to fake it till you make it. Here’s are a few ways to get started:
1. Double-Down on Social Proof and Customer Advocacy
Case studies, testimonials, and customer reviews are essential for establishing trust with potential buyers. Prospects will come to the table much more ready-to-buy when they’ve seen such an irrefutable volume of evidence for the quality and value of your product.
This is, without a doubt, one of the most important steps you can take to help establish a product-led funnel. Create a strong program that generates lots of inbound interest from software rating sites and compelling case studies or customer testimonials.
2. Produce Lots of Compelling Product Content
When a product wasn’t designed with a product-led growth strategy in mind, it can often be complex, making it difficult to learn the ropes or instantly ‘get it.’ Many software companies are tempted to hide that fact by keeping product details tucked away until a sales process is underway.
Rather than hiding the product, showcase it—no matter how complex or enterprise it is. It’s about positioning the product correctly for your ideal customer profile, so they have their own a-ha moment. Create videos, blogs, and other types of content to educate prospects on the benefits and features of your product—as well as how to use it and its capabilities. This doesn’t mean getting away from your solutions-based, benefit-focused content, but it does mean putting your product front and center in your content.
3. Consider Transparent Pricing on Your Website
It’s becoming increasingly common for companies to put their pricing on their websites, and buyers have come to expect it. They want to self-qualify and understand where your product fits relative to other products they purchase. Hiding your price makes your product seem even harder to evaluate & buy.
If you are confident in your pricing and positioning, you need to be confident in your buyer too. Trust that a qualified buyer won’t walk away when they see your pricing. And trust your content to correctly position your product, its value prop, and its differentiation.
To make this even more product-led, add a no-brainer, low-cost initial pricing tier so that users can try your product without needing to go through their purchasing department. Make it as easy as possible for prospects to try your product.
4. Provide Free Adjacent Value
The best way to get users to test your product is to offer a free trial or even a free version.
But if that isn’t possible for your product right now, there are other ways to provide adjacent value that associates your brand with frictionless value. One method I love is to create a helpful tool that will appeal to your target audience and solve a need that is somewhat related to your product.
A classic example of this is HubSpot’s free Website, Grader. Using this tool, anyone can plug in a URL for a free analysis. Then, HubSpot gives practical tips on how to optimize your website for better marketing potential.
HubSpot launched Grader in 2007. At the time, they didn’t have the option of being more thoroughly product-led, but this was one way to be as product-led as possible. It was a lead magnet for their ideal customer profile and created an ‘easy to try’ association for their brand.
5. Build Tutorials and Support Chats into the Product Itself
This may not seem like a product-led strategy but bear with me because if you have an unintuitive product, this is a must.
Create built-in tutorials in your product.
When a user logs-in, have a box pop up highlighting a feature they can use right there on the dashboard or other page. Once they’ve checked that box, have more pop up, quickly walking the user through what each part of the page is and how it can help them.
A similar concept is to offer in-product chat. If a user runs into a problem or has a question, have the option for them to get in touch with a support representative right there and then. That way, they don’t have to leave the product, disrupt their workflow, and file a support ticket. Just create a support organization that can answer questions in an on-demand, real-time manner.
6. Add an In-Product Expansion Request Button
This is one of my favorite straightforward ways to make a software feel more product-led.
Add a button in your product that users can click to send an instant notification to your customer success team with a request for more seats.
Even though the user will need to interact with a person at your company to upgrade, the in-product request makes it easier to initiate the request. You’d be amazed how many more requests you receive this way than if the user had to make a call or send an email to request more seats.
7. Set Up an Online Help Center
Create an online “product university” where users can learn how to use your software independently through convenient how-to guides and educational videos. Many buyers will want to figure out your product on their own time and at their own pace. Having to schedule an appointment for training is a surefire way to bring their curiosity to a halt.
By putting all your helpful resources in one place, users will be much more likely to dive deeper into all of its useful features.
Don’t put this help center behind any paywalls, either. You want to show prospects how your product works and what it can do for them before buying it. (Yes, even your help center can work as a marketing tool.)
How to Measure Successful Evolution to Product-Led
As you move towards a more product-led funnel, there are clear indicators of progress, such as:
Prospects who have heard about, seen, or experienced your product enough to be ready to make a purchase the first time they contact you.
As more ready-to-buy leads come in, the sales cycle decreases, and the win rate increases.
Shorter customer onboarding timelines once prospects have signed up.
More organic, inbound requests for expansions and upgrades from existing customers without a heavy lift from customer success or sales.
An increase in average revenue per account (or unit) without much additional effort from your sales team.
If you see any of those signs, you’re probably on the right track.