The Playbook for Blending Product-Driven Growth with Sales-Driven Growth: Teams, Tools, Processes (Pod 641 + Video) with Dimension’s VP of APJ Mark Velthuis | Shastra

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Product-based development is a hot topic. As a startup, you want people to love your product in a plain and simple way. Loving them is more complicated.

At SaaStr APAC 2023, Matt Wethuis, VP, APJ, at Amplitude shared his thoughts on how to bring power to your products through a hybrid mix of product and sales-based development, called product-based selling.

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Product-led development is a GTM strategy where the product is the main driver for development. That is, your product is helping your customers try it, buy it, and ultimately grow with it. You want them to fall in love with your product so much that they spend money on it.

But PLG has not always been the way companies operate. Let’s take a walk down memory lane.

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it’s not the 90s

Buying patterns have changed a lot in the last decades. From the late 1980s until around 2000, the Internet was not really a thing in most places. It makes sense that the sales-growth model was the number one growth driver during this time.

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Fast forward 10 and 20 years from 2000-2020, and executives control purchasing decisions. The CFO was looking for solutions to budget and plan. CRO looking for revenue forecast. Marketing-led growth and tailored messaging were the name of the game.

Now, we are in the era of digital products. Digital products have grown massively over the past few years, and by the end of 2023, we will double the amount in the market. They are everywhere, so product-based selling is even more important.

The purchasing decisions have shifted from you, the consumers, to us. A McKinsey study found that 70% of all purchase decisions are made remotely or by self-service. End user calling. They try a product and swipe their credit card without ever talking to a human.

And that means companies would do well to look at how they interact with customers, whether by humans or computers.

Spend less time cold-calling

Product-based development is not a one-size-fits-all solution. This can solve many use cases, but for larger enterprise opportunities PLG will be harder to work with. The good news is that you can adopt a product-based sales hybrid model, combining the two, for a strategy that aligns with your organization.

Product-based selling combines the power of your product with the power of your sales team, so your sales team spends less time cold-calling, and the product team focuses more on the customer journey.

For Amplitude specifically, Welthuis says this strategy has tripled pipeline conversion rates. Their sales teams are three times more effective at closing product-based opportunities than traditional MQLs or hand-raisers.

Step 1: Build a Good Product

If you want people to like your product, it has to be good. Without that, it all comes to a grinding halt. How do you make a good product? Let’s look at five components that make a good product. Each of these can result in the next, forming a continuous life cycle.

A good product needs:

Curiosity sparks.

You can encourage audiences and pull people around your product through traditional and non-traditional methods such as advertising promotions, using influencers, or through thought-provoking campaigns. Create Aha! Moment.

This is the moment the user says, “Ah, now I understand why everyone is talking about this.” they see the value. Nurture a value exchange.

The customer or user has traveled so far in the product that they are ready to spend money on it. Develop a trigger to keep users sticking around.

Your product needs to continually engage and delight customers. They won’t stick around forever unless you create something they will keep coming back to. Prioritize virginity.

Virility is the talk that spreads. From here, each of these phases begins again. Virility piques curiosity, and away you go.

Step Two: Market for Free

Now, you have a great product, and it’s time to think about how to market it for free. The best companies do this. Snowflake offers a free trial. Zoom and Slack too. Even Canva gave Adobe a tough fight when the free product took off.

50% of Dimension customers started as freemium members and then moved to pay. If you don’t have a free plan, consider these 3 things.

Do you want to offer Free Trial vs Freemium?

Welthuis recommends Freemium. Free trials are timed and often fail because customers are tied to a clock. Let them explore when they’re ready. Do you want to offer something unique to Startups and SMBs?

They have smaller budgets but could become the Canvas or Atlassian of the future. At Amplitude, they have VC funding worth less than $5M and a scholarship scheme for startups with less than 20 employees. As they take off, the amplitude is in the slipstream. What does your sign-up experience look like?

Keep it self-service, simple, fast, free and frictionless. In most cases when people are trying to sign up, especially for the free version of your product, you don’t need salespeople. Step Three: Go from Free to Purchased

You have a product, a way for people to try it for free, and now you need to move customers from free users to purchasing users. To do this, you need to identify product signals – when the customer is ready to proceed to pay.

To do this, you need visibility into the customer journey to understand what actions they take in your software. If you didn’t have that visibility, you would be looking into a black hole.

There are many different signs to consider, and they will be different for each business. You can ask yourself these questions.

Can a free user max out the number of queries they can run each month? Access them when they reach 80-90% of their usage. Is the customer pulling data from another vendor that does something similar to yours? Is the number of daily logins by a customer increasing? Is the customer sharing dashboard insights with people who do not have a license? Are active users constantly stopping their journey in the same places?

Step Four: Train Your Team

Once you have the answers to these prompts, you can create a guide for your sales team. They need to understand how to interact with these product qualified leads. It will be different from how they used to sell before.

Some tips to consider when creating your guide:

Develop a deep understanding of how your product works at a technical level. How do users interact with the product? Teach your team to read and interpret these product symbols correctly. Now that you have PQLs, the sales team needs to monitor them on a daily basis. Make sure they have easy access to information to see how users interact with the product. Train your team to talk to customers. You don’t want a sales rep to call a user and say, “Hey, I saw you yesterday talking with our product for 4 hours.” that’s creepy.

Some sales teams are reluctant to adopt PLG, fearing it will drain their business and reduce commissions. Don’t worry. PLG and product-based sales do not eat up commission. They free up sales teams to go after larger and more complex deals.

key takeaways

When done correctly, the product aids in sales and accelerates deals. Sales can still achieve the target, and the product is in the form of a partner of the sales margin. Together, they will give strength to your products.

PLG is a great development tool, but it’s not all or nothing. The best teams combine the power of product and PLG with the power of sales-led growth.

To drive product based sales, you need to get 4 things right.

You must have a great product. All you need to create a free plan. You need to identify product cues to know how customers behave within the product. You need to train your sales team on how to follow up on those leads.

If you can do these 4 things, your team will be stronger, better, and more efficient.

Published on March 10, 2023

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