Didn’t have time to listen in on the Crowdcast? Read the highlights to learn more about the past, present and future of Product-Led Revenue.
Last week, Jorge Soto led a panel to discuss Product-Led Revenue. The panel included a diverse collection of industry experts who discussed what it means to be product-led, how to implement a product-led strategy, and how the market for product-led companies has evolved. The panel included industry experts who brought diverse perspectives to the table, including our very own CEO Tim Geisenheimer, Chris Allen from IBM, Brendan Short from Zoom, Edgard Duque from TheVentureCity, and Matt Bellows from BodesWell (and the founder of Yesware).
At Correlated, we are passionate about Product-Led Revenue and are building the tools that revenue teams need to drive product-led revenue strategies. Throughout the Crowdcast, we heard some amazing nuggets of wisdom from the expert panelists that we’ve highlighted below.
What is Product-Led Revenue?
Product-Led Revenue is a company-wide strategy where the goal is to get the end product into the hands of users as quickly as possible with as few barriers as possible so that they can benefit from it.
What does a Product-Led GTM look like?
Most product-led companies today are self-service because it is a faster GTM than traditional enterprise sales. With traditional enterprise sales, you go to a website, schedule a demo, fill out 15 fields in the form, do a qualification call with a sales person, all before you’ve actually tested out the product. Over the last 5-10 years, products like Slack, Zoom, and Crowdcast have shown us how powerful it is to provide value quickly via a self-service (and often free) product. As users adopt the initial product within an enterprise organization, they hit various gating features, functions, or usage levels that drive monetization.
In Matt’s words, with modifications:
“The Enterprise product is the movie, and PLG is a trailer for that product.”
How do you actually execute a Product-Led GTM without losing a bunch of money on longtail, non-paying customers?
Transitioning customers from a self-serve product to an enterprise sale is very hard to get right. If you’re not careful, the low-end, freemium product becomes an expensive product line that doesn’t effectively drive revenue. The key to getting this right is to recognize that product-led isn’t just product - it’s a strategy that needs to encompass product, engineering, sales, marketing, and all other departments! Sales teams need to be equipped with the right battle cards to upsell, and the product needs to have the right levers to drive those upsells. A really successful pattern is to drive organic adoption from bottoms up end users and have enterprise sales reps target enterprise accounts with good adoption. As long as you’re equipped with a good story, you can do a big corporate sale in this way. That being said, the right strategy is company-specific, and some companies choose to separate self-serve and enterprise sales for this reason.
Product-Led Revenue is not Product-Only Revenue.
What does sales look like in this world?
A successful Product-Led GTM motion requires a balance between self-serve, product-led growth and enterprise sales. Different companies may have different ratios - for example, developer open source tools can get very far with relying on product-led growth, but the vast majority of companies will rely on a more balanced combination. In fact, thought leaders in the space suspect that the future SDR will actually be more like product specialists who help users get monetizable value out of the product. According to our CEO Tim, “It is the art of sales to help customers, and the product can only go so far.” At some point in the sales process, you’ll need a sales person to step in to help customers discover: here is how this general experience applies to your particular company, and how the product fits into your world. This is a hybrid approach that is product-driven, and it’s how you win a big enterprise contract.
At a higher level, there needs to be a really tight relationship between product and sales. Sales is on the front-line hearing use cases, wins, and objections. Product needs to take that knowledge to understand customers and build the right product.
Is Product-Led a strategy that only works for SMB?
Absolutely not! Based on Chris’s experience at IBM, even large companies are experiencing a paradigm shift. Products need to be easier to onboard and upgrade, and the product-led mentality needs to be adopted organization wide. In addition, one of the most important things to get right is sales team incentives. Sales teams that are incentivized to sell partner services over internal products will inevitably do so.
How would you suggest a startup to approach executing on Product-Led Revenue?
Talk to as many customers as possible - you can never talk to customers too much. Don’t be afraid to change something or go back to the drawing board.
What are some of the challenges revenue and operations teams face in executing Product-Led Revenue today?
Revenue and operations teams are logging into 8 different systems trying to figure out who to talk to. The ideal system would sit across third party and first party data sources, centralize all that data in a single place, and allow teams to build logic on top of it. For example, when certain metrics hit a certain threshold, automatically bubble up a workflow to the rep who owns that account.
We’re building a revenue expansion platform that centralizes data sources and helps you discover insights and automate playbooks that drive upsell and expansion. If you’re interested in learning more, we’d love to connect with you.