I recently shared a few quick thoughts on how the SaaS sales playbook has to be adapted to work well in a product-led organization. Here are some more details on those thoughts…in no particular order.
The biggest mistake you can make when building the sales motion at a product-led growth is to come in and just apply the standard SaaS sales model. Before you assume you need X number of SDRs to open X number of opportunities for X number of AEs, each AE can close X number of deals per month at X ARR value…stop. Assess what’s actually going on.
To do that, you will need to understand where the deals are coming from, channels, ARPU (and ARPU by channel if needed), sales cycle (if any), who is buying, how often they are buying, how they expand organically, etc.
If you have some salespeople, get on the front lines with them to really understand the sales cycle and where the leads, new deals, and expansions are coming from. In a true PLG company “deals” are coming from individuals who buy (even if for a business purpose) on your website primarily. But they may also come in via other channels, like website chat or support tickets. In product-led growth, you have a lot of incoming demand to buy, some of it happening through self-service, some of it happening through sales assistance, and some of it organically through customer success or support. Understand how your customers are buying today in order to determine how to capture even more of that and not get in the way of what’s already happening.
In a traditional SaaS sales model, all qualified leads go to sales. Period, end of the story. But in PLG, routing all the hot leads to sales may not be necessary. In a true product-led company, a lot of leads can skip sales and go straight to a purchase.
They may need to issue a PO or have already issued a PO and need somewhere to send it. They may need wiring instructions. They may need some security questions answered before they are allowed to sign up. Their procurement team may require them to actually speak with a vendor before forking over money. But what they don’t need is to be put through your sales process.
Not every buyer in a product-led world can whip out a credit card and sign up online. If you are sending these people to sales, you might be overcomplicating it. And if you aren’t allowing these customers to buy via a sales assistant instead of using online self-service, you are probably leaving money on the table.
Self-service takes many forms. You think of it as signing up on a website, but for your buyer, it may be that they are ready to buy (just like a self-service deal). They just need to interact with a human to do it. Think of this as sales-assisted versus sales-driven.
And it doesn’t have to be “sales” as we traditionally think. You can assign a deal desk coordinator to transact those inbound hot leads who are ready to close. There is no need to pay a commission on this type of deal (more on this later).
If people are reaching out trying to buy, don’t force them to a salesperson, and don’t force route them to buy online. Just have a process that supports a lightly assisted sale.
If you have a situation where “deals just close themselves,” don’t compensate sales reps on those deals. I know this is controversial, but the worst thing you can do is send leads who are literally ready to close to a salesperson and pay that salesperson commission.
First, there is just no reason to incur the expense of sales on those deals. You don’t need sales for customers who are ready to close (you do need expansion sales, though…keep reading below).
Second, it creates really, really bad habits that will come back to bite you at some point. Salespeople who are just taking orders aren’t actually selling. They aren’t creating or finding a need, they aren’t adding value, they aren’t positioning your product. They have no burden to keep their saw sharp and develop their skills. Discovery goes out of the window. Demos get sloppy. They may know the right things to do, but without having to do them, things get messy.
I love salespeople. I am a salesperson. I just don’t think it’s good to put salespeople in roles closing deals that would otherwise close on their own. That’s not sales. That’s customer support. And don’t get me wrong, a product-led company needs sales, just not for those leads who will close on their own.
What you want to incentivize are renewals and expansions. Determining the right mix of incentives in a product-led organization can be tricky. Some people have even suggested that PLG sales organizations shouldn’t have variable components to their comp. Be thoughtful about sales comp—you get what you incentivize.
Have some SDRs do true outbound to accounts you don’t have yet. It’s inefficient, but it’s a good muscle for your organization to have in case there is a market disruption, and the flywheel stops working as well. And you can land some incredible customers with cold outbound going after your ideal customers.