“Low touch does not mean no touch” when it comes to product-led growth, Atlassian’s President, Jay Simons, told the Scale podcast. His company was an early example of how far product-led growth could take a business - now valued at $46 billion, Atlassian spent only 19% of their revenue on sales and marketing at the time of its IPO. But the company’s growth model is not solely product-led - instead, Atlassian takes a hybrid approach, better known as product-led sales.
“If you’re a large enterprise customer that has more complexity, or potentially more value to us, we have a team that can help steer you in the right direction and answer a more complicated set of questions that you have,” Simons said. “But the question is, if we add 5,000 new customers a quarter, and add that to the base of 120,000 existing customers, it would be very, very difficult to do that if we had to touch all of those customers along the way.”
For that reason, Atlassian focused on “building efficiency in the flywheel model,” Simons said. “Most customers, if they wanted to go all the way through signup and straight into the product, they could. If they don’t need us, that’s great. We’ll leave you alone. If you do need us, then we’ll absolutely bend over backwards to help.”
Atlassian is not the only SaaS company leveraging product-led sales, nor is it only enterprise-sized businesses that are adopting this approach to growth. In fact, data from PeerSignal shows that, of 473 SaaS companies documented, 387 are utilizing product-led sales in their go-to-market strategy, 81 product-led growth, and just 5 sales-led growth.
Those businesses currently employing only product-led or sales-led models should consider incorporating tactics from the other to maximize their growth opportunities. Here’s how to do it.
How to add sales if you're product-led
Like Atlassian, many of the most successful SaaS companies that started out with a product-led strategy added a sales function once they reached a certain point of growth or identified a specific need in the market.
The size of that sales team varies. According to PeerSignal:
Slack, a company that has its roots in product-led growth, now has a sales team which makes up 20% of its workforce.
Shopify, a product that is as popular with mom-and-pop ecomm stores as it is with major retailers, has just 8% of their 12,500+ strong team in sales.
Zoom, a product that experienced pandemic-fueled growth to such a degree that a sales team alone could never have sustained it, has 28% of their 7,500+ team dedicated to sales.
Zendesk, a company that got to 5,000 customers without a sales team, brought on a sales team (21% of total workforce) after realizing that, as their product suite grew, new and existing customers needed a more hands-on approach to ensure they were getting the most out of the Zendesk offering.
Basecamp got to 3 million customers without a sales team, and now has a small sales department that makes up 4% of their employees.
In all of these examples, the product has experienced natural virality with customers who sign up for a freemium plan or free trial quickly experiencing the value, deciding to pay for the product, and recommending it to friends and colleagues. But at a certain scale, a sales organization can help drive the transformation from everyday users choosing to use the product within their team, to a company choosing to use the product across every department. It’s these deals that drive LTV up and help reduce churn.
If you’re a product-led organization looking to add a sales function, you can think of it in three stages:
Expanding product-qualified leads It’s likely you’re already tracking product-qualifying actions in your CDP, and have a number of product-qualified leads for a new sales team to pursue. This is the low-hanging fruit that your sales team can focus on initially to increase MRR on your biggest clients. Plus, sales, customer service, marketing, and content teams can use these splashy clients for case studies and testimonials, further driving growth.
Servicing marketing-led leads
Content initiatives, paid media, events, and other marketing activities are likely generating leads that haven’t actually gotten in and started using your product. Sales can reactivate these leads, answering questions, negotiating contracts, or helping them with onboarding.
Most SaaS companies have a list of dream customers — these could be the companies that you were thinking of when you built the product or they could be a set of influential companies in a specific industry that you are trying to break into (like ecommerce or agencies).
In either case, bringing just one of these dream companies on board could unlock a whole new world of growth. Narrow this list down to a manageable number, and get sales, product, marketing, and customer service teams together to strategize around how to win them.
How to integrate product-led strategies when you’re sales-led
This one is a little trickier to manage, but can be very worthwhile. As Alastair Simpson, Head of Strategy at Coassemble, shared in our 2022 SaaS Trends article, “By opening your product up to the market you can supercharge your acquisition funnel and see volumes of leads that a sales-led motion just can’t produce. By leveraging rich product data, sales organizations can prioritize who their sales representatives reach out to and when.”
If you’re in a similar position, start by following these three steps:
Some more traditional sales-led companies do not reveal pricing until after initial product discovery calls and demonstrations take place, and product-led initiatives really do require some amount of pricing transparency. After all, if you’re jumping into an opt-out free trial, you’ll need to disclose the amount the customer will expect to pay before they’ll be willing to commit.
Consider how shifting to a product-led model will impact your tiered plans. If free trials or freemium plans are too much of a jump, look at how you could start with a product tour or pre-recorded demos that allow customers to see your product in action without the help of a salesperson. This could be step one to unlocking a more product-led approach.
Follow the data
When operating in a product-led model, a single source of customer truth is essential. You will need to unify your data into one platform to essentially get a look at the customer journey and pinpoint the actions that make up a product-qualified lead. That way, you can discover the actions important to your business and get a complete view of the customer journey.
Coassemble is currently a sales-led organization, with plans to add product-led strategies in the coming year. Simpson shared, “To ensure success, we’ll be doubling down on tools that let us access richer customer data and use that data to drive customer behaviors. We'll be spending more time in tools like Ortto.”
Make product part of everyone’s life
Product-led growth is a company-wide strategy. From marketing to customer service to sales, everyone needs to be thinking about how the product can be improved upon to increase leads and MRR. Marketing will become focused on getting the product in the hands of the end-user and ensuring the experience of the product delivers on marketing messages. Sales will share intel with product teams, taking customer feedback on board to continually improve the product. Plus they’ll use new and improved features to reignite old leads and grow existing customers.
Like any strategy shift, there will likely be some road bumps along the way. But it will all be worth it in a year or two when your product is selling itself, your CAC has reduced, your MRR has increased, your product is famous, and your sales team is able to focus on the big fish.
The final word
Whether you’re adding a sales team, implementing PLG strategies, or starting a new business with a product-led sales approach, SaaS businesses that are able to successfully bring sales-led and product-led growth strategies under one roof will be better placed in a growing and highly-competitive market.