August 22, 2019

3 myths of product-led onboarding

As the conversation around product-led growth builds, some interesting trends have started to emerge. Amid all the stories and strategies are some frequently repeated myths about product-led onboarding and what it means in a product-led go-to-market strategy. 

So I’d like to debunk 3 common product-led onboarding myths—namely, the idea that you don’t need a sales team, that conversion is a linear process, and that people truly want to serve themselves.

Let’s dive in.

Myth 1: Product-led onboarding replaces sales

It’s easy to think that if two things are correlated—meaning they happen frequently together—that one must cause the other. This misconception about causation can lead us to try different kinds of onboarding and to try to push people down a path that might not be the right one.

I often hear people say that the fastest growing companies, like Slack and Stripe, basically don't have a sales team. And because of that occasional correlation, there’s a myth that fast growth stems from a lack of sales. And that’s an appealing fiction, especially on the product-led side of things. Everyone wants to believe that you could build a massive company without having a sales team and without the overhead.

Unfortunately, that's absolutely not true. While there’s potentially a correlation in that some of these fastest growing companies today have a smaller enterprise sales motion (or at least that’s how they talk about it), but that doesn't mean that to be able to be successful, you need to not have a sales team.

A good friend of mine, Pete Kazanjy, who runs the Modern Sales Pro community, wrote an amazing book around product-led selling and founder-led sales, and created a slide deck that really dives into this misconception that you can actually build massive companies without having a sales team. What he found is that yeah, companies like Slack, Dropbox, or even Atlassian say they don't have sales teams. But when you actually run a quick search on LinkedIn, you find that they actually do have a bunch of people at the company that are in sales. So while this idea is super seductive, it couldn't be further from the truth.

I think that in this product-led era of technical founders who prioritize engineering and product and design, we have this desire to move away from what we see as very sleazy sales tactics and sleazy sales people. Everyone has this idea of a used car salesman just trying to shove a product down your throat. 

But good salespeople are actually there to help make the product experience better. They're not there to replace it. That's a grave misconception that I think we have to move away from. Because product-led onboarding is not about not having salespeople—it’s about having salespeople who support product-led onboarding.

Myth 2: Conversion is a linear process

The second misconception that I encounter a lot is that people assume that the onboarding experience is very linear. 

There’s this idea that people go from signing up to activating and then to engaging with the product and finally they convert. Sure, it’s nice to be able to simplify things and to see high-level patterns and create a simple funnel so that you can visualize how things are likely to happen. Humans like linear models, but unfortunately that's not how things really play out. 

To give a very simple example of this: When we ran an analysis against 10 different companies and we looked at how long it took people to convert, we found that about 50% of conversions would happen after the end of the free trial.  And I think what this tells us is that the way we think of the funnel—this straight line from activation to engagement to conversion—is actually wrong and there’s a lot more value in nurturing people than we realize. Because even though people have maybe gone through your trial, there's still a chance that they'll convert in the near future. 

But the product experience still matters a lot even though they're not going to convert immediately. And just as importantly, their experience with the product after the trial (and therefore potentially outside of the product) is equally important. And so, from a product-led onboarding standpoint, it's really critical to think about how you incorporate your marketing nurturing into the overall experience of the product.

Also, in B2B SaaS it really takes a village to sell. It’s not just one user who's going to buy your product—you're trying to sell into the entire organization. And it’s often the case that you have very different patterns of behavior depending on job titles—the propensity to open an email, for example.

Different users are going to interact differently with your product, just like different people are going to interact differently with your sales process. You don't necessarily want to shove a CEO down your onboarding funnel. Instead, you might want to have the CEO invite the person who could potentially become your champion and have that person go through the product experience.

I often use the story of the Lord of the Rings as an analogy here. The Lord of the Rings is made up of a lot of different parts, but it’s ultimately a single story about a group of people—the Fellowship of the Ring—working together to destroy the ring. And the thing is, there are a lot of different characters that play different roles and are working toward their own goals separately but simultaneously. If you remove one of them from the story, the entire story collapses. 

B2B sales is very similar. Even though you might have only one person who is going to swipe the credit card or sign a contract, ultimately there are many different people with different roles involved. And it's really important to understand that and to understand that your onboarding has to take into account the goals of all these different people.

The further upmarket you go, the more important this lesson becomes. 

Myth 3: People want self-serve product experiences

The last myth that I'll talk about today is this idea that because B2B has been following a lot of the patterns of B2C and consumerization allows for easier transactions and faster interactions, that it means people want to self-serve. 

And this goes back to the idea that we can replace or do away with salespeople because people want self-service experiences and just want to use the product themselves, get value from it, and then swipe their credit card, and we're done.

I think that's a misconception and a misinterpretation of what people really want.

There is something called the paradox of choice. People talk about this a lot as a symptom of modern society, in which the current dogma seems to be that we need to maximize choice to maximize freedom and therefore to maximize happiness. But often the opposite is true.

But, Barry Schwartz used an analogy in his TED Talk (which I highly recommend). He explained that we’ve gone from a time when there were rules about how you should behave that we accepted as written in stone, but now there’s this idea that you can essentially write your own commandments and figure out what you want to do with them. At first glance that sounds liberating, but in the end, the resulting plethora of choice actually decreases our happiness because it leads to this paralysis of not knowing what is the right solution and what is the best thing to do. More importantly it leads to extreme regret when we feel we’ve picked the wrong option.

This applies to B2B as well. When we say that people should be allowed to self-serve and choose what features they want to use and choose what product they want to use and use it the way they want to—we’re really setting them up for choice paralysis.

You’d be amazed how many marketing automation platforms are out there. On G2 Crowd, there are over 300 products in the CRM category, more than 200 sales automation platforms, and over 150 e-signatures tools.

This means that as of today, a marketer has the option of over 805 billion distinct marketing stacks, just based on those 3 categories on G2 Crowd alone. And that's overwhelming, right? How do you know that one marketing platform is better for your needs than another? You don’t! So we see people consulting sites like G2 Crowd to read what people like them are saying. But even that still, there's just too much noise out there. 

I believe that the value of a salesperson is that they are actually able to listen to your story, understand what your needs are, and therefore be very prescriptive in terms of what is going to be the right solution for you. A good salesperson won’t just tell you if you’re a good fit for their product—they’ll tell you if you're a bad fit, too.

We’re seeing more and more of this desire for a consultative approach, especially in the B2C space. Companies like Trunk Club or Stitch Fix that provide tailored clothing recommendations are really interesting because their success goes to show that people don't necessarily want to go into a store or scroll through a dozen webpages and have to choose from 50 different pairs of jeans to find the one that works best for them. 

Similarly, YouTube has found that over 70% of time spent on its platform is spent watching videos that their algorithm recommends. That means that people aren’t actually searching for videos as much as you’d think—they’re following recommendations because that gives them a greater return for less effort.

I think we are in a situation where we need to do the same thing in B2B, and that’s where the added value of salespeople comes in. 

The product-led truth

Now I’m not saying that we should not have self-serve options. What I'm saying is that this idea that people should just be able to do whatever they want in the product and that this freedom will increase success and increase happiness is a misconception. And we really have to think about how we can maximize the relevance of what we’re offering and tailor our onboarding to the end user to make sure that they’re going to get maximum value from the product.

Likewise, I’m not saying that you can’t build a successful company without a sales team—just that not having sales is not a prerequisite for product-led growth. And yes, sometimes conversion is linear, especially in simpler tools. But that path is more of an exception than a rule—failing to optimize for more complicated paths to conversion is a mistake.

The real takeaway here is to be wary of simple, catchall explanations and to dig a little deeper into popular wisdom to separate the product-led myths from the new product-led reality.

Francis Brero is the Co-founder and CPO of MadKudu, the leading marketing operations platform for B2B. As a college math major, he has always strived to leverage his passion for numbers to drive growth. For the past 10 years, Francis has helped marketing teams increase sales by using customer data. His years of experience led him to advise marketing strategies and tactics at companies like Slack, Shopify and IBM.

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