June 11, 2019

Accelerating growth with product-led sales

Today’s buyer is drastically different than when I began my sales career back in 2006.

Back then, what we now know as the “subscription economy” was just starting to take off. Many companies were just beginning to move away from older perpetual license models to what we  know today as SaaS.

Buying behavior changed dramatically as a result. The age of information has brought with it a massive power shift from the seller to the buyer. In a traditional seller-buyer relationship, the sales rep held the cards.  As it stands today, most of that power now rests in the hands of the buyer.

People no longer want to be sold to. And they have options. When people have a problem, they want it solved one way or another—whether that’s with your product or one of your competitors’. Buyers are now able to not only research, but actually try out multiple solutions as part of the discovery process.

From the products to the buying experience, SaaS as a whole is becoming more and more consumerized—which means that the way sales teams engage and sell to their customers has to drastically change. Gone are the days of smoke and mirrors pitch decks. In a product-led model, the role of sales isn’t to dazzle the buyer—it’s to educate and assist them during the buying process.

Product-led sales in practice

Let me tell you a little bit about how my team at Privy operates and how that differs from the old sales model:

Our company offers a free trial. That means prospective customers can sign up for a trial then (if they’re satisfied with the product) begin paying us through a self-service subscription model. But they can also speak with a member of our sales team via what we refer to as an assisted sales of direct sales model. As it currently stands, self-service makes up 70% of total revenue in a given month, with assisted sales making up the remainder. Technically, none of our customers “have to” talk to our sales team, but because of the value-add approach we take, the percentage of revenue coming from assisted sales continues to grow month over month.

In this model, it’s all about meeting the buyer where they are in their journey and playing what I like to call a “concierge” role in the buying process. Our sales team is there to help the buyer to see value from our product, uncover use cases they hadn’t discovered through our marketing or help docs, and allow them to voice their opinion about product strengths and weaknesses—all before they hand over their credit card and commit to investing in our product.

A customer-centric approach to sales

This model of selling is extraordinarily human, and humans naturally want to help each other, so we’ve found a lot of success in this customer-centric approach. Product features and functionality are obviously part of the discussion, but believe it or not, that isn’t always the crux of the conversation. Often, the conversation starts by understanding the goals of the buyer, inspiring confidence that they can reach those goals, and helping them create a path to reach those goals using our product.

Sometimes that help comes in the form of inspiration by sharing other customers’ success stories, other times it’s about answering technical questions. Remember, in a product-led model, most buyers have seen and experienced your product before talking to your sales team, so don’t dodge the product-related questions. Just make sure you understand the “why” behind those questions so you can help the buyer to do what’s really best for their business.

Investing in the customer

The interesting thing about Privy is that our customers pay us anything from $10 per month to over $1,000 per month, depending on how mature their business is. So I often get the question: “How do the economics of having a sales team work with such a low price point?”

The answer to that question is going to be different for every business. With Privy, the key thing to note is that we have 2 products, both of which scale as our customer grows. Therefore, it’s not just a matter of “how much do we pay a rep for a deal that is closed today?” but more about “what is the lifetime value of a customer and how much expansion revenue can we drive with them after we sign them up today?”.

We are in the process of growing our sales team right because we want to have a human touchpoint with every potential buyer that comes to our product. There are plenty of options for people to choose from in our space, but because of that human element and the value we provide through our approach, we’ve been able to convert more free users into paying customers, more paying customers into expansion accounts, and (most importantly) keep customers happier for longer.

Truthfully, we went from nearly $0 CAC to something, well, higher than that today. But we’re comfortable with that.

Self-service growth tends to plateau at a certain point for most freemium business—especially in the SMB space that we play in—and one of the ways that we’ve found continued success on a high-growth trajectory is through this investment in assisted sales.

Because an investment in assisted sales is really an investment in our customers.

Before advising and investing in SaaS businesses, Ted led Sales at Privy. Before that, he spent 6 years at HubSpot working with small businesses to implement inbound marketing methodology. Fun fact: Before transitioning his career to helping small businesses with their marketing, Ted was a well known surfer, known for pushing the limits. Word on the waves is that his surf life is the subject in the upcoming documentary, Bunker77.

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