Welcome to the ultimate masterclass on how to nail the perfect interplay between product-led efforts and marketing or sales-led efforts. In this video interview, experts come together to discuss the art of creating a shared sense of communication between different departments—an essential ingredient to ensure a cohesive customer experience. As they say, it's not just about what a company presents on their website or through their messaging, it's about how the product feels to use, how customer support works, and how the product experience reinforces a company's message.
Now, if you're a company looking to transition to a product-led growth model, one of the biggest challenges you'll face is integrating sales into a product-driven culture. But fear not! The experts have a simple solution: both departments need to be aligned and have the same objectives to create a collaboration that benefits the customer.
When it comes to gaining traction in the market, the experts have one word for you: Product. Prioritize investing in building a good product, and success will follow. With the ease of product discovery, it's essential to focus on the quality of the product to create a large business. So, don't shy away from investing in R&D and spending the majority of revenue on the development of a product. But remember, it's not a one-person job; having people in product marketing, sales, engineering, and finance working together is vital to identify what's working and what's not working within the user's journey.
Achieving a balance between product-led efforts and marketing or sales-led efforts is an art that requires collaboration, communication, and a relentless focus on creating a great product. And with these expert insights, you're one step closer to mastering it.
You can view the full transcript from our video interview below:
You have a company and a product. In a way, everything you're doing is marketing because everything communicates. It's not just what you have on your website or your advertising campaigns, what your product does, how it feels to use it, how customer support works. All of those are moments and experiences that reinforce the things that you're saying about yourselves. So when I think about the interplay between product-led efforts and marketing or sales-led efforts, not only do they need a common and sort of shared sense of what's intended to be communicated, but they also need to think about the customer experience and the customer journey. How do these different moments in time work well together to reinforce the same ideas and take people that you want to use your product into a place of using it?
I've had the pleasure of leading two sales teams into product-led growth companies. There's two challenges. In both cases, we have a freemium model, so we have to figure out what's the value that we can offer beyond our usually inexpensive self-serve product, and why are people going to be willing to spend more for that? And the other one is the cultural side of how do we bring sales into a company that is primarily product driven, and how do we not create that bro culture that sales teams are often associated with, but rather be complimentary to what product's doing and close the loop and always be giving them feedback about what our customers are saying so that we're improving the product, which ultimately makes our job easier to sell.
I think in a product-led growth company for sales and engineering to interface well, it's really important that they're aligned and that they have basically the same objectives so that it's not a case of, "Well, you don't understand what I need and you don't understand what I need." And then there's always this friction that's inherent because they're trying to achieve slightly different things. But if we're able to elevate and put the customer first and make sure that we understand both perspectives, I think that can create a really good collaboration between sales and engineering.
The product team is responsible for the roadmap and creating it, but what they do before each quarter is they shop around a proposal to all the different departments. So they go speak with, have a session with the support team. They have a session with marketing. They have a session with sales, and they get feedback on whether they've prioritized the right things. Now they obviously wouldn't necessarily take all the feedback, but it's kind of a nice way for everyone in the company to feel like they contributed to the roadmap in some way. So that's been one thing. And then our support team, I mean from Zendesk, we are always preaching how support can be a strategic player if they just share what they know about customers. So I'm interested in helping my team figure out how they can help share what they know that people are talking about. And obviously they're tagging things, and so we have data on what are the biggest bugs and let's talk about how critical they are. So there's some of that. We have a support member who joins product meetings, so that's another way that they integrate. And then the product team is often involved with sales calls, so they're hearing from customers on what they might be saying in those conversations. So there's actually quite a lot of different ways that they get exposed.
Discovery is not as hard as it used to be and people can easily discover products. And so if you are going to put all of your time and effort into basically sort of the sales and marketing aspects as your product isn't good, these days where information flows freely, you're eventually going to be called out for that and that's going to present a problem. And so I think product led basically says most of the investment is going to be in the quality of the product, and we trust that the ecosystem or the general information technology landscape is going to allow people to find us. And we may have to stoke that a little bit, but for the most part, if you put most of your investment in building a good product and you do the basics, then that's the recipe to build a large business these days. The most obvious thing we're doing is we're spending the majority of our money on that. So about 50% of our revenue today is spent on R&D, which is an exceedingly high number relative to if you looked at a lot of publicly-traded SaaS companies, you'd see numbers that are much lower than that. And so we do have an explicit money where our mouth is approach on this, where we're really investing there.
You need folks in product marketing, sales, engineering, and I think a lot of people forget about it, but finance to be working together to understand and identify what's working and what's not working within your user's journey or your buyer journey. But it's also making sure there's collaboration within your application. So if somebody is only going to go into Litmus once on their own, do something and leave, they're less likely to shout from the rooftops how great Litmus is or bring the rest of their company on board. And so it's that moment when not only does somebody see value in the product, but they actually start bringing that value to somebody else that they work with. That's when you really see some fire with product-led growth.
It's just incredibly important to take the people who've decided to active in your product and have shown up and keep them with your product. In many ways, that's a demonstration of the ongoing value of your product. It's a demonstration of the defensibility of your product, that they haven't used your product then gone elsewhere. It's also, to some degree, a demonstration that you continue to improve your product because if it was just doing the same thing, it could be that they no longer have that use because companies themselves evolve and get better. So retention is a fantastic metric to be tracking and very meaningful. It's also true that at this point I think in the PLG cycle, revenue is definitely one of the things that most aligns people, and the reason I say that is not just as a business person, but also because it's just so weird and strains the different ways you can achieve revenue and they're all valid and they all mean that you've had a business impact. There are PLG companies I talk to that have relatively few customers or ones that have a massive base of customers that pay them very little. All are valid ways of going about their business. And revenue is the aligning factor on figuring out where to focus.
A lot of companies will try and get people closer to the customer, and for instance, even if you're looking at AH Traps, they spend one day, every single person in marketing will spend one day doing support. And at RD Station, what I thought was really, really smart is on their product-led growth team, what they were doing is their user interview person or user researcher was spending a full day where you block off specific times and people could just join as she was doing these user interviews. And so that to me is really brilliant because it just makes it so easy for people to get closer to the user, understand the user, what are the problems of that user, and start having people think about how can we help this user, because it's one thing that we all have our own biases and backgrounds, but when you start hearing the problems that your users are having, you can become really adept at solving those problems and helping them have a much better experience. So kudos to RD Station for doing that. I think it's a brilliant idea.
I think there was a report that Gartner did where something like 80% of companies say they're customer-centric and 30% of customers say that their companies are. And one of the ways that we tried to do this was we had every single person in the company from day one be part of support. So engineers are doing support, marketing was doing support. Everybody was doing support really to understand the customer really well. Nowadays, as we scale, we're talking to customers in a different way, but everybody is still talking with customers. And that's how we've been able to create this customer-centric culture that then is able to drive product-led growth because everybody understands where the customer's coming from, what the value they have, and how we can best serve them.