Transitioning from Sales-Led Growth to Product-Led Growth
You've been warned.
Let’s say you’ve heard about this new shiny Product-Led thing and now want to transition to Product-Led growth (PLG) from a traditional Sales-Led growth model (SLG).
This is great! You probably thought creating a new Growth role and bringing in a Growth leader might help you navigate the challenge.
But here's why you might fail despite hiring a Growth professional:
It’s a mindset shift
Product-led doesn’t mean product-owned. Hiring a Product Growth professional will not guarantee that your company will become product-led.
When you want to become product-led, every team member thinks about the end-user experience and how you deliver value first and instantly. It requires a shared alignment amongst product, sales, marketing, success, and every other team. A single Growth professional cannot possibly turn this around without a larger top-down push for becoming product-led.
Data things
Let’s say you have alignment from every team member, but if you don’t have solid product data tracking and infrastructure, you would not know which area of the product experience is terrible. It’s common for SLG teams to only track performance marketing numbers and MQLs. Product analytics are poorly built and maintained because the product was built on the requests of sales and success teams. You cannot be product-led without having a solid data infrastructure tracking the end-to-end customer journey in the product. You probably want to set up this infrastructure before making your first Growth hire.
Product and execution
In PLG orgs, products and features are built to be discovered. They are easy to use and can explain their value almost instantly. Different product features talk to each other, and their value compounds with usage, which leads to customer retention. This is unlike SLG, where sales teams spend hours explaining the value to buyers. To become PLG, you need a product that instantly delivers value to customers and helps retain them. Thus, product teams need to consider discoverability, adoption and delivering continual value.
The changing role of Customer Success
Product changes are complex and take time. Till the product can catch up to make the customer journey intuitive in-app, you need to have a customer success team who is hand-holding a new self-serve customer through their journey in-app. These teams also act as a faster feedback loop for product teams to iterate on the product faster to deliver optimum value.
Sales and their compensation
Perhaps the most significant change and the most crucial one to get this transition right. Sales teams in SLG rely heavily on Marketing qualified leads, and spray and pray is the only approach they know. Even if you started sending them richer, Product Qualified leads (PQLs), they wouldn’t know the plan of attack. This transition requires ample training of the Sales teams to equip them with what they need to do with this new kind of ‘lead’ and the new plans and pricing structures.
In addition to this communication, the sales incentives must align with your PLG model. The sales incentives need to encourage product usage, the addition of seats, or product adoption so that sales teams do not jump the gun and cannibalize your self-serve conversion.
Track and Measure
You can only improve what you measure. To ensure you are heading in the right direction of becoming Product-Led, track and measure your product metrics, such as activation, adoption, retention, and monetization, through this new model. Trials, free sign-ups, logins, activity, conversion, etc., must be monitored closely.
Ultimately, the SLG to PLG transition is fraught with many challenges. But some companies have done it well and have been successful category-defining leaders. Hubspot is the most prominent example.
#growth #sales-led #product-led #startups #plg