How can a business shift from sales-led to product-led growth?
Many companies have successfully transitioned from high touch and high friction sales models to product-led growth. Yet, there’s not a lot of guidance about how to shift from sales-led to product-led effectively.
So, I wanted to dive into this further and explore how a company can successfully transition from sales-led to product-led growth including some possible challenges you may encounter during the process and how to overcome them.
Why should businesses consider pivoting to product-led growth?
At Soapbox, we have successfully made the transition from being mostly sales-led to completely product-led. We have no sales team. Our product essentially sells itself. So, what made us switch?
Well, it was mostly because it just felt like the right move to make for the business. We love our product and wanted to build the best possible version of it. We realized that as the business grew, we had the opportunity to re-build the app from scratch and make it better than ever.
But what cemented our decision was a simple mindset shift. We had to ask ourselves if we were building a business for a company that exists today or a company that exists in five years. So, we decided on the latter and chose to build an app for the future, not the past.
To make the transition from sales-led to product-led as smooth as possible, we had to look at the problems in our existing sales model. In doing so, we identified two key issues:
1. The current model was heavily pipelined-constrained. We couldn’t start growing more revenue until we grew the pipeline.
2. The second issue was identifying why people left the existing pipelines. We were unable to deploy the latest development of the product until we were confident that people would actually use it.
The solution was to solve the adoption problem before we solved the sales problem.
Challenges when shifting from sales-led to product-led growth
Although we switched from sales-led to product-led growth successfully, the transition didn’t come without some challenges.
As we saw the pipeline of leads get smaller and smaller, we began to doubt whether we had made the right decision. Those doubts finally subsided when I started to look at the transition like it was a set of consecutive experiments that were either going to pay off big time, or not.
Another challenge we faced during the transition was figuring out how to explain the move to our existing customers and team members. Some members of the team didn’t think it was a smart business decision since the DNA of a B2B organization is vastly different to that from a product-led company.
However, the biggest challenge by far was deciding and committing to focus everything on the free experience of our application. As you can imagine, this wasn’t easy at the time because we were just a start-up company.
Over time, we realized that to be product-led, you have to be willing to invest in products upfront. As we moved from a sales-led to a product-led company, we also moved away from hiring sales reps. When you depend on sales reps to cultivate leads and generate sales, you get linear results because you have to hire more to grow more. With product improvements, growth is exponential.
How to shift to product-led growth with confidence
Many businesses who want to transition to product-led growth are reluctant to converse with their team members about it. They’re concerned that they won’t understand it fully and become fearful of losing their jobs as a result. However, if you’re serious about becoming a product-led growth company, you need to call a ‘spade a spade’ and go all in.
Think about it this way… Does it make sense to optimize for how businesses are buying over the past five years? Or, does it make more sense to optimize for how businesses will buy over the next five years?
If you want to start slowly, you should. You can start by experimenting and see it as a side project until it gains more traction and you’re confident enough to slam the pedal and shift the entire business to product-led growth.
How support can contribute to growth
Did you know that your support team can contribute to growth in a HUGE way?
If you have a product-led company, your support team can become one of the most important departments within the company. It’s very difficult to get users of your product to communicate with you, especially if you’re the one reaching out to them. However, that all changes when the user is the one reaching out to your support team.
At this stage, the user is ready to talk, complain, tell you what they like about your app and what they don’t like. You can learn so much about your users and their experience with your app by leveraging the conversations held between the customer and the support team.
Your support team can become a huge source of growth for the company. You can use what they’ve learned from active users of the app to improve the product, expand on it, fix any bugs that you may not have even been aware of, and so on.
For every person that writes a complaint about the app to your support team, there are at least 100 other people who are experiencing the same problem but staying silent. So, leverage your support team, listen to what users are saying about your product, and continue to improve it.
The key to transitioning from sales models to product-led growth is to change the team mindset from selling first to adoption first. Think about how you’re positioning the product and what you can do to get people to adopt your product instead of buying into it and then removing themselves from it just as fast!
Are you ready to level-up and discover how to build a successful product-led growth strategy from scratch and turn your product into a growth engine?
My 6-Week Product-Led Growth Deep Dive certification provides step-by-step advice on how to take the product-led methodology from theory to practice. Join the waiting list to get notified when enrolment opens up again!