How To Transition From Sales-led To Product-led Growth

Stephanie Cox, VP of Sales and Marketing at Lumavate, is in the unique position of running Sales, Marketing, Product, and Customer Service at Lumavate, a tech startup based in Indianapolis. With Lumavate – a no-code, mobile app-building platform – marketers can quickly and easily “build and publish mobile apps in as little as 30 minutes, without code.”

In this interview with Trinity Nguyen, Stephanie explains how her passion for solving complex problems drives her work in helping Lumavate transition from being sales-led to product-led (PLG).

“People never use your product the way you want them to. PLG is a lot of fun because no matter what problem you solve or what hurdle you overcome, there's always more. The more you add to your product, the more ways people use it that you wouldn't have expected. And you really have to see it as a new opportunity.”

What’s the Difference Between Sales-Led and Product-Led Growth?

Lumavate launched in 2015 with a sales-led growth strategy, but in March 2020, the pandemic changed everything.

“The world was changing so quickly. We knew we couldn’t sell the way we used to sell. We also knew that marketers needed to move faster. Their need for a platform like ours was greater than it ever had been,” says Stephanie. The Lumavate team pivoted quickly and reconsidered all facets of their business.  In four months, they rebuilt the entire front end of the product, set up auto-provisioning, and connected to a credit card payment system.  

Today, Lumavate uses a hybrid growth strategy, a combination of sales and product-led, where interested users create free accounts and, through an automated onboarding process, work with the customer success team to ensure a beneficial outcome. Some users convert automatically. Others get funneled to the sales team, who work closely with them to close the business. 

“When you start with a strategy of product-led growth (PLG), your goal is to get people to the product, and the product is going to sell them. They may not even have a sales team.”

“The customer learns about the product, typically through a free trial or freemium offering, they use your product, find value, upgrade, and pay. In the last couple of years with all the hype, everyone’s trying to do product-led growth, bottom-up motion, because it’s easier. With sales-led growth, you have all these requirements on your business operation, typically it’s quotes, order forms, DocuSign invoices.  PLG is usually paid by credit card online. They’re just completely different business operations.”

Another advantage of PLG is “the number of people who get exposed to the product.” Stephanie explains, “It is a lot more than with a sales-lead strategy. People are more likely to create a free account or create a free trial than they will to schedule a demo because they know they will have to talk to sales. If you create a free account or a trial, you know you’re going to get to test out the product and if you’re interested, maybe you talk to sales, maybe you don’t.”

On the other hand, a sales-led strategy has distinct advantages.

“You get to control every aspect of the customer experience. You tell them and show them what you want when you want."

“With product-led, you have no control. You may want them to go a certain path and they may choose not to. They’re going to make split-second decisions about your product and whether or not it's a fit for them based on their experiences, and you can't always control it a hundred percent.”

Transitioning to a PLG strategy required a new perspective. “I think it's really hard sometimes for people to swallow, especially if you've been sales-led before and you have a very successful product, which we did, prior to this change."

“When you open up PLG, people use it differently, and you realize everyone used your products the expected way in the past because you taught them how to use it. You don't train people with PLG. I mean, you try to, through content and guided experiences and onboarding emails, but consumers are a lot like people who don't like asking for directions, right? They kind of just want to click around until they figure it out. When they started doing that, it was kind of like, Oh, crap! We need to make some changes.”

Use Data to Figure Out Your “Magic Numbers”

“We’ve really been very data-driven,” says Stephanie. “You're going to have to look at the data more so than anything else, of how they're using our products, to figure out where those challenges are, and to figure out what the challenges are that people don't realize exist yet.” 

Data reveals the critical “magic numbers” that predict conversion from no usage to free usage to paid usage.

“What are the magic numbers that if a customer does these things they're going to convert."

“So, part of it early on is figuring out what those are. Because then you get really good at predicting you start to know if I bring in this many number of free accounts that have this behavior, they upgrade,” she explains. 

The first magic number has to do with getting the users to use the product and figuring out the tweaks you need to make to increase engagement. The second would be how to get prospects to a certain product functionality they consider worthy of a paid subscription. 

One of the magic numbers, per Stephanie, were prospect conversations lasting longer than 40 minutes. Qualified leads were identified at 45 minutes and handed over to the sales team who moved in with compelling offers to enhance value to the organization.

“We use Google Analytics for tracking our platform usage by customers, but then we also use Pendo. We realized a couple of months on, that we need more advanced analytics. We need even more than what we have access to today.” 

Adjustments to the Lumavate website included the addition of chat functionality to provide further data on user experience. Finally, every element from button colors to CTA phrasing was tested, revealing some interesting surprises.

“One of the tests we ran was ‘Start Free!’ instead of our existing “Start Now”. After we ended testing at three weeks, it was 90% probability that the original would be better. And I'm like, this makes no sense, but that's what's crazy about this.”

How B2B is like B2C and Final Takeaways

For marketers looking to make the transition to PLG, you don’t necessarily have to hire experts in B2C. Stephanie sees empathy and authenticity as foundational elements of brand voice and, in this respect, B2B and B2C marketing and communication are similar entities. 

“I don't think it matters if you have B2B or B2C experience because it allows you to be able to empathize with consumers and where they're at. Then your goal is: how do you make it easier and constantly asking yourself, what can we do to make it better?”

“The overarching thought for me,” says Stephanie, “was just how similar B2B product lab comes to B2C. Ultimately, you're selling to a person anyway. I think what the term you are looking for – it's called B2 human. I think that's the new term now. B2H. It’s no longer B2B or B2C because it’s always a human at the end of the line that makes a decision.”

Stephanie’s three key takeaways for working with a PLG strategy: 

  • How you manage subscriptions 
  • How you track analytics on product usage
  • How you enhance the product.

“The number one most important thing is going to be what you're going to use for managing your subscriptions and payment processing, especially if you're software-based. We use Stripe. You need to spend your time, make the right decision. Do your research and make sure it will work for you.” 

“Our product is for marketers, but our goal is that anyone can build an app right now. That means my mom can build an app. So, my goal is if I can get her to build an app by herself at 10 o'clock on a Tuesday, that is winning to me. And until we're at that point for all consumers, we're not done yet.”


Tune in to The First 100 Days full interview with Stephanie Cox for more great information.

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