In this episode, you’ll learn:
- How the pandemic has pushed many companies to move to product-led strategy
- Challenges of transitioning from a sales to product-led strategy
- How customers interact with your product differently when it is product-led versus sales-led
- How to successfully change your marketing strategy for product-led business
- Tech stack recommendations for a product-led company
What to listen for:
- [01:02] The difference between product-led and sales-led companies
- [03:40] Transitioning from sales-led to product-led
- [09:33] Key learnings from transitioning to product-led
- [11:11] Finding the magic numbers for conversion
- [16:53] Tech stack for a product-led growth company
- [17:16] Stephanie's cheat sheet for transitioning to product-led
Prefer to read instead of listening? Check out this blog post: How To Transition From Sales-led To Product-led Growth
Stephanie has more than 15+ years of marketing and sales experience in B2B, B2C, and B2B2C. She's experienced with launching companies, brands, new products, geographic expansion, and more. She's driven phenomenal growth, spoke at conferences around the world, led incredible teams, and more.
Stephanie: You don't train them 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? Like they just want to click around until they figure it out.
Trinity: Welcome to the First 100 Days, a show for revenue practitioners, by revenue practitioners, giving you unscripted access and exclusive resources to help you navigate any new transition or initiative.
I'm your host, Trinity Nguyen from UserGems. Stephanie Cox is the VP of Sales and Marketing at Lumavate, a platform that enables marketers to build mobile apps without code. With over 20 years in the tech marketing space, she has opinions and experience to share. In our conversation, she talks about the transition going from sales-led to product-led. To make sure we're all on the same page, here's Stephanie's definition for what it means to be a product led organization.
Stephanie: A product-led organization is one that really leads with their product. And what that means is your goal is to get people into your product and your product is what's going to sell them. And that can take on a lot of different facets at different organizations. So a lot of times what you see when companies start out, first and product wide, their product is what converts. So they may not even have a sales team. And then you see them as they grow, especially as they grow up market and the enterprise, they are still product led, but then they pair that also with a sales team that can help with the more enterprise customers. They come into your product typically through a free trial or a freemium offering, use your product and find value with it and that's what causes them to upgrade and pay. First, if you have to choose one to get started, it is much easier to start product-led and then move into a product-led and sales-led go-to market than it is to start sales led and add in product-wide. Part of that is just because product-led has so many requirements on your business operation. One example is when you're a sales-led, typically you're using things like quotes, order forms, DocuSign invoices. Product-led is usually payment by credit card online. They're just completely different business operations around how they do that. I think the pro with product-led is when you think about the number of people that get exposed to your product, it is a lot more than with a sales-led strategy. And the reason that is, is you're going to find, even if you don't make any changes to your website, traffic, more people are likely to create a free account or create a free trial. But what that also introduces is a lot of noise. So now you have a much bigger population getting exposed to your product and instead of a sales cycle, which is highly controlled when you have a sales team and you're running a sales lead process, you get to control almost every aspect of that customer's experience.
You tell them and show them what you want to, when you want to, during the sales process. And product-led, you have no control. You may want them to go a certain path and they may choose not to go that path. They are going to make split-second decisions about your product and whether or not it's a fit for them based on what their experience is and you can't always control it a hundred percent.
Trinity: from sales-led to product-led doesn't happen overnight. What motivated Lumavate to make the shift? Here's Stephanie.
Stephanie: One of them, for a lot of companies has been what's happened in the last year. So we've been talking about offering product-led for two and a half years, and it had been on our long-term product roadmap. But really the COVID-19 pandemic kind of accelerated that. The reason it did that is about a year ago, we started to realize pretty quickly that the way of working before has changed and the way of marketing to people, the way it was selling to people. It made us realize, you know, this idea of us getting on a plane to go talk to customers and prospects, we weren't going to do that for be able to do that for awhile.
We also realized – we saw the marketers. Marketers threw away their marketing plans in March of 2020, and really had to start rethinking and rebuilding and constantly iterating on what was happening just because the world was changing so quickly. And it seems like a perfect opportunity for us to lean into product-led growth, because we knew we couldn't sell the way we used to sell.
We also knew that marketers needed to move faster. And so their need for a platform like ours was greater now than it's ever been. From the sales and
Trinity: marketing side. Can you break down the changes that each of your teams had to make?
Stephanie: From a marketing side, we really started thinking differently about every single marketing tactic that we had.
So in the past, we did what most B2B companies do. We had an SDR team who was focused on outbound, doing cadences with email, personalized videos, direct mail. Calls, we have LinkedIn ads paired with that. Right. And that doesn't really work for product led. It's different. So we've really started to think about how do we get people interested in our product?
How do we still attract them? But do it in a different way because it's not feasible to put the same effort in someone to get them to create a free account as it is to get them to schedule a meeting, someone that schedules a meeting as much further in the funnel a lot of times than they are when they create a free account for the first time cause their motives could be a variety of different things. So that's one example. It also caused us to think about conversion testing a lot differently. So we had always tracked conversions on website visits. Demo requests in the past, but now every CTN or website is about creating a free account. And so now we really need to track what can we do to improve that because of 2%, 5%, 10% improvement in the number of free accounts has a direct correlation to the bottom line of revenue now in a different way than it did before.
The other thing it did is it forces you to be more authentic. And the reason why I say that is you can be a little bit fluffier sometimes when you don't give people access to your product right away, you can market it and position it, maybe perhaps bigger than it was. And we didn't never really did that elevate, but I think what we did realize is everyone's going to see everything.
As soon as they log in the great parts and the parts that aren't so great yet that we're working to make better. And part of that is just being really upfront about it early on and using it as an opportunity to tell people, Hey, like I know that is something that you want and integration perhaps with this other third party that's in your MarTech stack.
We don't have it yet, but it's on our roadmap, right? Like here's where it's at on our roadmap and trying to be more upfront because we've all been in situations. I think when we've been sold to before, I know I have at other companies where a sales person comes in and sells you this big vision, and then you get the product and they don't really always match up.
That's not an option. They have to match up. People see through that real quickly. So I think it gave us this shot in the arm per se to go, okay, let's be even more authentic than we've already been in our marketing. Let's start just telling it like it is. And that's what a lot of where this whole idea from a brand standpoint, and even our podcasts got rebranded as real marketers.
We're for the marketers that move fast, ask permission, not forgiveness, get stuff done. And that's not for everyone. And we know that and that's okay. And then from a sales perspective, the sales team was used to controlling the process. They controlled what you saw in the demo. When you sell it, they control what value props they shared with you.
And now they have no control in terms of the product experience, because we have people that come in at 10 30 at night, create an account and build it. And there's no one on my team. That was waiting for them at 10 30 at night and walking them through this. So their perception is whatever the perception of the product gives them and how they use the product.
And a lot of times that's really great. And sometimes that maybe not as great, because they didn't realize how to do something because they didn't see an integration that we had. So they thought we didn't have it. And from a sales perspective, it's a big change. One of the things that a sales team is used to, especially in a sales lead strategy, is that someone schedules a meeting for you like a demo, and then you typically, what does everyone start with PowerPoint slides, right, or Google slides – pick your poison. And there's some sort of value proposition building. And then maybe you get a quick demo. You know, I told this to my team and I think it took them a while to wrap their heads around because I kept repeating myself before we actually moved into this direction was you're not going to need to do slides anymore.
Like you're not going to need to tell them about . Because they already use limit. Like it's just different. The conversation you have with someone from a sales standpoint, when they're already users of your product is very, very different than what you have with someone who is interested in learning more about your product and has never experienced it.
It becomes more like an existing customer call and then upsell than it does a new booking cell for the first time in more of the sales led arena. So it's just, it's very different.
Trinity: Yeah, it sounds so exciting. I'm like, I can see like how someone's interested in going down this path will be like, goodness, where do I even start?
Oh, to circle back to one of the points you said earlier about the conversion testing now is different because there's so much more noise now. So was there any kind of learnings that you realize through this transition? They like, Oh my gosh, this is like the silver bullet for us.
Stephanie: Yeah. We've really focused on early on learning and we still do. We look at data every single week, but right now where we're at, it's important for us to look at all of it cause we're still trying to figure out, in PLG, you call it your magic numbers. What are the magic numbers that if a customer does these things, you know, they're going to convert.
And so part of it early on is figuring out what those are, because then you get really good at predicting. You start to know, like, if I bring in this many number of free accounts, they have this behavior, they upgrade, they look like best in this time period. We've really been very data-driven and part of it has been, I think... People will never use your product the way that you think.
I think that'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. We have prior to this change, we have customers that have 600 apps on our platform and we've gotten tons and tons of feedback from companies of all sizes that have been using our product for many years.
And then when you open up PLG, people use it differently, and you realize – and I think it was like this a-ha! moment for me. I don't know why I didn't think of it before. Well, everyone used your products that way before because you taught them how to use it. We train them all. You don't train them 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? Like they just want to click around until they figure it out. And it's not always the way you want them to click around. And so when they started doing that, it's kind of like, Oh crap, we need to make some changes.
Like, I'll give you one example. Like for us, we host everything as a progressive web apps. Everything's technically hosted on the web. And so one of the prompts when you create a new app was like, you enter your app name, there's an optional redirect URL. And we had a bunch of people that kept like typing in their website as the redirect URL.
And then getting confused when their app would then go to their website because they thought the redirect URL was like, where did they want it hosted? And we had never seen that behavior before, because. Our customers like we had trained them. And so it was just like some of these little things about your product, even that you don't realize without context, even if it's super obvious to you and to your existing customers and product lead at 10:30 PM on a Sunday night, someone else might think about it totally differently.
And that might cause them to view your platform in a completely different way than you want to. The other thing, when you think more like conversion, From a marketing standpoint. So we have, what's the call to action phrase. Everyone talks about that. Everyone's probably tossed about like a million times.
What color is the button? What's the words you use. And we had start now in our hero on our homepage. And so one of the tests that we ran was start free because we're like, well, free is a lot more obvious like that it is free, and so we thought that should increase conversion. It didn't, it actually made it worse.
Like, and it makes no sense, right? Like why, but it says start free and start now is unclear if it's free or not. So it's just like, that's an example of testing and it was super funny because when we first launched the test, Within about a week, it was like a 90% probable that the original would be better.
I'm like, this makes no sense, but that's, what's crazy about this, right, is my inclination. My team's inclination was wrong. And because of the volume of people that we get now that convert to free accounts. That were already coming to the website before and weren't converting to them house. We're able to test more and see what works better.
That's what we've learned the most about from a conversion standpoint. But then also from just a usage standpoint is people don't, they don't use things the way that you would think that they would or the way your customers used to. And you have to really use it as a new opportunity. Like in a lot of ways, we're at five-year-old company that is.
A few months into product lead. And so in a lot of ways, this journey is net new for us, and we need to look at everything with fresh eyes. Oh, that's
Trinity: amazing. I hope to document all these learnings and experience and probably to share it on medium or sub stack or something. Cause that's really fascinating.
I mean, in hindsight, the form example, but yeah, it makes sense. And hindsight is 2020, but in the process you wouldn't have thought about it most likely, right?
Stephanie: That's amazing. It's crazy. Like a great example is chat. We have chat on our website and we have a lot of product growth accounts of free counsel come in that chat on the website with us.
And so one of the things that we prioritize faster was getting chat and products. So actually in our products and you can chat directly with our customer success team while you're building app, because the website Chad's managed by someone different than what manages our customer success. Do you know?
What's hilarious. Since we put that in people don't go to the chat and product. They go to our website and chat us with their product questions. Wait, what I know it makes no, because they are used to doing it and that's maybe where they've done it before. So they felt inclined. So one of the things I just, I told my team, I was like, we need to better educate people that it's an end product or like have it pulse or something, because I can see them like go from the, like I had one today where they went from the product because we can see what you were all they came from before they went to enter the chat, and then they went to our website and went to chat, but they're still in the product working on something. It was just really fascinating. Or we need to figure out a way to like transition, right – the cues or something like that – better, because they're using it differently than I would have anticipated.
So it's just, it's really fascinating. The learnings that you can have when you give people your product to use really with no guard rails and a lot of ways, because you're not controlling what they do. And they meander their own way through the process. Ideally they're following the content and the context that we're giving them and the guided path.
But a lot of times they're just. They're not. So you can learn a lot of really interesting things that there is probably no way you could have thought of before
Trinity: You mentioned that different skillsets and different changes, essentially a cheat sheet for someone who's about to go through this transition. So from the tech stack standpoint, what would you say is a basic stack for a POG
Stephanie: company? So I think the number one most important is going to be what you're going to use for managing your subscriptions, especially if you're software based.
So we use Stripe, you have to make an investment in one, you have to pick one, you need to do your research and make sure it will work for you because I will tell you for us, it controls what people get for different accounts. Our subscription plans, all of our payment processing, and it will be the most difficult thing to read about later.
Really spending your time making the right decision, I think is number one. I think the second thing, and it depends on your product. We use Google analytics for tracking our platform usage by customers, but then we also use Pendo for that as well. Cause we just realized a couple of months on, we need more advanced analytics.
We need even more than what we have access to today. So I think really, operations, being able to collect payments, be able to manage subscriptions effectively without getting development involved. I think that's my number one thing, because your dev team needs to be focused on like enhancing the product, not making all these changes from cause you want to do things differently from a marketing and sales perspective and then getting analytics it's about product usage.
Trinity: The First 100 Days is sponsored by User Gems, a software that helps companies identify buyers that are more likely to buy a product use jams, tracks your current and past customers for job movements so that when they switch companies, you can sell to them again. And based on your sales and product usage data, it also finds prospects that are similar to your existing customers.
According to reviews and G2 crowd and I quote, "User Gems is a prospecting miracle. If your in a revenue role, check out userjams.com."
That was Stephanie Cox from Lumavate. Christian, welcome back to the show. What do you think of this episode? The overarching
Christian: thought for me was just how similar B2B product-led becomes to B to C. Like when, we're always describing B2B, shouldn't be that different in like advertising and communication because ultimately you're selling to a person anyway.
So many people differentiate between like your experience in B2C marketing versus your experience in B2B marketing. But in reality, it's all the communication that ultimately needs to convince a person because in B2B it's also the person that buys. Even if this person happens to be employed by a company.
And now when she's talking about product-led, it's so much more once again, this, in a sense, the skillset of B2C advertising, B2C selling, where she's talking about the magic number, which is what we all know from Facebook, the first thing Facebook focuses on, on the driving their engagement. Now we're back to B2B focusing on the same thing, the magic number of being very determined, figuring out what small actions we can change so that people have more engagement sign up more, et cetera. Yeah.
Trinity: I think that the term you are looking for it's called B2 human. I think that's the new term now B two H that's no longer B2B or B to C, always a human at the end of the line that makes a decision to provide context for our audience.
User Gems, right now, is also building a product. That follows this product-led motion in a sense that individual sales reps can sign up on their own and use the products. So what Stephanie shared in this interview is very relevant to us, especially right now we thinking about all of these components that she talked about, like what works for us right now in a sales-led marketing lead motion, we have to be thoughtful and I guess reject some of them so that it's more appropriate for product-led.
One detail that she brought up that I wanted to bring up is when she said, like, there are some features, I'd say some capabilities that if you can bring, if you can buy off the shelf tool, do that. You should consider doing, instead of getting your engineering team, building everything from scratch. Being engineers, everyone always think that, yes, I can build that too.
Yes, you can, but as a minimum that you should instead using that engineering bandwidth to focus on enhancing our core product or that product so that the experience of the user will be better and they see the value of the product faster.
Christian: Yeah. I think that's pretty much, even unrelated to product growth or not.
I think so often we decide that, Hey, we can build this ourselves, and then it turns out yes, like the whole 80-20 and yes, it sounds easy, but we didn't think through all the challenges and now we need to maintain another system. If we think, Hey, we can do a payment provider, similar to Stripe with Turnout.
So I think that it probably needs different tools if you do product-led growth, but the fact that you need some external tools to help you analyze, for example, and then if you are engineers, making the decisions as it was the first reaction to build it yourself, hopefully that it's so much better than you taught me so much better spent improving your own product than creating a haphazard version of someone
Trinity: else's product. We're going through, I guess, the same process as Lumavate. A few months ago when they started the transition, they started from sales-led to product-led. We're still a sales-led. But we want to use product-led as an additional channel to compliment our existing sales-led.
And one thing that I'm so thinking of I'm so struggling to get the answer is like, how do you effectively segment your customers so that they don't overlap and you can do so efficiently. So like your existing sales team can still follow the existing, go to market motion, going through this existing target account list.
For example. While your bottom up product acts as a new acquisition and help you a sales team going after a new segment. So they don't cannibalize each other. So how do you do that as one company and still maintain the cost effectiveness?
Christian: And if you start with product-led, you probably invest much more into the marketing arm of your company.
Then the is the way I see product-led is for us, it's a support for the sales team. It focuses more on the part that she mentions where. You get this much bigger exposure, so many more people see your product, and I want to see how this can be helpful for our sales reps to then sell to enterprises.
Trinity: Are you going through a major transition within your organization or your career?
Do you have a First 100 Day journey to share recently or in the past? If, yes, I want to hear from you email me at podcastatusergems.com. And if you're looking for the ultimate revenue leader, cheat sheets, sign up to receive them at usergems.com/podcast.