From Product-Led to Sales-Led Growth with Miro CRO Sangeeta Chakraborty

Summary

When should startups hire sales teams? Why should they transition from product-led to sales-led growth, and how can this be accomplished? By aligning themselves with the customer’s needs, experimenting, hiring highly adaptable sales leaders, and clearly defining their product's enterprise offerings, startups can navigate the tricky change from PLG to SLG.

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Key Takeaways and Calls to Action

In this episode, Mark and guest Sangeeta Chakraborty explore the intricate dynamics of transitioning from Product-Led Growth (PLG) to Sales-Led Growth (SLG). They discuss the risks and rewards of this transition, focusing on core values and developing an approach that unifies sales and customer success teams. Through their conversation, they reveal the important changes both startups and established enterprises can make to move toward sustainable growth and long-term success. 

Chakraborty is an experienced executive and strategic advisor who specializes in producing growth for SaaS companies. She was the Chief Customer Officer and is now the Chief Revenue Officer for the visual workspace company Miro. Prior to this, she brought her expertise to Okta as Vice President of GTM and as SVP of Customer Growth for the employee screening company Checkr.

These are the key takeaways from Sangeeta’s interview.

Understanding Product-Led Growth (PLG) vs Sales-Led Growth (SLG)

Before exploring the nuances of transitioning between these growth strategies, it's essential to grasp their fundamental differences:

Product-Led Growth: PLG focuses on the product itself as the primary driver of acquisition, retention, and expansion. The goal is to demonstrate the product's value by encouraging usage and generating value through hands-on experiences. This approach relies heavily on a seamless user experience and compelling product features to convert free users into paying customers.

Sales-Led Growth: SLG, on the other hand, emphasizes direct sales strategies. It involves deeply understanding potential customers' needs and offering tailored solutions that solve specific problems. This strategy prioritizes human interactions, typically through sales teams, to build relationships and drive conversions.

Risks and Challenges in Transitioning from PLG to SLG

Compromising Company Values

One of the primary risks cited by Sangeeta and Mark is the potential compromise of company values during the transition. When transitioning to SLG, the allure of quick wins can sometimes lead to superficial sales practices that undermine long-term enterprise value.

Actionable Takeaway: Develop a strong value system and ensure all sales representatives internalize these values. Regular training and workshops can keep the focus on the company's core missions and prevent deviations from the established principles.

The Enterprise Product Offering

Clarity regarding the enterprise-level product offering is non-negotiable in transitioning. Without a distinct enterprise version of the product that addresses specific pain points and offers additional value compared to the free version, businesses risk failing to justify the switch to a sales-led model.

Actionable Takeaway: Clearly delineate the additional features, security, and support provided in the enterprise offering. Conduct market research to ensure these additions address validated pain points and provide irrefutable value to potential enterprise customers.

Building a Robust Post-Sale Strategy

Mark and Sangeta both stress the importance of re-evaluating the post-sale approach to ensure ongoing success. Once a sale is made, the journey doesn't end; it transforms into a symbiotic relationship focused on customer success. 

Continuous Customer Engagement

Incorporating traditional customer success practices is crucial to ensuring ongoing value delivery. These practices involve proactive customer support, regular check-ins, and promptly addressing any emerging issues.

Actionable Takeaway: Implement a customer success strategy that includes regular touchpoints and a feedback loop to gather insights on customer experiences. Use these insights to continuously improve the product and service offerings.

Aligning Sales Teams and Incentive Structures

Aligning the compensation plans and incentive structures for sales and customer success teams is essential in preventing silos and fostering collaboration.

Unified Incentive Plans

Misaligned incentives can lead to a disjointed customer experience and a lack of cohesion between teams. Incentive plans should encourage collaboration, focusing not only on acquiring new customers but also on retaining and expanding existing relationships.

Actionable Takeaway: Develop an integrated incentive structure that rewards both sales and customer success teams for customer retention and expansion. This holistic approach ensures a smoother customer journey and long-term satisfaction.

Hiring the Right Sales Leaders for PLG

Sangeeta and Mark both also underscore the importance of hiring the right sales leaders who can bridge the gap between PLG and SLG. These leaders need unique attributes compared to traditional sales roles.

Curiosity and Adaptability

Sales leaders in a PLG environment must possess an innate curiosity and adaptability to understand the product and the value it offers deeply. They must also be comfortable adapting to changes and learning from the data.

Actionable Takeaway: In your hiring process, prioritize candidates who demonstrate strong problem-solving skills, adaptability, and a genuine interest in understanding the product and customer needs. Utilize situational judgment tests and case studies in your interview process to assess these qualities.

Understanding and Mapping the Buyer Journey

Building a comprehensive buyer journey is critical in both PLG and SLG strategies. The buyer journey should serve as the foundation upon which the sales process is built.

Stage-Based Sales Approach

After an initial sales meeting, understanding where a prospect is on their buyer journey allows for a tailored approach, ensuring the pitch resonates with their current needs and stage of consideration.

Actionable Takeaway: Create detailed buyer personas and map out their journeys from awareness to decision. Train your sales teams to recognize these stages and adjust their engagement strategies accordingly. This alignment ensures a more personalized and effective sales process.

Experimentation and A/B Testing

Sangeeta emphasizes the value of fast learning and experimentation through A/B testing at Miro, incorporating findings to continually refine processes and product offerings.

Data-Driven Decision Making

By continuously experimenting and validating ideas through A/B testing, companies can make informed decisions based on real-world data rather than assumptions.

Actionable Takeaway: Establish a culture of experimentation within your organization. Regularly run A/B tests on new product features, messaging, and sales approaches. Use the data gleaned from these tests to make iterative improvements that drive better customer engagement and satisfaction.

When to Hire Your First Sales Professional

A common challenge for product-led companies is determining the right time to hire their first sales professional. Sangeeta advises considering the stage of Product-Market Fit (PMF) and the velocity of the sales funnel.

Focus on PLG Fit First

Before adding a sales layer, ensure your product has reached a sufficient level of market fit and that there is a clear pathway for free users to convert into paying customers.

Actionable Takeaway: Regularly assess your PLG metrics, such as user retention rates and conversion rates from free to paying users. Once these metrics indicate a healthy and scalable growth pattern, you can start considering the incorporation of a sales team to accelerate the process.

Eradicating the Term “Post-Sales”

In the SaaS environment, traditional notions of "post-sales" can be counterproductive. Sangeeta highlights the importance of integrating sales and customer success to focus on continuous value delivery.

Continuous Relationship Management

The customer journey doesn't end at the sale; it's a continuous cycle of providing value, addressing needs, and ensuring satisfaction.

Actionable Takeaway: Foster a culture where sales and customer success teams work hand in hand from the outset. Develop shared goals and metrics that focus on the entire customer lifecycle, ensuring every team member is aligned in their mission to maintain and grow customer relationships.

Actionable Insights to Take Away

1. Maintain Core Values: Ensure that the transition from PLG to SLG does not compromise the company's core values. Regular training and reinforcement of these values are essential.
2. Clear Enterprise Product Offering: Distinguish your enterprise product features clearly and ensure they address validated customer needs and pain points.
3. Invest in Customer Success: Implement a strong post-sale strategy with proactive customer support and regular feedback loops.
4. Align Compensation and Incentives: Ensure that sales and customer success teams have unified incentives that focus on both customer acquisition and retention.
5. Hire Curiosity-Driven Leaders: Focus on hiring adaptable and inquisitive sales leaders and representatives who are genuinely interested in understanding the product and customer needs.
6. Map the Buyer Journey: Develop detailed buyer personas and map their journeys to tailor the sales approach effectively.
7. Experiment and Learn: Cultivate a culture of continuous experimentation and learning through A/B testing and data-driven decisions.
8. Assess Product-Market Fit: Regularly evaluate your product-market fit and sales funnel velocity before scaling your sales team.
9. Integrated Sales and Success: Foster an integrated approach between sales and customer success teams to focus on continuous value delivery rather than a traditional post-sales notion.

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Note: The insights shared in this podcast were initially distilled through advanced AI summarization technologies, with subsequent refinements made by the writer and our editorial team to ensure clarity and engagement.

About "The Science of Scaling" Podcast

Every week during a season, host Mark Roberge—co-founder and Managing Director at Stage 2 Capital and a senior lecturer at the Harvard Business School—interviews some of the tech industries most successful and renown leaders and managers in the areas of sales growth and Go-to-Market strategy. This is a HubSpot for Startups original podcast, and part of HubSpot's Podcast network. It's available on Apple, Spotify, and anywhere you get podcasts.