To thrive today software needs to be truly product-led. But that can be elusive and hard to achieve for some companies. Creating a product-led funnel is the first step towards a frictionless growth engine. This session presents a range of options along a product-led spectrum and practical advice for those ready to explore a transition to product-led growth.
You'll learn:
You'll leave armed with practical, hands-on advice about evolving towards a product-led model.
Anna Talerico:
Hello Product-Led Summit. I am so excited to be here presenting about creating a product led buyer in a sales led funnel. Got a lot to jam into the next 25 or 30 minutes so I'm going to jump right in. Really quickly about me. I'm a SaaS entrepreneur. I've had a couple of exits. I blog about startups and all things SaaS at SaasX.com. I'm also an operating partner at Arthur Ventures. We invest in early stage B2B software companies that are located outside of Silicon Valley. And in my role, I work with all of our partner companies, our portfolio companies on their go to market strategies. And as an operator, I have spent time in product led, sales led and everything in between. So what we're going to cover today is we're going to talk about what product led growth is versus a product led funnel versus a sales led funnel.
Anna Talerico:
I'll talk a little bit about the product led spectrum, which is how I like to think about it, and why product led growth can be so hard for some companies, but how the funnel can help bridge the gap and a couple of ideas to create your product led funnel. So all the way back in July 2020, I presented at the Product-Led Summit on adding inside sales into product led growth. So in that regard, I was talking about a product led organization that then adds sales into it, which we see a lot in our classic product led model. You look at Slack, Dropbox, Atlassian - these are companies that started product led and then added in sales. But today we're actually going to be talking about the inverse sales led models that are then adding in some product led elements. So this session is for you if you are learning still about product led growth, what it is, why it matters, how it might work on your business.
Anna Talerico:
If you have a sales led growth model today and you're exploring how to evolve into a product led growth model. And I would say if you're in a sales led model, probably your world revolves around leads, not trials and online signups. So this is the session for you if you are in any of these buckets. So let's start with what is product led growth. And the reason I want to start with this is because we're here at the Product-Led Summit, we all know what product led growth is. But I recently was doing some recruiting for one of our portfolio companies and I was recruiting their first product manager. And I interviewed about 10 product managers. One of the questions I asked them was how do you define product led growth? What does it mean to you? And I was really surprised that none of them knew what product led growth was and had heard of the term.
Anna Talerico:
So it really reminded me that we sometimes just need to kind of define things and now we're being exposed to them. So the way I like to define it is that it's a very specific approach to go to market that relies on a self-service customer acquisition channel, right? Where people try, buy, renew without ever talking to a person from the company. To me, that's really classic product led growth, is that it's a person free acquisition or sort of self service channel. Open view partners? They talk and blog a lot about a product led growth. As you probably know, they are really the thought leaders who pioneered the term. Their definition is also pretty similar. An end user focused growth model that relies on the product itself as the primary driver of customer acquisition. Product-Led Summit, the people are product led, the people that are putting on the Product-Led summit really similar there too. They define it as a go to market strategy that relies on using the product to acquire, activate, and retain customers.
Anna Talerico:
The easiest way to think about it though, is to me again, classic product led growth is there are no salespeople, there are no support people that are interacting to get you to sign up and try a product. It's all happening without interacting with a person from the company. In the sales led world, as you know, we've got a buyer or buying committee working with a salesperson, making a decision that kind of centralizes, and then pushing that decision down to the users. And you can see our friendly little users here. Some are happy, some are not, that's really what happens, right? A decision gets made and then people are asked to adopt and roll out and use a product. But product led is really different because it starts with the users, not with a salesperson and a buyer or a buying decision being made by a committee that gets pushed down.
Anna Talerico:
It starts with a user and then we add another user who starts telling people and now suddenly we've got a lot of users and suddenly the company is opting in to choose the product after the users have already chosen the product and are adopting and using it. So if this sounds hard to you, that's because it actually is hard. If everybody could do it, they would. And this is a challenge, right? It's hard because you need a product that's so good it solves an obvious need. You need a product that has a clear, easy to see value. Something that's so delightful that people just want to use it and be part of your tribe. Something that makes people rave. And I won't even read all of these bullets, but I think you get it. You also need a product that people can try or experience on their own even if they can't buy it on their own. There's still a way for them to get their hands on the product and use it. And something that's really easy to use without support and set up and training.
Anna Talerico:
And then really to be product led you need a customer acquisition model that has been intentionally created to be self-service. It's really hard to add in a self-service component if you created your whole customer acquisition model and your go to market model to require a sales sort of intervention or interaction. And the core ingredients of product led, the commonality in all of these bullets, is the product, right? The product is at the central part of it. And oftentimes when we start to think about a sales led model, and we're trying to transform it into a product led model, we've got salespeople working on that. We've got marketing working on that. We've got ledership working on that. We've got support working on that. But we forget what we have to have - we have to have engineering and product working on that, right? This is more than a go to market motion product led. It is at its core, a product function.
Anna Talerico:
So you need a product that sells itself, easier said than done, and that's why product led can be such a challenge, especially for companies that were built around a different kind of go to market and a different kind of product that did rely on sales interaction to land customers. So what stands in the way of product led growth for most companies are pretty obvious things, right? If you don't have a self-service free trial mechanism. If you don't have a freemium option. You don't have to have a freemium option, but it can certainly help. If you don't have a self-service purchase option, that's going to definitely stand in the way of product led growth.
Anna Talerico:
You need a pricing strategy that doesn't exclude the bottom of the market. So you want a product strategy to that lets a user or a couple of users, try it without a lot of risk, without having to go through purchasing, and getting approvals for budget and everything. So a product strategy that excludes a lot of the market, it can be really hard to create product led growth when you have that. And those are go to market things. And we think about self-service free trial, freemium, self-service purchase, pricing strategies - those are go to market focus. But then we get to the product itself, right? If you have a clunky user experience. If you have a complex product that requires setup and configuration and training. If you didn't build the product to be product led, it can be really, really hard to retrofit it.
Anna Talerico:
So what to do if you have a product or go to market that isn't capable today of no contact customer acquisition? You have to fake it 'till you make it. And we're going to talk a lot about that here in the next 15 or 20 minutes together. How do you do that? How do you start to create an environment that's more product led if your product really isn't capable of that today? I love this quote from OpenView because it's really inspiring, right? "Any company - even those selling to large enterprise or operating in vertical niche markets - any company can adopt product led growth principles to improve the user experience and increase go to market efficiency." And a lot of ways that you create a product led funnel is to create these go to market efficiencies that are very similar to the product led motion. It's faking it until you make it.
Anna Talerico:
Enter the product led funnel. I first heard this term, actually one of my partners at Arthur Ventures, Pat, one day we were talking about a product led company and we were talking about product led growth. And he stated they're not really product led growth, they're more product led funnel. And I hadn't heard that phrase before, but it really stuck with me. And as we started to talk and compare and contrast different companies, I really started to understand how product led growth, in its classic sense, is a totally person free online acquisition where you can try it, you can buy it, you can expand and you can renew without having to talk to somebody. That's classic product led growth. But there's a continuum and you've got the product led funnel where you can have these characteristics and elements of the efficiency of product led growth. And that's a great thing too, right?
Anna Talerico:
So when we talk about a product led funnel, I talk about creating sort of ready to buy customers that enter your funnel without having talked to a person. So maybe they can't buy online, but they're ready to buy by the time they get to sales. So that's the conditions that we're trying to create through some go to market tactics and a few product tactics. And you can think about it like a continuum or a spectrum, right? So on the one hand, you've got sales led where you can only purchase through a sales led interaction. Other side you've got product led where there's no interaction needed to try it, to buy it, to expand and to renew. And somewhere in the middle of this continuum, we start to be going away from sales led to more sales assisted - we'll talk about that a little bit - and more sort of like a product led funnel that's creating these ready buyers.
Anna Talerico:
So how do we create ready buyers? How do we create a product led buyer in a sales led environment? I think about it that there's two keys. We've got creating more inbound ready to buy leads and also creating elements of self-service. And this gets a little bit into the fake it till we make it, right? Creating a feeling of product led, even though the product might not be fully product led. So let's talk about how do we create more inbound ready to buy leads. And I'll talk in a minute about what that really looks like, but let's talk about how do we create ready to buy leads? Number one, we can double down on social proof and customer advocacy. And this is one of the most important things that we can do, right?
Anna Talerico:
If you can create an environment where you've got case studies and you've got testimonials, whether those be know video or written form or social media. If you've got ratings on review sites like Capterra and G2 Crowd and Trust Pilot, if you can create this environment where you have customers doing your advocacy and you have social proof of great customers that have had success, that goes a long way in creating a ready buyer. Where the buyer is ready to purchase it before they've experienced the product themselves, because there's just such irrefutable, sort of volume of customer advocacy. So getting ratings on rating sites is very important. We see that all the time now, and it's becoming more and more important. Getting your testimonials, getting your case studies and just doubling down on that channel. Getting your customers to speak on your behalf, by having them review you, having them give testimonials and case studies. Number one really important thing you can do to start to create ready to buy leads who've never even seen the product necessarily.
Anna Talerico:
Speaking of which a lot of times when we don't have a product led product itself, it wasn't created like that inherently, it might be feeling like it's complex or it's hard to learn. And so we want to hide the product and that is one of the worst things we can do. We have to have confidence that we can in a go to market, showcase the product in its best light. And so we need to increase our product videos and our product content. And we need to create that in a way where people can really start to understand what the benefits are of the product, how it feels to try on the product, right? How to use it every day, day to day. And I don't mean like create an hour long product demo video. I mean create a two minute video on a feature and then create a 60 second video on a different feature and create a three-minute video about a benefit.
Anna Talerico:
But we start to create these snackable product content that help the buyers understand the product more. So, although you might have an instinct that you need to hide the product until very late in the sales cycle because it's not product led, because it's cumbersome or complex or whatever it may be, the opposite is actually true. To create a ready to buy lead, they need to feel like they understand the product.
Anna Talerico:
This one is really 101 but I'm always surprised how many people miss it. And that is just creating trust and confidence in your buyer with your quality content. Your top of the funnel content, about your thought ledership, about the market and the space and the problems that you solve. And then the bottom of the funnel content with that product content that we just finished talking about. If the prospective customer trusts your brand because of the content that you've been creating that they've been consuming, you create this beautiful motion where they trust the product too. So you can instill a lot of confidence in your product, even when people can't try it, just by creating confidence in your brand, which happens through quality content. So although it's 101, it's often really, really missed. You've got to take a look at are we creating the type of content that resonates with our buyers, that builds trust in our buyers, that we understand the space, we understand the pains and the challenges that they're experiencing. So doubling down there.
Anna Talerico:
Putting pricing on your website. I saw a stat from the product led people that I think only 35% of companies at this point in this particular survey don't have pricing on their website. So number one is buyers expect pricing, right? They expect to be able to find pricing online. And by the way, if you don't have it on your website, they know where to find it. They can go to a review site to find it or they can ask people. So hiding pricing doesn't really help create a ready to buy lead. I know oftentimes when we have a more enterprised product we think we need to hide pricing, but buyers expect it. And you have to be confident that the value that you're delivering is worth the price that you're charging and be willing to put the pricing on the website. This is really important.
Anna Talerico:
And there's a whole strategy around pricing and things like that, that you can dig into. It's not just, let's go throw up pricing. You need to think about how it's presented and the value based pricing, but this is really important. And ideally you can create a no-brainer initial pricing tier where a couple of users can try without having to go get budget approvals, without having to jump through hoops, something that somebody can throw on their credit card. So again, even if it's coming through the sales channel and it's not product led, having a no-brainer initial pricing tier where people can try it on with very, very little risk, where they can try the product? Is a huge way to start to create this environment. So I think that's really important.
Anna Talerico:
And then as we start to above bullets are really go to market things. As we get into more of the product, can you launch a limited feature free version? That's always great if you can get product and engineering to work on that. And then one of my favorite ways to create ready to buy leads, is creating adjacent, lightweight tools that are designed to attract your ideal customer profile. So let's say you can't change the product right now. You don't have any engineering resources to work on the product right now. And you're thinking, how are we going to be product led? Well, you can create a tool designed to be attractive to your ideal customer profile that solves a problem that's adjacent to your product. And there's a couple of really sort of classic versions of this. One is the HubSpot Website Grader, which they still have, but they launched, I want to say back in 2007 or 2008. When the software first launched and there wasn't really a sole self-service channel built yet, they weren't truly product led yet. They used the website grader as a way of attracting leads.
Anna Talerico:
So the website grader's whole purpose is to create a faster time to value. Which is really important in creating this sort of buyer ready lead, buying ready lead. And it's free. And you just put in your URL and you get great, valuable information that's useful. And doing this creates a lead that again trusts you, trusts your product by having a great experience with one of these lightweight, adjacent tools it builds confidence in your product. So this is really important. And Moz, the SEO company has an example of this too, with their MozBar Chrome Extension, again, it's just trying to give a flavor of freemium to the customer and that builds trust and confidence. And the great thing about this is if you don't have engineering resources that you can put on this, this is a lightweight easy tool that's really easy to outsource to a development team. So it's a nice way to not take up internal resources, but get something of high value that you can use in your customer acquisition efforts that help create this sort of ready buyer.
Anna Talerico:
Okay. Now, if we don't have anything product-wise that can go self-service, we can't truly be product led where people can just find us, discover us, try us and buy us without ever interacting with us. One of the things we can do that help build confidence in your product is to create some elements of self-service. And a lot of these are things that you can do without needing engineering and product resources. So things that you can do, this one you do need product and engineering, but they should be lightweight projects to do. One is building buy virality into the product. My husband, who is a CMO, talks a lot about this. He talks about it like passive software versus active software. And what you want to do is build in elements of being an active software.
Anna Talerico:
So this is software that pushes information and pushes utility to you versus you as a user having to go in and get it, which would be passive. So a good example is like a tool that instead of me having to log in to a dashboard to see my results, the software sends me my results in a very usable format. And I can click to share it and I can share it internally. And now I've taken it out of the product and gotten it into the hands of my users inside of my company, let's say, because it's so easy to share the data and the results that I'm getting from the software or the insights I'm getting from the software, because now it's actively pushing valuable information to me that's usable. And through a click, I can share it out with different team members or something like that.
Anna Talerico:
So thinking about how can I get the product to do some things that are less work for the user, things that are more present for the users though. Things that are sort of pushing the product to the users is something. So, that's on the product side. This is a go to market thing, though. One of my favorite things is putting in these walk me style tutorials, right? So if you think about a classic product led growth, the product is really easy to use. I can sign up and I can start using it, and I can get value out of it right away. And if your product is maybe more complex, requires more training, you'd be surprised how much you can make the product feel product led and easier if you create these in product tutorials. Where you log in and it's prompting you to do this. Great, you did that, now you can do this. That kind of thing creates this feeling of self-service, which can go a long way towards people adopting, getting time to value and spreading your product internally into the company.
Anna Talerico:
So the in product tutorials can be very, very helpful and pretty straightforward to set up. Just having little help buttons everywhere to give tips and tricks is a product led element, for sure. I've seen this be a huge impact for companies that are struggling with moving from a sales led model to a product led model - is having in product chat. So that as a user is interacting with something, if they have a question, they can just chat with a support representative right there in the product. They don't have to leave the product and file a support ticket. And the reason this is important is again, a company that was designed to be product led from the beginning they have probably a tool that's very easy to learn and use quickly. And if you've weren't designed like that, it's probably something you've got a product that people need training on, people need to set up.
Anna Talerico:
And so how do we make all of that feel lighter weight and easier. And we do that by responding to the customer when they're in the product and they need help. So the walk me tutorials help and in product chat is tremendously helpful because now we're eliminating friction for the buyer and the user. They're in, they're working. They ask a quick question, they get a quick answer and they move on versus having to leave your product. We don't want people to have to leave the product to learn the product.
Anna Talerico:
In product expansion request button. This is one of my favorites. I've seen this work really well. Most product led companies you can expand yourself if you need to add users, you just sort of self provision. Let's say I'm using Slack, I've got five people using it and now I need seven people to use it. Boom, that happens automatically. I don't need to talk to the company or talk to sales. And that's part of why the growth on product led companies is so capital efficient. Well, if I don't have a way of doing that, I fake it and it can work really well, where I'm in the product as a user and I want to add some users. I can click a button and they'll have a little form that says how many users do you want to add? And I can add five, hit the submit button. And then that can fire off an instant notification to support or customer success who can then go provision on the backend, those seats, and then reach out to the customer to get the billing set up or charge the credit card, whatever it may be.
Anna Talerico:
But it gives this feeling of I want to add users, I can add users and I can get those users added quickly versus what you see a lot of times in this kind of case is somebody has got to call their customer success representative or go open a support ticket. So be really thinking that in product expanse request button is like that fake it till you make it. And I would really encourage you to be thinking about things like that, that you can do that can be frictionless for your user, that can give the appearance and feeling of product led.
Anna Talerico:
Oh, my big head is covering this last one, which is another favorite though - creating an online service or learning center, like your product university, where people can do training on their own, watch little videos and sort of get to know the product without needing to be trained. So a lot of times when we look at sales led versus product led, one of the biggest differences is in sales led, companies need training. And most users want to train on their own time and they want to do that at their own pace. They don't want to be scheduling appointments for training or jumping on office hours for training. Most modern users just want to learn it themselves. So having this online learning center where people can go watch a 10 minute video on a feature and then go use that product feature on their own can be really helpful. And ideally you can ungate that content so that anybody can access it. So again, you're getting product content and knowledge into the hands of potential buyers.
Anna Talerico:
Okay. We're nearing the end. I said there were two keys, but there's actually a third one. It goes without saying, you're probably going to hear this in a ton of sessions here at the Product-Led Summit - cross functional alignment. A lot of these sort of fake it till you make it they're about go to market and creating these conditions that give the appearance of product led, but you can't really become product led without a cross functional responsibility. Even if you're going to create a little free adjacent tool or you're going to sort of start to shift some of the elements of your product from passive to active, you really do need product and engineering as part of that. You can't do it without it. So I love this little matrix, this little infographic from Reinventgrowth.com because it shows the product at the center and they have his quote - "the product is not part of the customer experience, the product is the experience."
Anna Talerico:
So when you look at companies that have gone from sales led to product led, you will hear a lot of conversation around all of the internal reorganization that they needed to do to put the product in the heart and the center of the company. And so it really requires that. You can't really go from sales led to product led without putting the product in the middle and getting all the cross-functional teams working together in tight alignment. So food for thought, but I've never heard a story of moving from sales led to product led where there's not a sort of a realignment across the company, sort of all the different functions. So super important.
Anna Talerico:
So what product led funnel look like? Let me tell you, it looks more sales assisted than sales led, right? So prospects, by the time they're talking to sales, they've heard about the product, they've seen the product or they've experienced enough of the product that they have self qualified and they know they probably want it. So that's a big one. And the condition of I haven't gotten to use this product, but I know enough about it that I know I want it.
Anna Talerico:
Another thing it looks like is increasing inbound organic demand, right? So you want to get this flywheel going of inbound organic demand. And when you kind of see that happening, you think that looks like a product led funnel. And another way is these first call inbounds, and sorry but my big head's cutting off my bullets. You want to give these first call inbounds who are wondering where can I get a free trial? Or where do I send my PO? I'm ready, right?. You get these first call inbounds that are about I'm ready to go, where do I send my money? Or here's my credit card number. And you also start to get these one call closes, where people call, they just have a few questions. Maybe they want to see something, quick demo, and then they're ready to go. So that's another one. And then on the customer side, you start to see this increase in demand for account expansion, like we talked about where people are saying I need to add 10 users. So that's another way to kind of spot a product led funnel.
Anna Talerico:
So the KPIs to track are really clear and easy. Number one, increasing hot inbound leads with less effort, right? So you're increasing the leads without a commiserate effort to get the leads in, that's that flywheel. A steady decrease in sales cycles. Buyers are more ready by the time they come in, they're ready. And so you see a shrinking in the sales cycle and you can be tracking that. Faster time to value, hopefully you're tracking this. What's the first thing that people do that are invaluable in your product and track that and get that compressed. If you're a billing software, your time to value might be sending your first invoice, right? So how can we make sending your first invoice go from 24 hours to 18 hours? So we're looking at faster time to value because our buyers are more ready. They're geared up. They buy and they're ready to get in there and do whatever it is they need to do.
Anna Talerico:
So likewise, shorter customer onboarding timelines in general. People are ready, they're prepped, they're primed, they're excited. And they know they want it and need it so they jump in faster and go through the onboarding faster. And then increasing your ARPU without commiserate customer sales efforts. So you're increasing your average revenue per account or average revenue per unit without a big lift from the customer sales team. And that's because you're getting that nice natural expansion happening. So you're getting a lot of these organic account expansion requests.
Anna Talerico:
So I got to wrap up really soon here, but some things you can think about as you're thinking about how to be more on product led in your funnel. Think about are there ways that can significantly widen the top of the funnel through customer advocacy program, social proof, through great content, through a lower price tier that lets people come in from the bottom of the market. What can we do to create a wider top of the funnel? How can users achieve meaningful outcomes on their own in a self-service manner? It might be just a little in product tutorial or some in product chat, some self-service training materials. And then how can we get creative to reduce time to value? And those are things that'll really help create this product led funnel.
Anna Talerico:
And I would just say, don't let your fear about doing this impact you, because sometimes sales teams hear about this and they get worried. Does that mean we're not going to have sales anymore? Or customer success does that mean you're not going to need me anymore to expand and retain my accounts? That is not the case, as you probably know, right? All of our classic product led companies like Dropbox, Slack, Atlassian - they started product led and then they added sales and customer success in because to continue to kind of go upstream its important to broaden your footprint inside of organizations. It's important.
Anna Talerico:
So sometimes you get a little fear, fear of change. The risk associated with going sales led to product led. But this is happening. This is what buyers expect and it's worth it, right? Product led businesses are valued more than 30% higher than the public market SaaS Index Fund. This is a more valuable go to market motion. It's more capital efficient. And this is what users want too. I love this stat showing it, right? Users want a free trial or a freemium, or they want to get their hands on the product before they decide. So we have to start to move to that and we have to create the conditions. If we don't have a truly self-service acquisition model, we have to create the conditions that make it feel like we do. And we do that by creating intimacy with our potential users and the product itself.
Anna Talerico:
And this is what everybody's doing, right? We've got a huge percentage of businesses now offering a free trial, offering a freemium. And so we are more than 50%. So we have to start to do this because this is what buyers expect. Flat out, this is what buyers expect. So it's how buyers want to buy. It's way more capital efficient, that's why they are 30% higher than the SaaS index fund, right? It's a really capital efficient way to acquire customers and to grow revenue. Drives a ton of hot inbound leads and so it makes a sales effort much faster, a sales cycle faster. So product led funnel is very, very important. Even if you don't have a truly contactless acquisition channel.
Anna Talerico:
And I'll just leave you with this. It doesn't matter if you're SaaS is sales led, marketing led, product led, engineering led - your company thrives when you're customer led above all else. And I love this because remember I showed that little infographic with product in the center, which is true. But what's really more true than that is we have to have customer at the center of everything we do, and this is what customers want. It's a better customer experience to be product led. Just be thinking about how can we create the elements that make us more product led even if we don't have that self service channel?
Anna Talerico:
That's it. I know I was talking a lot. I was jamming a lot in. But I hope you got some valuable insights. Love to hear your questions or your feedback. Twitter is the easiest way to reach me at Anna Talerico. And have a great time at the Product-Led Summit. I know I'm excited about a bunch of sessions and I can't wait to attend. So hope you enjoy the event. Thanks.
