Some of the most successful software-as-a-service (SaaS) providers are implementing product-led growth strategies that are completely changing the role of marketing and sales.
To understand exactly how marketing is changing, let’s take a closer look at the strategy and learn how one company changed its marketing team’s focus.
First, let’s set the table with an understanding of product-led growth (PLG).
Understanding product-led growth
“Product led growth (PLG) is an end user-focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion and expansion.” - Blake Bartlett, OpenView Venture Partners.
According to the venture capital firm, there are over 300 companies currently operating with a PLG model (see the list here), including names like Slack, Dropbox, Calendly, MailChimp, MongoDB, and many more.
As Bartlett writes:
Software distribution today is best described as “product led growth,” and it looks a lot like consumer growth models. When you need to attract tons of individual end users to a free product, human-dependent growth doesn’t scale. The only choice is to de-labor the distribution engine behind your product by empowering end users to find, evaluate and adopt your product on their own.
Bartlett says that the key to getting your product into the hands of an end-user is to eliminate friction. To eliminate friction, you need to:
- Distribute your product where users live: find out where your users spend most of their time and offer your product there. “Your product’s proximity to end user annoyance is key.”
- Make it easy to get started: offer self-service sign-up and on-boarding that gives the user control over when and how they use your product.
- Deliver value before the paywall - there is an “aha” moment when the end-user knows this product will help them; you have to deliver that moment before you ask for money
- Hire sales last: You need a strong support/customer success team before you need a sales team
A product-led growth strategy is all about letting the product do the marketing and selling for you. But that doesn’t mean that marketing and sales don’t play a role; it’s just a different role.
Marketing’s expanded role in PLG
I was interested in how marketing works for companies that take the PLG approach. One of the things I learned is that marketing becomes much more about customer acquisition. This is not exactly unique to PLG. We’ve been talking for a while now about marketing expanding its role to support customer retention and loyalty; how much that is happening is another question.
Product-led marketing also requires the marketing team to play a big role in user onboarding. Creating content that helps users work with the system, keeps them aware of features and functionality they might like to try, and regularly checks in when it looks like the user isn’t using the system are all activities important for marketing.
These points all are very content-themed. Content, I learned from Mark Parker, is the key role of marketing in PLG. Parker is the VP Sales and Partner Channels for MOVUS, an industrial IoT-as-a-service company located in Brisbane, Australia.
MOVUS has only recently adopted PLG. Said Parker:
We were selling around the world, selling into large businesses. What we found probably 12 months ago was that once we would set up a new customer through a typical marketing sales channel, that they would then become this kind of unseen sales team that was selling us internally around their organization. So, we would have a heavy investment in the initial sale, but then these advocates are running around promoting us and getting more people involved in using our solutions.
What happened, Parker said, was that customers were showing up asking for the product before the company did any selling. He said PLG was just becoming well known around this time, and they put together a small team to investigate if the approach would work for them. They decided it was the right approach and that they needed a way to help these advocates promote them and bring other stakeholders on board.
Parker runs both the sales and marketing teams at MOVUS, and he pointed out that you can look at PLG two ways: as a massive threat sales and marketing, or as an opportunity to focus on onboarding customers once all the heavy lifting is done.
Before adopting a PLG approach, marketing focused on print advertising and gated content that required an email address:
Give me your email address. Give me the details, and I'll give you a piece of content and to be blunt, that wasn't working. In essence by gating or protecting content, we were turning away a lot of
prospective buyers and also a lot of buyers who had peers already using the solution, but we were because we're taking a typical marketing approach we were, in essence, making it difficult to obtain information and sell internally.
Finding and communicating value
MOVUS had an interesting challenge in adopting a PLG approach. It offers is a web platform and a physical sensor. How could they get users to experience the solution and get value from it without actually shipping the sensor to them, especially when the sensor was key to the solution?
They talked to a lot of buyers and prospects, trying to understand where the value is and how they could communicate and deliver that value. There were a lot of “vigorous” internal discussions as a result, Parker said. There was a lot of pride in the parts of the solution the team was developing, and it was difficult to accept that what the customer perceived as the value was not necessarily what they were building.
As a result, they shifted their marketing approach from one that talked about features to one that got into more of the emotional side of the platform (e.g., more inquisitive, what it is or what it means). The messaging and how they communicated changed dramatically.
Today, the marketing team’s role is to constantly look for examples where a user found value and communicated that value to the company or internally to others in their company. It could be as simple as a few lines in an email, Parker said.
I guess where we get good, sticky customers is where they have this constant stream of aha moments. And where a customer has these many aha moments, that's where they start promoting, and that's where the product takes over. And, the product becomes our salesperson.
Part of marketing’s role then is to create short, digestible content, or stories. No more whitepapers or long case studies. No more gating content, instead, putting it out there where it is read and shared. There was a realigning of skillsets as a result of this new marketing approach. Parker said there are now two core roles in marketing: content creation and digital campaign management. Content creation is the biggest role, something they also do for their channel partners.
For MOVUS, it wasn’t just how marketing delivered content, but the language they used as well. They went from writing about features and benefits to writing in the language of the customer, whether it was the blue-collar worker that used the solution or the executives trying to run a transformation agenda.
Parker also said the PLG approach has also increased the sales conversations they are having. These conversations focus on understanding where the customer found value and then asking who else would need this value and how should they approach them. Sales become, in a sense, more of a customer success function, validating and exploring.
We're finding that a lot of the pain identification and the value discovery is being done by the product in the buyer. And we just need to repeat that back to them and then use that to drive further sales conversations.
A few years ago I wrote a piece on marketing in SaaS (and I wish I could remember the company or find the article). In it I talked about marketing playing a bigger role in helping customers us the service but giving them regular content, checking in when they weren’t active and helping them understand how the service worked. This is part of product-led growth.
From the time SaaS solutions became available, smart marketers understood they had to do more than get the customer to sign up for a trial or a free version of their service. Today, with PLG, it’s more obvious that marketing, and sales, need to change. I’m looking forward to diving deeper into this approach over the next year.