Product-Led Summit - why you should adopt a product-led funnel when you can’t go true product-led

Profile picture for user barb.mosher By Barb Mosher Zinck August 3, 2021 Audio mode
Summary:
There’s no such thing as being only sales-driven or product-led; many companies fall somewhere in between. That’s where the product-led funnel comes into play.

funnel

Many people believe your company must either support a sales-driven growth model or a product-led growth model. But as Anna Talerico, Operating Partner at Arthur Ventures, explained in her session at the Product-Led Summit - From sales-driven to product-led - the who, what, why, when and how - that there is an in-between that can bring you closer to the product-led approach.

Sales-driven, product-led, and the product-led funnel

A sales-driven growth model is one in which marketing runs campaigns and programs that bring leads in the door to give to Sales. Sales then do its outreach and try to convert the lead to a customer. With a product-led model, it’s the product that brings the prospect in and ultimately converts them. There is no interaction with sales, but instead, the company relies on a customer self-service acquisition approach.

In her presentation, Talerico outlined the principles of product-led growth, including:

  • A fast time to value
  • The adequate recurrence of value (a series of “aha” moments)
  • Virality
  • High switching costs
  • It solves end-user problems
  • Lower barriers to entry

Not every product lends itself to a product-led growth model, and there are only a small number of companies that are true PLG. But even if you can’t rely solely on self-service customer acquisition, either because you can’t provide a free trial or freemium model easily, or there’s no way to purchase without interacting with sales, there are some elements of a PLG model you can leverage.

The product-led funnel is a way to use self-service elements of PLG that help prospects self-qualify themselves before they enter the funnel and need to talk to sales. Talerico called it “sales assisted” as opposed to “sales-led” because the prospect already has enough experience or knowledge about a product to know that it’s right for them before they enter the funnel.

Generating product-ready buyers

So you can’t offer a free trial or develop a freemium model. Or you need some degree of sales interaction to acquire customers. Or maybe you are working on providing a free trial/freemium version in your product, but you don’t want to wait - what can you do to become product-led?

Talerico offered some suggestions, many of them center on content.

Social proof - Double down on social proof and customer advocacy. If you have happy customers who are willing to speak to the benefits of your product, take advantage of it. Many studies show that we look to our peers to find the best products. There are several ways to provide that information, including customer stories, testimonials, customer reviews, and getting your customers to review you on sites like G2, TrustRadius, and Capterra.

Content that showcases the product - Product-based content doesn’t have to be dry and dull (e.g., product help, knowledge base, technical content). There are ways you can generate interest in a product and show how it works, such as product tours, videos, webinars, and how-to blogs, among other content.

Provide free adjacent value through an add-on - You can’t offer a free version of your product, but you can create an add-on and offer that for free. Talerico said you need to find “creative ways to associate your brand with frictionless value.” Examples include the HubSpot Grader, Moz’s Chrome extension, Ubersuggest’s Chrome extension (many products provide free Chrome extensions).

When you decide what type of add-on to create, Talerico said to think about your ICP and what would interest them. The other reason to create a free add-on like this is that you don’t necessarily need your development team to build it; you could outsource it or leverage low code/no-code software to build it.

Other tactics and a new role for sales -  Other things you should consider, said Talerico, are putting your pricing on the website and offering an easy to try pricing tier, adding an in-product expansion request button that sends an instant notification to your team, and setting up an online help center providing self-service education.

She also talked about the demo button on websites. Someone asked her if using it goes against the PLG model, and Talerico said no. However, she said that the hours-long full demo goes away with a product-led funnel. Demos in this approach are quick and meant to answer specific questions the buyers have after already seeing and learning as much as they can on their own.

Finally, sales still has a role to play in the product-led funnel, but it is more about assistance when prospects are ready to buy. Talerico said companies need to teach their salespeople not simply to follow a defined sales process but to meet people where they are and do more value-based selling.

My take

I work with a company trying to adopt a product-led growth model, knowing they can’t move to a true PLG model. The recommendations in Talerico’s talk to build a product-led funnel would work well for them. The plan then is to figure which of these elements to focus on first, given budget and resource constraints. But there’s also a question of time to value.

A product-led funnel relies on prospects self-educating before talking to sales, something many want to do anyway. But self-education can be a slow process if you can’t dive in and try the actual product at the same time. Sales-driven companies will struggle with the time they have to wait to get qualified leads/accounts (even if they complain today that most of what they get isn’t good). They’ll also struggle with adapting their sales approach because as much as sales are now learning that education is critical, they still want to be out in front providing that education and engaging with customers.