6 Tactics on How to Fuse Product & Enterprise Sales for PLG Success
At Work-Bench, we know customers are like oxygen for early-stage startups. This is why enterprise go-to-market is the #1 thing we support our portfolio companies and greater enterprise community with. Every year, we host an Enterprise GTM Summit that dives into the most tactical and topical GTM motions with 100+ early stage enterprise SaaS startups (read our 8 GTM tactics from our last Summit here).
However, it’s no secret that the future of enterprise software sales is changing. With the rise of product-led growth (PLG), every startup wants to be as self-serve, with as few sales touch points, as possible.
The reality is that even the best PLG companies (Slack, Dropbox, Zoom, to name a few), still need a strong enterprise sales motion to scale. Earlier this year, the CEO of Twilio even admitted to us that, “One mistake we made early on was that we should’ve had more sales people…if you want to upsell or cross sell, you need a sales team.”
To address this growing, yet often misunderstood motion, our Enterprise GTM Summit explored what it means to supercharge PLG with enterprise sales. We featured masterclasses from Jeanne DeWitt Grosser, Head of Americas Revenue & Growth Stripe and Diana Hsieh, Co-Founder & Head of Product at Correlated (formerly at Cockroach Labs and Timescale), who shared their top tactics and templates on how they work to acquire customers and drive revenue in today’s new enterprise sales world.
How To Build a Product that Generates Meaningful Sales Leads with Diana Hsieh, Co-Founder & Head of Product at Correlated
One of the biggest PLG myths is that if you build an awesome product, PLG will scale sales all on its own. The reality is that product leaders need to closely collaborate with the sales team in order to build the right PLG motion…from day 1. As a product leader at Cockroach Labs, Timescale and now Correlated, Diana walked us through how she thought about this from a product perspective at each company.
Tactic #1: Choose a PLG strategy that fits your product.
PLG spans multiple customer life cycle stages: Evaluation (sign up and onboarding), Activation (product usage), and Expansion (growth and adoption). Unfortunately, most early-stage startups won’t have the time and budget to heavily invest in all three stages off the bat. Instead, you should pick one to master.
The most common stage to focus on, including for Diana, is the Activation. Here, you’re able to determine what part(s) of the product customers are using the most, and therefore can better define your product market fit and true value add.
Example: Cockroach Labs and Timescale both built a working database, and Correlated built a hand held on-boarding expereince — all built to ensure the smoothest user experience.
In many cases, investing and closely monitoring the Activation stage will dig up product issues you never knew you had.
Example: Diana realized that developers hated being sold to and that it was difficult for Cockroach Labs customers to evaluate the product (a distributed SQL database) on their own. From this realization, Cockroach Labs made more of an investment in the Evaluation phase, revising the product to allow customers to download CockroachDB for free and on one laptop (opposed to multiple servers…no one wants to deal with that).
Lastly, it’s important to augment PLG with manual processes. You may be thinking “shouldn’t we automate everything so that we can maximize efficiency?” No. Filling gaps with manual processes actually gives early-stage startups the agility to move faster and reinvent processes when and where needed. So much changes at the pre-seed and seed stage, and you don’t want to lock yourself into any one process.
Example: Cockroach Labs ran forums on GitHub to drum up community support, set up meetings with top customers to design schemas, and had the sales engineering team run pre-sales processes with key customers, ALL manually.
Tactic #2: Embed sales touch points throughout your customer journey.
Now that you have a PLG motion to focus on, you need to embed sales touch points throughout your customer journey. As captured above, PLG sales is no longer a linear motion. Instead, when a customer starts using your product, they can easily slide from stage to stage. For this reason, you need to track signals that indicate they’re ready for a sales touchpoint.
When a customer first signs up for your product, they’re likely not ready to use the product yet. Therefore, this would be a bad time to bombard them with sales emails or calls. Instead, figure out a process of when to talk to follow up with them. Then, wrap these signals into your product. Example:
Again, this can be a very manual process, but given PLG companies store a lot of data about customer engagement, it may be helpful to utilize some of the top measurement tools:
- Marketing: Marketo, Hubspot
- Product Usage: Heap, Segment, Snowflake
- Sales: Salesforce
- Finance: Stripe
- Support: Zendesk, Intercom
Tactic #3: Align pricing to the needs of target customers.
Enterprise customers have specific needs that they will pay for.
Example: At both Cockroach and Timescale, they mapped pricing to gated “enterprise” features. However, as Diana experimented more, she discovered another effective strategy included aligning pricing to your value (usage-based pricing), which can include the number of seats, active accounts, and/or integrations used. In this case, pricing scales with product usage.
On the topic of free trials, Diana pointed out that so many companies make the mistake of making free trials too short. The user needs enough time to experience the value of the product. Diana found the sweet spot here is layering a free trial on top of a freemium features — ie. after 14–30 days of a free trial, some features disappear. Before deciding what time period and which features to gate, make sure you have a few customers under your belt so that you already understand the customer mindset.
How To Build an Enterprise Sales Engine Out of Sole PLG with Jeanne DeWitt Grosser, Head of Americas Revenue & Growth at Stripe
According to Jeanne, “The biggest mistake companies make is an overreliance on PLG.” Quoting Stripe’s co-founder, she continued, “[Stripe] would be several X larger today if we hired more sales people sooner knowing what we know from GTM.”
Tactic #1: Create an outbound sales model to complement your PLG.
When Jeanne first joined Stripe, her goal was to meet a new, higher revenue target. To do that, she needed to better understand the current sales funnel and then uplevel it.
Despite having this robust, high growth PLG flywheel with 100s of signups coming from the platform’s contact sales form, most PLG in-bounds were low-value and predominantly SMB or Series A and B companies.
In short, these in-bounds weren’t large enough to reach the new revenue target. There needed to be sales improvements, aggressive marketing, but most importantly, an outbound sales motion to reach net new (and larger) customers.
Building an outbound engine is a year-long process, if not longer. To break it down, they first identified the few big companies who came in the door (ie. TaskRabbit), and created a manual lookalike model to prospect others similar (pulled from Crunchbase, etc.).
Then, they internally educated the sales team how outbound outreach focuses on high quality content, ensuring every outbound sales email left the prospect a little more educated than before. Even through their automation and immense data, they made sure every email looked and sounded like a human wrote it. Examples:
“Do you want to talk to our sales team at Stripe?”
= No value add“We analyzed your checkout flow. You do 6 of 10 practices. Would you like to hear about the other 4?“
= Provide an insight to prospective buyer that ensures they are better off having received an email from Stripe
Tactic #2: Target your full potential wallet share.
You need to understand what dynamics your self service funnel is driving, and what you’re leaving on the table. If it’s the CTO who can get you 100% share of the wallet, you need to call the CTO.
For Stripe, customers have to provide a bank account, so someone in finance is always involved. At that point, they realized since the CFO was eventually going to sign off on the contract anyway, they might as well talk to them first.
But it’s not enough to identify the best wallet share stakeholder and move sales efforts over to them. You need to research what drives them and how your product can help:
Then translate that research into the product and marketing itself, so that it’s best suited for that persona.
Example: As Stripe began to target the CFO, they built better reporting into the product and stopped pitching code as a marketing tactic (developers like to hear about code, but CFOs certainly don’t).
Tactic #3: Price for the enterprise.
Early stage startups always make the mistake of pricing too low. And no matter what you price at, customers will always ask for a lower price. Where you get into dangerous territory is when you give into too many pricing demands and end up with a lot of customers who are negative margin (you’re essentially paying them!).
Instead, price your enterprise tier competitively, so that you’re not undervaluing yourself. Here are three tactics to follow:
- Make it clear that you have an enterprise price separate from an SMB price. These will be drastically different, given more discounts are given at the enterprise level.
- Don’t go for ‘shock and awe.’ Price high so you don’t leave money on the table, but not so high that you end up discounting 90%.
- Make sure your early big logos have a compelling use case, so they’re referenceable in future sales. If your competitors all have the same logos, they’re no longer strategic in future sales pitches.
The Major Takeaways:
- Choose the right level of PLG based on product maturity, but don’t over-rely on inbound and self-serve. If you have a strong enough product market fit that your sales team is being fed, you need more salespeople.
- Securing large enterprise customers (and large annual contract value) tends to involve non-technical personas. Identify those personas and target them through marketing, product, and sales.
- Leverage manual processes to augment your customer journey.
- Your initial pricing model probably isn’t optimal, particularly as you expand your market. Plan to re-evaluate it annually and actually change it periodically. Tie pricing to value (but don’t go overboard).
If you’re an early stage enterprise founder looking to join an upcoming Work-Bench event or want to chat about anything GTM — connect with us directly or drop your email below to stay in the loop on all things happening in the Work-Bench community.
