Adopting a Hybrid Product-led and Enterprise Sales Approach in Your SaaS Organization

Every cloud-based SaaS company is trying to implement a product-led selling motion that can complement the traditional system of enterprise-led sales. There are a number of thought pieces on how to individually scale ‘product-led’ and ‘enterprise-sales’ motions but in reality a business needs to implement a hybrid version that caters to the need of different customer profiles. That is not an easy task to accomplish and requires a delicate balance between different functions and conventional vs practical wisdom.

Before we dig deeper, let us define key Go-To-Market motions:

• Product-led growth: Bottoms-up product adoption targeted primarily at end users (e.g., developers) driven by open-source distribution and/or freemium-style product offerings.

  
  

• Traditional Enterprise sales model: Top-down segmented sales motion targeted directly at senior leaders and/or decision-makers.

  
  

• Hybrid product-led, sales-assisted model: Bottoms up product adoption complemented by enterprise sales model.

In this article, I will share a few best practices that companies can adopt as they look to adopt this hybrid motion in their organization

1. Take a segment-based view

There is a misconception that product-led sales primarily cater to SMB customers. While it is true that the SMB teams derive immediate benefits from monetizing customers that have been using the product.

However, a lot of times the real benefit is how product-led growth can unlock the path to signing multi-million $$ deals with large enterprises. This is particularly true for companies selling developer or collaboration tools and thus have a large pool of end-users that could already be using the freemium version of the product.

An installed base of customers, who are avid users of the product and have ‘road-tested’ it, provides a compelling reason for the executives to approve larger deals which would traditionally be negotiated on a top-down basis. There is a need, however, to look at what approach works best for different segments.

An enterprise segment would most probably require a POC which provides initial validation of the effectiveness of the solution and addresses concerns of security, compliance, and infosec teams. Building a tailored hybrid motion that works for every segment is absolutely critical for success.

2. Invest in systems/processes/metrics to drive accountability

Successful hybrid GTM motion requires customized solutions for various operational aspects (tracking of product engagement, pricing, and billing, top-of-the-funnel engagement) of the PLG motion.

Without appropriate tools, companies are left with creating workarounds to overcome the limitations of their current software stack. There are a number of startups attempting to create tools for the hybrid GTM motion but companies can't wait for a perfect solution in the market.

Here are a few things that a SaaS company can do to ensure they progress in the meantime:

• Ensure product qualified lead (PQL) measure is defined and tracked alongside MQL and SQL. Change the definition of an opportunity to include product-based criteria and review the definition on a periodic basis to make any adjustments

  
  

• Drive clarity with the sales team on when to engage with product-qualified leads and define an appropriate SOP for the same

  
  

• Ensure customers have the ability to keep on expanding via the product so they don't feel compelled to engage with salespeople if they don't see a need to

3. Challenge traditional GTM roles

Traditional enterprise sales motion is underpinned by various customer and non-customer-facing GTM roles e.g., sales engineers, account executives, customer success and support, professional services, business value advisors, product marketing, account-based marketing, demand gen, etc.

There is conventional wisdom that guides the ratios of each role which is based on years of the software selling motion. It is important to evaluate each function and look at its importance in a hybrid selling environment.

While you will still have a number of these roles to cater to your highest tier of strategy enterprise customers, a well-run product-led motion can reduce the need for these roles (or help them be more productive) for the majority of customers. A large portion of pre-sales and post-sales customer-facing teams are structured to help customers understand the functionality of the technology or get them onboarded with white glove service. In a product-led environment, companies spend more effort upfront to invest in ‘ease of use’ features and also on ‘DIY’ tools/content that helps them get onboarded quickly

4. Allocate separate $$ to invest in ease-of-use features

Every company works under healthy tension to determine product priorities - a lot of time is spent trading off investments in ‘ease of use’ vs ‘security/compliance/governance’ features. Investment in the latter is generally driven by the needs of large customers and is easy to measure in terms of $$ impact. ROI of the former is harder to measure since it is based on metrics like increased customer satisfaction, higher retention, etc, and is not directly related to sales.

However, as noted above, product-led and sales-assisted hybrid motions can only scale if supported by a product that is easy to onboard/get started with and does not require human intervention to get up to speed. The best way to accomplish that is to agree on a separate bucket of $$ that is focused on ‘ease of use’ so it doesn't get de-prioritized by enterprise-grade features. One of the most important tasks of a CEO or a CPO is to figure out the right balance in terms of investment in ‘ease of use’ vs ‘enterprise grade’ features depending on the maturity of the business

5. Ensure appropriate engagement model for both end users and executives

Whereas companies with traditional enterprise sales focused messaging disproportionately on middle/senior management owing to their buying power, pure product-led companies tend to focus solely on end-users.

In a hybrid world, you need to build capabilities to cater to both sets of stakeholders. Anyone who has attempted this in practice knows that it's not a straightforward exercise. An example from Confluent which caters to developers and data engineers is interesting:

• To ensure end-user engagement, Confluent builds and invests in developer communities via separate online forums, content (incl., blogs, webinars, talks, etc.), in-person summits, education courses/certifications, open-source investments, etc.

  
  

• To ensure exec engagement, Confluent has built technical/exec marketing materials, customer advisory panels, exec leadership summits plus subject matter experts in specific verticals that could build customized business value materials.

  
  

Similar to what we discussed in the previous section, it is important for a CMO to find the right balance between investment in marketing activities targeted at end-users vs senior leadership in this new hybrid world

6. Hiring is key!

While a great sales and marketing leader would find a way to thrive in most GTM environments, the vast majority of the company’s hires would not have the skillset to wear different hats in a hybrid environment. A lot of emphasis needs to be placed on hiring appropriate folks who understand the modern hybrid selling motion and are comfortable leveraging products in closing deals or making customers successful.

Most companies tend to hire leaders with experience in product-led motion early on in their journey, switching to experienced enterprise leaders once they mature. This is generally not a great approach and can make it difficult for companies to build a hybrid approach that works at scale. A better approach is to use a mixture of experiences while ensuring a strong voice (generally founder or COO) who believes in hybrid motion and can thus steer the ship in the right direction

Finally

In conclusion, the rise of product-led sales-assisted hybrid motion has created an unprecedented opportunity by democratizing the selling process and breaking the monopoly of a few incumbents with strong connections with senior leadership. However, to fully monetize the hybrid motion, it is important to understand the nuances between different GTM motions and ensure the resources, metrics, and roles are structured appropriately.