Attributed to Mark Velthuis, Vice President of Sales, Asia Pacific and Japan, Amplitude
Now, more than ever, there is mounting pressure on businesses in Asia Pacific and Japan (APJ) to cut costs and prioritize efficiency – to get more, but with much less.
In a down market, your product becomes the most important place to invest. This is particularly true for the APJ region, which will see 40 percent of total revenue from the top 2,000 Asia-based organizations generated by digital products by 2026. As companies look for more efficient ways to grow, many are doubling-down on product-led growth, which relies on the product as the main vehicle for business growth. In other words, your product helps people go through the try, buy, and grow phases of the customer lifecycle.
But product-led growth has its limits, especially when it comes to large enterprise deals that require more hands-on sales support. Both product-led growth and sales-led growth have proven effective, so how do companies decide which route to take when they reach a fork in the road? The right answer is somewhere in the middle.
The evolution of sales-led growth
Before product-led growth went mainstream, companies relied on the traditional top-down sales motion. In this approach, sales teams are the main source of customer acquisition, conversions, and retention. This model was at its height in the 1980s and 90s. Requests for proposals (RFPs) were issued, software was sold on a physical disk, security was everything, and a nice user interface wasn’t even considered. If you wanted to make a software sale, you had to get buy-in from the CIO and work through a painfully long approval process.
But since then, buying patterns and channels have changed. Between 2000 and 2020, the broader executive team gained more buying power. And in 2020, buying went digital. A McKinsey study found that 70 percent of all buying decisions are now done remotely or through a self-serve system, making software purchases as simple as swiping a credit card. In a new reality where end users make the call, their experience with a product has the greatest say in determining their relationship with it – whether they choose to try it, buy it, or shelve it for a better alternative. Now, when it comes to acquiring or retaining customers, your product can be the greatest advocate – or the biggest downfall – for your business.
That makes it no surprise that companies have started shifting towards product-led growth strategies to steer their business. In doing so, the product becomes a distribution channel, competitive advantage, and driver of customer loyalty.
Getting the best of both worlds with product-led sales
While many companies are aware of the benefits of both the sales-led and product-led growth models, not all are clear on which might be the best strategy for their specific business. The secret to success, however, lies in a hybrid model that blends both strategies: product-led sales.
The most effective businesses combine the power of their sales team with the power of their product. When your product supports your sales motion, sales teams can spend less time cold-calling and more time closing deals and providing customers with support, especially in the case of large enterprise relationships. At the same time, the product team can invest more time into sharpening the customer journey so customers understand the benefits of expansion over time.
This approach works. At Amplitude, our sales team is three times more likely to convert a lead from our product than a hand-raiser or inbound marketing lead.
The playbook for blending product-led growth with sales-led growth
So what exactly does product-led sales look like in practice? First off, companies need to build a product that people love. I could write a dozen articles about just this, but it all starts with digging deep into product metrics. You need to understand what features users love, where they are getting stuck, and how users reach their “aha moment.” An aha moment is when something clicks and a customer understands the value of your product. Product teams should build a customer journey that enables this moment to happen as soon as possible.
Once you’ve near-perfected your product, it’s then time to think about using it to drive sales. This starts with offering a free way for people to try your product, whether through free trials or a freemium option. Take Canva, for instance. It became a fierce competitor of Adobe after its free products saw incredible adoption. By offering a free version of your product, you’re creating a steady pipeline of customers that will see the value of your product and slowly expand their use of it.
The next step is converting users into paying subscribers. Businesses need visibility into their customers’ journey in order to identify user behavior signals for when they are ready to graduate to the next level of product usage. For example, is a free user maxing out the number of requests they can make each month? They may be ready for a paid subscription. Are more users with marketing titles getting a license? It might be time for that company to upgrade so they can access features built specifically for marketing teams. With the help of analytics tools that showcase every action made by customers within the product, businesses get insight into customer behaviors that typically signal intention to upgrade. This makes it a lot easier for sales teams to identify product-qualified leads which they can then zone in on and pursue, ultimately closing deals more efficiently.
Unlocking the power of products
In today’s digital world, the power of products cannot be underestimated. A product-led approach is the growth tool that businesses need to successfully ride the digital wave. However, the best teams are able to combine the power of product-led and sales-led growth approaches, creating a fruitful and efficient partnership between product and sales teams. Put simply, your sales team still scores the goal, and your product is the assist.
