Summary: Ultimate guide to Product Led Sales with Elena Verna

Elena Verna has led growth at some of today’s most successful B2B businesses, including Miro as CMO, SurveyMonkey as SVP of Growth, and now at Amplitude as interim Head of Growth. She’s advised on growth for MongoDB, Clockwise, and Netlify (where she’s on the board).

She started out in data analytics at SurveyMonkey. There wasn’t a Chief Data Officer, so she started the Growth (Marketing and Product) function, where she saw bigger opportunities. Over her career she has worked with more than 17 companies. She transitioned to advising, thanks to Miro, and realized that’s what she loves doing more than taking on a full-time CXO role. She continues to do advising today.

She has a growth dictionary, to define things like PLG (product-led growth), PLS (product-led sales), in the show transcript, so check that out.

For Part 1's episode summary with Elena, see Why product-led growth is the future | Elena Verna (Amplitude, Miro, SurveyMonkey).

Product-led sales (PLS) vs. product-led growth (PLG) ▶

"Product led growth is all about product's ability to activate, engage, and convert that usage to a monetization opportunity." The goal is to bring users to a "aha" moment and help them find value in your product, leading to monetization, whether direct or indirect.

“Product Led Sales” comes in when your product stickiness can be utilitized to find bigger customers via a prosumer usage.

• Don't rely on self-serve alone, bring sales into the mix, for monetization: While self-serve is a big part of PLG, you can really amp up your success by adding PLS into the equation. Sure, there's a cap on self-serve monetization because of credit card limits (~$10,000) and how much folks are willing to spend, but turning that self-serve usage into a sales opportunity can land you some sweet, big contracts.
• Go from helping individuals to solving big company problems: "Product-led growth has actually started more on individual use case. Product-led sales assumes that there's a migration from an individual use case and an escalation into an enterprise-level solution that solves enterprise-level problems, via sales"

How sales solutions can be applied to enterprise-level problems ▶

• As a sales rep, be the bridge, not the barrier: In my Amplitude example, yeah, I can drop an SDK in my product area, but how do I convince entire client / company to adopt Amplitude and put an SDK on every single interaction across the entire app?

Defining enterprise-level problems ▶

• Identify the different levels of problem-solving: Elena uses Miro and Figma as an example and explains that it starts with an individual problem, then moves to a team-level problem, and finally, addresses an enterprise-level problem.

In Figma, “I come in as a designer and I just need a better way to capture feedback from my stakeholders, a more scalable way to capture it so I can iterate on the perfect design. What is it at the team level? Now there is a team that can collaborate with me more openly. I can capture more feedback from more stakeholders faster and get the project done sooner. What is it on the enterprise level? Well, on enterprise level, our designs are just better fit the business needs. They have faster turnaround time and our product is performing better”

When you're working on product-led sales, it's essential to recognize these different levels and adapt your approach to meet the needs of each stage.

How product-led companies start with PLS ▶

• Wait for organic demand before hiring salespeople: Product-led sales (PLS) usually starts when an organic demand arises from the user base, with users reaching out and expressing interest in purchasing the product for their entire company. Don’t hire salespeople until you feel this pull, as you need those hand-raisers (people demanding enterprise-level adoption) before bringing on a sales team.
• Organic demand has a limited ceiling: Once you start hiring salespeople to address the organic demand, you may soon find that this demand dries up if you rely solely on hand-raisers or champions. To grow beyond this limited ceiling, it's crucial to convert usage into opportunities by finding decision-makers outside your user base.
• Understand your target market: To invest in product-led sales, your company should be ready to go upmarket, targeting customers with contract values over your sales floor (traditionally around $15,000). Companies that can handle contracts of $100,000 to $200,000 are likely in the higher end of the mid-market segment (200+ employees) or in the enterprise segment (1,000+ employees)

There are two ways to reach product-led sales (PLS) ▶:

1. Begin as a product-led growth (PLG) company, starting with individual users and then moving up to a company-level value proposition. That's when you'll need PLS to make things happen.
2. A top-down sales organization that's mainly targeting larger enterprises or upper mid-market companies. So, if you find your existing approach isn't working well or if you want to go downmarket and make the sales process more automated, adding PLS could be a great solution.

Two ways you can own revenue ▶

1. Self-serve revenue. In this case, someone from the product team (usually on the growth team) needs to have a self-serve revenue target. It's like, "Hey, let's make sure our product can sell itself without needing help from the sales guys!”
2. Product qualified accounts (PQA). These are accounts that show they're super engaged and ready to talk business. So, product teams should be like, "Let's give our sales team a steady stream of accounts to work with!”

PQAs, PQs, PQLs, and MQLs ▶

• What are PQAs, PQLs, and MQLs?
  • A PQA (product-qualified account) is all about a group of users from a single account or company showing interest in your product.
  • On the other hand, a PQL (product-qualified lead) is a decision-maker or buyer within the account.
  • The MQL (marketing-qualified lead) is when marketing steps in to find leads that aren't already in the user base.

• Source: B2B Product-Led Sales Guide
• There are now two paths to sales – one with product funneling qualified accounts, and the other with marketing funneling qualified leads. Before engaging with potential leads, it's essential to know who your target buyers are, otherwise, users will be like:
  • "Why is sales talking to me? I have no decision-making power in my organization. I love the product, but please leave me alone.”
• Don't mix traditional top-down sales with product-led sales. Jamming product-led sales into a traditional top-down sales playbook. Users signing up for your product are initially just solving individual problems, not ready for enterprise-level offerings.

Source: https://www.elenaverna.com/memes

How to get started adding PLS ▶

• Start with Top-Down Intuition: Understand what signals sales teams are excited about and feed them as many accounts that fit that model as possible.

  • The one thing is not to do is just to start sending every single user to sales because that's the fastest way for sales to say, "This product channel is garbage and I don't ever want to see a lead from it again.”

• Gradually Move to Data Analysis: The next stage is to use data analysis to identify  the hand-raisers. This could be as simple as a regression model or a histogram analysis to differentiate hand-raisers from non-hand-raisers.

  • "You look at the signal of who looks like a hand-raiser, smells like a hand-raiser, acts like a hand-raiser, but is not hand-raising...That should be your first PQA model."

• Involve Sales Early On: This ensures you're partnering with them, not just dumping leads on them. Establish strong feedback cycles with the sales team, as PQA definitions should evolve over time based on feedback and changing conditions.
  • Use Tools Wisely: While tools like Amplitude and Mixpanel can help identify correlations and causal connections between metrics, it's crucial to understand the data thoroughly before scaling up or automating the process.

Metrics to identify PQAs ▶

• Create Network Effects: In a product-led sales approach, the more team members from the same company using your product, the better.

  • “What you are trying to create is the value of each additional user into account…Any new sign-up that happens from the company that already has an account in my system should be presented with an option to join that account, not just create a brand new account"

• Volume Thresholds: Next, monitor certain usage thresholds as indicative of a potential PQA. This could include the number of events sent through (in Amplitude's case), the number of boards in an account (Miro), or the number of revisions on a given design (Figma).
• Velocity of Use: The rate at which usage or user numbers increase (velocity) can be a powerful predictor of potential PQAs. Changes in velocity, such as the number of users being added, events being sent, or storage being utilized, can indicate when it's the right time to involve sales.
• Behavioral Signals:

  • "At Miro, we had a very strong behavioral signal that if there is an admin switch in the account, some sort of evaluation is happening... If you see anybody from account land on your terms of use pages, reach out to that person. More likely than not, you have a buyer on the hook."

Why sales should be carefully applied ▶

• Consider Channel Effectiveness: Whether it's email, in-app messaging, chatbots, or paid marketing channels, each has its own level of effectiveness.

  • “If you highly saturated the channel that is your primary for reaching out to the user, they're not going to react even if it's more of a right time for them to react… Fool me once, shame on you. Like, ‘Fine, you tricked me to opening this email.’ Fool me twice, it's shame on me and I'll be a lot more frugal of which emails I open or which notifications I react to.

• Accounts Go In and Out of PQA: This suggests you should be ready to pause your efforts if you can't get in touch with a customer and wait for the next PQA moment to resume.

Systems, infrastructure, and tooling ▶

• Start with your existing systems: If your team is already comfortable with tools like Salesforce, instead of pushing them onto a new platform, try to embed the required data into Salesforce itself. This can help reduce resistance and increase the chances of successful implementation.
• Validate Before Automating: Initially focus on manual processes to test and validate the approach. Once you see that it works and adds business value, then you can consider investing in automation and scaling.

  • Use "Google Sheets, Looker, Tableau dashboards, Amplitude charts and reports" and even "widgets within Salesforce or ETLs that you pipe through HubSpot and Marketos into Salesforce." This approach allows you to prototype different outreach strategies without needing to invest heavily in new systems or tools.

The people and resources required for PLS ▶

Building a PLS strategy is more of an “evolution than a revolution”.

• Build a Well-Rounded Team: For effective PLS, having a diverse team consisting of product managers, salespeople, marketers, and data analysts is crucial. This ensures the product reaches the PQA stage, users are well educated, and data is used to glean insights.
• Early Hands-On Experience: "You need to close maybe first couple of deals you sell first so you truly understand what's happening." Don't wait for the first hand-raisers. Close deals yourself in the beginning to better understand your sales process.
• Multifunctional Roles: You can have the same person handling customer outreach and closing the deal when you're just starting. As your organization grows, you can then specialize these roles.

Why you should have a clear ROI for every new hire ▶

• Leverage Existing Resources: It's not always necessary to hire new personnel when transitioning to a product-led sales strategy; the team already in place can often handle the tasks.
• Validate ROI Before Hiring: Before putting out a job requirement, it's important to establish a potential return on investment (ROI) for a PLS motion for the new hire. You might need to perform individual contributor work that is outside your comfort zone but “but that's the fastest way to grow in your career.”
• Learn from successful PLG Companies: Many successful product-led growth (PLG) companies didn't hire their first salesperson until they reached a significant amount in ARR.

  • "Notion didn't hire their first salesperson until they were past 10 million ARR. Miro did not hire their first salesperson until they were like 5 or 7 million in ARR. They were literally closing the contracts through support team."

Revenue-based goals product teams should have ▶

• Distinct targets for different revenues: There are different targets for self-serve revenue and product-led sales revenue. KPIs for self-serve revenue might include free to paid conversion rates, package mix, average revenue per user (ARPU), and retention rates.
• Focus on monetization awareness: A key success factor in driving monetization is ensuring that customers are aware of what they're getting when they buy a product

  • "Only focusing on monetization awareness can give you incredible output on driving monetization, and it's really it's product's ability to communicate via feature walls, via usage walls, via trials, or what the value of the paid offering is."

  • To improve monetization awareness, it's important to track who is viewing the pricing page. Pricing page views per activated account can be a good indicator of interest.
• Master conversion rate optimization: Your pricing page, checkout page, the currencies and payment methods offered should all reduce friction for customers.

Common pitfalls startups run into when implementing PLS ▶

• Don't treat Product-Led Sales (PLS) as traditional sales: Don't think of every user as a potential sales target; instead, identify the right triggers and usage patterns that indicate a user might be ready for a sales intervention.
• Sales Interaction Should Add Value: Sales interventions should provide a meaningful contribution to the user's experience with the product, rather than becoming a disruptive or irritating factor.

  • "Why am I getting a phone call 10 minutes later" It's annoying. I'm going to stop using the product because of it." They feel misunderstood.

• Don't Exclude Marketing: Marketing teams can find and engage buyers, connect them with product usage, and help with sales enablement.

  • "Don't leave marketing out of the equation. Majority of your usage will not have a buyer in it. You will need marketing, your enterprise marketing, your account-based marketing to go and find and hunt that buyer and to bring them and connect them with usage."

• Don't Delay Data Efficacy: PLS relies heavily on leveraging usage data for pipeline creation, so you'll need to be able to measure, understand, track, and evolve this data.

  • "Don't wait on data efficacy too long. You might be using your intuition at the beginning very well, but start thinking about how you will need to scale your data issues because product-led sales is all about leveraging usage for pipeline creation."

Benchmarks and the amount of time needed for implementing enterprise solutions ▶

• Understand that transitioning from individual usage to an enterprise-level contract takes time. While exceptions exist, it usually takes around a year for a user to escalate from individual usage to an enterprise contract.
• Differentiate between users and buyers. It's crucial to understand who you're speaking to. "Don't confuse user and buyer. Please, please, please profile your users upon sign-up." Profiling your users during the onboarding process helps ensure that you're tailoring your approach to the right audience.
• Know your conversion rates and strive for improvement.

  • "Freemium conversion rate is usually around 5%, trial conversions are more closer to 10 to 15%."

  • While conversion rates might not change significantly, what's important is that the contract values and lifetime values of your customers start to increase. This creates a revenue curve that looks like a smile, where the beginning and end (customer acquisition and customer lifetime value) are high points, and the costs in the middle are the low points.

Using onboarding to profile users ▶

• Prioritize accurate profiling over short-term user acquisition: Accurate user profiling during the onboarding process is more important than losing a small percentage of users due to a few extra questions. "They were never going to be activating if one extra question deterred them from continuing with your product."
• Keep your profiling questions concise and focused. Limit your profiling questions to three to four screens. This prevents the process from feeling too long and potentially dissuading users. Ensure the information you ask for is actually useful.
  • "Make sure they only ask information that you either going to use in the data segmentation that then you can escalate to personalization and messaging."
• Ask universally accepted profiling questions.

  • "You should always be able to ask about company size, about the department, which customers coming from, about their seniority on the team and about their use case."

Continually test and refine your profiling questionnaire. Don't assume that your initial set of questions is the best one. Experiment with the kind of information you ask for and whether you make certain questions required or optional.

This is a human edited summary of the podcast episode with Elena, by Gaurav Chandrashekar (@cggaurav, productscale.xyz). To listen to the full episode, go here.