Taming the Pivot: 5 Considerations for a Smooth Transition to Product-led Sales
New year, new sales motion! How do you pivot to product-led sales?
You are in Rev Ops at a company that recently made the pivot to a product-led (or product-influenced) sales motion, and you are hoping to create that lucrative flywheel effect, feeding warm, qualified leads from your self-serve platform to your sales team. You are also firing on all cylinders, navigating all the hairy problems that come with a large pivot in your sales motion!
I recently spoke with the amazing Sean Lane, author of the Revenue Operations Manual about the operational considerations when pivoting to product-influenced sales, especially at a company with extremely successful bottoms-up adoption. You can listen to the full episode here.
We touch upon some of the themes below based on my experience pivoting from a sales-led to a product-led sales motion at the hyper-growth Canva, which was already at $1B+ in ARR when the pivot to the new sales motion was made!
The spectrum of product-led to sales-led motions
It’s rarely ever a binary choice between pure self-serve product-led models and entirely human-led sales models, especially today, when bottoms-up adoption is the key to success. You want some degree of product influence in your sales motions. Product-landed and sales expanded motions offer unique advantages in feeding warm, qualified leads to sales teams. These leads have experienced their “aha” moment in small teams, and are ready to take the next step in moving to an Enterprise contract. Boom. The product seeds, then sales expands!
The 5 considerations of implementing a sales motion pivot at scale
Nailing your sales territories, PQA/PQL criteria, sales processes, sales incentives and data infrastructure is critical to succeeding in your pivot to product-influenced sales.
Planning a 3 month transition period with guaranteed sales incentives to minimize risk while the kinks are being worked out can help build trust and a strong partnership with your sales teams.
1. Sales territories
Your sales territories can become even more potent when enhanced with product usage data. Even something as simple as adding a minimum free/ paid MAU threshold to your territories can help ensure your reps are not calling completely cold prospects. You can even use this opportunity to right-size territories given higher territory quality.
While dynamic territories sound great in theory, they don’t quite align with sales compensation cycles. Territories in constant flux result in loss of trust. Freezing territories for the sales compensation cycle (e.g. the quarter) can ensure your quotas stay reasonable and valid through that period.
Determine how accounts just below the product usage territory threshold can be nurtured by Product Advocates or Marketing, so territories can be replenished at the start of the quarter with new accounts.
2. PQAs and PQLs
Even in streamlined territories of ~100 accounts for an Enterprise rep, stack-ranking accounts using product signals can keep your reps laser-focused. Short term product usage signals (e.g. week on week increase in usage, new team members added etc.) can be used to score accounts within territories. The top 20% of the territory based on these scores become your Product Qualified Accounts (PQAs). Within those accounts, power users or admins could be flagged as Product Qualified Leads (PQLs), a.k.a, the champions who can open doors for your sales reps to expand the account. Extra points if you are able to enrich user data with titles to further boost your PQL scores.
What should your sales reps do with these PQAs and PQLs? Design sales playbooks that can be executed when product signals change. For instance, did the number of teams with 5+ users for one of the accounts in a rep’s territory just hit 20? Launch the “Convert to Enterprise” playbook!
3. Sales processes
Codifying rules of engagement during changes in sales motion is critical. How should your reps handle upcoming renewals for current Enterprise customers, especially if pricing is changing? Are there any scenarios where your reps honor legacy pricing, for instance, multi-year contracts?
Rev Ops teams abhor exceptions in policy, but documenting frameworks in partnerships with sales on how to handle potentially complex customer contracting scenarios can provide structure to these exceptions.
Clear delineation of roles and responsibilities and hand-off points between xDRs (Product Advocates), AEs and CSMs in a product-influenced model are critical as product signals that trigger conversions, expansions and consolidations can happen anytime during the customer lifecycle.
4. Sales incentives
Changes in sales incentives are almost inevitable when shifting to a product-influenced sales motion. This can be quite nerve-wracking for your sales teams, and loss of trust is the last thing you want!
In addition to pure Bookings or ARR based incentives plans, your reps might be held accountable to some new metrics, like seat activation, in SaaS models, or product usage in consumptive models. Make sure your metrics are high-fidelity, and the plumbing connecting your sales data and product data works well.
Which brings us to …
5. Data infrastructure
A product-influenced sales motion is only as successful as its data. Salesforce.com generally isn’t designed to host millions of rows of product signal data. Be judicious in the product data you decide to pipe into Salesforce. While adding an extra step in a sales rep’s workflow is less than ideal, consider showing PQA/PQL scores in a BI tool to start, while testing their fidelity. Once you have a better sense of which signals best predict closed-won opportunities, you can push them into your CRM, so your reps can see all their territory information in one place.
It can be tempting to delegate all of this immediately to a tool. Several vendors today offer platforms that seamlessly unify sales pipeline data and product signals, and can even push notifications to reps when product signals are triggered. While these tools can supercharge your sales motions, prioritize designing your sales playbooks and determining your PQA/PQL thresholds. Tools can only streamline and automate sales processes that are already well structured!
Doing all this at once can be daunting. However, even small (but well executed) changes can unlock significant value in terms of shorter sales cycles, higher win-rates and more ARR!
Leave a comment if you have recently pivoted or are considering a pivot to a product-influenced sales motion.
AartiRamanConsulting is here to help make this process seamless for you. Drop me a line at aarti@aartiramanconsulting.com if you are looking for help pivoting to a product-influenced sales motion.