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Product Led vs. Sales Led Growth (Episode 18)

Summary

Aazar Shad joins us to talk about his experience testing both product led and sales led growth philosophies at User Pilot, plus he shares his research on the go to market efforts for market leading sales software like Gong.

Show Description

Pipeline Meeting is a sales podcast for founders and sales leaders. If you are looking for actionable steps to close high ticket deals, you’re in the right place. Tune in for help with things like cold outreach and qualifying inbound leads. We regularly feature guests and experts to take our business to the next level. Pipeline Meeting is hosted by Harris Kenny, the founder of Intro, a company that provides sales as a service.

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Show Notes

In this podcast, we talk about sales.

Sales is not the right way to grow every single company. And when I say sales, I’m talking about the process of having conversations with your customers, explaining how your product works, helping them see value and how you can take them from where they are today, to where they want to go. This involves people. But there are a lot of companies that grow without this type of sales motion.

This movement is called product led growth. And there’s a tension between sales led and product led growth. Usually people are in one camp or the other, depending on which category they’re in and how their product works. I’m excited because in this episode, we’re going to talk with Aazar Shad, who has experience with both.

This interview was inspired by a podcast that Aazar recorded entitled “Wins & Losses: Behind-the-scenes of Sales-Led to Product-Led Experiment That I Did.”

Follow Aazar Shad’s work:

Pipeline Meeting Podcast Cover Art
Pipeline Meeting Episode 18: Product Led vs. Sales Led Growth

Transcript

Intro

Welcome to Pipeline Meeting, a sales podcast for founders and sales leaders. You’re going to get ideas that you can apply today to close high ticket deals and find repeatability in your sales process. Pipeline Meeting is brought to you by Intro, learn more at introcrm.com.

[00:00:20] Harris Kenny: In this podcast, we talk about sales. Now. Sales is not the right way to grow every single company.

[00:00:26] When I say sales. I’m talking about the process of having conversations with your customers, explaining how your product works, helping them see value and how you can take them from where they are today, to where they want to go. This involves people.

[00:00:41] But there are a lot of companies that grow without this type of sales motion.

[00:00:45] And this movement is called product led growth. So there’s a tension between sales led and product led growth. Usually people are in one camp or the other, depending on which category they’re in and how their product works.

[00:00:59] I’m excited because in this episode, we’re going to talk with Aazar, who has experience with both. Let’s jump in!

[00:01:05] Aazar Shad: I started as a sales person in my career and was a SDR– field SDR. So I used to go door to door. Do cold calling and then just try to call, call a hundred people to get like two people to make new visits. Then I go visit them and then tell them, “Hey, why my package is better.” It was, it used to be in telecoms. So the only advantage I had a sales guy was at least like there, there was a brand and there are not enough brands in telecom back in Pakistan.

[00:01:30] I moved to Germany like seven years ago from Pakistan. And I saw that the world was moving to digital world and I was still a field sales guy, which right now, if you’re a field sales guy, you’re making a lot of money because a normal field sales guy makes above like 100-120 K euros a year.

[00:01:47] But for somebody who doesn’t speak German, somebody who doesn’t accustomed to culture, like, okay, the easiest way to make money for me, it’s somebody who’s already speaking English. I moved to like offline, to online SDR, to account executive, to starting my own tool, startups . I ran sales and marketing for them.

[00:02:07] My first successful venture would be like User Pilot, where I actually was running a product that actually helped product led growth. I could see both movements in front of me. And I was always in this dilemma, which we’ll talk about later, but product led sales is great. And I’ve talked to a lot of people have a lot of opinion on that.

[00:02:23] User Pilot, I would say, is a relatively successful startup. It has a good brand and top three brands, in the user onboarding category, product led growth category.

[00:02:33] So then I moved on to the next stage, which is working for another product led growth company, which was in Shopify ecosystem. So worked as a head of growth there, and now I’m a growth marketing lead at synthesis, which is a completely different, what I’m doing, it is B2C. And in ad tech.

[00:02:49] I was previously in ad tech, but in sales, now I’m ad tech, but in marketing, so that’s the only difference. People need to know why this guy has sales and marketing knowledge and product led growth knowledge together.

[00:02:59] Harris Kenny: I think a lot of people define these differently. So can you just recap what is product led growth, and how does it different than sales led growth? Since you’ve seen both.

[00:03:09] Aazar Shad: Product led growth for me is meant product does the most of the heavy lifting of hey, this is the product. And if you need it, try it. And once you hit the limit, then you need to become a paid customer. Product is the main sales engine.

[00:03:23] Product led sales is where the sales guy has to explain what the product aha moment is and what his activation moment is.

[00:03:32] I’ll give you a good example of aha and activation. We are on this podcast right now, when you hit record it’s a podcast recording software, but when you publish it, then you say, okay, the voice quality was great compared to a Zoom. And so that’s why I should use it. That’s an activation on when you realize the value of the software.

[00:03:52] The sales guy, in product led growth, aha and activation, product has to do itself. You just have to present the product. And in product led sales because the product might be complicated, product is difficult to explain, all the features are hard to use, maybe the persona is not accustomed to trying the product itself, or the product has no one- to- many use cases and that’s where our product led sales come in.

[00:04:21] The whole movement of product led growth started with this book and OpenView by Wes Bush, which have personally contributed to his blogs and OpenView as well. They have a different opinion on this, which totally makes sense where they’re coming from and how staff software shifting from product led growth product led sales to product led growth.

[00:04:44] But I don’t think every software has to be a product led growth software.

[00:04:48] Harris Kenny: That’s how I stumbled across your podcast.

[00:04:50] Listeners, check out Growth Marketing Stories, just look it up wherever you get your podcasts, and the episode I’m talking about specifically is, called “Wins and losses behind the sales lead to product led experiment.”

[00:05:02] This is the one that I thought it would be so interesting because you’re right, people tend to have an opinion, consultants, experts tend to have a perspective, and then they focus on that and they go to conferences and read books that tend to reinforce that. What was so interesting is that you experimented between going back and forth between the two.

[00:05:19] My experience working with founders is that people who are open to how they’re going to grow their sales, their business increase their sales, those are the ones who tend to find, to strike it at some point versus the people who say, okay, I’m going to do this one thing and I’m going to keep doing it over and over and again, until, you know, until I either get rich or we go out of business.

[00:05:38] Can you just recap what you talked about in that, and your process in terms of doing it yourself and switching between the product and the sales led.

[00:05:45] Aazar Shad: This is specifically a story about User Pilot, and User Pilot is a product led enabling software, right? It enables you to teach people in the software where it exactly aha moments are and where the activation moments are and then teach you about the software without having any person involved.

[00:06:05] So it helps with product led growth, but what we found out was that at User Pilot, for us, we were running just get a demo button model, get a demo is basically sales person. You click on it. They talk to me in Calendly book, a demo, try to understand a couple of qualification questions and then convert them into at least a trial.

[00:06:26] And what happened was that we just started to get a demo and somehow the other, all of our competitor, except one, was pretty adamant about product led sales because, I didn’t get it that time, I didn’t get to talk to them, but we said, okay, let’s just get a demo button.

[00:06:41] At least we will be able to talk to people and understand the user research and understand what they really need. A lot of founders specifically early on the career, they put it product led growth model and they say, oh, you know what? I will just let it product led growth way. And they don’t talk to customers.

[00:06:56] They don’t know the needs that they’re building in their own head. And so, I at least at that, from that sense that it really helped us. I was kind of a part of founding team. That’s how I also used to think as well.

[00:07:07] And then what we saw, what we saw that, like not a lot of people were converting from get a demo button and it was taking a long, long time.

[00:07:14] So we, what we did with turn from sales led to product led good. We just opened a free trial, but we didn’t tell people the main CTA was still get a demo. And whoever figured out free trial button on top of the header menu was able to go and convert. But at the same time, we also reduce our price for startups and the startup price was like, so normal price was like $150, our price of 50% discounted.

[00:07:36] And we, we saw Intercom. We saw everybody was doing it. I said, okay, we also need to do it. Startup package, as well as the trial model, both worked along really well. And we saw a huge number of people coming.

[00:07:48] And so, no product led growth model really works. We doubled down on it. We went to the, the startup package. We figured out that like, startups are not actually great customers because they are still figuring out, and if, it’s anything in life. Okay. If somebody is still figuring out is not a good fit for you, either it’s in relationship audits in, in a job, or in buying some product, okay, because they don’t know what they really, really want.

[00:08:12] We thought, okay, you know what, let’s do this way, we will, we will just focus on free trials. And so then we did like three, four months of experiment and waited like, okay, what’s the data tells us. And data tells us that people who actually got to get a demo. And talk to one of us in sales, and then talk to customer success who actually onboarded them personally, and converted, were retained longer and paid us longer.

[00:08:41] And because you can’t have data for one or three months, you need to at least have six month data to actually see it. So we then bought of this and then the founders said, okay, let’s turn off the free trial because although people will come, the intent is still lower. They just want to check out.

[00:08:54] I also covered in my own podcast, there was this SaaS company, there are a lot of tire kickers who will just try to check the product, but don’t necessarily want to buy. And then what a big thing is, what we did was we always had this 14 day trial limit. And in the 14 day trial limit, even if somebody is not has experienced a product, but it’s not, it has forgotten about it is a low priority, had to pay to actually continue it. And so those also people were not converting well later on, they didn’t stay longer because they still want to experience the product. All in all, which we found out, people who go through a sales person has better experience with us than somebody who would just try as a product.

[00:09:36] And there is a reason why.

[00:09:38] Because our product itself has like four or five different modules and it’s almost like a platform you offer everything like Intercom. But we found out that it’s very hard for somebody to think about onboarding. Onboarding, everybody thinks they can do it. It’s like everybody thinks they can do marketing, but they can’t.

[00:09:57] Everyone has an opinion about marketing. So everybody has an opinion they can do with the onboarding. This saw the onboarding of this other software they saw it’s working. So they should do it. But onboarding almost starts with your customer, like, and reverse engineering back towards where they started.

[00:10:11] So you have to go backwards rather than forward. Which means you have to think a lot, you have to ask first principles question, thinking about why it’s going on. Once you figured out your why, you need to figure out how.

[00:10:22] Harris Kenny: Hm.

[00:10:25] Aazar Shad: If your product is complicated, if your product needs a lot of education upfront, it’s like, you know, when you have Zoom, you just try and click on it. You know how it works, right? But let’s say if you have like a software that needs 10 integrations before it starts showing you the value. Takes time, right?

[00:10:41] Think about Gong. Gong is a really good use case. I was a huge proponent of, product led software. And so I went to Gong’s CMO Udi and I said, Hey, why don’t you have a product led growth software? He said, because people don’t understand, it takes so many tasks so much time to actually set it up properly.

[00:10:57] Somebody has to physically help you to set it up. Somebody has to tell you how to work. Somebody has to tell you what the, what the aha moments are. And then eventually that software starts showing you the results. And I’m like, this is a good opinion. Like he actually has thought about how the whole journey looks like.

[00:11:13] Actually product led growth is not for everybody. It’s just a nice term that people have invented for self-serve softwares, but it doesn’t mean it’s for everybody.

[00:11:23] You have a complicated product, you have a lot of education to do upfront, you have value delayed. Your value is delayed like two, three months later, okay, don’t do product led because it will take three, somebody will take three months to figure out a product is already lost if they don’t figure out on the first day, right?

[00:11:43] If you have these things, then you should not go with product led growth model, you should definitely run an experiment, and see if it works out.

[00:11:50] Think about like software, like Tableau, right? It’s free, but Tableau does so much upfront education to students to actually go and use the software. But it’s still really hard to use like, there’s a lot of CSS iframes there, and it takes time.

[00:12:05] If it takes time, then, try to find people who are looking for you. And try to educate them first, and then let them in, make sense. But this doesn’t mean that you can’t show, and like the reason that product growth works is because you need to show, don’t tell correct? That that’s the reason.

[00:12:25] You can still show the software without letting somebody in. And so there are new softwares that are like showing the product, roughly how it works, what it would look like to give the aha moment, at least in their head, the other thing is like the products, SEMrush, ahrefs, right?

[00:12:41] They are all like product led, and the reason appropriate is because first people need to understand SEO. Whenever I started my journey, I didn’t start with a software I started with the, like, what is SEO, and then to learn about SEO. I said, okay, now I need to use the software, right?

[00:12:55] So what, what ahrefs does, what SEMrush does, they do a lot of upfront education for people to understand what is SEO, how it works. Like ahrefs has a course that used to cost $700. They made it for free to educate people how to use SEO for their business. And then they said, okay, now you need to use this offer.

[00:13:13] And now ahrefs has a free model where they still keep people, like they take the data to collect the data, but that’s the reason our product led growth work for them.

[00:13:25] So it just depends on the industry. It depends on the complication of the product. Depends on how, like, I remember when I tried ahrefs for the first time, I did not use all the features. The features. I use at first were the ones, which I was already using in the, in the competitive software for the first time.

[00:13:41] And then slowly, it just told me who are you? Can you find the new backlinks? You can find people who mentioned, you can find people do this. So it was a lot of education ongoing, and it was not still like breaking the bank for me. So I said, okay, now let’s do it. And then we learn with time.

[00:13:55] The data says that only 20% of the features are actually being used in any software. So that’s then another case story for another day.

[00:14:06] Harris Kenny: What about a product where, so it’s a few of these examples you’re talking about where sales led makes sense is because it’s complicated. It has a long delay or a lot of features or an implementation or setup time.

[00:14:18] I’m curious what you think about a product where the product itself, maybe like the interface is simple, but the behavior change is complex.

[00:14:30] Aazar Shad: So in FinTech, right? N26, Revolut, where this incumbents are very hard to use, right? Like the existing banks versus N26 and other software, or like Brex, where they have a software, but these are all consumer kind of software products. I’d say there’s no sales required, in general. What I think is that even if the behavior change is required, it’s like a big deal, it’s a really big deal to change a behavior.

[00:14:54] Think about this where like, if there’s no more swiping on the mobile. And now somebody says, tried to use our software, and try to click on a dating profile. It’s a complete different mindset. For B2C, it still makes sense to go with product led because that’s the only way to do it and you do like one screen at a time.

[00:15:12] But for B2B, if the behavior change is huge, think about like somebody who was already using an incumbent. So think about Salesforce. Salesforce is a lot of different kinds of software, and app exchange, and all of them, almost all of them require get a demo button because you need to integrate Salesforce, and Salesforce itself is a big giant altogether.

[00:15:31] Or think about Oracle. This whole ERP system, right? ERP systems are there, this whole ERP system you can do on self services? I haven’t heard of a company that can do that really well. So if those companies cannot do that really well then it means there is a reason, unless you make it super simple for somebody to do it and say, okay, the next one only will unlock when you actually have done the first one.

[00:15:53] And it’s same thing like Tableau giving a software for free and then the right decision-makers are making the purchase. So people actually figured out, okay, this is a complicated software, but we still need to use it.

[00:16:05] Harris Kenny: I agree, and I think that like what sales looks like could mean different things. Maybe it’s like a customer success team. Maybe it’s an account manager who helps coach through getting adoption across the team. You know, it doesn’t just have to be a demo button, it doesn’t just have to be cold calling.

[00:16:20] My takeaway from what you’re saying is that sales really, in this context is really just about a person being intentional or being deliberate about helping a customer, understand how to use something, how to adopt it. It’s not necessarily a customer support function where you’re just troubleshooting.

[00:16:35] There is something that’s forward-looking about it, where you’re trying to help people see and then use more. You’re going to get this set up and then you’re going to figure it out, and you’re going to upgrade to this tier once you hit that limit.

[00:16:44] Whereas I feel like on the customer support side, it’s more of, there’s a bug, or where’s this in the menu, or how do I set this up? And then once it’s resolved, the ticket’s done and they’re back on their own.

[00:16:53] Aazar Shad: Yeah. Yeah. I think product led growth is like a freemium e-book, so sure if you have a feature, which is super easy to use, super simple to use, sure have that for free already.

[00:17:05] So for example, for User Pilot, the easiest thing we could actually do, actually, we could not do anything easiest because first you have to integrate your software with our software. You have to install the snippet, which is the hardest thing. So we cannot do it.

[00:17:19] The easiest thing now, we can do, is like, we have some kind of Typeform way of asking questions in app. Think about how Hotjar does the forms. In order to use Hotjar forms, you don’t need Hotjar script, you can just readily make a form out of it. That is very easy to do so you can actually have the one part of the piece, which is like super easy to use, to let people in and experience the product.

[00:17:42] People are only trying to figure out, is this right for me? Is this something that I I will use? And if you have that one feature that is like free to use. Sure, go ahead and make a product led growth software.

[00:17:52] For example, the way, the way free version works for Gong, how it works, is that they do this conference all the time, they have these research labs and where they talk about these reports, where they figure out like all of this content is for free for people to figure out how the software works. So it just like it’s a premium ebook product led growth is like a premium ebook given for free.

[00:18:15] Harris Kenny: That’s awesome. All right. Well, I, you know, we have a short format on the show and I want to be respectful of your time. I’m going to wrap here, but I would love to know, if people want to follow you, follow your podcast, follow you on social media, I don’t know if you’re active on anywhere in particular that you want to point people to, or if there’s anything else that you wanted to share before we wrap.

[00:18:32] Aazar Shad: I’m about to release a book on sales. If you subscribe to my newsletter aazarshad.com/newsletter, which I’m pretty sure you will put in the show notes, I am going to share how I did the sales of product led and non-product led companies.

[00:18:46] I’m going to share a thread with you, which is super valuable for people in sales to actually think about it. Follow me on Twitter, @aazarshad, and I’m active on LinkedIn.

[00:18:54] That’s all from my side, but when we are thinking about product led growth, perhaps if you’re a founder, start with doing product led sales first.

[00:19:06] Harris Kenny: Thank you so much. I will drop all that stuff in the show notes. Appreciate your time and have a good day.

[00:19:11] Aazar Shad: Perfect. Thanks.

Outro

That’s all for now. You can find show notes at introcrm.com/podcast. The theme music for Pipeline Meeting is by Neighbourhood Vandal and it’s shared under a Creative Commons-Attribution, or CC-BY, license. If you learned something, consider sharing this show with a friend. Thanks.

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