When does outbound sales have a place in a PLG company? Each company’s answer will depend not just on their product, but on the opinions and strengths of the founding team.
In our recent podcast interview, we sat down with Jim Norton, the CRO of Flowcode, a platform that elevates QR technology to offer more valuable data and interactions for SMBs and big brands alike.
In part due to his decades of experience in sales at Google, AOL, and Condé Nast, it was an illuminating conversation. He reminds us that, even in the world of PLG, sales still matters. Outreach and one-to-one relationships can be your competitive advantage, especially if your competitors are only pursuing a self-serve business model.
If you’re a CRO, you’ve got to understand the culture of the company and the culture of the founding group. You need to know where the bias is going to be. Our culture as a company has been very much rooted in direct sales.Jim Norton, CRO, Flowcode
The myth of PLG
“I think there’s this great myth within the PLG community that revenue growth can be built predominantly just by way of product led,” says Jim. Because companies want that holy grail of self-serve sales and high revenue-per-employee, business leaders might forget about the massive opportunity with direct sales.
“Our culture as a company has been very much rooted in direct sales. Many of us, our founder included, come from a direct sales background, where we’re used to working one-on-one in a personalized way, especially with large clients,” says Jim. To get an initial steady stream of revenue, achieve product-market fit, and drive results for brand names, the team has led with a direct sales approach over its two-year history.
Why more PLG companies should do direct sales
“The majority of modern SaaS companies are starting with PLG. And it’s a free-to-premium or freemium model. Over time, they begin to add direct sellers,” explains Jim. He says that one way isn’t better than the other. Which method a company should tackle first depends a lot on the product and the target audience. The danger lies in assuming PLG sales is the only way to go (because it’s what the cool kids are doing), and leaving money on the table.
Direct sales can drive traffic for new freemium users through referrals and word of mouth. Plus, the better results you get for your first customers via direct sales, the more social proof you can add to your website, and the higher your self-serve channel will convert.
As Jim says, “I strongly believe in, as a lifelong card-carrying direct seller, the importance of a personal relationship, the importance of trust, and the importance of having a partner that brands can reach out to to make decisions.”
Direct sales can help you build deeper relationships than self-serve funnels. This is especially important for customers in regulated industries, complicated fields, and enterprise companies where the rollout process won’t be simple. At the end of the day it comes down to this, if your target audience needs not only a solution but also a trusted partner, then your sales process should reflect that too.
Why SDRs should prospect to non-users
When they do sales, many PLG companies focus only on product-led sales, meaning they only interact with and enhance the experience for their current user base of either freemium users or users that are on a lower paid plan. Here at HeadsUp, we know exactly how lucrative it is when sales professionals reach out to the right users at the right time.
But it’s also important for direct sales to get in contact with non-users as well. This is how sales can help a company grow beyond the functions of marketing and product.
“Today we’ve got about half a dozen people on our outbound sales team, mainly calling on fortune 1000 and power brands. We identify our core prospects in each vertical, whether it be automotive or financial services or retail or consumer packaged goods, and then as a sales team, we do very aggressive outbound,” explains Jim.
“We’re using tools like LinkedIn Sales Navigator and ZoomInfo to identify the right prospects and decision makers,” says Jim. “Then we work to set up meetings, understand brand challenges, and offer solutions via the Flowcode platform.”
How company culture and founder beliefs dictate GTM strategies
If there’s no right answer to what a company should start with (focus on direct sales or self-serve), how do companies decide? Although the type of product and audience should always be the guiding factor, much of the initial direction will depend on the talent within the company.
“The culture of a company is going to dictate whether or not you’re going to lead with direct sales versus more of a product lead approach,” says Jim. “Much of this culture is going to come from the founder. If you’ve got a very product-led engineering minded culture, there’s going to be a bias towards a more product led self serve, kind of feature-driven model. Whereas, if your founder is more customer-minded, I think there’s going to be a bias towards a direct-sold personal client success model.”
Jim says that understanding this bias is key to success in a CRO role. “If you’re a CRO, you’ve got to understand the culture of the company and the culture of the founding group. You need to know where the bias is going to be. That’s something that would be very difficult to overcome.”
When you know the starting point, you can start to collect the data you need to balance out the approach. “Once a company’s got a sufficient sample of data, you can begin to do your own analysis,” says Jim.
Jim suggests doing a blended CAC analysis to discover the cost per acquisition for a marketing-qualified lead (MQL), a product-qualified lead (PQL), and a lead that came through outbound sales. Analyzing the CAC can help you identify what improvements you need to make across all GTM methods.
Flowcode’s path forward with product-led growth
“We’ve got a CEO who built an executive team that believes in the power of a one-on-one, personal relationship. And now we’re beginning to balance that with much more of a self-serve, or product-led mindset,” says Jim.
So how does a company that rocks it at direct sales pivot deeper into PLG?
“The most important thing for us is really activation,” says Jim. The team is continuously looking to further their understanding of what makes someone a Flowcode creator. They’re creating KPIs around the different levels of creators, from the people who simply make a QR code, to the ones who regularly login to review their analytics and receive thousands of scans for their codes.
The team is also re-examining their plans. Jim gives us some insight into this process: “We’ve spent a lot of time debating how to move customers from a free to a paid plan. What do those price points look like? What are the features that we would want to offer? What are the features that were gated on the free or the basic paid plan?” By asking the right questions and diving into the product analytics, they’re coming to conclusions about the next evolution of their plans.
To listen to the full interview, click here.
For more advice from top PLG experts, check out the Product Led Sales Podcast.