Chapter 12: The Anatomy of a Product-led Organization

A product-led GTM strategy requires a complete alignment of product, marketing, sales, and success teams in an organization. Key to this approach is being hyper-focused on delivering personalized customer experiences based on in-product behavior and usage patterns.

Just as it was marketing automation’s mission to better align sales and marketing as we moved from a sales-led to a marketing-led strategy, it will be the job of product experience platforms to align sales, marketing, customer success, and now, product. This creates the triad needed to really improve customer experience and efficiency.

Note: To be successful with a product-led GTM strategy, it must become part of your organizational DNA. A leadership team should lead this change in your company, providing all necessary guidance and resources to align all key departments. If the CEO can’t ensure this alignment, is there another C-level role tasked with solving this?

Let’s consider how teams have to adjust their playbooks to succeed with a product-led GTM strategy.

12.1 Product Playbook

Because product teams are part of the customer acquisition process with a product-led approach, they can make key decisions about what product features to build next based on in-depth customer behavior taken from the product.

SaaS companies release updates and new features on a weekly, daily, and in some extreme cases, hourly basis; but a product team’s success is no longer measured by simply delivering features on time and on budget. Today, product success can be measured based on product adoption and customer engagement metrics. This is why the role of product leaders is changing, and they are viewed more as the mini-CEOs of the product, as McKinsey & Company pointed out in the article “Product Managers for the Digital World”.

Some product teams will need to make a huge mental shift to execute on a product-led strategy. SaaS companies who sell into sales and marketing organizations have always understood the need to support growth from a product perspective, but it’s not nearly as obvious to some product teams, who mostly think about selling to personas. More product teams need to think about making customer growth a much larger priority in the roadmaps. A product-led approach can help them do that, guiding them to understand which personas actually use the company’s product and the profitability of these personas.

Making informed decisions about what to build next

By maintaining a unified customer profile with detailed in-product behavior, product teams can better understand their customers, what features they actually use, and how often they use them. Customer journeys provide insights into how users navigate through your product and what new features or updates will encourage higher adoption. By leveraging capabilities such as a feature heatmap, product teams can identify the most valuable features that directly impact revenue. This allows the product organization to align its development efforts to increase sales and market acceptance. A product-led GTM strategy enables product teams to create what Jeff Gothelf and Josh Seiden referred to in their book Sense and Respond2 as outcome-based roadmaps. In a nutshell, these are focused on driving product engagement metrics, rather than delivering certain features.

Guiding customers to use your product

You can improve product adoption by using customer segmentation based on behavioral and product usage data. This enables your product teams to create more personalized onboarding experiences, foster initial value with various cohorts, and get new features adopted more quickly.

Collecting relevant feedback from the right customers

With a product-led approach, the product itself becomes a primary method of engaging and interacting with customers. In-product engagements are highly contextual, and create a nearly real-time feedback loop between companies and their prospects and customers. This two-way communication process makes product teams more agile and enables product experimentation by releasing new features for specific segments.

Product teams can then determine the effectiveness of their strategies by reviewing in-product surveys, triggered feedback, and the Customer Behavior Index (CBI). (CBI is a metric that helps you determine how engaged your prospects and customers are based on their in-product activity and usage. More on this in Chapter 13.) Together, these provide a clear understanding of customer satisfaction and the overall health of the account.

Assigning product operational responsibility

In most SaaS companies, marketing operations and sales operations teams are responsible for setting up technologies and processes so the larger marketing and sales teams can handle everyday tasks more efficiently.

We believe that a shift to product-led strategies may lead to the creation of a product operations role. This role will be responsible for supporting the product, marketing, and sales teams by setting up processes, workflows, and technologies to streamline user segmentation, engagement campaigns, and product experimentation. It’s conceivable that some of the existing operational roles in the organization will be repurposed to better align marketing, sales, customer success, and product teams’ responsibilities. This will help ensure that all departments have access to the same unified customer data to create consistent omnichannel experiences for customers.

12.2 Marketing Playbook

We believe that, as a new organizational culture emerges geared toward generating PQLs, this new customer-centric approach will fuel the next evolution of GTM strategies. This will move marketing away from mass lead demand generation, to tactics focused on creating and curating customer experiences. This approach is more efficient and more CAC-effective, and increases CLV for companies.

Focusing on product signups

Knowing which customer segments are the most engaged helps marketing teams build campaigns that better target customers to increase retention, thus increasing CLV potential. With a product-led strategy, marketing teams can also build better retargeting campaigns, focusing on the most valuable accounts.

Focusing on the right segments and nurturing prospects to PQLs

Vanity metrics, such as website visits and scoring leads based on whether a prospect opens an e-mail, do not provide marketers with an accurate picture of the most profitable target customers. Instead, a product-led strategy enables marketing teams to understand prospects on the behavioral level, and build strategies to attract the most profitable segments. Marketing teams that build automated behavior-based triggers during the nurturing phase can better engage potential customers. Automation reduces the response time between user behavior and an appropriate engagement campaign, and generating demand from the right customer segments can in turn drive more efficient and better marketing ROI.

Developing thought leadership content based on customer in-product behavior

Insight into prospect and customer behaviors and feedback helps marketing create more effective thought leadership content. Additionally, they can use in-product communication as another channel for engaging potential and existing customers with relevant and helpful content.

12.3 Sales playbook

The highest value a sales team can receive with the product-led approach is to know when it is the right time for prospects and customers to buy, renew, and/or upgrade, based on in-product behavior. The role of the sales organization may shift toward a more consultative approach to selling, where SDRs and AEs will focus on helping prospects get started, and educating them on product and best practices.

Prioritize PQLs and improve forecast

In-product behavior provides a more accurate signal of buying intent, which helps sales better prioritize opportunities. At the same time, sales teams that determine the stage of each prospect on their trial and adoption journeys can improve forecast accuracy.

Optimize the land-and-expand strategy

With a product-led strategy, sales teams are better equipped to drive low-touch prospects to self-service and focus resources on the expansion of highly valuable accounts.

12.4 Customer Success Playbook

Customer success teams face the difficult challenge of piecing together customer data and building workflows for manual outreach to customers. The product-led approach helps these teams more proactively battle churn rates by taking advantage of automated in-product triggers based on relevant in-product behaviors.

Improve customer onboarding and training

Customer onboarding and training can be improved with a better understanding of individual users and the account as a whole. Even when a personal training session is required, customer behavioral data allows customer success teams to be more prepared. For example, the customer success team can monitor where customers fall off the journey to achieving a core goal (such as creating and sending an expense report), and proactively help by guiding the customer in-product. Similarly, if the customer success team has an upcoming call with a customer, it can review her in-product behaviors to identify potential issues. The team can then help her resolve those during their discussion.

Prevent customer support issues

As mentioned above, customer success teams can closely track how customers use the product and where they experience difficulty. Doing so, and then proactively addressing these issues, can reduce the number of support tickets and requests. Consider the case of RapidMiner, which offers a SaaS app for data science teams. The company tracks user error rates and notifies its Customer Success Manager (CSR) if a customer exceeds a predefined threshold of errors within a single hour. The CSR then proactively reaches out to the customer. By helping customers understand how to avoid errors, and instead, best use RapidMiner to achieve their goals, the company minimizes both support requests and churn rates associated with user frustration.

12.5 Key Takeaways

  • A product-led GTM strategy requires a complete alignment of the product, marketing, sales, and customer success teams, along with changes to the team playbooks.
  • The product playbook will use a unified customer profile based on detailed in-product behavior to decide what to build next, and learn how new features and updates are adopted. A new product operations role could evolve — one that supports all of the teams with processes, workflows, and technologies.
  • The marketing playbook will focus on product signups, nurturing prospects to PQLs, and developing thought leadership content based on in-product behavior.
  • The sales playbook will learn from in-product behavior when customers are ready to buy, renew, and/or upgrade, which will allow sales to then prioritize PQLs and optimize their land-and-expand strategies.
  • The customer success playbook lays out how to piece together customer data and build workflows for manual customer outreach. This team will need to improve customer onboarding and training, while working to prevent customer support issues.