Edward Ford
Last updated 05 July, 2021.
"With a product-led approach, you're really exercising all areas of the business within the product itself. So the product is not just the product. The product is marketing. It's marketing to the user. It's also selling the user."
Hilary Kay is CMO at Wibbitz—a SaaS online video editor. In this episode, Edward and Hilary discuss how to evolve your marketing strategy from a sales-led enterprise model to a product-led hybrid model.
This is a transition Wibbitz went through about 1.5 years ago and it’s something many SaaS companies are looking at today. Hilary walks us through:
- Why Wibbitz decided to make the change
- Some of the signs and indicators you should look out for when making this type of transition
- The impact it has on understanding your target audience, customer lifecycle, and marketing tactics/channels
- How it influences sales and marketing alignment, product and marketing alignment, and the marketing team’s structure
- The things that shouldn't change when making this transition
Stay tuned until the end of the episode to hear what books and marketing resources Hilary recommends, as well as her favorite piece of advice for fellow marketers. 👀
And let us know what you think by tweeting to us @SaaSGrowthHub
Enjoy the show!
---
Links:
Wibbitz
Think Like A Monk by Jay Shetty
---
Follow The Growth Hub on Twitter
Episode transcript
Edward:
Welcome to another episode of the Growth Hub Podcast. And it's my pleasure to welcome Hilary Kay to the show, who is CMO at Wibbitz. So, Hilary, thank you so much for joining us today here on the Growth Hub Podcast.
Hilary:
Hello, thank you so much for having me. Excited to be here.
Edward:
This is going to be a super relevant episode for many listeners, since we're hearing how to evolve your marketing strategy from a sales-led to a product-led hybrid model. So I was thinking to kick things off, why did you transition from a traditional sales-led enterprise model to a product-led model?
Hilary:
So I think this is probably something that a lot of companies are contemplating right now. I think PLG is definitely a pretty hot topic. We actually considered making this transition for a while. We made the decision to actually to move forward on it in April of last year, though. So sort of right when the world was shutting down. I'd say COVID was sort of a catalyst for us making the leap. But we did think about making the change for a while. And our approach for a product-led growth is more of a hybrid strategy. So just want to preface it by saying that we still do have an inside sales team. We still do have account managers, but our company strategy is product-led versus the enterprise model that we had before.
Hilary:
So I'd say the three main reasons we decided to make this change were trends in just how people are buying and what they're expecting in the buying process. Second being our product. So just how people are actually using our product, the essence of it. And also more of a business strategic reason, improving our efficiency spent within the company. So to elaborate on those three, when I say trends in buying behavior, I think this is something if we really think about ourselves and how we're evaluating tools and making purchasing decisions today that we can resonate with, that people are really looking to make purchases independently. They're looking for a more low friction process. And most people want to actually understand and experience the value of a product before they spend money. I think it's something we're getting more and more accustomed to. Not just being told how we can be successful with a product, but actually experiencing that ourselves before we make a purchase.
Hilary:
And that's not just consumer tools or things that you're using in your everyday life. It's things you're using at work. I think we have some big examples, like Slack or Zoom, of course, Zoom being the quintessential one for COVID, that you can understand how impactful and valuable Zoom can be without spending any money.
So that's something we just observed in the larger B2B market as a whole, but also within our target audience. The second product. So I think when you're making this decision, you really have to think about what your product is, how it works, what the onboarding experience is, how complex is it for someone to understand that value. There are definitely products out there that probably aren't best for a product-led growth strategy, those that are incredibly complex that require a huge amount of integrations, but, at the same time, you still see companies, like Mongodb, who have introduced a more product-led motion into their strategy.
Hilary:
So for us, at Wibbitz, our tool is meant to be easy. Basically, our goal is to reduce the barrier to entry when it comes to video. So we want to make it simple for pretty much any content creator on a marketing team, at a publisher, to just get right in and start creating video without needing a lot of hand-holding without needing prior experience. So if you just think of that description, it fits very well for a self-service model. We want people to be able to get right into our product to understand how they can start creating videos. So that was a big reason as well. Just really thinking does our product work for a PLG model? And then the last is more of a business strategic decision and I think this is where COVID comes into play, being a catalyst.
Hilary:
So we wanted to put ourselves in a very strong position when the pandemic began, because there were a lot of unknowns, a lot of questions. So we just really spent time thinking about our model, thinking about our projections and trying to figure out how can we put ourselves in the strongest place possible? So what we decided is that we do believe we can reduce the touch points within our sales process, which will lower our acquisition costs. And, ultimately, it just put our business in an even healthier place. So that was the third reason there.
Edward:
That's great to hear and it definitely makes a lot of sense. So following from this, how can marketers identify if and when it's time to shift your go-to-market strategy to product-led? So what are some of the signs?
Hilary:
As a marketer, I'm very excited about product-led, because I think that marketing... and I think maybe we can dive into it a little bit more later on, but we play a very important role in the entire customer life cycle. So as a marketer, some of the things you can look for and to help position your reasoning and if you are trying to sell this internally, is looking at your audience. So marketers are probably the team within your company that is thinking most about audience, target persona on a daily basis, if you're coming from a more maybe enterprise structured work. So if you are looking at that target audience, you're understanding how are people purchasing, like I was talking about before, that's something that you can raise internally and showing other examples within your space that other companies that have adopted a product-led approach.
Hilary:
Our target audience actually did not change when we transitioned to a PLG company. I think that it has expanded just because our product is much more accessible, but our ICP is still, like I was saying, content creators. So once you are thinking about your ICP, you're trying to maybe prove your point that this is a trend within your target audience market, I mentioned this, but drawing on the competition and the market landscape as a whole. So looking at what other leading companies in your space, what approach they're taking. For us, for example, HubSpot, I think is a great example within the marketing world that was a strictly enterprise, inside sales model and then adapted a product-led growth motion. So trying to just have a larger picture and understand what other companies in your space that are targeting your target audience are doing.
Hilary:
And then the next is just looking at your standard metrics. So looking at conversion rates through the funnel, your website conversion rate, your conversion rate handing off from an MQL to an SQL, and just trying to understand if there's any fluctuations there. So, for us, when we transitioned to offer a self-service option on our website, so instead of just having your standard demo requests, setting up a call with a sales team to actually allowing people to sign up for our product on our website, we saw an incredible change in our website conversion rate. Before it was about 2%. Now, it's hovering between 15 to 20%. So I recommend just actually looking at some of these standard metrics that you're looking at every day and come up with some scenarios of looking at benchmarks within the industry and seeing how that might work for your business in order to paint that picture on the impact that it could have on marketing, but, obviously, on the larger business.
Edward:
Wow, that's a really impressive spike and jump in website conversion rate. And you spoke about target audiences and let's break down the go-to-market model and how your strategy should evolve. So what does this mean in terms of understanding your target audience's, since users are now decision-makers too?
Hilary:
I think this is a great, great question. I know that we're all trying to really understand our user, understand the target audience and you do have to think about it differently with a PLG model. You're putting most of your focus on the end-user. So probably a lot of us are familiar with you have your decision-makers at the business or the company that you're targeting and then you have users. And often with an enterprise sales approach, those are two different people. But as you're saying, with a PLG motion, these are now becoming the same person. So thinking much more about your product and the experience that a person has with your product is essential to understanding who that target audience is. Because you are speaking directly to the people who are using the product every day and who happen to be the ones who are putting in their credit card at the end of the day and making the decision whether they want to buy or not.
Hilary:
So it's essential that your users are falling in love with your product. That's really your number one goal. You want your users to understand, and when I say users, I'm talking about both trial users, but also people who have ended up purchasing and are now an existing customer. So I think, as a marketer, to really put that in a more central focus, really thinking about the experience around your product is a pretty big shift for a lot of marketers who have worked in a more standard enterprise structure. You're probably, in an enterprise model, you're thinking more around the decision makers, what their motivaters are within a business, how they're making those purchasing decisions and enabling your sales team to then try to sell the buyer on why your solution is the right fit.
Hilary:
With a PLG approach, you're actually speaking directly to those people and, at the end of the day, it's all about the product. So you really want to focus a lot more on that in just understanding the positioning to the target audience, and, obviously, building out all of your marketing strategy and campaigns around that. I will add that with a PLG approach, you do want to think about organic expansion within the organization. And, especially, if you're taking a more hybrid model, like we are, you are thinking about, "Okay, when is it that time to proactively look to expand within a customer?" So, of course, you do need to think about the influencers in those decisions to expand and your more standard decision maker, the users' boss if you will, and take that into consideration, but it comes secondary to the end user, I'd say, as being your target audience.
Edward:
You spoke about expansion there. So how did this transition to product-led redefine your customer life cycle? And what does it mean for typical marketing channels, like email, paid media content, for example?
Hilary:
So the customer life cycle is something that is defined and in different ways at different companies and there's different models and ways to look at it. But I think probably the biggest change is with an enterprise sales process, with an inside sales team, ownership of the sale itself is passed to sales at a certain point. So, of course, marketing is nurturing those opportunities. You're then continuing to market to customers. But that that ownership sits within the sales team. That's not the case with a self-service or a product-led growth model. So marketing and product together play a leading role across the entire customer life cycle, including that point of sale. So it means that marketers need to have a much tighter grasp on that process and really build out their campaigns to address every stage within that life cycle.
Hilary:
So we're thinking of our life cycle as more of a flywheel approach. So stages being awareness, activation, adoption, advocacy. So focusing a lot more on the product within that entire life cycle. And one example would be instead of using MQL as a metric we're looking at, so marketing-qualified leads, we're actually looking at something called a PQL, a product-qualified lead. So with that, our scoring model is using not just more demographic or firmographic data, it's also using product data, because we are looking to actually understand where is the person in their life cycle and journey with our product. So that, I'd say, is a good example of how you can redefine your customer life cycle. And then with that, I think it's important to just stop, reflect, look at all of the channels that you're leveraging in your marketing campaigns and rethink what are the most effective channels and what is the most effective messaging for each of them to better address those different stages, keeping in mind that the PR you're really putting the product at the center.
Hilary:
So one example would be for content, shifting to focus your content actually more on success with the product. So I think B2B marketers tend to turn away or shy away from talking about your product too much. With a PLG model, you need to help your customers and your users be as successful as possible with the product. So that often means bringing the product more into your content. So whether that's video tutorials, whether it's even video series on how you can be successful, like pro tips with the product, those are maybe some examples of how the change in your customer life cycle can affect your standard marketing channels in just your approach.
Edward:
That's really good to hear. And this last point can be quite challenging for content marketers and people working in content. When your mindset has to shift from what's traditionally been a top of funnel acquisition play to success in bringing your product into it and talking about your product, which is something, particularly, if you grew up in the HubSpot inbound school of marketing, it was a bit of a no-no. So it definitely requires a shift in mindset for everyone on the team. And following from this switch, you spoke about transitioning from funnels to flywheels. If we talk about measurement and analytics, you mentioned the introduction of PQLs, but how did this shift impact your marketing metrics and what are your new KPIs?
Hilary:
So I'd say there is a whole different set of language that we're still working to adopt within the company. So even things like your closed-won rate, for example, is where we've slowly, but surely, adopted using trial to paid. So that conversion rate between an opportunity and a customer, or now in our case, a free trial user to a paid customer. So there's definitely a shift in certain areas and even if, essentially, it's very similar, the language that we're using is different around the metrics we're talking about. I think on the marketing front, we are looking much more closely on actually website traffic and conversion rates on the website, since with the self-service model, that is the driver. So instead of a more 50-50 split between our outbound and inbound strategy, for the self-service sales channel, it's entirely coming from the website.
Hilary:
So we are definitely looking at website traffic on a larger company level, not just within the marketing team, and conversion rates. Trial signups, so instead of just looking at demo requests on our website, we're actually looking at the trial users in our product. After the trial, then we're diving in more to product metrics. So I'm actually looking at metrics, like percentage of PQL. So the percentage of the trial users we're bringing in that are using the product, they're active in the product, they're finding value there to make sure that I'm bringing in the right types of people. I'm also looking at things like the actual number of days they're in the trial, the percentage of people who are coming back multiple times within the trial. So really product-related data, which is definitely not something I was looking at before within the team. And we're even using that data within our marketing campaigns.
Hilary:
And another, I guess, lower in the funnel, looking at that trial-to-paid conversion rate. So again, that's, I guess, similar to your closed-won rate, but, as I mentioned before, our marketing and product together are really owning that metric. So that's another one I'm looking at daily. And revenue, at the end of the day. I think something for me, I've always been very revenue minded, but with a PLG model, your marketing team has a much more direct impact on revenue and a much stronger ownership, I'd say. So revenue is another one I'm looking at.
Edward:
Nice. And sales and marketing alignment has always been super important in a traditional sales-driven, go-to-market model, but what did this change from sales-lead to product-lead mean in terms of product and marketing alignment and your relationship with the product team?
Hilary:
So I would say that in a PLG model, marketing and product need to have as close knit of a relationship as marketing and sales does in a strictly enterprise model. So that might mean a familiar tension that you tend to experience between marketing and sales, I think it's a good tension. There's going to be, especially early on in this transition, there will be a lot of questions in ownership over different areas, different initiatives, different metrics, and just a process and alignment on objectives between the marketing and product teams. With a product-led approach, you're really exercising all areas of the business within the product itself. So the product is not just the product. The product is marketing. It's marketing to the user. It's also selling the user. So the product team needs to, I'd say, create really good processes between marketing and sales and whichever teams you are working with, support teams, for example, to integrate a lot of the initiatives within the way the product works.
Hilary:
So I'd say it's important to, if you're coming from an enterprise model, really think about that relationship in the same way. So focusing on communication, making sure you're creating as much transparency as possible between those teams, really focusing on building trust, and establishing common goals between the marketing and product team. I think that if you're able to do that, then you'll see it's a much smoother process. But it definitely will be a process just like, I think, with any marketing and sales relationship, it's an ongoing process to strengthen.
Edward:
And going back to the sales and marketing alignment side of the coin, how did this change the relationship then with your sales team, since that can be pushed back, as people think becoming product-led might mean you don't really need a sales team anymore?
Hilary:
And I think this is probably one of the biggest concerns raised when a company is considering moving to a product-led motion. I think it really depends on the company. I'd say if you're like us and you did have an enterprise structure in place, you will likely need that sales team. It's unlikely that instantly you're not going to need that role within the company. And I actually think sales plays a very important role in the transition process. So I would say working with your sales team and working to get buy in from sales leaders, but also just the team as a whole, positioning it to them as they are acting as advisors in this process. Because as I said before, your product is no longer just a product used for this specific use case that it's meant for. It's also meant to market. It's also meant to sell. So who better to advise on how to sell within the product than your sales team.
Hilary:
So I think working with your sales team as almost like a consultant and an advisor, as you work to build out your product and build out the structure around it, that they can understand the value that they're bringing. They can bring, of course, a lot of value in that process in making sure that this transition is successful. And as that begins to be built out, I think that's when you start to think about things like what does that handoff look like between the self-service and a more sales-assisted process? So that's actually something we're thinking a lot about right now and I'm working closely with our sales team to create a very scalable and streamlined process between identifying the users that are coming in for a free trial who are happy with the product, but that also have an opportunity for a more typical enterprise offering and solution that we have, and also that those users that might prefer that. Because you will still have the users that come in that try the product, but at the end of the day, they want and need to speak with a sales person.
Hilary:
So I think building out those processes as well for a more sales-assisted funnel in working closely with the sales team on that will, ultimately, put you in the best place, because you'll get buy in, of course, from that team. And I think that's the best way to make it be successful.
Edward:
And if we think about your marketing team and your set up, how did this change impact your team roles, responsibility and the overall marketing org?
Hilary:
So great question. I think when you're looking to make this change or when you're in the midst of it, it is important to pause and really rethink the roles that you have on the team, also the knowledge and the backgrounds. You might realize that you're missing some knowledge and you do want to bring that in. So it's definitely a point to pause and consider. For us, we really looked at the channels that we're leveraging. We realized that we wanted to put a larger focus on paid channels on email and also in just our strategy and approach within the different areas. So I talked a bit about content before, but with a product-led growth approach, the content you're producing, it's different. It's definitely a bit more product focused. So trying to rethink the responsibilities within the existing roles that you have and make sure that the focus is put on the right areas to best support this new customer life cycle that you have.
Hilary:
And it also might even mean bringing in new roles. So one example on our team is we created a director of growth role. I think growth teams, in general, is something that's very commonly talked about when you're thinking about PLG. Growth is an interesting function. It can sit in between a lot of different teams and that's because it's meant to. So, for us, growth is a marketing role, but works very, very, very closely with product. So it almost sits between marketing and product. And also we have actually a task force that has our director of growth, someone from our product team, someone from our BI or business intelligence team and a developer to lead those initiatives.
Edward:
Cool. That's really good to hear. And, finally, what are some of the things then that shouldn't change when you go from sales-led to product-led?
Hilary:
So I think it feels for a while, when you make this transition, that everything is changing, because it almost is, a lot is. I think two things, one more marketing-related, one more company-wide related. So first, I think, unless you're doing a very significant rebrand that your brand should really stay the same. You might be telling stories through different channels in a slightly different way, but the essence of who you are as a company and what you represent in the landscape I think you should stay true to. You don't want to lose sight of the foundation that you've have built for your brand. And I think that can also just maintain a sense of consistency through a pretty big shift and transition. And then the second being just, I think that your team, so not necessarily, like I said, you might need to bring a new roles, you might need to shift responsibilities, but make sure that you're paying attention to your team, how you work together.
Hilary:
Your same company values that you have, don't lose sight of those. I think it's more important than ever when you're making a big transition to make sure that you are prioritizing your team and your company values.
Edward:
Those are really, really good points as well to consider, that not everything has to change. Some things do still stay the same. And, Hilary, I'd say this was super good. And we could now move to our closing questions and our fast five challenge. So to wrap things up, I will ask five questions and all you need to do is answer as quickly as possible. So are you ready?
Hilary:
Yeah. I'm ready.
Edward:
All right. First question. What is the one book you would recommend others to read?
Hilary:
Think like a Monk by Jay Shetty.
Edward:
Cool. Second question. A SaaS company you love and why?
Hilary:
So I'm a huge Slack fan. I think if we're talking about PLG, Slack is probably one of the biggest success stories with a product-led growth approach. I think that their branding is genius. It's incredibly universal, but also incredibly, really relatable at the same time, which is very difficult to accomplish.
Edward:
Absolutely. Third question. Favorite place to learn about marketing online?
Hilary:
So I actually love podcasts. I know we're on one now, but, truly, I really love. For me, it's the easiest way while I'm out about moving [inaudible 00:32:21] to be able to absorb as much new knowledge as I can. I, of course, will have to recommend the Growth Hub.
Edward:
Why thank you.
Hilary:
I also love OpenView BUILD. OpenView BUILD is a great, great resource, if you're thinking about product-led growth and SaaStr also love.
Edward:
That's great. And this is the first time anyone has given a shout out or recommended this podcast on the podcast for that question. So thank you so much. This just made my day.
Hilary:
Of course.
Edward:
Fourth question, most important growth metric?
Hilary:
Active users. That has become our north-star metric as a company. So not just new customers, not just revenue, but people that are using our product, that are happy with our product.
Edward:
Nice. And fifth and final question, best piece of advice for fellow marketers?
Hilary:
I'd say never settled with what you know. Continue to ask questions, continue to learn. If there's one thing that I think is true about marketing is that it never stays the same. And with technology, there's really no sign of that changing and it's only going to accelerate. So being a marketer is being a forever student, I'd say.
Edward:
Yes, absolutely. Awesome. Well, Hilary, I have to say this was awesome and thank you so much for coming on the Growth Hub Podcast.
Hilary:
Thank you. It was a great time. Thanks so much for having me.
