Opportunities for B2B Sales in a product-led era
There were three main questions that I wanted to answer through this article:
a) How is the current macro-environment impacting the way commercial teams operate?
b) What’s changing as a result in the B2B Sales stack?
c) Who are the companies that are changing the way partnerships are being built?
Let’s get started by examining one of the key models guiding how modern GTM teams operate - the flywheel.
The concept of the flywheel model dates back to the business book classic “Good to Great”, published already in the beginning of the century. That said, I’d argue that up until just 5–6 years ago, majority of commercial departments still operated in a dynamic more akin to a “funnel”, where marketing & sales worked largely in silos and optimised for reaching the next step of the sales pipeline (visualised below).
I first came across the the flywheel GTM motion when analysing Hubspot’s incredible growth and product expansion about 5 years ago (also check out their article on how the Flywheel model drives every action in the company). Today, its become one of the most well known playbooks in B2B SaaS and for a reason — it introduces a more holistic view of the buying process and puts the customer at the centre of the equation.
The beauty of the analogy is in its simplicity — adding more “force” to the wheel (input), leads to further customer recommendations and faster growth (output). Additional force can come from referral programs, self-service onboarding flows or seasonal discounts. The central aim of the model is to drive customer growth, increasing top-line revenue. On paper, marketing, sales and customer experience teams all work hand in hand, from attracting quality inbound leads, all the way to creating customer advocates, who promote it to other prospective clients.
In reality however, for most early-stage organisations, the sales process is either a lot less fixed (usually in the super early days) or much more complex, requiring involvement from many other departments (finance, product, legal). In both cases, a lot of customer data is fragmented across systems or just exchanged infrequently, usually as part of internal processes or meetings, leading to information slippage between teams and little action.
The baseline GTM toolset (across various stages of the customer lifecycle and not including any optimisation or outreach software) looks something like this:
Analytics (Google Analytics) — CRM (Pipedrive, Salesforce, Hubspot) — CX platform (Gainsight/Vitally) — Google Sheets/Excel/Airtable — Slides
Of course this is a massive oversimplification, but you get the point — there’s a lot of information divided across various sources and they are not always in sync, especially in the early stages, when there’s no one to handle a “sales-ops” function.
Given that we have entered a macro-environment, where budgets are monitored much more closely, understanding and optimising the core value of each partnership has become a lot more important for both buyers and sellers. What is the impact of a shift towards quality on the purchasing journey?
Furthermore, as product-led growth (PLG) has taken off, with incredible companies like Airtable, Notion and Calendly paving the way for the next-generation of great software, sales is more dependant than ever on topics like product marketing and positioning. How does the emergence of new sales-associated roles impact the requirements and assumptions of the flywheel? Let’s find out.
1. “Identify” — product usage data as the missing pillar for sales activities
The central aim of the PLG movement is to build in a way that that the product would sell itself. Sounds simple, right?
In reality however, research conducted by the team at Pocus found that over 97% of PLG companies still have a sales team in place or are looking to build one. Why is that? Well, the goal of establishing a product-led sales team is not so much in removing the human aspect of selling and negotiating, it’s to narrow the focus and understand end user behaviour prior to spending a significant amount of time on calls and meetings. By recognising who the users are, how they are intending to use the platform and the intensity of testing, sales teams are able to filter for high quality opportunities and creatively approach potential customers.
Unfortunately, most early-stage organisations, where the sales team is just getting off the ground, usually don’t have access to detailed, high quality usage data, at least until there’s a proper data analytics team in place. There’s a massive opportunity here to rethink how sales teams engage with customers, making the entire process a lot more tailored and collaborative.
A couple of examples of companies tackling this space are the aforementioned Pocus and Calixa.
2. “Equip” — the buying process is becoming more collaborative
While the end-user can drive purchase intent, tighter budgets will also mean more scrutiny in the procurement process. This leads to increased collaboration also on the procurement side, involving finance, sales, product and security departments.
If you are an early-stage company selling to mid-market or enterprise, you will need to tick a lot of boxes ranging from data protection policies to financials. These processes can take a while and often the reason lies in prioritisation differences between various counterparts. I’ve seen it firsthand how security approval can delay some contracts for several weeks, either due to limited resources or overlapping holidays. This is why I’m excited that companies like Omnea are popping up, massively simplifying the entire procurement process by creating a transparent ledger for all the parties involved.
Moreover, the change towards collaboration is not only reflected internally, but applies also for the buyer-seller relationship, as demonstrated by the likes of Accord, who helps companies build partnership plans, ensuring a smooth onboarding.
3. “Partner” — usage-based pricing is here to stay
As mentioned above, the end-user has now become the main initiator. This is why a lot of companies are introducing usage based pricing, allowing the end-user to test and make the decision with limited risk, before pitching it to the rest of the team. For those interested in how to effectively adopt and scale a usage-based pricing strategy, I recommend reading through OpenView’s playbook.
Usage however, does not just reflect the buyer’s activity, it also comes with certain performance expectations. Companies usually mitigate performance risk by establishing SLA’s with their software providers, such as downtime protection or certain quality metrics (e.g. time to perform a single activity). Yet, hiccups often don’t convert into action and are not reflected on the invoice at the end of the month. From the sales side, this might be positive in the short-term, but with the spirit of building a long-lasting partnership, transparency between the customer success team and end-users is critical.
There’s an Estonian company called Reiterate building something super-interesting in this space.
What’s the common theme between these three points?
Alignment.
Whether it’s internally between sales and product teams, between the end-user and the account executive or across the organisation, the purchasing process is moving towards a much more comprehensive approach. While each department maintains responsibility for their own targets, cross-function dependency is increasing, leading to organisations thinking more holistically about their commercial/customer-facing departments.
Returning to the initial flywheel model, while it’s a great representation of the result you want to drive, the sales process for modern B2B SaaS companies is complex and has become a lot more interconnected over the past couple of years. Neither the model or the dominating tools fully reflect that. There are massive opportunities to add more “force” to the flywheel by bringing product data to the center of the conversation (“Identify”), tailoring your offering to internal workflows (“Equip”), building custom usage-based contracts (“Partner”) and providing your clients with an exemplary experience through world-class support (“Empower” — I didn’t talk about this above, but check out what the team at Fullview is building).
What should you do in light of this? Well, if you are currently building a GTM team, perhaps a good place to start would be by following these three action items:
1. Make sure commercial teams are aligned on key targets and review the same operational data
2. Analyse compensation structures and make sure all commercial teams share incentives that are built for long-term success
3. Invest in a revenue operations function earlier than you think — a mutual understanding between commercial & finance teams will become crucial as the focus shifts back towards unit economics
Good luck!
If you made it to the end, thank you for reading!
I’d love to hear any thoughts you have, so feel free to reach out to georg@elign.io
