The SaaS business can be broadly classified into Product-led and Sales-led companies. In the past decade, the Product-led approach has gained significant traction among startups due to its customer-centric approach. It enables potential customers to discover the product by themselves through trial or freemium modes and pay only if they like it.
Since the PLG approach facilitates faster user onboarding and in turn lead to higher conversion rates, a lot of SaaS companies moved towards the PLG approach.
Below is a very simplified illustration of how a sale happens in a PLG vs SLG company.
You can see how much the Product-led approach cuts down the clutter when compared to the Sales-led one. The Product-led approach highly depends on product and self-discovery, and the Sales-led approach depends on human intervention.
However, this doesn’t mean that product-led companies don’t need salespeople to sell the product.
So, where does PLG differ from SLG?
Product Discovery & Sales process in both PLG and SLG approaches are different. Product-led businesses depend heavily on the idea that customer will find their product organically or through paid media. They basically rely on the pull marketing. The sales team comes much later, i.e., after the user signed up for a trial or freemium. It’s now called Inside Sales or Inbound Sales. Here the sales team will be an additional nudge to make the customer purchase the product.
This will be opposite in the Sales-led approach. These businesses heavily rely on outbound or Account-based Marketing to pull people to the product otherwise called as “push marketing”.
Is that the only difference?
Nah… one of the biggest differences is in the next step, i.e., Onboarding.
The product-led companies tend to be self-serving. They typically aim to keep the onboarding process as simple as possible to ensure that customers can easily understand the product. Since these products generally have a low Annual Contract Value (ACV), it often doesn’t make sense for them to invest in a dedicated onboarding or customer success team.
However, it’s quite the opposite in the Sales-led businesses. In most cases, these products are a bit more complex, so they tend to have an active Customer Success team to help the users onboard.
The product-led approach removes the burden of the product’s success from the Customer Success teams and puts it back to the product. This makes businesses focus on building a better product that converts itself.
Customer Onboarding: Why is it important?
Onboarding is the first interaction a potential customer has with your product. It is the quickest possible way for a user to find the Aha! moment of the product. When onboarding is done right, it not only improves the chances of success with your product but also lays out the groundwork for a positive and lasting relationship and ensures customers understand all your product’s capabilities.
The ownership of the Onboarding process varies depending on the complexity of the product and, of course, the company’s size as well. If your product is a very complex one, for example, a financial reporting product that connects with multiple tools, then a guided approach, be it human or in-app, is necessary for the success of the program.
In the Sales-led companies, the customer onboarding is handled by the Customer Success or a dedicated Onboarding team, closely aided by the Marketing team. Once the lead moves down the funnel, it will be handed over to the respective team by the Sales team. Then they get on a call with the lead, understand their requirements, and guide them to set up the product.
However, in the PLG companies, the onboarding is mostly self-serve. They kickstart the trial or freemium on their own. They either follow a guided product walkthrough or discover the product in their own way. Customer Success comes much later in the journey when the users are stuck somewhere or need help to clarify their queries. As mentioned above, the product-led businesses try to keep manual intervention as minimal as possible and make the product speak for itself.
Having said this, it’s now clear how SLG companies handle product/trial onboarding. So this now begs the question: who should handle the onboarding in product-led companies?
What’s the current status quo?
In traditional Product-led companies, customer onboarding is generally handled by the product team.
The logic?
Since the customers have entered into the product, it’s now the prerogative of the product team to handle them. This is true in certain cases and clearly sets the boundaries for the teams i.e. from discovery to sign up is handled by Marketing & Sales and from post sign up to whatever actions within the product are owned by the Product team.
With the rise of Product Marketing as a separate career, this is always a bone of contention for PMMs and PMs. Both work on the product side. In a few instance both work under the same leadership.
Ideally, this is how we define both functions:
“A Product Marketer focuses on bringing the right person to the product and a Product Manager focuses on ensuring that the right person stays with the product for a long time.”
Now, in many startups, where there is no solid sales-led motion, the PMMs are restricted to just work with the product launches and other marketing initiatives. Heck, in my experience, I’ve been asked to just own the Landing pages apart from managing the launches.
However, I have a slightly different take on this. There is a huge gap in the previous statement. I’m rewriting the statement and you will see the gap I’m talking about.
“A PMM should be responsible for bringing in the right person and making sure that person converts, and a PM is responsible for making them stay.”
Note the part of the sentence that is highlighted. That’s what almost all companies miss.
The biggest gap in the previous approach is that it doesn’t take into the account whether the user converts or not. Unless the user converts and becomes a paying customer, the product team cannot ensure that user stays. Which means they are still not “in” the product.
Without this clarity a lot of teams irrespective of the company sizes, tend to hand over the onboarding and trialing part to the product team.
And that’s why I’m saying…PMMs should own the onboarding and trialling phase.
Why is that?
As said before, a Product Marketer’s job is to take the product to the right audience. So, their role is not just to work on the TOFU and bring in the trials but ensure whether the people they brought in are the right persona and solves their problem
Product Marketers serve as the crucial link between the product team and the users. They sit in the intersection of Product, Customer Success, and the customers. Hence, they possess an in-depth understanding of the product’s features, capabilities, and target audience. Since they also own the persona creation and positioning & messaging, they will have better clarity on how to onboard a particular user and what needs to be shown during the trial phase.
As said above, Onboarding is the quickest way to the aha! moment. To know a particular person, you need to learn more about them, their day-to-day life and pain points. In most cases, it’s the PMMs who regularly get on a call with customers to understand what they like, dislike, their pain points and the ecosystem they operate in.
Besides, Onboarding is not a one-time event but a critical stage in the broader customer journey. PMMs will have an understanding of the importance of nurturing relationships throughout the customer lifecycle marketing. By actively owning onboarding processes, PMMs can ensure that users not only complete the onboarding phase but continue to engage with the product effectively, increasing long-term retention rates.
“Product marketing” means you need to market the product by all means possible. And, one of the most effective ways to promote a product is via the product itself. Apart from a landing page, where else can you show the value proposition, messaging, and differentiators to the users?
IT’S WITHIN THE PRODUCT!!
When a user is on trial, they haven’t converted yet. They are just checking out the product. They are still in the funnel and have yet to pay us. The Marketing department’s job is to bring the user to this stage of the funnel. It’s the Product Marketer’s job to move these users to the next stage and convert them. Once a user successfully converts, the responsibility shifts to the Product team, who must then focus on retaining these customers and exploring opportunities for upselling, ensuring they experience ongoing value and satisfaction.
To reiterate what we said before,
A PMM’s job is to find the right audience for the product so they convert, and a PM’s job is to build a high-quality product that the target audience wants.
Let me know your thoughts on this!
