Mario’s Newsletter
PLG False Starts
PLG False Starts With Derek Skaletsky: Product-led Sales With Wrong Sales Incentives 💥
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PLG False Starts With Derek Skaletsky: Product-led Sales With Wrong Sales Incentives 💥

Learning from missteps implementing product-led lases, and aligning organizational culture with Derek Skaletsky
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False Start 1 - Launching as a product-only initiative

"Initially, we thought PLG was all about the product. We learned the hard way that it's a team sport."
— Derek Skaletski

The journey into Product-Led Growth (PLG) is often misconceived as a solo product initiative. Derek Skaletski's experience illustrates this fallacy. Initially, their approach to PLG was product-centric, focusing on refining the user onboarding and early experience. Despite these efforts, the lack of coordination with marketing and sales resulted in minimal revenue impact.

This false start highlighted a crucial lesson: PLG requires a cross-functional approach, integrating efforts across product, marketing, sales, and customer success teams.

The Solution: a cross-functional team involving sales, marketing, product, and customer success

The shift to a more integrated approach was transformative. A seven-member cross-functional team was formed, focusing on the entire customer journey. Marketing began to leverage data from self-service trials for targeted messaging and determining when to engage sales. Additionally, an activation team was introduced to assist users during trials, moving from a reactive to a proactive stance.

These changes eventually led to a significant increase in self-serve revenue and a reevaluation of sales and account management opportunities.

False Start 2 - Not changing sales incentives

"We had to rethink our sales incentives to really align with our PLG goals."
— Derek Skaletski

A major hurdle in PLG implementation arises from traditional sales incentive structures. Sales teams, driven by commission models focused on new bookings, often prioritize larger deals, inadvertently creating friction with a product-led model. This misalignment not only hampers PLG adoption but also creates internal competition between sales and product teams.

Incentivise sales teams to close smaller initial deals

They shifted the commission model to favor account expansion over initial landings. This incentivized sales teams to focus on smaller initial deals with potential for growth, aligning their efforts with the PLG strategy. Such innovative compensation models can drive behaviors that support a seamless PLG motion.

False Start 3 - Treat every single PLG lead as a high priority lead

"Suddenly, we were drowning in leads. We needed a smarter way to prioritize."
— Derek Skaletski

A common transition challenge in PLG is managing the shift from lead scarcity to overwhelming volume. Sales teams, accustomed to a lower number of high-quality leads, may find themselves inundated and unable to prioritize effectively.

Prioritise leads based on product signals

To address this, Derek's team developed an internal tool that notified sales through Slack when a trial account met certain activation criteria. This tool helped sales teams focus their efforts on the most promising leads, demonstrating the value of leveraging product usage data for sales prioritization.

Conclusion: It’s About People

"The real secret to PLG success? It's understanding that at its heart, it's about people – your team, your users, everyone."
— Derek Skaletski

The journey into product-led growth is as much about people and processes as it is about technology. The key lies in building a cross-functional framework that aligns the goals and incentives of all teams towards a common PLG vision.

By focusing on the customer journey and leveraging data-driven insights, organizations can navigate the complexities of PLG and unlock its full potential.

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Mario’s Newsletter
PLG False Starts
Hey there, it's your host here, welcoming you to the "Product Led False Starts" podcast by productled.com. We've got a real treat for you – it's a raw, unfiltered look at the roller coaster ride that is embarking on a Product Led Growth (PLG) journey. We get up close and personal with a slew of incredible folks – savvy entrepreneurs, product whizzes, and trailblazers – who've had their share of stumbles and soaring successes in the PLG realm.
They've had their battles with setbacks and false starts, but they turned them into breakthroughs, and now they're here to spill the beans. We talk about:
1️⃣ The strategies that soared and the ones that sunk.
2️⃣ The tough lessons learned from their early PLG iterations.
3️⃣ The perseverance that led to their eventual successes.
So, let's get real, get inspired, and get a hearty dose of truth about what it really takes to succeed in the product-centric world. Remember, every stumble, every pivot, every iteration is a stepping stone towards success.
Join us as we chart the undulating terrain of PLG, where we'll laugh, learn, and leap forward together.
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Appears in episode
Mario Araujo
Derek Skaletsky