Alexa, CEO of Pocus, hosts PLS AMAs with product-led sales experts to share best practices, frameworks, and insights on this emerging category. These AMAs are an opportunity to ask PLS leaders any question - ranging from hiring to sales compensation to tech stack - in a low-key, casual environment.
The PLS AMAs are for members of the product-led sales community, the go-to-place to learn, discuss, and connect with GTM leaders at product-led companies. The goal of the community is to bring together the most thoughtful and innovative GTM leaders to build the next generation of sales together.
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This week's PLS AMA recap is with David Apple!
David is the CRO of Zingtree, a no-code, interactive decision tree tool. Previously, he was the head of sales and the head of customer success at Notion and the head of sales & success at Typeform.
In David’s experience building sales teams in early-stage product-led growth organizations, there have three main sources of leads:
Our take: How you define PQLs is extremely important; under qualify and you’ve lost the value of utilizing PQLs, over qualify and you might miss out on some opportunities. Need help defining PQLs? We’ll be diving into the topic in an upcoming Pocus Post.
At scale, Account Executives should own new logos, Account Managers should own expansion, and Customer Success Managers should own adoption / retention.
But, this is only possible when PLG companies are mature enough and have significant deal flow. Before this, the lines are deliberately blurry and there is no real right or wrong answer.
Who owns expansion depends on your company’s priorities. If you are prioritizing new logos, then you might want to keep AEs focused on new business and CS on expansion. If you are prioritizing expansion, you may want to ensure that AE's also spend time on expansion.
It’s important to be aware of common challenges as your company (and install base) grows. If AEs only focus on new logos and CS focuses on existing customers, then the company could be leaving money on the table for expansion opportunities. AEs are usually best equipped to map an account, request intros, uncover new opportunities, and work with executives on a top-down sales motion.
On the other hand, if the AE spends too much time with existing customers, then they are not spending enough time closing new logos.
In order to create the right balance, it’s important to create the right systems and goals:
“It’s important to create an incentive structure so that customer success and sales work together, rather than being territorial. You don’t want sales and customer success teams fighting over who gets credit for a deal; instead, they must be on the same team and both teams should win together.”
The way that David made this work at Notion was by setting goals for CS on how many expansion opportunities were created for sales (instead of commissioning on ARR). So, if a customer success manager sent over a great lead to the AE and then the AE closed the deal, everyone is happy.
You need to set the right commission plans to avoid conflict between sales and self-serve (product & growth teams).
You don’t want to have sales teams touching every single account, as it is not cost-effective, and it could cannibalize the self-serve business. Some Sales leaders are commissioned on any deal they "touch", which creates the wrong incentive to "touch" as many accounts as possible.
David’s suggestion - if you can - would be to avoid commissions all together. David feels that commissions are not a good thing for PLG Sales teams because they don't incentivize the right behaviors. For example, if AEs are commissioned on bookings, instead of closing a 10-seat deal immediately and letting it expand over time (which would be best for the business), they might try to grow that deal before they land it (e.g. to 100+ seats) which would delay the close date, and sometimes lose the deal.
With commission plans, company incentives and personal incentives are often misaligned. David built a Sales team at Typeform without commission. This led to hiring a certain type of salesperson and ultimately created very little friction between the sales team and the rest of the company.
Although no commissions would be nice, David also acknowledges that it’s not possible for many leaders.
So, if you need to set commissions and incentive plans, make sure to:
First, It’s important to have one clear leader of all revenue, regardless of how it comes in the organization. Instead of the product & growth business trying to push for self-serve and the sales business trying to push for sales-led, the revenue owner should guide the user to the process that makes the most sense for them and the business as a whole.
“The head of revenue should think of themselves as a PM. They should think through how the account could be successful, regardless of if the user self-serves or talks to sales.”
Second, it’s important to set clear boundaries. Sales teams should only talk to customers that will likely not close via self-serve (usually above a certain headcount and PQL metric) and/or with a high enough deal size that it justifies the cost of human intervention. An example of this type of boundary is that Sales only talks with accounts that have more than 100 employees.
Short answer: no.
The real question is, “how do you proactively engage with accounts that need to talk to a sales team?” You should only be engaging with customers that need to talk to a human. And, you should definitely be talking to the big enterprise accounts that need to talk to a human.
“Large enterprises simply cannot and will not buy with a credit card and only self-serve. They need a custom contract and they want to speak with someone to negotiate a bulk discount. We need to sell to these customers in the way they want to buy. If we don’t, then we’ll stay an SMB company forever”
Instead of thinking of enterprise sales as bypassing self-serve, it’s more accurate to think about it as the next step. Users love self-serve, but once they get too big, they are ready to go through a proper procurement process.
David explains, “everyone thinks of product-market fit, but you also need to think of market business model fit and business model channel fit”.
Every business model is different, so PLG companies need to think through the channel that works best for their target audience (sales, self-serve, outbound, bottom-up marketing, etc.). The answer was different for each company David worked at (Notion, Zingtree, and Typeform). For some companies, AEs were fully reactive to inbound requests. For others, AEs proactively engaged with existing accounts and/or PQLs to drive expansion. The optimal business models and channels are not 1-size-fits-all, but rather contextual based on the specific company.
Our take: your channel:biz model fit may evolve over time, take Hubspot for example, they made the switch from mostly niche SMBs to much larger enterprise and their channel strategy changed to accommodate.