The Account Executive 2.0: Account Executives at a PLG company
Hot take: in a product-led company, the Account Executive is responsible for both user acquisition AND customer adoption/expansion.
As you might recall from this article, there are three teams that sit within the product-led sales organization: self-serve, assist, and sales. We’ve already deep dived into the function and attributes of the assist team, and began exploring the make-up of the sales team by discussing the role of the SDR 2.0.
Today, we will continue our discussion on the make-up of the sales team with Garrett Scott, the Head of Marketing & Demand Gen at Calendly. In this blog, we introduce a second integral function within the sales team: the Account Executive (AE).
The Account Executive in Traditional Enterprise Sales
Traditional sales is often split into what’s referred to as “the bowtie model”. Why? Because the first half of the bowtie - which starts wide and narrows into the center - represents the customer acquisition process, in which you start with a large pool of leads and eventually narrow them into converted customers. The second half, which starts narrow from the center and then widens, represents the customer expansion process, where you leverage your existing customer base to increase upsell opportunities and network effects.
Historically, the AE has been responsible for the acquisition piece. They are assigned customer and revenue targets, tasked to work with sales development representatives (SDRs) to set up sales meetings and calls, and are paid commissions based on how many qualified leads they ultimately convert. Most of their time is spent working directly with qualified leads to learn their goals and establish how the company can meet them. Their duties include regularly meeting quotas and understanding the lead’s expectations of the product in order to translate those needs into a closed deal.
While some companies partially rely on the AE to assume some of the responsibilities associated with customer expansion, in most cases, once a sale has been made, the baton is passed on to a Customer Success Manager (CSM) or Account Manager (AM), whose role is to help existing customers realize more value out of the product and generate more revenue through renewals, expansions, and upsell opportunities.
Introducing the AE 2.0.: The Account Executive in Product-Led Sales
In product-led companies, the Account Executive’s role starts to blend into the role of the Account Manager/Customer Success Manager because the hand-off between acquisition and expansion becomes less clear. Since the whole concept behind product-led is that the product sells itself, companies can leverage the self-serve flywheel to acquire users quickly.
If the product handles acquisition, where does the Account Executive come in?
PLG Account Executives are a hybrid acquisition and expansion sales role. After the AE receives a product-qualified lead from the self-serve funnel, they are responsible for converting the self-serve user to a paid contract, and then upselling to larger enterprise deals. The AE liaises with the SDRs and taps into product-usage data to develop a hyper-personalized sales strategy to go from self-serve user to team contract to enterprise agreement.
The AE is responsible for guiding the user on their journey to purchase and identifying new areas of opportunity throughout the organization. The AE communicates with various stakeholders to navigate layers of security and complex procurement processes. They bring various customer teams using the product onto a centralized billing plan. They also identify new teams in the customer organization that can realize value from the product once there is an enterprise license in place.
Benefits of the PLG Account Executive
Because PLG AEs are data-driven, user-centric, and customized in their outreach, they have the ability to identify the most promising sales opportunities and reach out to the highest-value leaders proactively/at the right time - whether it’s a new customer, upsells, or expansions. This leads to the product-led sales trifecta:
- Accelerated time to revenue
- Decreased CAC, and
- Improved customer experience
“AEs at a PLG company are in a great position to succeed at customer acquisition as well as expansion. With access to end-user data, AEs have insight into when a user is ready to convert to paid, and then when the user(s) are ready to upgrade to more advanced plans. This is a win-win-win for the AE, the company, and the customer.” - Garrett
Not only does the role of the PLG AE improve the sales motion, but also the customer experience. Why? Because users prefer continuity. Customers of product-led growth products want the frictionless experience that brought them to the product in the first place. Multiple hand-offs to various members of the PLG company is not a frictionless process for the end-user.
“PLG customers prefer continuity of service because the PLG customer IS the end-user - if they are already dealing with a sales rep named Stacy, they prefer not to have to build a relationship from scratch with another one named Ryan, especially if Ryan has not been with the user since they first signed up for the product.” - Garrett
Having said all this, it does not mean that the idea of a more specialized CSM team should be totally written off.
The Value of Having a Specialized CSM / AM Team
You may be wondering: if the expansion responsibilities of the customer success team are absorbed by the Account Executive, then will a PLS organization ever need this function at all? For some, the answer is yes, there may be value in eventually having a more specialized customer success team as part of your PLS organization.
- When would it make sense? Typically, it will depend on what stage your company is in. Are you an early stage company and need to prioritize new business? You probably don’t need the CSM team right now. Are you a more mature company with millions of customers that you need to keep happy, while you’re still growing? Then maybe your team of AEs could use a hand from a more specialized customer success team.
- What could the customer success team take over? In one word, churn reduction. While the AE owns new business and expansion, the customer success team can focus on ensuring existing customers are happy and continuing to adopt what they already own.
At the end of the day, whether you decide to have a superpowered AE, or an AE + CSM + AM structure, the most important thing to do is to design an experience that feels natural and works for the customer.
What do you think? Who owns expansion at a PLG company? Is it the Product-Led Sales Account Executive, the Customer Success Manager, or both?