Self-serve growth doesn’t last forever, it’s time to hire Sales.

As an angel investor and startup advisor, I meet a lot of founders who are addicted to product-led growth.

“Virality, we’ve nailed it.”

“Our product has strong network effects.”

“We don’t need paid marketing.”

“Sales reps? We don’t really need them.”

I don’t blame them. The fastest growing software companies have something in common… They started with no Sales team.

Bessemer Venture Partners State of the Cloud 2017

Product-led growth unlocks early revenue growth through a fairly frictionless experience for the end-user: no sales call, no contract and in many cases no credit card required.

Dropbox is a great example where even a Dropbox Business plan is entirely self-serve.

But guess what? There’s a problem…

Product-led growth has its limitations:

  1. Self-serve SMBs churn at a much higher rate than Mid-market and Enterprise customers. 
The Innovator’s Dilemma for SaaS Startups by Tomasz Tunguz

This is especially true if you’re selling to other startups or tech companies who typically try a number of free tools and ultimately choose based on price, feature set and relationships (ie: YC companies buy from YC companies. Startups want to use the latest products.)

2. Self-serve users have a low expansion rate. 

While free trials are effective for driving new user sign-ups, keep in mind these users are less loyal, less engaged, and less likely to change plans or add premium features.

On average, only 15-20% of free users will convert to paying customers.

Product-led growth is a great way to drive top of funnel growth and acquire a high volume of free trials.

However, it’s typically less effective in converting free users to paying customers. In many cases, tiered pricing pages introduce channel conflict where it’s impossible to ask one segment to pay more for a product when others get it for free.

When self-serve channels have been exhausted, your $/customer will flatten. 

You are not likely to get any additional revenue from these users from any product-led growth channel.

This is the moment when you need to add a formal Sales team.

In this moment, I highly encourage you to proceed with caution.

To ensure a successful pass from Product to Sales, you’ll need to implement a few new processes such as a lead qualification model and a more robust CRM like Pipedrive, ProsperWorks or another solution.

To ensure long-term alignment, start by identifying blind spots across your funnel and review leads on a weekly basis to ensure no lead gets left behind.

Industry Product 2018 Talk

Questions? Comments? Find me on Twitter @briannekimmel 

Additional resources

Join Modern Sales Pro‘s community of 6,000+ Sales leaders from venture-backed startups and leading tech companies.

Watch All Things Sales by Peter Levine, General Partner Andreessen Horowitz

Stop buying contact lists. Try these b2b growth tools instead.

90% of contacts from list buys will ultimately not convert to a sale, so let’s explore a few data-driven growth tools.

I recently calculated that 40% of my LinkedIn Inbox messages are cold emails from vendors who sell contact lists. “Hot leads.” “New contacts.” “Prospects searching for software in your category.” Each sales rep claims thousands of unique contacts based on a proprietary technology or differentiated data sources. Tempting, but something tells me these hot leads are too good to be true.

If you’re in B2B, and in particular have lead generation or growth in your title, then I’m guessing your inbox is also flooded with dozens of vendors who claim they can provide thousands of relevant contacts who are high intent and ready to buy your product.

While it may be tempting to try the new vendor with the latest methodology for acquiring prospect data, it’s highly unlikely that you’ve found a silver bullet for growth. Here’s why:

According to Leadiro the average list buy yields:

  • 50% bounced contacts
  • 40% unanswered emails

This means 90% of new contacts will ultimately not convert to a sale.

[It also assumes 0% overlap with current customer base, which is extremely rare. From personals experience, I’ve found any sample sets of data can yield anywhere from 40–50% duplicate contacts when you de-dupe against existing contacts in Salesforce.]

After pooling collective knowledge from growth leads at companies like Drift, Dropbox, Segment and Twilio, here is a short list of data vendors to help systematically scale your b2b growth efforts:

  1. Clearbit Reveal: instantly match IP addresses with company names, and see full profiles for all site visitors.

Clearbit Reveal immediately identifies web traffic by dynamically converting the IP address of visitors into a rich profile (85 data points including name, company, revenue, employee count and contact information for sales).

For Marketers:

Clearbit data is dynamically refreshed, which means cleaner data for personalization and refreshed contacts when an email bounces.

  • More granular retargeting campaigns based on site behavior and psychographic and firmographic data: job title, industry and more.
  • Safer personalization: recent data means fewer awkward emails such as bounced emails, incorrect job title, outdated company information.

For Sales:

  • Real-time alerts in Slack for named accounts who visit your website with recent contact information including name, job title, phone number and email.
  • Give your Sales team more context on the prospect before an exploratory call or old outbound: company revenue, employee count, industry and current technology stack: analytics tool, live chat provider, etc.
  • Ability to personalize programmatic outbound email campaigns. Create one email template and personalize using Clearbit data fields such as technographic data:

“Hi John, I noticed you’re using Slack. 60% of our customers use the Slack integration to solve customer support tickets faster. Would you like to learn more?”

Learn more about how I’ve used Clearbit to run competitive marketing programs at scale in Clearbit’s free Data-driven Digital Marketing book.

2. Datanyze: predictive technographics provider, helping B2B companies apply unique technology insights to identify and close their best accounts.

Datanyze crawls the web and mobile technology for technographic data of 35M companies to help you build a more robust view of prospects and customers.

Datanyze aggregates company-level data based on technology installed on their site. For Marketing and Sales, this empowers your team to have more productive exploratory conversations. It can also become a foundational tool for tracking your competition.

This technology is particularly relevant if you’d like to track competitors or complementary products. While it’s highly effective for web widgets and front-end tech tags such as live chat products (Intercom, Zendesk Chat, LivePerson), it’s less effective for back-end technology such as customer support products (Freshdesk, Zendesk Support or Salesforce Support Cloud).

3. HG Data: technographic data provider with best coverage of back-end technology such as help desk software

HG Data has the most robust database of technographic data on the market today.

While HG Data provides a similar solution to Datanyze, they have a unique ability to provide intelligence on back-end technologies such as help desk software.

Download the free Chrome extension that allows you to see the technologies used in your Accounts while in Salesforce. See the most trusted technographics on the market displayed in the most popular CRM.

In addition to these vendors, I would also suggest real-time search data providers such as Bombora and G2 Crowd. I plan to create a deeper analysis of these two tools in the future, please share any feedback or experiences you’ve had with these tools.

Say hi on Twitter: @briannekimmel