This article was first published on July 15, 2020.
Patsnap’s software sales were actually higher in the past few months during COVID-19 than they were at the beginning of the year before the pandemic hit the world hard.
If you are wondering how, like us, then watch the latest webinar where we chatted with CEO of Patsnap, Jeffrey Tiong. He shared their transition from a sales-led to a product-led growth model and how COVID-19 actually enabled it.
Key takeaways
- In today’s hyperconnected business environment, it is not the fittest that survive, but the most adaptable one. This is in line with the idea that British naturalist Charles Darwin had proposed years ago.
- In the 1980s, when Microsoft and other software companies came into the market, purchasing decisions were made on a top-down basis. It was done with the big bosses in command.
- Patsnap traditionally relied on a sales-led growth model where the sales team would make cold calls to potential customers.
- The typical funnel looked like this: “We talk to them and ask if they are interested. If they are, we qualify them. We will do a demo. And once they’re once they agree to purchase, we will onboard them.”
- But now the department managers have the power and the budget to make these decisions. “We are entering the end-user era.”
- With examples such as Zoom and Slack, the end-user is now opening up and guiding enterprise decisions. This is the bottom-up era that has been going on for the past few years and COVID-19 has accelerated it.
- Product-led growth is when the end-user sees the value in a product and how it can aid their lives thus influencing their companies, startups, or even communities to adopt them.
- Patsnap shifted gears to the product-led growth since COVID-19 struck China and seen considerable results.
- While they still do the typical marketing approach such as using SEO, SEM, Content marketing, and other channels, they started a free use of the product in Q1 in China. Surprisingly, it has led to higher customer interest and lead generation for them.
- This “freemium” model allows the customers to use and test the product even before the salesperson gets to them. This totally changed the customer acquisition model for Patsnap. Their conversion rate was higher and user acquisition cost went down considerably.
- “Use your product to become your spokesperson and let the customers experience its value.”
- Product-led motion worked well for Patsnap across markets such as the US, China, and Europe.
- It is important to make the product journey simple and easy to use for consumers. Even if the product is free but complex for a user to comprehend and avail without guidance, it will not yield results.
- Continue to monitor and analyse metrics for users that log in but don’t continue using the free product. So keep looking for answers to the “why”.
- The funnel looks like this: Acquisition, activation, retention, revenue, referral.
- The right timing, employee buy-in, and a strong product are the only essentials you need for driving product-led growth.
- Be prepared to change your full company DNA. It will not just affect your customer acquisition but also operations, product development, and other areas.
Also Read: From sales-led to product-led: PatSnap founder shares how COVID-19 shifted their growth strategy
Silver lining
- Tiong emphasised that usually shifting to a product-led growth model would lead to resistance from the sales teams but COVID-19 is actually a good time to bring in this model. The markets are in a tizzy and this is a great time to adapt and shift gears. It is the best time to make a big change.
- Even if your product is a service or not easy to sell, there are many valuable propositions. It can be a feature, it can be a part of the product, etcetera. So look harder.
- For an entrepreneur, anything is possible.
Worth mentioning
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”- Charles Darwin
“We have seen two years’ worth of digital transformation in two months.” – Satya Nadella, CEO, Microsoft
Resources
To know more about what happens to your existing sales team when you adopt this model, or how to retain the new customers and more, check out the full video recording.
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The post It is all about survival of the most adaptable, says PatSnap’s Jeffrey Tiong appeared first on e27.