Author: Joel Reed



Your Sales Process Is Not Enough



Leadership at a global FinTech software services company spent part of 2023 formalizing their sales processes in a sales motion guide. Their value selling approach aligned with their target buyers’ journey. Their processes were thorough and solid. We know this because our experts at Mereo had the good fortune of supporting this important effort.

Yet these leaders astutely realized that the sales process on its own is not enough. Instead, they dug deeper: How can we broadcast this process to our entire organization and get their attention? How can we ensure our sales force truly internalizes this approach? How do we know our people are capable of seeing the process through?

Good organizations guide their teams with a unifying sales process and supporting methodology. Leading organizations take sales processes a step further — focusing on individual skills and behaviors comprising the whole process. They train their sales force on not just skills but help them embrace new behaviors and a unifying mindset. They make their sales process not a step-by-step activity but the foundation for the sales organization’s culture. How? We want to share this secret-sauce to successful selling with you.

ELEVATE COLLECTIVE SELLING SUCCESS THROUGH INDIVIDUAL PERFORMANCE DRIVERS

The modern B2B buying journey requires a high level of sophistication in selling. Organizations must comprehend who their ideal client profile (ICP) — in other words, who their buyers are. They need to lead with a cohesive, compelling effort to prospect and engage qualified buyers across all departments and geographies. They are required to know the marketplace — even better than their buyers — and offer insights based on that knowledge. They must close and follow through with tenacity and care.

Your sales force needs the right skills and behaviors for these 10 critical sales methodology steps across the sales process to work. Think of these as a critical subset of revenue performance accelerators that align with the selling cycle, and can improve individual execution and group revenue performance:

Early Stages

  1. Prospecting power moves
  2. Resisting the itch to pitch
  3. Leading their meetings
  4. Performing the quest of discovery

Middle Stages

  1. Becoming a trusted advisor
  2. Maintaining control of the buying journey
  3. Avoiding being single-threaded with buyers

Late Stages

  1. Reframing objections
  2. Managing radio silence
  3. Going beyond budget constraints

In the coming months, we will provide you the tools for each stage of the selling process to train and enable your teams to succeed. Follow us on LinkedIn, and do not miss these game-changing tools.

3 SELLING BOOKS TO BOOST THE GROWTH OF YOUR SALES FORCE

In the meantime, assign your teams these reading materials to kick-start their growth and understanding.

  1. Blue Ocean Strategy by W Chan Kim and Renée Mauborgne
    Embrace this game-changing strategic approach and learn how to tap into new market spaces ripe for growth. Get it here.
  2. The 5 Paths to Persuasion by Robert Miller
    Tailor your presentations to the mindset of your decision makers. Learn the five distinct categories and how best to engage them. Get it here.
  3. The Challenger Sale by Matt Dixon and Brent Adamson
    Inspire your sales force to become effective “challengers” in their buyer-seller relationships. Get it here.

LEAD AN UNSTOPPABLE SALES FORCE

Our experts at Mereo have supported leading B2B organizations in both formalizing sales processes that work — and training and enabling teams with the methods and skills to see these processes through. Reach out if your organization could benefit from outside guidance.

 

LET’S TALK SALES METHODOLOGY



IS IT TIME TO RENOVATE YOUR GO-TO-MARKET ORGANIZATIONAL STRUCTURE?



A leading global financial technology (FinTech) client recently reached out with a big request: They wanted to completely overhaul their go-to-market organizational structure, roles and relationships. Like a number of our clients, they are moving towards a stronger sales-led oriented culture, recognizing the benefit of higher growth rates across all parts of the organization.

We immediately saw the benefit of their doing so and gladly helped. A poorly-structured organization threatens your revenue potential. After all, poor and outdated organizational structures breed misalignment across departments, delayed action and performance inefficiencies. But when you fine-tune your organization to be buyer-first in focus and to align to your current business model and market environment, you set it on the road to sustainable revenue performance.

Is your organizational structure as optimized as it could be? There are a number of factors that should tip off sales and go-to-market leaders to rethink their organizational approach. Here are five key drivers we think you should pay attention to.

1) TRANSITIONING FROM A FOCUS ON THE DEAL TO REVENUE

If your organization is in the midst of pivoting from a focus on closing the deal (transaction) to ongoing revenue for the full client lifecycle, your go-to-market organizational approach will need to pivot too. This transition comes with a number of changes that will influence your structuring and your team’s roles.

Are you moving to a cloud-based solution with recurring revenue contracting models? Is your account management focused on ensuring client satisfaction and client retention? Do they understand how to identify new value opportunities to serve existing clients? How is your financial valuation affected by more-predictable revenue streams and better visibility of future revenues? Is your team still focused on professional services post-sale or on client success and onboarding to support the whole product?

2) THE GRAYING OF LINES BETWEEN SALES AND MARKETING RESPONSIBILITIES

Many sophisticated B2B organizations are seeing their sales and marketing responsibilities blurring and overlapping. This is especially true in large organizations’ field marketing and demand generation efforts — or in those practicing account-based marketing and sales.

Take a hard look at the role of your business development representatives and ask yourself: Is business development the last stage of qualifying a marketing-generated lead — or the first stage of sales outreach and prospect engagement? Do they align to a market program or a selling territory? Is a business development representative an apprentice salesperson and compensated as such, or are they simply appointment setters?

3) THE GRAYING OF LINES BETWEEN SALES AND CLIENT SUCCESS / EXPERIENCE TEAMS

Historically, many companies segregated sales teams grouping “hunters” and “farmers.” Hunters focused on acquiring new logos, while farmers worked to expand the solution footprint or wallet share in existing accounts. Recurring revenue and / or SaaS delivery models increase the focus on client retention — not just expansion.

Who owns a client? What are your client retention rates? Are the client success teams compensated on retention only or on account growth as well? Do these individuals understand how to identify new opportunities and engage the right resources to develop them?

4) LOSING THE NON-COMMISSIONED OFFICER IN SALES

The non-commissioned officer in sales used to be the staff sergeant — the first-line manager. They sat in the regional office with a sales team of six to 10 people. They were deeply engaged in accounts, coaching and training, opportunity and pipeline management, and reviews.

In the last decade or two, companies have eliminated this layer of management and consolidated upwards of 15-25 reps under a sales director. The sales director is not co-located with his or her team, has much less time for one-on-one engagement, and spends a disproportionate amount of time reporting-up versus managing and coaching down.

This shift will affect your sales effectiveness, sales technology, and training and coaching / onboarding. How often do your sales leaders participate in prospect or client meetings? How much training have they had to enhance their coaching skills? Are pipeline reviews viewed as reporting exercises or enablement opportunities? If these leaders are not coaching your sales representatives, who is?

5) NEW DISTRIBUTED NATURE OF THE SALES FORCE

As the non-commissioned officer has been removed, there is less need for small sales offices. COVID-19 further accelerated this trend. Even in Europe, where the relatively small size of the countries makes it more likely salespeople live within reach of an office to go in, COVID influenced more stay-at-home work.

Today, sales reps spend less time with managers and peers. They are now more likely to spend the majority of their time in a home office than in a traditional place of employment. This remote set-up makes the right sales systems, technology and methodology all the more important to get right.

Do you have a sales process and methodology tailored specifically to your organization, market and solution set? Does your technology actually benefit the representative as they work with a Prospect through the buying journey and selling cycle or is it simply a reporting tool? Do your sales representatives have assets and artifacts to support your methodology honed through numerous trial and error processes or is every asset produced on the fly by them? Do they have approaches that align the members of the go-to-market team for success or is each representative acting as a lone wolf?

STRUCTURED FOR SUCCESS

With an up-to-date and optimized go-to-market structure, your organization will have the foundational bones to Seek to Serve™ buyers with powerful solutions. Download the Mereo Sales Organizational Roles Guide for the most common sales structures that leading B2B organizations follow.

DOWNLOAD THE GUIDE

Reach out to our experts for a complimentary baseline evaluation of your current go-to-market structure.



3 Ways to Make Your 2024 Revenue Kickoff Engaging



Your 2024 revenue kickoff (RKO) is your opportunity to prepare your teams for the future and any changes you would like to see in your organization. Yet, these programs too often are full of long slide shows and speakers who seem to drone on in monotone. Having an engaging kickoff program holds your teams’ attention and helps them retain more of what you are saying. Creating an engaging kickoff could prove to be valuable to your organization and to your teams’ growth.

1) Make Your Teams Experts on the Buyer Journey

Understanding how your buyers approach purchases can boost your chances of closing a sale and even create repeat buyers. One way to do this is by creating a trade show experience for your sellers at your RKO. In your “trade show”, display your solutions linked to the problems they solve (Value Proposition) and provide a short compelling demo. Your demos should be pithy and highlight the differentiated value capabilities of that solution. This gives your teams a deeper understanding of what your buyers see, what exactly they are selling and what value your solution offers. Creating a trade show segment allows your teams to immerse themselves and avoids the boring slideshow that lists every product and solution.

Another way to understand your buyer is to showcase interactive customer panels. The one person who knows your buyers the best is your buyers — do not be afraid to utilize that! Holding a customer panel allows you to uncover what problems they are facing and assess their competitive environment. This provides situational knowledge to your sellers enhancing their ability to effectively engage and converse with prospects and it helps your teams to understand potential buyer pains and help your organization develop solutions to those pains.

2) Give Your Teams Time to Network

Networking within teams is just as important as networking with strangers! If your teams do not know each other, how can they rely on each other? In your RKO program, set aside ample time for your teams to network with one another. This gives them the opportunity to discuss aspects of their selling strategies such as successful approaches, the resources they have (or need) and how they can lean on each other. Create formal meeting times for sales teams where they can start thinking about how they can apply what they have learned at your kickoff and develop an activation plan, and to utilize newly learned skills. They can choose a time frame to test something, set goals for this time frame and report back to each other with their results.

Another reason to implement these networking opportunities is that many of these teams are no longer co-located. This is a great opportunity for your teams to meet-up, discuss relevant topics and build relationships with one another.

3) Create Your Agenda with Your Teams at the Center

For your program, it is important to build your agenda around your teams. This can easily be done by sending around an anonymous survey before your kickoff to see where they feel confident from a skills application and solution knowledge standpoint. For example, you may ask, on a scale from one to five, how familiar everyone is with a certain product / solution. If you find that most of your teams responded with a four or five on one product / solution, do not spend a copious amount of time discussing it in your kickoff. Another example is to ask how confident they are explaining the differentiated capabilities of a product / solution. If you will likely see much lower answers on this question, then you can reinforce the differentiated value of said solution and ensure your teams can communicate that to your buyers and prospects.

Plan For Success in Your 2024 RKO

The key to having a successful and engaging kickoff is to start with a strong plan. With Mereo’s RKO Planning Playbook, you can gain access to exclusive insights from experts and plan a winning kickoff.

 

Download the Playbook for Free



Ultimate Pricing Power Part IV: THE FINAL STEPS TO A SUCCESFUL PRICING STRATEGY



Previously we laid the groundwork for an effective pricing strategy, setting goals and gathering key inputs. Now it is time to take the final steps toward your ultimate pricing power.

Pricing affects external AND internal behaviors. Salespeople will quickly determine the best way to maximize their interests just like a customer or prospect will strive to minimize their cost. This has become particularly important with the drive to subscription revenue. Selling companies like the subscription pricing approach (whether or not they have a software as a service offering or leased physical product) because it creates a more predictable revenue stream. The issue becomes how your pricing model affects your sales team compensation plan. What term of subscription do you offer? What risk of renewal or inflation do you want to bear as a company? Additionally, how will you pay commissions — up front, as revenue is recognized or on what part of the subscription?

Buyers generally want to reduce inflationary risk by locking in long-term contracts with no cost of living / inflation adjustments. So as a provider you must determine the balance of risk you will bear to offset the benefit of predictable revenue streams. Let us explore all the internal and external forces that should shape your price.

Pricing Structure

What key factors will your team need to consider in the pricing decision that will impact the final calculated price? Remember, having to update your pricing strategy for current customers often results in churn. Avoid surprises and spend the time noting down all relevant impacts to your price. This might include:

  1. Unit price
  2. Embedded or associated partner products
  3. Volume discounts and cutoffs
  4. Time factors
  5. Incentives
  6. Geography
  7. Bundles or packaging
  8. Direct or resell (third-party)

Discounting Practices and Policies

Set the criteria for discounting, including discount levels, determining factors and who is allowed to authorize these decisions. Also consider how bundling and packaging can impact price discounts and adjustments. Lastly, include a plan for exception processes for things such as end-of-life of your product or any sort of market change (remember COVID?).

The Review Cycle and Roll-out

Next, build a formal foundation of your organization’s’ standard practice for a pricing review cycle. Common triggers of a pricing review cycle include:

  1. Annual review or updates
  2. Solution / product introduction
  3. New packaging or bundle introduction
  4. Product change
  5. Product end-of-life

Additionally, formalize what needs accomplished, who owns the tasks, and what systems and assets need to be created or changed for a pricing rollout.

UNLOCK YOUR ULTIMATE PRICING POWER

A B2B Leader’s Guide to Pricing Strategy Workbook provides B2B leadership with the four key pricing principles and the six steps that will lead you to a successful pricing strategy and outcomes.

 

DOWNLOAD NOW



Ultimate Pricing Power Part III: THE GROUNDWORK OF EFFECTIVE PRICING STRATEGY



I recently shared the key elements that make for an effective pricing strategy and who should be leading this. Yet actually taking the steps toward creating an effective pricing strategy can be daunting.

Emotions can rear their heads and lead decisions astray. Opinions can undermine what should be a calculated, informed decision. And, most importantly, your leadership team should be able to use this strategy to replicate the process for any product updates or new solutions into the future.

I am here to show you the approach that will lead you and your team to a pricing strategy that serves your buyers, reduces future churn and supports your revenue performance. Are you ready to set the groundwork?

THE 5 GOALS OF PRICING

In order to realize success in the end, your leadership team must first identify which goal your exercise will help fulfill. Five common pricing goals include:

  1. Alignment with Financial Plans and Strategy: Defined in specific revenue targets, revenue mix, growth rates and margin targets over time.
  2. Growth: Defined in terms of revenue, market share, market penetration, units sold, and customers retained or acquired.
  3. Retention: Defined typically by revenue or customer numbers, but may also include rates by geography, industry or other market / product segment.
  4. Pull-Through or Cross-sell / Up-sell: Defined by attachment rates and cross-sell or up-sell rates.
  5. Product Selection: Targets associated with selecting one solution versus another (typically considered in replacement, end-of-life or transition strategy scenarios).

6 KEY PRICING INPUTS TO GATHER

Before any decisions start to form, your team needs the right input and data to inform them. These six pricing inputs all play a key role in the final pricing strategy. And when they are all considered and incorporated, your organization will ultimately reduce significant pricing churn into the future.

  1. Product Cost: For example fixed cost and variable cost, such as data storage, maintenance and access
  2. Competitive Environment: Such as pricing level and pricing approach
  3. Financial Strategy and Financial Plan: Like revenue mix by product segment / category (this impacts packaging and bundling considerations)
  4. Differentiated Value Proposition: Such as assessed level of differentiation in the marketplace
  5. Product Strategy and Defined Roadmap: For example growth dimension (what are the goals and tactics?) and identifying products that will pull this product into a sale or vice-a-versa
  6. Market and Environment Trends: Like regulatory and compliance drivers, as well as overall economic market trends

UNLOCK YOUR ULTIMATE PRICING POWER

A B2B Leader’s Guide to Pricing Strategy Workbook provides B2B leadership with the comprehensive four key pricing principles and detailed six steps that will lead you to a successful pricing strategy and outcomes. Download the guide for the complete framework.

 

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Ultimate Pricing Power Part II: UNLOCK YOUR POWER WITH 4 KEY PRICING PRINCIPLES



Nextworld was going to market with a powerful no-code enterprise resource planning (ERP) platform. Rather than assign an ambiguous, arbitrary cost to their subscription services, they recognized that pricing was key for both their organization’s and their buyers’ long-term success.

“Pricing can be a highly debatable, emotional subject, both internally and externally,” Minda Marshall, VP of Business Development, said.

For organizations like Nextworld, a calculated pricing strategy can provide a substantive competitive advantage or it can be an albatross that impedes sustainable growth. Here, we share four key pricing principles that can help you achieve the latter.

4 KEY PRICING STRATEGY PRINCIPLES

There should be zero mystery, ambiguity and unpredictability in pricing. Selling organizations must stand on objective, solid, repeatable ground each time they set about pricing a new solution or bundle.

Our solution management experts at Mereo independently researched 20 B2B software companies, including application and platform providers. We supplemented our online research with 15 in-depth buyer and seller interviews focused on C-level executives that procure and sell software, as well as product management and sales executives of software providers — representing the spectrum from SMB to enterprise companies.

After digging into the biggest challenges, solutions and outcomes for our participants, we yielded four key pricing strategy principles every seller should consider when determining the right price for a solution:

1) Pricing Should Encourage Growth

As obvious as this seems, in the companies we were helping and that we researched, we found numerous examples of pricing models that in fact discouraged user growth and adoption.

In those cases, it was necessary to revamp pricing strategies to:

  • Align the pricing to the value the solution delivers
  • Simplify scaling as the business requires
  • Package to encourage initial adoption as well as cross-sells and up-sells of new features and associated modules

2) Pricing Should Be Predictable and Understandable

Buyers want to predict how much a solution costs now and into the future. The sellers in Mereo’s research also did not want models that created buyer confusion and objections to closing a deal — in essence not adding friction to the buying journey.

As part of aligning to this principle, selling organizations need to think in terms of pricing structure versus the price itself. Keep the structure simple to understand for the buyer and seller, and consider how predictable it will be for you as a solution provider and them as a buyer. Can the buyer see how future costs would be impacted, for instance, by a merger, acquisition or other growth strategy?

3) Pricing Should Reduce Churn

Sellers must make it easy for buyers to remain a customer. Providing flexible models for consuming the software from both a technology and pricing approach (e.g. modules, users, transactions) is critical, but, as a provider, you will also want to think about what will make your solution “sticky” in the long-term. For example, a seller could provide built-in concierge service for specific tools to ensure they are rapidly deployed. The strategy varies between solution, market and customer, but is important to consider from the onset.

4) Pricing Should Recover Fixed and Variable Costs

Solution providers, especially those in rapid-growth mode, often talked about the “surprise” factors associated with using third-party hosting services (e.g. Microsoft or Amazon Web Services). These providers had not considered all the associated costs related to storage, transactions, integrations and more. As such, they often were put in a position of having to go back to customers upon renewal with significant cost changes.

No buyer wants to be surprised by data and storage charges, unexpected transaction fees or costs of integrations to other mission-critical systems (see Principle 2). Do your up-front research and do it well to make this part of pricing transparent to the buyer. Also, consider approaches that allow you to recoup these environment charges early to reduce cost absorption risk on your business.

PRICING PRINCIPLES IN PRACTICE

These four key pricing principles helped Nextworld enter the marketplace competitively and with little barriers to sales — setting Nextworld up for sustainable revenue performance from the start.

“Mereo came in as an objective expert,” Marshall said. “They didn’t just provide pricing input focused on the software aspect, they delivered a holistic view of pricing, packaging and everything that rolls into a complete ERP SaaS solution.”

Learn more about Nextworld’s successes here.

UNLOCK YOUR ULTIMATE PRICING POWER

A B2B Leader’s Guide to Pricing Strategy Workbook provides B2B leadership with the four key pricing principles AND six steps that will lead you to a successful pricing strategy and outcomes.

 

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Ultimate Pricing Power Part I: Who Is in Charge of Product Pricing?



Pricing a B2B solution is complex. People are quick to debate pricing models and numbers. Sellers and buyers alike can fall prey to emotions over reason when considering dollar signs associated with a solution. And it is a challenging concept: What is the buyer willing to invest for the target outcome this solution delivers? What should the value this solution provides cost a buyer? What is it all worth?

The leading B2B organizations do not leave pricing up to chance. They treat pricing as an art and science.

In part one of this four-part series, let’s look at the leaders who should be driving pricing power forward in the organization and what key roles they play.

WHO IS IN CHARGE OF PRICING?

These key leaders within a B2B organization should play an active role in the information-gathering, discussions and roll-out of pricing and its policies. Importantly, for pricing to work well, these leaders must be working in unison with clear role expectations and regular communications.

FINANCE’S ROLE: Finance creates the internal strategic context for pricing models and decisions by setting financial milestones and direction to achieve the overall business plan. Recent movement towards subscription revenue models are an example of this context setting.

  • Strategies
  • Annual Plans
  • Policy Compliance

PRODUCT MARKETING’S ROLE: Product Marketing interaction with external players (e.g. customers, analysts, competitive sensing) provides key insights into broad market and specific competitor trends. Alignment of the differentiated value proposition to the pricing approach is critical.

  • Market Sensing
  • Analyst Input
  • Messaging and Differentiation

OPERATIONS AND SUPPORT’S ROLE: The Operations team provides key cost and risk information needed to model pricing impacts on margin and investment decisions. As an example, for software companies hosting solutions in a cloud environment, fully understanding cost drivers is critical to the pricing model.

  • Cost Information
  • Efficiency Plans
  • Strategies
  • Roadmaps

SALES’ ROLE: Sales complements Product Marketing’s input with more real-time competitive insight and feedback on pricing policy impact on sales performance.  Sales representatives’ reaction to pricing models, pricing complexity and approval processes and impact on compensation plans can be a key performance driver.

  • Market Insights / Sensing
  • Competitive Information
  • Policy Compliance

PRODUCT MANAGEMENT’S ROLE: Product Management needs to consider pricing in the context of the Whole Product design, strategic plans and investment roadmap including one solution’s impact on the broader portfolio.

  • Physical Product Design
  • Future Direction
  • Co-Dependency Relationships
  • Strategy
  • Roadmap
  • Final Pricing Decision
  • Roll-out

HOW IS PRICING FINALIZED AND APPROVED?

With so many leadership functions vital to uncovering the right pricing model and approach, it may seem daunting to land on an ultimate decision. Leading pricing committees benefit from developing a formalized process that reduces heated disputes and in-decision.

Key points in the process include:

  • Formalization of the pricing process
  • Agreement of roles and responsibilities (as outlined above)
  • Regular pricing committee meetings (often monthly or quarterly)
  • Standard approval process
  • Instantiation of a feedback mechanism / loop so the committee can respond quickly to unexpected market or competitive changes

UNLOCK YOUR ULTIMATE PRICING POWER

Download A B2B Leader’s Guide to Pricing Strategy Workbook to discover the four key principles and six steps to a successful pricing strategy.



Planning a Hybrid Sales Kickoff? Proceed With Caution



In a recent Mereo poll, we found that 15% of companies in our sampling plan to hold a hybrid sales kickoff, while another 15% were undecided on their plans yet.

Hybrid sales kickoffs hold the appeal of one-size-fits-all. What could go wrong with giving your selling force the option to engage? Yet, much like the slippers that either dwarf your feet or barely cover your big toe, a hybrid sales kickoff can actually do more harm than good for both planning leadership and participants alike.

If, due to lingering restrictions, financial challenges or other considerations, a hybrid sales kickoff is your only option, we want to provide you with these cautions and potential solutions to make the best of it. Or, if you need more justification for your entirely in-person or all-virtual event, we have your defense lined up here.

HYBRID SALES KICKOFFS ADD EXTRA STRESS ON PLANNING COMMITTEES

One of the greatest undertakings in planning a sales kickoff is effectively creating and delivering content. As many organizations have learned through these last few years, virtual content formats and delivery must differ from in-person content in order to remain effective.

When planning a hybrid event, planning committees must make one piece of content available across these two different formats, all the while sorting out the logistics to deliver them seamlessly across multiple channels during the event too. While the planning committee’s purpose is to serve the participants, undue headaches and stress hinder the strategy and planning of the overall program, which impacts professionals serving on the committee as well as participants alike.

HYBRID SALES KICKOFFS LEAVE PARTICIPANTS LESS ENGAGED

For your participants, a hybrid sales kickoff may limit their engagement if the planner is not careful. Virtual and in-person formats demand different schedules in order to keep participants fresh and captivated. In virtual settings, sales kickoffs work best in shorter engagements with small breakouts driving increased participation across a longer event time period — for example, two hours per day over a week or two. For in-person settings, traditionally everyone comes together for highly-engaging sessions and events across a few days. There is an inherent disconnect by trying to merge both formats into one event, where one group suffers their ability to engage meaningfully.

Beyond engagement, too, a hybrid event can limit interactions. In a traditional in-person setting, participants are often given plenty of opportunities for formalized and impromptu networking, relationship-building and culture-deepening moments. Virtual formats also provide avenues to recreate these team-building moments to some degree. Yet, in a hybrid format, your in-person participants and your virtual participants often remain fractured and it takes special planning to try and integrate the two groups.

PLAN WITH PRECISION

There are numerous more considerations for your sales kickoff. And we at Mereo have developed the guidebook to help you lead yours to success. Download The Ultimate Sales Kickoff Planning Playbook, and gain leading B2B sales kickoff planning best practices.

 

YOUR FREE COPY AWAITS



WHAT IS PRODUCT-LED GROWTH (PLG) — AND HOW CAN IT IMPROVE YOUR REVENUE PERFORMANCE?



Product-led growth (PLG) has been a rising strategy of late in the B2B sphere — especially within the private equity investment space when it comes to Software as a Service (SaaS) portfolio companies. According to the 2022 Product-Led Growth Index report, 58% of surveyed companies already were practicing PLG and 47% planned to double their investment in the year ahead. But what does this growth strategy actually entail?

Multiple variations of PLG definitions exist. Some describe PLG as a business methodology in which the product itself primarily drives user acquisition, expansion, conversion and retention. Another form of PLG describes it as an end user–focused growth model that relies on the product as a primary driver of customer acquisition, conversion and expansion.

Regardless of source, all definitions share one key element in common: To be successful, a company must drive growth by creating a compelling user experience with a market-relevant solution. Therefore, they must also commit to relentlessly analyze and act on usage data to increase their go-to-market efficiency.

What does this mean for your go-to-market approach? In this article, I will dissect what PLG is — and, importantly, help overcome any misconceptions by detailing what it is not.

WHAT PLG IS

In many ways, PLG aligns with a number of key product management strategies and practices the leading B2B organizations follow.

PLG increases focus on the Whole Product approach. Every part of your solution that impacts the user experience becomes more important. This includes considerations such as pricing and packaging, services, complementary products and adjoining solution ecosystems, support and break / fix — to name but a few. Every facet of how a product is bought, consumed and used needs to be defined and honed.

PLG requires companies to engage the market in strategy and roadmap development using approaches such as:

  1. Advisory boards: To understand market challenges and needs
  2. User groups: To understand how end users consume the product in the context of their business processes and daily life
  3. Early development cycle testing: To engage users for insights on interfaces and interaction points, and to understand how intuitive the solution is for accelerated ramp of a user base
  4. Embedded and intuitive support tools: Chats, videos, help desks, videos, etc. that enable users to educate themselves and quickly get help 

PLG fundamentally relies on a foundation of a full understanding of your target buyer’s key problems issues to ensure 1) you are meeting those challenges and 2) you can create assets to properly market and demonstrate the capabilities and their value.

PLG puts a spotlight on effective governance, which becomes even more critical in this approach. Companies need to fully understand and obtain feedback through multiple channels — user inputs, ratings, usage patterns, etc. — and continuously adjust the product to those inputs (and to competitive responses) for success. 

WHAT PLG IS NOT

PLG is not about selling a product without context of the market, the buyer and their issues. Products “sell themselves” only when the buyer believes you have a full grasp of their needs and pains — and then believes your solution addresses those needs better than your competitors’.

PLG is not a replacement for defining and articulating your differentiated value proposition. Rather, with full understanding of the market, you can align your product capabilities to those needs and articulate how you uniquely bring specific capabilities to answer these needs. 

PLG is not effective without satisfied buyers and clients advocating for your solution. Take the time and expense to build an effective client reference base or rating system to capture and position success. Client stories and references are still the best sales tool.

PLG AS PART OF THE SOLUTION MANAGEMENT STRATEGY

PLG can support organizations’ success, as long as the rest of the solution management engine is working. If one part of the strategy is broken — from solution themes to validation to governance, pricing strategies and more — it may be holding you back from your full revenue potential.

We can help. At Mereo, we call PLG by another name, specifically the Whole Product approach. And our experts have written the executive guidebook for building a winning solution management engine around this. Get the expert guide to unstoppable revenue performance.

 

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Does your organization struggle with follow-through? Reimagine your sales cycle steps to Seek to Serve™



What is the last step of your sales cycle? Most B2B sales organizations will consider the job complete at the contract signature. The goal has been reached, the quota met. All seems to be in order here.

Yet, if the true goal of sales is to Seek to Serve™ a buyer, the sales cycle is not over until the value promised is actually the value delivered. A purchase alone does not guarantee this. But the majority of B2B sellers are failing on this vital follow-through.

In Consumption Economics: The New Rules of Tech, only 14% of surveyed business executives rated their software installations as “very successful.” A number of buyer struggles from poor user adoption to long time-to-value have driven this overwhelming buyer dissatisfaction. The increasing adoption of SaaS software deployment models is accelerating the time-to-value issue even further that, in turn, exacerbates renewals — the revenue cycle is unforgiving. As it is, according to Forrester Research, B2B buyers believe only 8% of salespeople are focused on driving valuable end results.

It is imperative your organization expands its sales cycle to ensure customers receive the value they have purchased — by adopting your solution with ease and success. Supporting this can improve buyer health scores and increase the likelihood of buyer retention and renewals. And even as little as 5% increase in retention can boost profits by 25%, supporting sustainable revenue performance.

To start, your leadership team must productize your onboarding, adoption, education and account management services through, what we call at Mereo, the Whole Product approach.

EXPAND YOUR SALES CYCLE STEPS — EXPAND YOUR VALUE

The Mereo Whole Product approach treats your solution as more than a piece of code or hardware. Your solution becomes the combination of your core product, your tangible product and your augmented product — the services and support you build around the core.

In practice, the Whole Product approach and expanded sales cycle amounts to:

Introducing your onboarding, implementation, education and adoption, and support services during the sales cycle.

Leverage these services as an essential — and perhaps differentiating — complement of your product offering. Show how your approach will drive value and a return on their investment.

Ensuring an overlap in customer handoff between the sales team, onboarding team and account management.

Maintain sales engagements until onboarding is complete and account management takes the reins of buyer support. Embrace and envelope the buyer during the point where their risk is highest — implementation.

Including project management, technical services, communication (marketing to their users) and education as part of the onboarding solution.

Help them communicate and drive user adoption. Leading companies offer a 30- to 90-day window of concierge services to every customer to ensure adoption happens quickly and seamlessly. Many even include a formal training program at a cost as required with every contract to accelerate adoption.

Employing a formal account management approach for all customers.

Hold regular health checks with your client to help them understand adoption by area (e.g., function, region) — while helping illuminate opportunities to improve value creation. These health checks can also lay the groundwork for account expansion through user growth or complementary product sales. Using an ABC analysis based on actual and / or potential revenue, schedule these account reviews on a monthly, quarterly or semi-annual basis as the buyer’s value to your organization dictates. 

Engaging your best customers in customer advisory boards and user groups so they can learn from each other — and you can learn from them.

Create online forums while scaling thought leadership and best practice communications. Encourage and respond to your buyer’s feedback and input that can improve and shape your product strategy and roadmap.

Lastly, reflect your Whole Product approach in the proposal timeline to show your prospect you mean to be their trusted advisor for the long haul — and to set your organization apart from competitors. The contract signature will become merely a step on a comprehensive path of value, and an easier decision for your buyer at that.

TAKE THE NEXT STEPS TOWARD SUSTAINABLE REVENUE PERFORMANCE

Cloud-based deployments and subscription revenue cycles make buyer renewals and expansions all the more critical to revenue performance. Your buyer’s satisfaction relies on the value your organization can create and, most importantly, actually deliver for successful user adoption.

Transform your sales cycle to elevate value for your buyers and your organization alike. Contact our Mereo expert revenue consultants to set up a 30-minute baseline review of your current approach.

 

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