Driving product-led transformation: The rise of product-led marketing

MJ Jordan:
All right, I’ll go ahead and kick things off. Welcome to you all today. I’m MJ Jordan. I lead our customer marketing and Pendo free teams here at Pendo. Today we’re going to be talking about driving product-led transformation, the rise of product-led marketing.

And let’s see, let’s talk about what we’re going to talk about today. So we’re going to talk about how buyers’ expectations have evolved, what it means to be a product-led marketing team, how the shift to product-led has impacted the role of marketers, product-led strategies for marketers, and the future of what’s next for product-led marketing.

Joining me today, we’ve got a great group of panelists. We have Aurelia Solomon, she’s the senior director of product marketing, customer marketing and product education at Drift. Got just a few things on your plate there, Aurelia. Joe Chernov, our CMO here at Pendo. Elle Woulfe, SVP of Marketing at Envision. And Evan Woock, VP of Customer Lifecycle Marketing at Zendesk.All right, I’m going to let each of you give a little intro, tell us a little bit more about yourselves and answer reported question. I also will note that we’re going to record this and we’ll send this recording out to everyone after the fact. Okay, so here’s my question for all of you. What was the last app you downloaded on your phone and why? Let’s get started with Aurelia. Aurelia, tell us a little bit about yourself and that last app.

Aurelia Solomon:
Yes, thanks, MJ. Thank you for having me and excited for today’s conversation. So a little about me. You have heard what I do at Drift. So outside of Drift, I live in the Boston area and actually grew up in Washington DC proper. And I’ve been in the product marketing B2B tech space for about 10 years. Prior to that, I spent a lot of my life playing soccer, so that’s another big passion of mine. The last app I downloaded was actually a… It’s called CAN App. It’s to go into Canada because I was going to Quebec City or I was in Quebec City for a week about two weeks ago and you have to show your passport and COVID cards now. So that was the last app that I downloaded.

MJ Jordan:
I love it. I love it. All right, Joe, tell us a little about yourself.

Joe Chernov:
Hi, I’m Joe Chernov. I lead the marketing team at Pendo and I feel like a little bit of a phony on this webinar because MJ Jordan really is the point person for all things product-led marketing at Pendo. So certainly if there are questions, they could come to me, they could come to MJ because she’s really on the front lines. My last app was Google Home. I just moved back to Boston after spending a couple years in North Carolina and I can finally go physical keyless now that we put in a smart lock. So able to tie together my TV, thermostats, lock and shed keys entirely. So that felt good.

MJ Jordan:
Love that. Elle, tell us a little about yourself as well.

Elle Woulfe:
I’m a big fan of that app. I love the ability to turn the heat on in my office before I walk downstairs. That is just cultivating laziness. Thanks. I’m Elle Woulfe. I also live in the Boston area, North Boston. Prior to Envision I spent 12 years in marketing technology, marketing tech to marketers. The last app that I downloaded, ugh, it’s a blessing and a curse, it’s called Gab. I bought my nine year old a watch that she can text from because, and it’s relevant where I live is relevant. We live on the coast and my daughter, when we go to the beach, she likes to go walking in the dunes and she disappears for four hours at a time and we’re trying to leave and I can’t find her. So I bought this thing she can text or call exactly 10 people from it and it is the biggest pain in the butt because now she’s like texting all the time, but I can always track her, I can see where she is and I can reach her, which allows her to have a little bit more freedom, which is nice.

MJ Jordan:
It gives you so much more sanity, I’m sure. That’s great. All right, Evan, take us home. Tell us a little about yourself.

Evan Woock:
Sure thing. Yeah, my name is Evan Woock. I’m at Zendesk. I’ve been there for about three and a half years now. Started my career in advertising and then went into product management and a number of different events led me to focus solely on marketing. And the last apps that I have downloaded all had to do with travel. I was doing currency conversion apps and translation apps and things like that because I just spent three weeks in Guatemala and I actually just got back home this last weekend. So yeah, lots of travel and if you haven’t been to Guatemala, it is a wonderful place to go. So recommended to everybody.

MJ Jordan:
I love the theme of travel is really influencing what folks are putting on their phones right now. That’s great. All right, let’s talk right into it. We’re going to talk a little bit about software buyers’ expectations, how those are evolving and we really like to say buyers’ expectations have changed. A recent Forster survey said that three out of four B2B buyers would rather self educate than learn from a product or learn about a product from a sales rep. So this feels a little self evident, but we want to explore, are you seeing this with your buyers? If so, what evidence do you have that really speaks to that change? And Evan, we’re going to kick things off of you. What are your thoughts around this?

Evan Woock:
Sure. I think what we’ve really seen at Zendesk, especially on the side of the market that is more SMB focused and a little bit more transactional is that, you really need to provide a quick time to value for our customers. And I think the thing… I notice this even with myself, and we do notice this with our buyers and we hear it in some of the research that we do, is just that, especially with the availability of information these days and certainly with Zendesk, we try to provide this as much as we absolutely possibly can with our customers, is that customers are very capable and willing and able to find and implement things themselves. And the more you get an email or this sort of communication from the company itself, I think customers these days are worried that they’re going to be upsold with every interaction and it doesn’t need to be an upsell just to set up a product.

And so we’ve started to see that a lot and hopefully are moving our product in a way that will allow them to accomplish the things that they want to get accomplished without having them feel like they’re getting sales pressure.

MJ Jordan:
Elle, what’s your take on this? Are you guys seeing this also at Envision?

Elle Woulfe:
Yeah, for sure. I mean, I think you’ve seen over the past couple years and both at Envision and the company I was at before that where we’ve seen a huge increase in people who want to use chat as a channel to connect. And I think that kind of speaks to this as well. It’s like I’d rather get some of those questions answered up front and sort of make sure that I’m willing to talk to someone before I actually talk to someone. I think a lot of that is carryover from B2C. I think in our B2C lives it’s totally normal that you adjust, download an app and try it and see if you like it. And so I think buyer’s expectations have evolved because it’s like why do I have to go through 12 calls to finally see this product? I just want to feel it and touch it and see if I like it.

I think the other… I totally agree with Evan, I think the availability of information and the savviness of buyers to find information speaks to the fact that they can do a lot of the upfront work. And so I think as a brand, if you don’t do enough to facilitate and remove friction from how they actually do that research, you’re going to find buyers who are frustrated and opt out because they don’t want to have to go through your super long enterprise-y sales process. And I definitely think the kind of try before you buy mentality is definitely here to say, I mean we can do that in almost every aspect of our lives right now. And so B2B technology buying should really be no different.

MJ Jordan:
I love the speculation that B2C motion really creeping into the B2B buyers mindset. Aurelia, what’s your take on it? What do you think from a perspective of Drift?

Aurelia Solomon:
Yeah, definitely agree with a lot of what Elle and Evan have said. I think we talk about this merging, as Elle said, of B2C and B2B as a sort of like B2H is B to human, we’re just all humans regardless of our personal lives as consumers or our business lives as professionals. And we have so much more information available to us today. And there are many more options available today too, across probably every type, every industry. So as buyers, we just have so many options that we have more control sort of, there’s that reverse of the businesses being in control prior to now as we talk about the buyers. So I think it’s less of… We don’t want to talk to humans or that it’s more of what Elle’s saying of that we all consume information differently and at different times and it’s when we want to engage with somebody to learn more.

So I might want to read something or watch a quick video or have a quick chat just to get the answer but it all depends on the stage that I’m in of my buying journey. So perhaps I’m really early on and I’m just evaluating who could be the five vendors I even evaluate to kick off my RFP or my process. So doing that requires just preliminary research, but I don’t want to talk to a salesperson yet. I might not even be ready to see demos or later on now I’ve validated and qualified, this is an account, this is a vendor that I’m interested in and now I want to learn more, I want to talk to somebody, I want to see a demo. And I think it’s really important for us to think about as marketers that yes, we are trying to qualify our buyers, but they’re qualifying us as well. And so you have to create value for them before you can ask for anything from them in exchange.

MJ Jordan:
Joe, I know we’ve talked about it in the past, has it been the fact that marketers over time have lowered the MQL bar and what we’re really hearing out of this group is that no, it’s humans being humans. What’s your take on this?

Joe Chernov:
Look, I think marketers have put ourselves in this position a bit by lowering the MQL bar such that, you download one ebook and your phone blows up. But I think Aurelia really is onto something here with this notion of qualified. Nobody wants to get cold called. I’ve had people reach out to me, sales reps, and say, “Could I cold call you today?”

I don’t want to be qualified, I just want to try the product, you want to qualify me. So there’s discord in our relationship before we’ve ever even spoken. And so I think it is, yes, there’s an element about people not wanting to be sold and being able to self-service the information, even the experience. There’s also this idea of immediacy. If I am in the moment and I want to try this product now or learn about this product now, one, I don’t want to be cold called, but I certainly don’t want to have to wait several days before I get cold called to only then go on and see the product later. It’s too much friction in the path. I want to see it now or at least chat about it now.

MJ Jordan:
I agree and it’s just such an interesting thing. I think we’re all really having to shift and address that and meet these folks where they are today. So let’s dig into another topic around product-led and that is this shift in mindset of marketing teams to really embrace models like premium and free trials. Evan, we’re going to start with you. Does your marketing org drive product-led strategies and why are they coming out of marketing and why did you guys choose this approach?

Evan Woock:
Well, we have had certainly free trial for a long time and up until recently had a freemium product for a very long time. Certainly helped the top of the funnel, but I think more than that, what we have found is that some of our biggest and best customers started as some of our smallest customers. And to be able to look at the market and let people kick the tires and show them the power and the value of the product upfront has been invaluable for our customers and to show them what we can do versus the competition. And we spend a lot of time, effort, and resources showing those initial customers from the product side to email marketing and everything in between, just how powerful the platform can be. And so we find that it is a part of the funnel that we just wouldn’t give up so that we can find those next unicorn customers for ourselves. So yeah.

MJ Jordan:
How are you guys embracing freemium and free trial at Envision?

Elle Woulfe:
I want to say Envision was a kind of pioneer in PLG. I mean they’ve pretty much always had a freemium version of the product. I think part of that stems from the fact, and I don’t mean this as a diss in any way, but historically they’ve sold to design teams and designers are inherently a little bit fickle. They want to pick their own tool, they want to bring their own thing that they enjoy using. And so I think freemium was probably the only way to do this, to allow end user designers to try it and touch it and feel it and decide if they wanted to use it. I think if you get good at PLG, you will inherently become an enterprise software provider because you will have hopefully critical mass of users in organizations that provide some pull and the opportunity to turn them into bigger accounts.

The thing that we have really obsessed over, especially recently, is delivering value as quickly as possible. Because if within the first really 24 hours, but probably three days, you do not have a user who is taking significant action, they will not become a habitual user, they will not become a great lead, which is really what you’re trying to create. I mean you are trying to create paying customers. So it’s not just about having tons of people using your freemium, it’s about having tons of people using your freemium in ways that either indicate they’re willing to pay or get them to a point where they have to pay and they’re happy to do that. And one of the strategies that I think has worked really well for us is creating a cross-functional growth squad that really kind of owns that problem, owns the problem of how do you get them activated and engaged in a short amount of time.

And I’m not going to say it’s marketing driven, it’s really cross-functional. It’s marketing, it’s product, it’s engineering, it’s data. And this team owns those hypotheses around what will lead to engagement, usage and virality to be honest with you. And we’ve had a lot of success kind of moving the metric around. At first it was upfront kind of engagement thing, then it’s like, okay, more Maru focus looking a little bit further out and further down the funnel. And I think the cool thing about PLG is you get so much upfront signal from customers who are using your product that in an enterprise selling environment would take you a really long time to get right.

You can see instantly what they’re gravitating towards, where do they go, what do they use, which allows you to then really iterate and move the ball a lot faster and optimize products. So it’s not to say… Envision does both. We have PLG, which is kind of our top down acquisition motion and we have an enterprise marketing motion that is much more about cultivating buyers on their journey over long periods of time. But you definitely with PLG get to critical mass so much faster. So it’s definitely been a winning strategy for Envision pretty much since day one.

MJ Jordan:
I love that call out of real time innovation. I think that is so exciting and something that you have to, it’s a much slower ramp if you just have a paid product. So I love that. Aurelia, at Drift you guys have both freemium and free trial, correct?

Aurelia Solomon:
Yes, we do. So we’ve had… Yeah, sorry, go ahead.

MJ Jordan:
Oh, I want to ask, I’d love to just know how do you segment between the two and how do you find the balance between both of those motions?

Aurelia Solomon:
Yeah, so Drift has had a freemium model since our founding, so over I guess seven or so years now and I think that was a really important part. We started obviously a lot smaller in making it available to folks that for all the reasons mentioned, get used to the product, play around in it, you start to see the value, you want to get more of it. And so that has been mostly freemium model for new business. And then the free trial in terms of segmentation, we think about more for our customer base. So things that we’ve played around with, I wouldn’t say we have a programmatic approach to free trials by any stretch. We play around with where does it make sense, where can it drive some upgrades and conversions, expansion opportunities. So there are certain products of ours that we have released through a launch or you can start to get value right from the start, as Elle mentioned.

So those are the types that we try to focus on. Free trial for conversions. There’s other parts of Drift that we integrate across a number of different tech stacks. So a customer integrating their map and their CRM are going to get a ton more value out of Drift because you can do a lot more targeting and personalization and all these things that if you don’t set up that integration you can do some but not the same level. So that’s where it doesn’t… A free trial wouldn’t show all the value so to speak. So we think about it for what are those products within our offering that customers can start to see value in right away to hopefully drive some expansion and stickiness.

MJ Jordan:
And, Joe, how about here at Pendo? What are your thoughts on freemium versus free trial?

Joe Chernov:
They serve different functions and as we started our first, our initial foray into PLG was freemium and the guiding principle was let a thousand flowers bloom. Create this global community of people who are passionate about the Pendo product. They live inside, they get value from Pendo. We deliberately kind of over-scoped the freemium product, make ourselves uncomfortable a little bit and give away more value than most folks would be at ease doing. And then we figured we would harvest them when they were good and ready to be harvested. And then there was a challenge, there was no real forcing function for sales to call into these. We have an opportunity for somebody to, who wants the free product, who wants the full product to click on a grade out feature and ask to talk to sales. So sales would follow up with those. And we had some entitlements that we would know if somebody was exceeding their entitlements and sales could call into those but what about everybody else that hadn’t raised their hand and hadn’t like explicitly exceeded their entitlements.

There’s a lot of really happy users in there that we should be calling into, but it’s kind of a squishy call for sales. I know you got it for free because you didn’t want to talk to anybody, but now I’m calling you. And so we had to create essentially a forcing function to create a natural context for that sales call. And that’s where free trial entered the picture. So within the freemium experience, if you are an active user, you can click a button and unlock all of Pendo for a limited period of time. And as that starts to expire then there’s a trigger set up for a much more conventional sales call. And so to us that’s sort of how the two work together. Now there are other forks, can you go free trial alone? Can you go free trial without freemium? Yes. Do you then downgrade into freemium? Sure. We’re having those conversations but big picture, it’s really about creating a natural conversation and that’s where free trial came into the picture.

MJ Jordan:
And I also love tying that to what Aurelia shared earlier. I think there’s such a huge opportunity for us to test some of those premium features in free trials and use those not only within really the flywheel of free, but also in our paid product. There’s just so many opportunities where these things start to intersect. It gets really exciting.

Elle Woulfe:
One could argue that freemium puts a lot more pressure on a business to figure out how you will monetize, whereas free trial has instant urgency. It’s like this is it and then it’s over. I think that’s the challenge with freemium is you have to find ways to make sure there is a monetization gate. And I think if you’re not good at that, you could be letting tons of people just use your product for free. So I do think that’s the natural sort of push and pull of it.

Aurelia Solomon:
And I think…

Joe Chernov:
That was… Oh, go ahead.

Aurelia Solomon:
I was saying something that Joe, you said… I totally agree, Elle, on the monetization side, from a brand side it sounds like what Joe, you said it’s such a great tech, like a strategy to build your brand. So depending where you are, evolution of the company, getting started, getting all these folks using it, really being advocates of it, obviously you have to figure out the monetization piece, as Elle said, later on or rather quickly. But I think it’s a really great brand strategy play as well.

Joe Chernov:
And she brought up a point that I had forgotten, which is when we started down the freemium path, one of the value props internally was, well we can’t apply a CSM to these accounts. We can’t throw even more money at these accounts that are using the product for free. So how can the product accelerate the onboarding process? How can the product accelerate the provisioning process? And that all had an upstream effect in terms of improving the core premium product that Pendo delivers. So it’s almost counterintuitive, right? You can improve that central premium product that you charge for by virtue of the needs of the free experience.

MJ Jordan:
All right, let’s shift the topic a little bit. We’re going to talk about the impact of product-led to the role of marketers. Elle talked a little bit about this and I’m going to dig in with you here in a minute, Elle, around where the ownership of a growth strategy really lives. It can be in the product team, it can be in the marketing team, it could be some collaboration of both these teams. I’m really curious to understand what this dynamic looks like inside your organizations. What sort of that day in day out execution ownership roles of engagement kind of looks like? I’m actually going to start with Aurelia. What does this look like at Drift?

Aurelia Solomon:
Yeah. So I think it started at the top level from a business growth perspective. We follow a model that actually Mark Benoff at Salesforce created called B2-moms. And so at our executive, at the C-suite level, we have a number of shared goals, vision, values, methods and measures of what it stands for, but shared goals. And so each of our C-suite members co-share different goals. And so the value of that is there isn’t sales owning a revenue number, marketing owning a pipeline number, CS opening a retention number and then you have the old story and pointing fingers and everyone looking out for their own, so to speak. So we all work really cross functionally from the top down because the goals that we’re working towards are shared anyway across different departments. And then if I’d go micro into macro in our business, but micro is my team.

So I lead product marketing as one of the functions. And I mean in and of itself, product marketing is extremely cross-functional and our two primary stakeholders, one being product and the other being sales. And we sit adrift here in the marketing org, some companies that sits within product. So we work hand in hand with our product team defining product strategy, product adoption for our different product lines based on the personas, the direction of where we’re going, the stories we want to tell. And so that’s just inherent I think for my team as being a big part of that, which is selfishly also one things I find most fun about product marketing.

MJ Jordan:
I love that. Elle, I want to double click into… You talked about these pods or little crews that really have focused around your product-led motion. Tell me a little bit more about how those are aligned and then what are the way that they’re measured to success together, the KPIs and goals and how those teams really function and measure their success?

Elle Woulfe:
Yeah, it’s really evolved a lot, especially over the past year. It’s funny because prior to Envision, so this is actually the first company that I’ve worked at that had a PLG strategy. Prior to that I’d worked in very classic enterprise sales and marketing environment, long considered purchase, very expensive stuff. And in those businesses, marketing obsesses over alignment with sales, that’s all you’re constantly trying to play, do this dance of how can we all get along and how can we all agree that what we’re doing is the right thing. And I find in PLG it’s like… Not to say that the inter relationship with sales isn’t important, it is because you have to figure out how PLG will be a feeder for an enterprise sales team and how that works with your enterprise selling motion. But I have found that the other relationships are so super important and in fact I think the relationship between marketing and product becomes incredibly heightened.

I mean, at the end of the day, and I said it before, we have this growth squad model which is a few key leads from a few different areas. So life cycle marketing things that are focused on using Pendo, user onboarding, engagement programs. But so many of the things you find through the process of driving usage and virality are things you want to test in the product. And this is the thing we struggled with for a while, it was like we wanted to make changes in the product and we’d kind of flag that, but there wasn’t this co-owned strategy. And so I think the growth squad was a really great step forward and being very, very clear about what the charter is and what metrics that team is trying to move. But also making sure the things they want to do get prioritized for the larger teams.

Because now it’s not marketing coming to product and saying, “Hey, we’d like to try this with three fields versus two, we’d like to move this button, we’d like to introduce this thing, whatever.” Now it’s someone from product who co-owns that problem with marketing being the ambassador. Because the problem is with all of this stuff, a really smart group of people can identify all kinds of cool things to test and try, but chances are that people are going to do the work may not be part of that original crew.

And so I do think what we’ve done a good job of is creating core ownership of the problems and the solutions but then helping to actually get that stuff actioned and done on the larger teams. And that’s been really, really successful. I remember the early days of it was funny because it was kind of like it took a while to find their footing, how do we work together and how does this work? And now I would say they probably test something new every week. They’re constantly putting forward a hypotheses around how do we get people more engaged, more activated? How do we drive virality? How do we make it remove friction from sharing and bringing people in? How do we play around with guest roles versus creator roles? And again, so many of those things are, some of them are marketing things for sure, but many of them are product or they’re data centric or they’re just a little bit deeper. So that’s worked really well for us.

MJ Jordan:
I love that those squads are not only creating this culture of test and learn, which is going to drive innovation, but it really does facilitate that process from all the way from ideation, execution, which where is the friction often happens when you’re working cross functions. So I love that so much.

Elle Woulfe:
I think it also feeds into the signaling, it’s that feedback loop. I mean again, the things they’re learning come from the things customers are doing and really making sure that that’s making it back to the people who need to know to change the things that need to be changed.

MJ Jordan:
It’s really powerful. Joe, I want to ask you a question which is how do you get sales on board with this? We sometimes have had challenges with sales worrying, are they going to cannibalize deals when we introduce this free product? And so I would love your perspective on how do you get them over that concern?

Joe Chernov:
Yeah, I mean especially when it’s like… Pendo isn’t Drift or Envision, we didn’t have freemium from the jump. We added it after having a pretty well established classic inbound sales process and the sales team was a little spooked and they were a little spooked in naturally because it was a big change but also because as I said earlier, we deliberately kind of over-scoped what was going to be in this product. We had a lot of Q and A sessions, we had a lot of enablement. We brought sales leaders into conversations about what would be included and excluded in the product, what the definition of a PQL would be. So I think we did some of the… Followed some sensible processes but then we conveyed a message that really landed with the sales team and we said, you’ll never again lose a deal over price because we will lose it to ourselves, we’ll lose it to ourselves, we’ll lose it to our free product.

And fast forward 18 months, I was just in a QBR and the leader of the group within Pendo that essentially sells to startup, [inaudible 00:31:42] and she put a number on how many deals she “lost to free” last quarter. And it was presented as enthusiastic information, not as a disappointment because she said, we would’ve lost all of these deals to either someone else or to do nothing in the past and now I can park them all in free and when they’re good and ready, harvest them later. And so that notion of you’ll never again lose a deal on price really did land. And then we have a great leader of that group and the leader of that group really reinforced that message throughout and he’s absolutely sort of on team free and that helped, that went a long way. So thanks, Jim.

MJ Jordan:
Yeah, I agree. I think as we all hear all the news around unpredictable economic changes like all of these things, it feels like the right move to keep those people close and continue to market to them and push them down that flywheel and expose them to your product over and over again. So when they are ready to buy, they’re right there and available to contact sales or buy in products. So love that so much.

All right, we’re going to dig in a little bit around some specific strategies we’re going to talk adoption, loyalty, growth. I want to start with Evan here. Evan, talk to me around some of the product-led strategies that marketers should really leverage when it comes to driving adoption of your product.

Evan Woock:
I mean, this is something that we’ve been evolving quite a lot and through the help of Pendo actually over the last few years where we’ve taken the funnel from taking folks through a trial and trying to get them quick value realization all the way through now multiple years of continuous education and retention. And so we’re now looking at things not just in terms of getting sales leads to upsell, but really driving continuous value realization. And we’re doing that. We have entire teams on our product orb that are looking at this, they’re working with my team really specifically. My team was born out of this thought and strategy and now it has really permeated all throughout different teams at Zendesk to make sure that we’re looking at things in an entire life cycle from a customer and setting up not only just our processes and the data and looking at when should we reach out to customers to make these moments in time happen, but putting that into the product so that if you’re there, it’s the right place and it’s the right time.

And if we’re looking at all of these customer interactions, we can tell when somebody is either on or off track. Well, the best place to make sure that we can either create a better behavior for the customer or we can understand something where they might be on the wrong path and headed toward churn or on a really great path and headed toward expansion. Well, we can make those moments happen within the product. And so certainly at Zendesk we have spent a lot of time and effort to make sure that we’re identifying those key moments and giving them the tools right then and there to make a better product experience and to use the product better themselves.

MJ Jordan:
Fantastic. All right, let’s dig into decreasing costs. So marketers are always thinking about efficiencies, accelerating pipeline anywhere and everywhere we can. How can you lean into a product-led strategy here? And Joe, I’m come to you for this one.

Joe Chernov:
Boy, I’m the one that keeps talking about sales. Salespeople are expensive and their time is really valuable and B2B sales processes are typically pretty methodical. And methodical is a long word for slow. There’s call, discovery, multiple steps along this journey and the meter is running in all of those steps. And so if we can compress particularly the front end of those steps, the educational discovery portions, by getting a prospect to have self-educated, discovered the value themselves, then there’s a lot less convincing that a rep needs to do and reps can be more productive. And so it’s less of a hard dollar savings. Just because you build a free product doesn’t mean you don’t have to market that free product. You do, but the soft dollar savings in terms of productivity are there as well.

MJ Jordan:
Awesome. All right, let’s also dig into growth and virality. So, Elle, I’m going to come to this one for you. Talk to me about some product strategies really focusing on growth and virality, really expanding the visibility of Envision.

Elle Woulfe:
Yeah, I mean this is a big question and it touches, there’s so many elements to it. I would say first of all, the growth piece of it has a lot to do with obsessing over the activation of the user. Again, just acquiring a user and getting them in there is meaningless if they’re not actually using the product in meaningful ways because what you’re looking for is a habitual user who cannot live with live without this product now that they’ve got it for free. And I think a lot of that comes down to really thinking about what it takes to get people to take the next best action. Okay, cool, you signed up for the product, what’s the first thing we want you to do? And then if you did that, what’s the next thing? And I think a lot of that is marketing intervention. It’s again, having an obsessive focus on new user onboarding and trying to attack that from every channel being personalized for different roles, thinking about things like that.

We’re lucky because our tool is a tool that is for collaboration, which inherently means you’re trying to bring more people in. It’s not the kind of thing, I mean it is the kind of thing that I could just use on my own and people do that, but the real value to both the user and to us is when people get invited to come and work with me in this tool. So it’s got an inherent virality component because you’re hoping someone’s going to share, but that means you have to really obsess around these guests who get invited because I come and I try it myself and I’m like, “Oh, this is great.” Now I invite 10 people from my org to collaborate with me. Well, those people have no context, they just got invited in by their buddy and they don’t really know why. So now you have to really think about if you’re successful in driving virality, what do you do with those folks who show up and didn’t come as a first person trier and now you need to create the same experience for them.

So again, we focused a lot on those kinds of things. And the other thing, and look, and with any of this stuff you’re hoping to create the kind of user who will tell someone about it. I mean, you think about the things you love and the apps you love, and you’ve probably, without prompting have told people about it. And so it does have to be a frictionless, joyful, wonderful experience that goes without saying. I think the other thing is a lot of tools, depending on what it is, it’s like an empty shell. So you get there and it’s just a vessel and sure you can play around with it and people do a great job of creating guided tours and things like that but one of the things we found that works really well is providing starting points for people. So I mean, on day one when someone comes in to our collaboration canvas, they have a “get started” template and we’re trying to walk them through orientation of certain things, but templates as a concept are a huge part of virality.

I mean, it allows us to go after very specific end user types and use cases and not dump them on an empty shell, but give them a starting point and a place to start to work from. And there’s all kinds of cool things we’ve played around with having customers or users submit templates, which then inherently gets them out sharing those templates. So again, I think this is the kind of thing, and I think this is true of PLG in general, you have to have really, I keep saying the word obsessed, but I think it’s true. You have to obsess about how you drive engagement with this cool thing that you’ve got and really try to attack it from every level if you want to see that kind of growth and virality.

I do think what Aurelia said it when commenting on something Joe said, it is a great brand strategy. I mean, Envision built this massive brand and it was because they were allowed to attract huge volumes of people with something inherently and immediately valuable. So it is great for that. Again, then the next piece of it is just like how do you get those people to want to share that with the world? And that’s something that I think we think an awful lot about.

MJ Jordan:
Yeah. We’re going to be kicking off here soon in the next this quarter, our first branded NPS product. So we have, NPS is not part of our free product right now. We’re going to do this powered by Pendo sort of NPS. So we’re really excited to see the impact on what that drives for virality. But in hearing you talk, it takes me back to what you said really early on around the innovation that happens in your free version really drives the innovation in your paid product. And one of the things we’re experiencing, we have had our paid product much longer, and is this sharing of learnings across these two teams when it comes to the customer journey.

So what are the things that we’ve done to drive adoption, to drive people to community, to drive people as part of the renewal process and our engage product? How can we share those learnings with our free peers as they’re thinking about creating that journey app? And vice versa, what is the free team learning that we then can take into as customer marketers into the work that we are building in our engage product? So there’s just so much opportunity to learn from each other and innovate really quickly even in our marketing strategy and our journey outside of just product development itself.

Elle Woulfe:
Totally. And the math and the math is much better because what you have is much higher volume of data on how people are engaging in using. And so way easier than if you’ve got 500 enterprise customers, a handful of users in each doing certain things. Now you’re talking about hundreds of thousands potentially of people giving you signal and missing the thing you thought everyone would click on and not using that feature that seems so obvious that you hoped everyone would adopt. So I do think the math is just better in terms of giving helpful signal for innovation.

MJ Jordan:
I actually am… I’m going to go rogue for a minute here and I want to double click into this a little. Can any of you talk to how your premium product has benefited from your free solution on that same notion? Evan, Aurelia, I don’t know if you guys have any thoughts here, but have there been learnings that have been really shared across your free product and your paid products?

Evan Woock:
Yeah, I think one thing that we always say at Zendesk is when we have a customer support product, our current agents are our future admins. And so when we are creating those aha moments really quickly for the end users of our product, then we can instill that value creation really, really quickly even before they’re decision makers or buyers, they may just be users. And so creating those moments of realization in the product are key to continuous growth for us at Zendesk.

Aurelia Solomon:
Kind of echoing Evan, I think that’s similar to what we’ve seen. Obviously they evolve into, grow in their careers, but I think the other part for us is also… And we’ve been touching on this theme, but this PLG obviously brings us bottoms up. You have a number of the users, not necessarily the economic buyers, but the users of the product who are in mass saying, “I need this. This is so important to my day to day and so Mrs. Boss, let’s buy this and I make the business case for it.” And so I think that’s what you can start to get with a free trial motion into a paid and depending who you sell to, I think it also who your users are. I think that can be really strong. So for Drift, we actually have things for marketers, for SDRs and AEs as well as service, we actually integrate with Zendesk and others, so we don’t do it, they do, but if they have a chat question or things like that.

And so I know as support leaders care a lot about what their support agents think of a product and are always going to have them in evaluation. Same with sales, behavior change there is the hardest thing to solve is getting sales to try something new, time versus tabs and competing for that. So I think that’s a really great opportunity to get the users really bought in to make the business case up to drive to your premium or other levels of products.

Evan Woock:
And I would even add to that, if you can create those relationships over time and you can have some trust with your customers and create a real sense of partnership, they’re going to take that with them to their next job and next company. And you’re not just creating a relationship for one contract, you’re creating multiple contracts over time. So all of these strategies have benefits that paid dividends so much over time.

Elle Woulfe:
And I mean it goes without saying and is an obvious end result you’re looking for but I also think if you can have a critical mass of end users who are using your product and then you have an enterprise seller who’s going top down and trying to actually sell something to an economic buyer certainly helps if you could point to the fact that you’ve got 50 users already. And as similarly, I think as sort of a churn prevention or mitigation tactic, sometimes decisions get made in a business about tooling for end users and it’s not made by those end users. It’s an economic decision, it’s an IT decision, whatever it is. And so there’s maybe a mandate to switch tools. Well, that becomes really difficult when you have tons of people out with their pitchforks being like, “No, we want this tool, we’re using it, we need it.” So that’s become a helpful tool to be able to point to the critical mass of users who are obviously loyal and visioners and using these tools in the event that somebody wants to rip it out.

Aurelia Solomon:
And I think I totally agree with that, Elle and to piggyback on Evan’s point too, it’s so true, we’ve seen a lot at Drift of going to… Everyone switched companies at some point and you bring that over but I think the stat too is 80% of new business pipeline comes through referrals or something. It’s really, really high. So think about the trust, as Evan said, if you build that, not only are they going to bring that to their new company perhaps, but they’re going to be referring and speaking well of you. And tying back to the beginning of this of buyers in control and having so much information available to them, customer peer references and customer to customer references and just user to user feedback and sharing has become, I think in my time, seeing that becomes so much more important to the sales process and decision making process. Obviously, it’s always been important, but I think more so today.

Joe Chernov:
The irony here is… What Elle pointed out I think is absolutely true. You have the math works better, you have many, many more signal that you can capture in terms of what people want, what people are using. But then on the other hand, I think, Aurelia, you’re absolutely right that referrals become critical. And yet this is where marketing attribution breaks, It breaks on the back of all this really good math because you have these free users that go onto a new job and then they purchase you really quickly in their next job and you have no idea that they purchased you really quickly in their next job because they were a freemium user in the previous job, unless you are able to get them to say that to the salesperson. And so there’s this huge gap in attribution where it’s like, wow, that unknown sourcing really skyrocketed and it’s because you built this community of people that loved your brand, you built this community of passionate users and then they go on to buy you in really short cycles later and you can’t always connect it back to what they were doing before.

MJ Jordan:
Yeah, I can’t count how many times I’ve seen, we have sort of an announce list for the announcement new deals where someone has said passionate user came from another company. It really does that long tail is there whether you can attribute it or not.

Joe Chernov:
And how many times do you not know, right? That’s just what you know.

MJ Jordan:
Right. You don’t even get that story. So true. All right, we’re going to wrap things up with the future of product-led marketing. There’s a lot of, I think maybe myths or oversimplifications that exist around PLG. One of them that we hear fairly regularly, I think that is maybe assumed is that low… This is a low in motion, it’s good for small logo acquisition, but not great up market when that’s actually not the reality. There’s often enterprise accounts that are coming in through Pendo free, oh sorry, through freemium through ours, but through freemium motions and organizations. And I want to explore this idea of other myths. What else is out there that you have heard or seen around PLG that you would really like to debunk for us? Elle, I’m actually going to hand this one to you.

Elle Woulfe:
Well, I mean, first I just have to touch on what you just said, and it kind of speaks to my last comment, which is Envision has several very large enterprise customers and some of those customer relationships started by a design team adopting our free tool. And so again, just became a catalyst for… And I mean, same with expansion motion, right? It’s like, well, I can now point to five teams within your giant organization that are using this, even if the buyer sits outside of our typical IC. It’s a really nice data point to help the seller. I personally think the big fallacy in PLG is that just having a free trial or having a freemium it’s like there’s so much hype around it now, and I totally agree that as in an acquisition motion and a selling motion and a growth motion, it is the way to go but that doesn’t mean that if you do that, you will naturally be successful.

I mean, again, yes, it’s a great way to acquire new users. It’s a great way to orient them to your value, but that means that your free experience, whatever it is, has to be amazing and wonderful. You do yourself no service if you build a crappy freemium, right? It’s like you just showed that it’s hard to use, you don’t want to do that. And I think, again, and it’s not to say that that’s the way that people are going, but I do think you have to come into it going, “We’re going to build a wonderful free tool, free trial, whatever that is.”

I think that there’s also so much intervention around your free experience that has to occur. I mean, we’ve talked a lot about experimentation and obsessing around making it better and easier and more frictionless than all those things. And that is true. It’s not a build it and we’re done. It is the kind of thing that I think in the same way that your product teams are constantly innovating for your paid tools, you have to do the same thing with a free tool or the growth will stall out. So I think the big fallacy is just inherently doing PLG is enough. It’s like doing PLG great is what actually is worthwhile not phoning it in.

MJ Jordan:
And I will even add on top of that is that I also don’t think there’s a single playbook here. What works for one company may not work for yours. And that’s why that experimentation and that test and learn culture is so critical is because you can’t just do X, Y, and Z and check the boxes and it’s working brilliantly, right? You have to understand the nuance of your business and your customer. And it’s so… That’s such an important part of getting it right, is that ability to test and learn.

Elle Woulfe:
It reminds me of what a wise man named Joe Chernov once said, which was something like, assuming what has worked for you in the past and bringing that to the next thing is the worst thing you can do and it’s totally true. I mean, it’s true in marketing and from business to business, but certainly with PLG. I mean, you got to remember, we’re all solving different types of problems with our products and they are targeted at different users and people use them in different ways. And so the way we do PLG is inherently for the type of buyer we’re selling to and the type of experience we’re trying to deliver. I think there are some standards in terms of tactics that are worth experimenting with and testing and trying but you’re right, I think there is no single playbook for this. Totally agree.

Joe Chernov:
I think what’s next too is it exceeds marketing, right? We have in some ways PLF, product-led finance. We marshal, we deliberately, was it you, Elle, who mentioned the people with the pitch forks?

Our customers, our users really like us. It’s one of the advantages this business has, but finance doesn’t always pay us, or at least they don’t always pay us right on time. And so what we do is we’ll put an in app guide in Pendo that tells our users, the ones with the pitchforks, “Hey, we want you to keep getting value from us. You might want to go talk to your CFO because we haven’t been paid.” And then we put them to work. They don’t do it right away, eventually they get what we call the big nasty, which is a very large guide that renders the product ultimately hard to use until they go and talk to finance. So sharpen those pitchforks and light the torches, guys. If you want to keep using Pendo, go talk to your finance team. So I mean, that’s product-led, right? It’s in app, so I don’t think it has to stay within the confines of marketing either.

MJ Jordan:
Yeah, it’s definitely pervasive. I think it’s growing into all parts of the business, and it’s a channel with which to communicate, engage, and interact with customers like never before. So definitely exciting about what’s possible and what’s next. I want to one, wrap things up. Thank everyone for joining us today. Some of the big takeaways really that I hear here is our expectation of buyers have changed. That B2C expectation is really filtering into the B2B user experience.

As part of that evolution, we have to recognize sales used to be our best friend, product is really becoming as much of a counterpart to the marketing org as sales used to be. And that ability to partner cross-functionally and creating that culture of experimentation and test and learning is what’s going to drive innovation for what’s next. And strategies like freemium and free trial are no longer nice to haves. These are necessary parts of our growth strategy, particularly in times of economic downturn. It really does drive so much innovation through that ability for real time signaling.

I am so excited about this opportunity to get together. I appreciate all of you joining us. If you have questions for our panelists and you want to reach out to them, find them on LinkedIn. Would love to continue the conversation there. We will be sharing the recording out to everyone who joined us today. Thank you all for coming. Take care.