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How Usage Signals Redefine the Sales Motion with Dan Fougere
00:06:58
In this clip, Dan breaks down why traditional sales playbooks fail in PLG environments, and how leaders need to shift toward usage-based signals and first principles thinking.
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- [00:11]
A
Welcome to the Revenue Builders podcast with John McMahon and John Kaplan. This podcast is brought to you by the team at Force Management. Today we're revisiting a segment from our episode on product led growth and modern sales playbooks with Dan Fougere. Dan has been highly successful at scaling and leading revenue teams. He's the former CRO at Datadog, former head of Global SAL at Medallia. He's now advising high growth startups. In this clip, Dan breaks down why traditional sales playbooks fail in PLG environments and how leaders need to shift toward usage based signals and first principles thinking. He explains how buyer engagement now starts inside the product, what those signals actually look like, and how sales teams should adapt their timing, messaging and motion accordingly. Let's dive in.
- [01:07]
B
And I think a big mistake that a lot of leaders make is they're going to try to force fit a playbook from a previous company into a new company. And you need to be I said fluent. I said fluid. Now I'll say fluent. You have to be fluent enough with the components of a framework to know that I need to tweak it here, tweak it there. And especially these days, like I saw this at Datadog, I'll get into it in a second. Where the dynamics of a PLG motion now Datadog I would say is like Rev1 maybe or maybe Atlassian was Rev1 of PLG, Datadog was Rev2. This is like prehistoric times. What's happening now is like if you look at like notion, you know, Slack was really more PLG cursors, plg. And so these kind of companies, things have changed a lot by, by definition with that kind of change you have to be able to change the playbook. And so how do you do it? Well, I would say I would recommend advise people to change it by approaching things from a first principles perspective. And so what do I mean by that? Well, how are the what who's using the product, what's working so far and how do they buy? Not only like when we talked about how do they buy back in the day when I was a student to you guys, we were mostly talking about from a buy, like the purchasing process, right. What I'm talking about now is the usage because typically they're going to have some kind of usage before they buy. And now there are other ones I'll talk about in a second. There's a company called Decagon, right. That does, you know, customer support and they're doing more like traditional top down sales that still exists but for the ones where there's plg, you need to think about it. So for example, I'm advising a company, it's one of our portfolio companies. They are an open source vector database. And so we're changing the way that they're selling it based on the fact that somebody is going to be, we know we have signals. The good news is you have signals where they're downloading the product. They, that's a signal. They're looking at the user manual, they're looking at the first part of the user manual. That's a signal. Then they start to get into things where you could see, okay, now they've developed something, they're in testing. Okay, now we should. So in the beginning it's like, hey, notice that you're using it, we're here to help, let us know. Then when they get towards the testing stage, that's when we should really start to talk about things that are commercial that are in their interest, such as SLAs. Well, do you want to go to production with a 4 day SLA or would you rather have a 1 hour SLA? Would you rather have, you know, hosted on your own and maybe hope that you're up to date on the updates or would you rather have it hosted by us and know that it's always up to date and bug with bug fixes, things like that, that means you need to adjust. Back in the day you'd say, I'm not going to do a POC until I meet the economic buyer. Still, best practice. And if you're doing something that's more traditional, but in this case they're already using the product. So right there you've got to rethink how you're doing things. So and I would say generally speaking, this, this when we go back to like a datadog example, when I went to datadog, there were two parts of the business. One existed, it was selling to other software startups that was kind of like what I just described. They're gonna download, they download, they're going to use the product over the cloud. I don't, I can't stop them from using it. But we are going to get to a place where they do need to test it. Maybe they're comparing us to others. So that became kind of like the proof of concept stage or the validation. So we use the same framework. We just some of that it's like, it's kind of like the life of the elephant versus the life of the mayfly. Right. If you have that big gnarly old school traditional sales process. I'm going to stick to something more traditional. Like I said, get to the economic buyer before I commit on what is success criteria look like for the POC and make sure that if we do this that somebody there says yes, we'll buy it. Versus with Datadog it was something much smaller. We said. Did we just. You said you wanted to make sure it was easy to use, that we could hit all your open source components. If we do that, do you say that you're going to buy it? I'm talking to the CTO. There's 10 people at the company. We just condense the whole thing down to one phone call.
- [05:36]
C
Yeah, well, you see that a lot. Even with consultants that might come in to try to help companies or a new CRO that comes in sometimes, venture capitalists, people that have just had one win and to your point, they try to take what they did in company A and push it over to company B and it has a different asp they sell to a different Persona. It's a different product. You sell to different stakeholders. It's more complex. Know you can either sell it plg, you can sell it down low, sometimes you have to sell it up high because you're selling it to a different Persona. So you can't. There is no such thing as cookie cutter to your point. And I think the people that try to cookie cutter stuff, that's where they fail. If it was that easy, you know, the world would be pretty, pretty boring, right? You have to figure out who am I selling to, why are they buying, what's the process to your point? And how am I going to most effectively sell to them using my resources.
- [06:33]
A
Thanks for listening to today's episode. If you enjoy the content, please subscribe, rate and review the show to help us reach more people. This show is brought to you by Force Management, where we help companies improve sales performance, executing the growth strategy at the point of sale. Check out forcemanagement.com for more information.