Blending Enterprise and PLG Sales: Lessons from Atlassian
February 20, 2020
Change is hard even under the best of circumstances. For the unprepared, change can throw a major wrench into the works. The companies that consistently achieve the greatest success and staying power are the ones that are able to not only navigate change, but also willing to instigate it—even at the core of their organizations.
One of the most fundamental changes a company can make is shifting its sales model. Consider the difference between self-serve/product-led (PLG) models versus more traditional enterprise sales models. The two seem diametrically opposed—situated firmly at opposite ends of the sales spectrum. But, even the most firmly entrenched (and highly successful) PLG company will likely reach a point in its evolution when additional growth requires the addition of enterprise sales in some form.
On the surface, integrating enterprise sales into a resolutely product-led company might seem like an almost impossible pivot, but it’s actually more common than you might think.
In my role as Head of Global Sales Strategy and Operations at Atlassian, I lead the team that is redefining how B2B software is sold to enterprise companies. This might be a surprising mission for a company that has been something of a poster child for the self-serve model, but it makes perfect sense at this stage of our company’s evolution.
What we’re finding is that while it’s no small undertaking to integrate enterprise sales into a company that has been so committed to a PLG approach since the startup phase, it doesn’t have to be completely overwhelming. If you can recognize and address a few key issues early on, you can make it much easier for yourself and your team over the short and long term.
Getting Started: Figuring Out Where Enterprise Sales Fits
One of the first bridges you’ll have to cross is determining how an enterprise sales element fits into your existing growth strategy. At Atlassian, we’ve made the decision as a company that we will continue to count on marketing and word-of-mouth to land new customers to our company. This is a viable strategy for us because over time we have built a strong reputation and earned high brand awareness for our products.
At this stage, we have more than 150,000 customers, and the majority of those customers have come on board via the self-serve model or as solution partners. Obviously, we aren’t going to do away with that approach. My team’s job is to determine the most effective way to weave the enterprise sales effort into what’s already working so well. This requires that we serve two parallel roles. The first is a traditional sales strategy that’s focused on our enterprise customer base. This includes everything from identifying and segmenting customers to developing coverage models and ensuring our entire team is able to articulate the value we bring to our customers. Our second role covers operational infrastructure and optimizes processes for all the different actors: channel partners, inside sales, field sales, as well as the groups that we call customer advocates and product advocates.
The model we’ve developed to help us define where we draw the line between product-led and sales-led efforts is a “wallet” model. We have identified very specific enterprise playbooks and–using analytics–assessed the upside spend potential for every customer.
Once we have an estimate of each customer’s potential value, we set some thresholds based on unit economics, which determine the type of sales coverage we apply. So, for instance, your top segment of enterprise prospects would warrant the highest intensity of coverage with inside sales reps who handle maybe 40 to 50 accounts each and have the highest annual quotas. The next tier down would focus on the next-best level of prospects, might also be covered by sales reps, but could take a more volume-based approach, so maybe 200 accounts per rep and smaller annual quotas.
This is roughly the approach we take at Atlassian for the top 5,000 customers, and then our remaining customers are covered by our global customer and product advocates. These teams are more reactive and focus on responding to inbound presales’ interest and inquiries. These groups manage the long tail of our customer base, handling questions about products, pricing, billing and other day-to-day issues.
However you segment your customer base for sales efforts, it’s good to continually review and assess how those segments are serving your ultimate business goals. As you get your foundational sales strategies cemented, you can start to experiment a little with ways to uncover incremental opportunities. For instance, we’ve begun looking more closely at how to qualify certain large companies that are currently part of our core customer base, but which represent substantial cross-sell or upsell potential that may warrant a more proactive sales approach.
Building the Foundation: 4 Tips to Get it Right
Whatever your specific situation and strategy, there are a few big-picture things you must acknowledge and address as you set out to integrate enterprise sales into your PLG company.
1. Get Past the Fear
Fear is the biggest hurdle most PLG companies need to overcome when they are looking to add enterprise sales to the mix. More specifically, we’re talking about fear of change. At the end of the day, this is a cultural issue. People in PLG companies are often afraid of bringing salespeople on board because they think that they will either screw up the business or—just as bad—screw up the company culture.
Your job as the person leading the charge is to gain the trust of the rest of the organization and earn their buy-in. In my experience, it’s much harder than you might expect to convince die-hard PLG folks that enterprise sales won’t destroy the self-service engine. You have to assure them that you’re going to put the right guides and guardrails in place. You have to explain that you’re building a complementary sales team that will augment what’s already been built, not sabotage it.
2. Hire the Right People
One of the key guardrails has to do with making sure you’re bringing in the right people. Enterprise sales requires a whole new skill set, and high on the priority list is the ability to navigate large organizations and articulate enterprise-level narratives. You need people who understand what matters to these C-level and V-level prospects and can credibly articulate an implementation course for the large digital transformations they lead.
At the same time, you need salespeople who will be able to merge with your company culture. This means people who understand and respect the PLG model, are willing to adopt key components of that model, even while they perform a sales-led role. Finding those can be difficult, which is why have largely opted for growing that talent from within.
3. Craft your Enterprise Narratives
Selling to the enterprise requires a whole different messaging, packaging and outreach approach. This might mean you need to augment your marketing team with a different skill set. People from a product background won’t naturally have the perspective or skills to identify and shape the right enterprise-level stories about your products and solutions. People from traditional enterprise software companies, however, will be better versed in the language of enterprise sales.
4. Blend the Models
Finally, you need a plan for successfully blending the new enterprise model with the PLG model that’s already working for you. You want to leverage the best of both worlds in a way that takes full advantage of each model’s intrinsic strengths without compromising the potential of the other. You need to find the points of give and take that will allow for the best outcomes on both sides. This may require concessions in some areas. For instance, one of the things we’ve committed to at Atlassian is the establishment of transparent, published pricing and terms and to not allow our sales teams to negotiate. This is not the norm for traditional enterprise sales, but it’s a necessary component of our strategy for running sales-led and product-led activity in tandem and has actually been well-received by team members who have joined us from more traditional sales organizations. It removes a lot of the friction with the customers throughout the sales cycle.
Planning Ahead: No Time Like the Present
Atlassian will continue to be a standard bearer for product led growth. Self-service is still the bulk of our bookings, and it’s a model that has served us well and will continue to serve us well. Our PLG approach has been instrumental in building a massive customer base that consistently renews and continues to expand with us. There’s no reason for us to change that.
Our emerging focus on enterprise sales represents the next opportunity for our company. We’re pursuing it not to replace any of our PLG efforts, but to complement what we’re already doing on the self-service side—both in terms of capturing enterprise business that was never the right fit for self-serve and for growing with our customers as their needs change and expand.
The best piece of advice I can offer about integrating enterprise sales is to start before you think you have to. You may not feel ready. You may not think you need an enterprise sales team yet. But when that day comes, you don’t want to be caught unprepared. Think about what it will take logistically and culturally to engineer a successful integration. Start planting the seeds within your organization early so that it’s easier to get everyone on board. That small, proactive effort will make a world of difference when you decide it’s time to step into the enterprise arena.