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class="mck-o-container--wrapped mck-o-container--mobile-spacing mdc-u-grid mdc-u-grid-gutter-xxl"><section data-layer-region="article-body-header" class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-animation-blur-in-400 byline-share-container"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-8 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-8 mdc-u-ts-9"><span> </span><span class="AuthorsByLine_mck-c-authors-byline__author__XdrlD"><span class="AuthorsByLine_mck-c-authors-byline__no-wrap__Ced0j"><a data-component="mdc-c-link" href="/our-people/rikki-singh" class="mdc-c-link-inline___7DRrt_8032924 mdc-c-link-inline--secondary___YKoOK_8032924"><span class="mdc-c-link__label___Pfqtd_8032924">Rikki Singh</span></a></span></span></div><div class="mdc-u-grid-col-md-start-8 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-8 mdc-u-grid-col-lg-end-11 ArticleContent_mck-c-article-content__share-tools__kWRRw"></div></section><section class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-animation-blur-in-400"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_8032924 mdc-u-ts-5"><div class="mck-u-links-inline">Robert Chatwani, president of growth at Docusign, discusses how to drive sustainable revenue growth and brand love through product-led sales.</div></div></div></section><main data-layer-region="article-body" class="mdc-u-grid mdc-u-grid-gutter-xxl"><div class="mdc-u-grid mdc-u-grid-col-1 mdc-u-grid-col-md-12"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><div class="mdc-o-content-body mck-u-dropcap"><p><strong>In this episode</strong> of <em>McKinsey on Building Products</em>, a podcast dedicated to the exploration of software product management and engineering, McKinsey partner Rikki Singh speaks with Robert Chatwani, president of growth at Docusign. Chatwani’s decades-long career has focused on the marriage of the marketing and growth functions to create more-compelling products. This discussion explores how to drive sustainable revenue growth and brand love through product-led sales. Singh and Chatwani explore the importance of three actions: creating value for customers before capturing it, delivering a great end-to-end customer journey, and aligning teams to pursue shared outcomes through data. An edited version of their conversation follows.</p>  <h2>Product-led sales as a catalyst for growth</h2> <p><strong>Rikki Singh:</strong> Before we jump in, tell us a bit about your background and how it has influenced your philosophy and definition of product-led sales?</p> <p><strong>Robert Chatwani:</strong> I started my career in consulting but got my footing in consumer marketing. I was at a consumer marketplace, eBay, for more than a decade then moved on to the enterprise SaaS [software-as-a-service] and software space at Atlassian for many years where I was leading the marketing and growth functions. More recently, I’ve joined the team at Docusign.</p> <p>I love taking the principles that have driven growth and revenue in some of the world’s most successful consumer platforms and building those engines within the context of a SaaS company. It’s a big part of our focus at Docusign.</p> <p><strong>Rikki Singh:</strong> What does product-leading growth entail?</p> <p><strong>Robert Chatwani:</strong> I like to think about it at the highest level, which entails two important responsibilities: driving an organization’s revenue in a sustainable way and building a brand that your customers love. When you do those successfully, you foster loyalty and commitment among customers and build an emotional connection to your company.</p> <p><strong>Rikki Singh:</strong> Do you see a difference between product-led growth [PLG] and product-led sales [PLS]?</p> <p><strong>Robert Chatwani:</strong> For companies that have been more traditionally sales-driven, this concept of product-led growth or product-led sales is important because it represents a change or an evolution in the go-to-market model.</p> <p>To me, product-led growth is the ability for the product experiences to be the vector through which customers can convert from free to paid or can expand. For example, a customer of one of Atlassian’s products like Jira, Confluence, or Trello can upgrade their services to a premium edition or try a second product without interacting with a salesperson. It’s a pure digital experience.</p> <p>Product-led sales is being able to put your data to work to facilitate or create product-centric motion to encourage a customer to purchase or expand their services; it’s also about using data to help your sales team make better decisions around how to interact with customers. For example, they could use behavioral data from a product experience to understand what the next conversation should be with a customer or a prospect.</p> <div data-module-category="" class="PullQuote_mck-c-pullquote__DbaQ5 mck-o-lg-center"><blockquote data-component="mdc-c-blockquote" class="PullQuote_mck-c-blockquote__6n21p PullQuote_mck-c-blockquote--hide-quotes__CpGpg mdc-c-blockquote mdc-c-blockquote--is-quotes___TozKo_8032924"><p>To me, product-led growth is the ability for the product experiences to be the vector through which customers can convert from free to paid or can expand.</p></blockquote></div> <h2>Effective go-to-market strategies for product-led sales</h2> <p><strong>Rikki Singh:</strong> What signals to an organization that it’s the right time to start thinking about PLG or PLS strategies?</p> <p><strong>Robert Chatwani:</strong> I believe companies should focus as much on their go-to-market model as they do on their product strategy. Most companies have a product road map that looks at the product from six months to 24 months. That long-term thinking on a product strategy is often shaped by your understanding of your customer and your differentiation in the market to prioritize the decisions you need to make around what to build and who to build it for.</p> <p>I often find that organizations and companies put a lot of effort into that, but they don’t put the same amount of effort into the design of the go-to-market model. So the mistake I often see companies make is that they find something that works to drive growth—say, human-powered sales or digital experiences—and they double down on that, but over time, there are diminishing returns. Then there’s a crisis moment where they step back and see that the cost of sales is too high, or their average contract value has diminished through their digital experience, or they can’t seem to crack their enterprise segments.</p> <p>I think about go-to-market models as a road map over six, 12, or 18 months. From there, we can work backwards and with the intention to design the mechanisms we need to grow today and plant the seeds for how to grow in the future. It’s about orchestrating the way these different go-to-market channels work together to support growth.</p> <p><strong>Rikki Singh:</strong> In many venture capital pitches, companies focus on why a product is the best but not as much on how they intend to take the product to market. How can people be more thoughtful about their go-to-market strategy?</p> <p><strong>Robert Chatwani:</strong> The first question to ask is how to create a customer. We tend to overcomplicate this. There are three approaches: you can have a direct-sales organization, a channel- or partner-centric organization where you’re driving growth from a network of resellers or independent software vendors [ISVs] or channel partners, or you can have your digital experience where customers can buy services without interacting with anyone. All of those approaches can be powerful, but across all of them, it’s important to think about the DNA of a good customer experience. How do you deliver a great journey end to end?</p> <p>I like to first think about bridging the experience gap. What do customers expect from the product based on other experiences, and what do they actually experience? This is important because the benchmark for most customers today is not based on other B2B software companies. Let’s face it: the bar is pretty low in enterprise software for what a great customer experience feels like. So I like to push my teams. I often think about great consumer brands like Airbnb, Disney, or Tesla and determine what the customer journey and experience looks and feels like. Each of your channels—sales channels, partner channels, and digital channels—should codify what that experience should look like and understand how to close the gap between what customers expect and what they experience. Today, there is a class of SaaS companies, such as Canva and Figma and Shopify, that are setting a new bar in the software space for what great looks like. Those are the benchmarks every company should be thinking about.</p> <p>The other thing that creates a great customer experience is consistency. I’ll give you an example. Some time ago, I was flying to Sydney, Australia, and I dropped my phone under the seat and cracked the screen. When I landed, I went straight to an Apple store, and within 30 minutes, I got a brand-new phone reactivated with my SIM card. The quality of that experience was better than I expected, but it was consistent with any Apple interaction that I’ve had anywhere in the world.</p> <p>The third thing to consider is friction. Is the experience you’re creating low friction? How do you remove all the barriers from your customer getting what they want? That’s what it takes to build a great customer journey. Every go-to-market team needs to think about what great looks like for their customers and start to design the customer experience with a lot of intention.</p> <div data-module-category="" class="PullQuote_mck-c-pullquote__DbaQ5 mck-o-lg-center"><blockquote data-component="mdc-c-blockquote" class="PullQuote_mck-c-blockquote__6n21p PullQuote_mck-c-blockquote--hide-quotes__CpGpg mdc-c-blockquote mdc-c-blockquote--is-quotes___TozKo_8032924"><p>I like to first think about bridging the experience gap. What do customers expect from the product based on other experiences, and what do they actually experience? This is important because the benchmark for most customers today is not based on other B2B software companies.</p></blockquote></div> <p><strong>Rikki Singh:</strong> The way you bridge the experience gap is going to be different depending on the customer journey. At what point in the customer journey can companies enable the different experiences?</p> <p><strong>Robert Chatwani:</strong> How do you analyze the experience? In the early years, Brian Chesky, [CEO] at Airbnb, would inspire the team to map out the customer journey on a wall so that everyone felt responsible for each stage of the customer journey.<span class="FootNote_footnote-holder__tjRqy"><a aria-label="footnote" href="javascript:void(0);" class="FootNote_footnote-wrapper__AIRwL undefined FootNote_bottom__9aoSL FootNote_inactive__VZfCp" aria-describedby="a5e1a344-3937-4df6-88e9-4405a6700fb8"><sup class="FootNote_footnotesup__e73z_">1</sup><span class="FootNote_notch-wrapper__b_5NS"><span class="FootNote_notch__omKtY"></span></span><span class="FootNote_tooltip__QtrbA mdc-u-mt-2"><span class="FootNote_footnote-content__r2OVl"><span id="a5e1a344-3937-4df6-88e9-4405a6700fb8" aria-hidden="true" data-module-theme="light" class="FootNote_footnote-text__VjKgO mck-u-links-inline">https://www.figma.com/blog/config-brian-chesky-airbnb/</span></span></span></a></span></p> <p>For example, if you’re a SaaS company offering trials, then the team’s responsibility is not just to look at the trial experience but also to look at who is driving the activity before a customer creates a trial and what happens after the customer activates a trial. The end-to-end journey should be shared with adjacent teams and thought about in a connected way.</p> <p>The primary responsibility is to generate customers or drive revenue, then it’s about maintaining sustainable revenue growth and boosting brand love. The good news about revenue is that it can be deconstructed into a formula. If monthly recurring revenue [MRR] is one of your metrics and you have a seat-based business, then MRR equals the number of customers you have times the seats per customer times the dollars per seat. That’s your basic formula. Empower your teams by showing them how to understand and optimize for that outcome across all channels, then map out how to grow in each area.</p> <p>Organizing and thinking in this way is powerful because you can take your company-level goals, deconstruct them to the lowest common denominator, and help any individual or team understand how the outcomes that they’re driving connect to the North Star goal. Then you can show them how that drives the customers’ experience end to end.</p> <div data-component="mdc-c-module-wrapper" data-module-theme="default" data-module-background="transparent" data-module-category="" class="mck-c-disruptor1up mck-o-md-center mck-u-inline-module-border-top mck-u-inline-module-border-bottom mck-u-screen-only" data-layer-region="disruptor-1up"><div class="mdc-u-grid mdc-u-grid-gutter-md mdc-u-grid-col-lg-12 mdc-u-grid-col-md-12 "><div class="mdc-u-grid-col-md-span-12"><header data-component="mdc-c-header" class="mdc-c-header"><div class="mdc-c-header__block___i1Lg-_8032924"><h3 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924"><div>Subscribe to the <em>McKinsey on Building Products</em> podcast</div></h3></div></header><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924 mdc-c-link-container--display-column___X0HDD_8032924 mck-c-disruptor1up__content Disruptor1Up_mck-c-disruptor1up__content--links__VV4lE mdc-u-grid-gutter-md"><a data-component="mdc-c-link" href="https://podcasts.apple.com/us/podcast/mckinsey-on-building-product/id1735607317" class="mdc-c-button___U4iY2_8032924 mdc-c-button--primary___Ed-lT_8032924 mdc-c-button--size-large___jwpUy_8032924" target="_blank"><span class="mdc-c-link__label___Pfqtd_8032924">Apple Podcasts</span></a><a data-component="mdc-c-link" href="https://open.spotify.com/show/79pncGJtBtzz7pFoR6OiH8" class="mdc-c-button___U4iY2_8032924 mdc-c-button--primary___Ed-lT_8032924 mdc-c-button--size-large___jwpUy_8032924" target="_blank"><span class="mdc-c-link__label___Pfqtd_8032924">Spotify</span></a><a data-component="mdc-c-link" href="/capabilities/people-and-organizational-performance/how-we-help-clients/mckinsey-academy/product-academy/mckinsey-on-building-product" class="mdc-c-link-cta___NBQVi_8032924"><span class="mdc-c-link__label___Pfqtd_8032924">Listen to previous episodes</span><span data-component="mdc-c-icon" class="mdc-c-icon___oi7ef_8032924 mck-link-arrow-right-icon"></span></a></div></div></div></div> <h2>Key enablers for a product-led sales approach</h2> <p><strong>Rikki Singh:</strong> What is the role of the marketing, sales, and product functions in this end-to-end approach? Which team is responsible for acquiring and growing the customer?</p> <p><strong>Robert Chatwani:</strong> Even if you’re not the head of sales, marketing, or growth, it is very powerful when any individual within a team thinks about how to hit their goals and achieve their outcomes through the resources that they control. They start by understanding the outcomes they can drive and how to collaborate across teams to achieve those outcomes.</p> <p>For example, at Atlassian, we told the growth, marketing, and sales teams that we wanted to drive better sales interactions, meaning we wanted our sellers to have better-quality conversations with customers. Atlassian was a teamwork software company, so we would look at a large account and try to understand how many seats they have purchased and how many were being used. Oftentimes in SaaS companies, customers would pay for seats but not use them. That can be an awkward conversation for a seller—to tell a customer they are purchasing, say, $100,000 worth of software but are using only about $60,000 in value.</p> <p>We would go one step further and benchmark that account against peer sets so we could use product data to help empower and enable a seller to have a different kind of conversation with a customer. It allowed us to look at the gaps in that data and show customers how they can be more successful by suggesting capabilities that could help them maximize the value of the software they purchased. And we could personalize that advice to a particular account.</p> <p>In this example, you could ask which team’s responsibility it is to make these decisions, but it almost doesn’t matter. What matters is that we are helping a customer become successful with the products that they’ve paid for to get a better outcome.</p> <p><strong>Rikki Singh:</strong> Apart from data and a culture of collaboration and accountability, what are some other factors that allow companies to succeed at product-led sales?</p> <p><strong>Robert Chatwani:</strong> A company’s intrinsic culture is really important, especially a culture that values openness, candor, and transparency. That shows customers you don’t want to undermine them.</p> <p>Another big advantage is having multiple products. Organizations should think deeply about “land and expand” strategy, which allows them to efficiently acquire new customers and optimize for new customer growth. Expansion could mean a lot of things, such as getting more seats of the same product for that customer, cross-selling a different product, or an upward migration in which a customer goes from a free version to a standard to a premium to an enterprise.</p> <p>Another way to be successful is by designing your product from the get-go to facilitate frictionless growth. Transparent pricing and consistent pricing for your customers is important, for example. And enabling self-service, similar to the e-commerce experience, is key so customers can buy products with ease.</p> <p>Last, one enabler that is often overlooked is the power of community and ecosystem. If you’re a billion-dollar company, is your ecosystem—apps, developers, ISVs, system integrators, channel partners, and resellers—generating more than a billion dollars? Community is also part of that; at one point, Atlassian’s community site generated more traffic than the company homepage.</p> <p><strong>Rikki Singh:</strong> A common theme I’m seeing today is that if you have an implicit desire to create value for others, whether it’s your customers or your partners, then the company benefits from that investment.</p> <p><strong>Robert Chatwani:</strong> Yes. The key question here is, “How can we first serve and create value before we capture value?” Companies can’t always afford to be patient, but in the long term, it leads to better outcomes. If I know I can sell a customer 5,000 seats but they may not want to consume all of them right away, I can sell them 1,000 seats and they will be wildly successful. Over time, the growth and expansion will be more sustainable. It does require the ability to think in the long term. But if you can build that mindset into your business, that can be powerful.</p> <h2>Measuring success</h2> <p><strong>Rikki Singh:</strong> How do you get B2B enterprise sellers, who haven’t had a benchmark for fantastic customer experiences, to start thinking more long term to create sustainable value for your customers?</p> <p><strong>Robert Chatwani:</strong> The design of those incentives makes a big difference. You want to balance short-term growth with the right long-term incentives. We want to create and convert customers, but we also want that customer to be successful, so we should onboard them in a way that gives them a chance to utilize a product’s capabilities. Then, how do we think about retention? To mitigate churn, we want to make sure these customers are using these features and capabilities. Potentially, we could wire in the churn rate metric into a compensation decision for a particular seller so that the seller is not just motivated to sell to the customer but also to do it in a sustainable way.</p> <p><strong>Rikki Singh:</strong> How do you determine which metrics matter on this journey?</p> <p><strong>Robert Chatwani:</strong> It’s important to deconstruct the steps a customer would go through to buy your product. That requires having customer data in one place because then you can understand where you see success and challenges.</p> <p>For example, at Atlassian, we tried to understand what it took for a customer to go from a free account to a paid account. As we deconstructed the steps it took between a customer signing up for a service and upgrading, we realized activation rate was a leading indicator, which makes sense because if a customer is not activating your service, then they’re not going to pay for it. Then we determined which activation period was most important, and we started to look at a regression and the correlation between a particular activation date and purchase rate. Then we had to make sure that metric was shared across teams so different teams can optimize for it, which is going to result in the output metric that we want: purchases. That process can work for any go-to-market motion.</p> <p><strong>Rikki Singh:</strong> Aligning cross-functional teams can be hard without a common goal or outcome. If everyone is in pursuit of that driving metric, then you’ve aligned the forces to get to your common output metric.</p> <p><strong>Robert Chatwani:</strong> The reality is different teams will have operational metrics that are unique to their function and team. I like to call a company-level goal “L0,” and this is what you’d report publicly or to your investors. “L1” goals may be at the leadership or function level, “L2” goals are for the team level, and so on. The way teams cascade individual goals between them is important, but they also should share goals.</p> <div data-module-category="" class="PullQuote_mck-c-pullquote__DbaQ5 mck-o-lg-center"><blockquote data-component="mdc-c-blockquote" class="PullQuote_mck-c-blockquote__6n21p PullQuote_mck-c-blockquote--hide-quotes__CpGpg mdc-c-blockquote mdc-c-blockquote--is-quotes___TozKo_8032924"><p>It is an obligation for go-to-market teams to understand how to responsibly integrate AI capabilities into how they generate and expand customers.</p></blockquote></div> <h2>Leveraging AI for product-led sales</h2> <p><strong>Rikki Singh:</strong> There’s a lot of hype around AI. Are there experiments you are running related to generative AI?</p> <p><strong>Robert Chatwani:</strong> It is an obligation for go-to-market teams to understand how to responsibly integrate AI capabilities into how they generate and expand customers. But it’s important to deploy these tools to achieve an outcome. For example, what role can AI play to deliver a better customer experience? Here, companies can use it to conduct research on a prospective customer to have more context about their industry and some of the problems they’re solving for. Or companies can use it to see how existing customers are using the products and find opportunities for them to use them more effectively or offer the next product to consider. They can also use AI to power the digital experience to learn what products or services a customer may be interested in next.</p> <p>Some of our pilot work shows anywhere from a 10 to 30 percent productivity improvement as a result of empowering individuals with AI-driven go-to-market capabilities. This means we can free up human capital to work on more-complicated tasks to create more value.</p> <p><strong>Rikki Singh:</strong> I’m taking away three lessons from our discussion. First, the definition of growth is the ability to drive sustainable, scalable revenue growth for an organization while building a brand that customers love. Second, organizations should create value for their customers before capturing value. And third is that regardless of who owns sales, marketing, or product functions, mapping the customers’ end-to-end experiences and closing the gap between the customers’ expectations and reality matters the most.</p> <p><strong>Robert Chatwani:</strong> Exactly. These principles apply at every level. If you assume responsibility and believe that the things you’re doing drive growth for the company or help deepen the connections with customers, then you cannot go wrong.</p></div><div class="container-placeholder"></div></div></div><div class="mdc-u-grid mdc-u-grid-gutter-xl"><section role="contentinfo" data-layer-region="article-about-authors" class="mdc-u-grid mdc-u-grid-col-md-12 AboutAuthor_mck-c-about-author__nRJzu"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-3 mdc-u-grid-col-lg-end-11"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-c-heading--title___5qyOB_8032924 mdc-c-heading--border___K8dj3_8032924 mdc-u-align-center"></h5><div data-component="mdc-c-description" class="mdc-c-description___SrnQP_8032924 mdc-u-ts-8 mck-u-links-inline mck-u-links-inline--secondary mdc-u-mt-5"><div><p><strong>Robert Chatwani</strong> is the president of growth at Docusign. <strong><a href="/our-people/rikki-singh">Rikki Singh</a></strong> is a partner in McKinsey’s Bay Area office.</p> <p>The author wishes to thank Aditi Chawla, Akul Vijayvargiya, Seline Chen, Stratos Botis, Tomas Pinilla, and Victoria Yang for their contributions to this article.</p> <p><em>Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of McKinsey & Company or have its endorsement.</em></p></div></div></div></section><section class="mdc-u-grid mdc-u-grid-col-md-12 mck-u-screen-only"><div class="mdc-u-grid-col-md-start-2 mdc-u-grid-col-md-end-12 mdc-u-grid-col-lg-start-5 mdc-u-grid-col-lg-end-9"><h5 data-component="mdc-c-heading" class="mdc-c-heading___0fM1W_8032924 mdc-c-heading--title___5qyOB_8032924 mdc-c-heading--border___K8dj3_8032924 mdc-u-align-center">Explore a career with us</h5><div data-component="mdc-c-link-container" class="mdc-c-link-container___xefGu_8032924 mdc-c-link-container--align-center___ar3mu_8032924"><a 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\u003cem\u003eMcKinsey on Building Products\u003c/em\u003e, a podcast dedicated to the exploration of software product management and engineering, McKinsey partner Rikki Singh speaks with Robert Chatwani, president of growth at Docusign. Chatwani\u0026rsquo;s decades-long career has focused on the marriage of the marketing and growth functions to create more-compelling products. This discussion explores how to drive sustainable revenue growth and brand love through product-led sales. Singh and Chatwani explore the importance of three actions: creating value for customers before capturing it, delivering a great end-to-end customer journey, and aligning teams to pursue shared outcomes through data. An edited version of their conversation follows.\u003c/p\u003e\n[[audio 1]]\n\u003ch2\u003eProduct-led sales as a catalyst for growth\u003c/h2\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e Before we jump in, tell us a bit about your background and how it has influenced your philosophy and definition of product-led sales?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e I started my career in consulting but got my footing in consumer marketing. I was at a consumer marketplace, eBay, for more than a decade then moved on to the enterprise SaaS [software-as-a-service] and software space at Atlassian for many years where I was leading the marketing and growth functions. More recently, I\u0026rsquo;ve joined the team at Docusign.\u003c/p\u003e\n\u003cp\u003eI love taking the principles that have driven growth and revenue in some of the world\u0026rsquo;s most successful consumer platforms and building those engines within the context of a SaaS company. It\u0026rsquo;s a big part of our focus at Docusign.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e What does product-leading growth entail?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e I like to think about it at the highest level, which entails two important responsibilities: driving an organization\u0026rsquo;s revenue in a sustainable way and building a brand that your customers love. When you do those successfully, you foster loyalty and commitment among customers and build an emotional connection to your company.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e Do you see a difference between product-led growth [PLG] and product-led sales [PLS]?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e For companies that have been more traditionally sales-driven, this concept of product-led growth or product-led sales is important because it represents a change or an evolution in the go-to-market model.\u003c/p\u003e\n\u003cp\u003eTo me, product-led growth is the ability for the product experiences to be the vector through which customers can convert from free to paid or can expand. For example, a customer of one of Atlassian\u0026rsquo;s products like Jira, Confluence, or Trello can upgrade their services to a premium edition or try a second product without interacting with a salesperson. It\u0026rsquo;s a pure digital experience.\u003c/p\u003e\n\u003cp\u003eProduct-led sales is being able to put your data to work to facilitate or create product-centric motion to encourage a customer to purchase or expand their services; it\u0026rsquo;s also about using data to help your sales team make better decisions around how to interact with customers. For example, they could use behavioral data from a product experience to understand what the next conversation should be with a customer or a prospect.\u003c/p\u003e\n[[pullquote 1]]\n\u003ch2\u003eEffective go-to-market strategies for product-led sales\u003c/h2\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e What signals to an organization that it\u0026rsquo;s the right time to start thinking about PLG or PLS strategies?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e I believe companies should focus as much on their go-to-market model as they do on their product strategy. Most companies have a product road map that looks at the product from six months to 24 months. That long-term thinking on a product strategy is often shaped by your understanding of your customer and your differentiation in the market to prioritize the decisions you need to make around what to build and who to build it for.\u003c/p\u003e\n\u003cp\u003eI often find that organizations and companies put a lot of effort into that, but they don\u0026rsquo;t put the same amount of effort into the design of the go-to-market model. So the mistake I often see companies make is that they find something that works to drive growth\u0026mdash;say, human-powered sales or digital experiences\u0026mdash;and they double down on that, but over time, there are diminishing returns. Then there\u0026rsquo;s a crisis moment where they step back and see that the cost of sales is too high, or their average contract value has diminished through their digital experience, or they can\u0026rsquo;t seem to crack their enterprise segments.\u003c/p\u003e\n\u003cp\u003eI think about go-to-market models as a road map over six, 12, or 18 months. From there, we can work backwards and with the intention to design the mechanisms we need to grow today and plant the seeds for how to grow in the future. It\u0026rsquo;s about orchestrating the way these different go-to-market channels work together to support growth.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e In many venture capital pitches, companies focus on why a product is the best but not as much on how they intend to take the product to market. How can people be more thoughtful about their go-to-market strategy?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e The first question to ask is how to create a customer. We tend to overcomplicate this. There are three approaches: you can have a direct-sales organization, a channel- or partner-centric organization where you\u0026rsquo;re driving growth from a network of resellers or independent software vendors [ISVs] or channel partners, or you can have your digital experience where customers can buy services without interacting with anyone. All of those approaches can be powerful, but across all of them, it\u0026rsquo;s important to think about the DNA of a good customer experience. How do you deliver a great journey end to end?\u003c/p\u003e\n\u003cp\u003eI like to first think about bridging the experience gap. What do customers expect from the product based on other experiences, and what do they actually experience? This is important because the benchmark for most customers today is not based on other B2B software companies. Let\u0026rsquo;s face it: the bar is pretty low in enterprise software for what a great customer experience feels like. So I like to push my teams. I often think about great consumer brands like Airbnb, Disney, or Tesla and determine what the customer journey and experience looks and feels like. Each of your channels\u0026mdash;sales channels, partner channels, and digital channels\u0026mdash;should codify what that experience should look like and understand how to close the gap between what customers expect and what they experience. Today, there is a class of SaaS companies, such as Canva and Figma and Shopify, that are setting a new bar in the software space for what great looks like. Those are the benchmarks every company should be thinking about.\u003c/p\u003e\n\u003cp\u003eThe other thing that creates a great customer experience is consistency. I\u0026rsquo;ll give you an example. Some time ago, I was flying to Sydney, Australia, and I dropped my phone under the seat and cracked the screen. When I landed, I went straight to an Apple store, and within 30 minutes, I got a brand-new phone reactivated with my SIM card. The quality of that experience was better than I expected, but it was consistent with any Apple interaction that I\u0026rsquo;ve had anywhere in the world.\u003c/p\u003e\n\u003cp\u003eThe third thing to consider is friction. Is the experience you\u0026rsquo;re creating low friction? How do you remove all the barriers from your customer getting what they want? That\u0026rsquo;s what it takes to build a great customer journey. Every go-to-market team needs to think about what great looks like for their customers and start to design the customer experience with a lot of intention.\u003c/p\u003e\n[[pullquote 2]]\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e The way you bridge the experience gap is going to be different depending on the customer journey. At what point in the customer journey can companies enable the different experiences?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e How do you analyze the experience? In the early years, Brian Chesky, [CEO] at Airbnb, would inspire the team to map out the customer journey on a wall so that everyone felt responsible for each stage of the customer journey.[[footnote 1]]\u003c/p\u003e\n\u003cp\u003eFor example, if you\u0026rsquo;re a SaaS company offering trials, then the team\u0026rsquo;s responsibility is not just to look at the trial experience but also to look at who is driving the activity before a customer creates a trial and what happens after the customer activates a trial. The end-to-end journey should be shared with adjacent teams and thought about in a connected way.\u003c/p\u003e\n\u003cp\u003eThe primary responsibility is to generate customers or drive revenue, then it\u0026rsquo;s about maintaining sustainable revenue growth and boosting brand love. The good news about revenue is that it can be deconstructed into a formula. If monthly recurring revenue [MRR] is one of your metrics and you have a seat-based business, then MRR equals the number of customers you have times the seats per customer times the dollars per seat. That\u0026rsquo;s your basic formula. Empower your teams by showing them how to understand and optimize for that outcome across all channels, then map out how to grow in each area.\u003c/p\u003e\n\u003cp\u003eOrganizing and thinking in this way is powerful because you can take your company-level goals, deconstruct them to the lowest common denominator, and help any individual or team understand how the outcomes that they\u0026rsquo;re driving connect to the North Star goal. Then you can show them how that drives the customers\u0026rsquo; experience end to end.\u003c/p\u003e\n[[disruptor1UP buildingproductspodcast]]\n\u003ch2\u003eKey enablers for a product-led sales approach\u003c/h2\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e What is the role of the marketing, sales, and product functions in this end-to-end approach? Which team is responsible for acquiring and growing the customer?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e Even if you\u0026rsquo;re not the head of sales, marketing, or growth, it is very powerful when any individual within a team thinks about how to hit their goals and achieve their outcomes through the resources that they control. They start by understanding the outcomes they can drive and how to collaborate across teams to achieve those outcomes.\u003c/p\u003e\n\u003cp\u003eFor example, at Atlassian, we told the growth, marketing, and sales teams that we wanted to drive better sales interactions, meaning we wanted our sellers to have better-quality conversations with customers. Atlassian was a teamwork software company, so we would look at a large account and try to understand how many seats they have purchased and how many were being used. Oftentimes in SaaS companies, customers would pay for seats but not use them. That can be an awkward conversation for a seller\u0026mdash;to tell a customer they are purchasing, say, $100,000 worth of software but are using only about $60,000 in value.\u003c/p\u003e\n\u003cp\u003eWe would go one step further and benchmark that account against peer sets so we could use product data to help empower and enable a seller to have a different kind of conversation with a customer. It allowed us to look at the gaps in that data and show customers how they can be more successful by suggesting capabilities that could help them maximize the value of the software they purchased. And we could personalize that advice to a particular account.\u003c/p\u003e\n\u003cp\u003eIn this example, you could ask which team\u0026rsquo;s responsibility it is to make these decisions, but it almost doesn\u0026rsquo;t matter. What matters is that we are helping a customer become successful with the products that they\u0026rsquo;ve paid for to get a better outcome.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e Apart from data and a culture of collaboration and accountability, what are some other factors that allow companies to succeed at product-led sales?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e A company\u0026rsquo;s intrinsic culture is really important, especially a culture that values openness, candor, and transparency. That shows customers you don\u0026rsquo;t want to undermine them.\u003c/p\u003e\n\u003cp\u003eAnother big advantage is having multiple products. Organizations should think deeply about \u0026ldquo;land and expand\u0026rdquo; strategy, which allows them to efficiently acquire new customers and optimize for new customer growth. Expansion could mean a lot of things, such as getting more seats of the same product for that customer, cross-selling a different product, or an upward migration in which a customer goes from a free version to a standard to a premium to an enterprise.\u003c/p\u003e\n\u003cp\u003eAnother way to be successful is by designing your product from the get-go to facilitate frictionless growth. Transparent pricing and consistent pricing for your customers is important, for example. And enabling self-service, similar to the e-commerce experience, is key so customers can buy products with ease.\u003c/p\u003e\n\u003cp\u003eLast, one enabler that is often overlooked is the power of community and ecosystem. If you\u0026rsquo;re a billion-dollar company, is your ecosystem\u0026mdash;apps, developers, ISVs, system integrators, channel partners, and resellers\u0026mdash;generating more than a billion dollars? Community is also part of that; at one point, Atlassian\u0026rsquo;s community site generated more traffic than the company homepage.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e A common theme I\u0026rsquo;m seeing today is that if you have an implicit desire to create value for others, whether it\u0026rsquo;s your customers or your partners, then the company benefits from that investment.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e Yes. The key question here is, \u0026ldquo;How can we first serve and create value before we capture value?\u0026rdquo; Companies can\u0026rsquo;t always afford to be patient, but in the long term, it leads to better outcomes. If I know I can sell a customer 5,000 seats but they may not want to consume all of them right away, I can sell them 1,000 seats and they will be wildly successful. Over time, the growth and expansion will be more sustainable. It does require the ability to think in the long term. But if you can build that mindset into your business, that can be powerful.\u003c/p\u003e\n\u003ch2\u003eMeasuring success\u003c/h2\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e How do you get B2B enterprise sellers, who haven\u0026rsquo;t had a benchmark for fantastic customer experiences, to start thinking more long term to create sustainable value for your customers?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e The design of those incentives makes a big difference. You want to balance short-term growth with the right long-term incentives. We want to create and convert customers, but we also want that customer to be successful, so we should onboard them in a way that gives them a chance to utilize a product\u0026rsquo;s capabilities. Then, how do we think about retention? To mitigate churn, we want to make sure these customers are using these features and capabilities. Potentially, we could wire in the churn rate metric into a compensation decision for a particular seller so that the seller is not just motivated to sell to the customer but also to do it in a sustainable way.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e How do you determine which metrics matter on this journey?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e It\u0026rsquo;s important to deconstruct the steps a customer would go through to buy your product. That requires having customer data in one place because then you can understand where you see success and challenges.\u003c/p\u003e\n\u003cp\u003eFor example, at Atlassian, we tried to understand what it took for a customer to go from a free account to a paid account. As we deconstructed the steps it took between a customer signing up for a service and upgrading, we realized activation rate was a leading indicator, which makes sense because if a customer is not activating your service, then they\u0026rsquo;re not going to pay for it. Then we determined which activation period was most important, and we started to look at a regression and the correlation between a particular activation date and purchase rate. Then we had to make sure that metric was shared across teams so different teams can optimize for it, which is going to result in the output metric that we want: purchases. That process can work for any go-to-market motion.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e Aligning cross-functional teams can be hard without a common goal or outcome. If everyone is in pursuit of that driving metric, then you\u0026rsquo;ve aligned the forces to get to your common output metric.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e The reality is different teams will have operational metrics that are unique to their function and team. I like to call a company-level goal \u0026ldquo;L0,\u0026rdquo; and this is what you\u0026rsquo;d report publicly or to your investors. \u0026ldquo;L1\u0026rdquo; goals may be at the leadership or function level, \u0026ldquo;L2\u0026rdquo; goals are for the team level, and so on. The way teams cascade individual goals between them is important, but they also should share goals.\u003c/p\u003e\n[[pullquote 3]]\n\u003ch2\u003eLeveraging AI for product-led sales\u003c/h2\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e There\u0026rsquo;s a lot of hype around AI. Are there experiments you are running related to generative AI?\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e It is an obligation for go-to-market teams to understand how to responsibly integrate AI capabilities into how they generate and expand customers. But it\u0026rsquo;s important to deploy these tools to achieve an outcome. For example, what role can AI play to deliver a better customer experience? Here, companies can use it to conduct research on a prospective customer to have more context about their industry and some of the problems they\u0026rsquo;re solving for. Or companies can use it to see how existing customers are using the products and find opportunities for them to use them more effectively or offer the next product to consider. They can also use AI to power the digital experience to learn what products or services a customer may be interested in next.\u003c/p\u003e\n\u003cp\u003eSome of our pilot work shows anywhere from a 10 to 30 percent productivity improvement as a result of empowering individuals with AI-driven go-to-market capabilities. This means we can free up human capital to work on more-complicated tasks to create more value.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRikki Singh:\u003c/strong\u003e I\u0026rsquo;m taking away three lessons from our discussion. First, the definition of growth is the ability to drive sustainable, scalable revenue growth for an organization while building a brand that customers love. Second, organizations should create value for their customers before capturing value. And third is that regardless of who owns sales, marketing, or product functions, mapping the customers\u0026rsquo; end-to-end experiences and closing the gap between the customers\u0026rsquo; expectations and reality matters the most.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRobert Chatwani:\u003c/strong\u003e Exactly. These principles apply at every level. If you assume responsibility and believe that the things you\u0026rsquo;re doing drive growth for the company or help deepen the connections with customers, then you cannot go wrong.\u003c/p\u003e"},"isFullScreenInteractive":{"boolValue":false},"hideStickySocialShareBar":{"boolValue":false},"desktopID":{"value":""},"mobileID":{"value":""},"desktopURL":{"value":""},"mobileURL":{"value":""},"desktopPaddingPercentage":{"value":""},"mobilePaddingPercentage":{"value":""},"desktopOverrideHeight":{"value":""},"mobileOverrideHeight":{"value":""},"cerosOembedURL":{"value":""},"cerosRenderMode":{"targetItem":null},"cerosBackgroundColor":{"targetItem":null},"hideByLine":{"boolValue":false},"tableOfContentsTitle":{"value":"TABLE OF CONTENTS"},"accessStatus":{"targetItem":{"key":{"value":"RegisteredUsers"},"value":{"value":"Registered 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Botis, Tomas Pinilla, and Victoria Yang for their contributions to this article.\u003c/p\u003e\n\u003cp\u003e\u003cem\u003eComments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of McKinsey \u0026amp; Company or have its endorsement.\u003c/em\u003e\u003c/p\u003e"},"authors":{"targetItems":[{"template":{"id":"3FBABDB63A094F68B1F8E1BBE1BA124E","name":"Author"},"id":"264E7D3E029D4FAD92ADD0EF888757B5","name":"Rikki Singh","authorTitle":{"value":"Rikki Singh"},"description":{"value":""},"thumbnailImage":{"alt":"","src":null},"profile":{"targetItems":[{"standardImage":{"src":"/~/media/mckinsey/our people/rikki singh/rikk-singh-standard-profile-1536x1152.jpg","alt":"Rikki Singh"},"emailLinks":{"value":"Rikki_Singh@mckinsey.com"},"linkedInUrl":{"value":"https://www.linkedin.com/in/ritikasingh24/"},"description":{"value":"Helps software companies around the world on product-related topics including product management 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