Saas

The right way to Promote a Second Product

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So we’ve had a ton of nice conversations through the years on SaaStr on when and go multi-product.  And you may see some nice deep dives right here from among the high leaders in SaaS:

Rather more right here:

When Ought to You Add a Second Product? Solutions from the CEOs of Twilio, Veeva, Amplitude, HubSpot, Gainsight and Extra

I wished although to do a deep dive on only one piece — just a few ideas promote that second product.  It’s arduous sufficient to construct a second product, with all of the constraints on product and engineering.  Then how do you really get anyone to purchase it? :). Too many form of assume it should promote itself with the identical group, motions, and so on.  It so not often does.

Just a few ideas, actually a 3-part take a look at:

First, work out should you’ve constructed an add-on or a real second product.  The distinction is crucial.

An add-on is simply what it seems like.  One thing an present buyer, usually on the identical time they purchase your core product, can simply add-on.  And one which not less than 10% of shoppers will, so it’s materials.

The traditional within the restaurant trade is guacamole at mexican eating places.  Including guacamole is among the highest margin add-ons you may add to an order.

The identical is commonly true in SaaS.  Are you able to add a paid integration to an order?  An AI co-pilot to an present product?

If it’s really a toggle on the pricing web page so as to add onto an present product, it’s in all probability an add-on, not a second product.  The upside is it’s a lot simpler to promote than a really distinct, second product, and one of many easiest methods to develop your ACV. The draw back to an add-on is it often doesn’t actually matter radically broaden your TAM.  However once more, the upside it your present salesteam can often simply promote it.

“Need fries with that?”  If that works to your new product, promote it along with your present group.  It probably will in actual fact create battle should you add a separate gross sales group to promote including fries to the order.

OK, now, if it’s a real second product — ask your self if the client is identical purchaser as your present core product, or a unique one

Having a gross sales group promote 2 very completely different merchandise is tough sufficient when its to the identical purchaser.  However to a unique purchaser?  You actually need a separate gross sales group nearly on Day 1 right here.  Nearly each SaaS CEO at scale confirms this.  Dharmesh and Brian, co-founders of HubSpot, did a terrific deep dive on this after they launched their CRM product right here:

If it’s a unique purchaser, you mainly want a separate gross sales group on Day 1.  Perhaps it could begin off as founder-led gross sales, however you want a completely distinct group.

Time and time once more, I see an thrilling new product form of stall out at launch when the client is a unique ICP.  They get just a few gross sales, however nothing like what they anticipated.  And sometimes draw the fallacious conclusions when the second product doesn’t actually take off.

If the client of the second product is identical, perceive ultimately, gross sales simply needs to hit their quota as simply as potential.  In order that they’ll actually simply promote what’s best.

If it’s the identical purchaser to your second product, perhaps you can begin off having your core gross sales group promote it, particularly if it’s not too arduous to promote.  If it’s arduous to promote, they’ll form of shortly hand over.  But when they will get their present buyer accounts , they’ll attempt to promote the second product … up to some extent.  The purpose at which they hit their most important quota and core purpose.  Then, most gross sales execs form of cut back a bit.

The fact is, when the second product is bought to the identical purchaser, you might make it simpler for the reps to hit quota.  However you often don’t promote all that rather more web.  An vital level it takes some time to see.

So web web, perhaps if the client is identical purchaser for the second product, you may postpone having a devoted salesteam till just a few million in ARR.

However for much longer, and also you simply don’t promote as a lot.

 

 

 



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