Transforming a company's approach from sales-led to product-driven requires careful navigation and a deep understanding of both internal and external dynamics.
I'm Sylvain Grande, and with over twenty years of experience in product management and business strategy, I've had the opportunity to lead this transition at PayFit. Having worked in product-led B2C companies for the majority of my career, stepping into the B2B space of payroll presented unique challenges and insights.
In this article, I'll share our journey at PayFit, highlighting the importance of empathy, collaboration, and strategic integration as we shifted from a sales-led to a product-driven model.
Join me as I delve into the strategies and practical steps that have been essential in navigating this complex transformation and driving success for our business and our customers.
Navigating the transition from sales-led to product-driven at PayFit
At PayFit, we simplify payroll for small and medium-sized companies, targeting businesses with up to 100 employees.
Our goal is to provide a seamless service to non-experts across three very different countries: France, Spain, and the UK. France and Spain are notoriously complex when it comes to payroll, while the UK is comparatively straightforward. This diversity in our target markets introduces unique challenges in product development, particularly as companies grow and their level of expertise increases.
Importance of segmentation
Segmentation is crucial in the transition from a sales-led to a product-driven model. For the first seven and a half years, PayFit operated entirely with a sales-led acquisition model.
The product team was not involved in areas like the website, leading to a clear division of responsibilities: sales focused on signing contracts, marketing generated leads, and the product team took over once customers had access to the app. This delineation highlights the traditional sales-led approach we were following.
Another significant aspect is that payroll services don’t lend themselves to free trials or freemium models, which are common in other industries. Setting up payroll is a complex process that can take two to three weeks at best.
This complexity means that transitioning to a product-driven model involves more than just implementing standard practices; it requires adaptation to our specific context.
Payroll is inherently seasonal, with most employees receiving their payroll once or twice a month, typically at the end or middle of the month.
For B2B payroll providers, peak times vary by country: in the UK, the tax season is April-May, while in France, it’s January. This seasonality affects sales capacity planning and has a significant impact on how we approach the transition from sales-led to product-driven.
The macroeconomic environment also plays a crucial role. Given the current economic climate, characterized by slower growth and reduced hiring, we had to re-evaluate our unit economics and sales strategies.
We asked ourselves fundamental questions about where to focus our sales efforts, particularly in relation to different customer segments. Simple math revealed that the lifetime value to customer acquisition cost ratio for smaller clients made extensive outbound sales efforts on these segments less worthwhile.
The journey from sales-led to product-driven at PayFit is shaped by a variety of factors: market segmentation, the complexity of payroll services, seasonal dynamics, and the broader economic context.
Understanding these nuances is essential for successfully navigating this transformation and tailoring our approach to fit the unique needs of our business and customers.
Tanya Lang
