You’ve seen a lot of rumblings about product-led growth all across the internet over the last four to five years.
And rightly so.
For the last decade, some of the most successful SaaS brands to reach scale have used this go-to-market strategy as a huge part of their launch efforts.
But there’s one question that sometimes comes up for teams looking to evolve their sales-led strategy into a product-led strategy: What does it mean for sales teams? Or even marketers?
Luckily for your salespeople, being product-led doesn’t mean doing away with your sales team. In fact, almost every PLG company supports its GTM strategy with several traditional sales-led tactics.
In this article, we’ll break down the differences between the two growth strategies and explain why the best option for most legitimate SaaS companies is a healthy balance of both.
What is sales-led growth?
In a sales-led growth strategy, the primary driving force behind your company’s growth is its sales team’s ability to identify accounts, perform targeted outreach, and develop relationships with potential clients.
It typically thrives in markets where products are highly complex, needing tailored solutions and a hands-on approach to selling and onboarding.
In the SaaS world, the products that fare best with a majority sales-led GTM have the following attributes:
- Have a steep learning curve
- Are tailor-made for large enterprises
- Require significant integration with a company's existing systems
The intricate nature of these products and the companies they’re built to serve calls for an equally detailed selling process. This means having sales reps who can thoroughly demonstrate the product's value proposition, adapt to the individual needs of the client, overcome complex bureaucratic hurdles of large organizations, and provide a high-touch, personalized experience to close the deal.
What is product-led growth?
Product-led growth (PLG) is a go-to-market strategy that revolves around the product itself to fuel growth, where users can derive value from the product before making a purchasing decision.
From there, sales and customer success teams can help with upselling and retention efforts, as these companies frequently spend time battling churn. It generally promotes a bottom-up approach, focusing on user experience, and facilitates a quicker sales cycle.
Software products that thrive under a product-led growth strategy are usually those with:
- A user-friendly interface
- Minimal setup and low-touch onboarding
- Tangible value from the get-go for that immediate “aha!” moment
A PLG strategy shines in its ability to attract a vast user base quickly, leveraging user satisfaction, freemium product offerings, and organic growth as powerful tools for expansion.
Users ideally become quick advocates, promoting the product within their networks — thus accelerating the growth trajectory via a product-led flywheel.
Recommended reading: What Product-Led Marketing (PLM) Is, and How To Use It To Grow Your User-Base [+ Helpful Resources]
What are the differences in a prospect’s user journey for each strategy?
Let's break down the contrasting paths a potential customer may take under each approach, from product discovery to eventual upselling.
The product-led customer journey
In a product-led growth strategy, the buying process often starts with an enticing freemium offering or a free trial, casting a wide net to capture as many users as possible.
Marketing teams leans heavily on the virality factor (easy promotion and distribution options within the product), utilizing customer feedback about product experience for constant product marketing improvements and creating organic, product-led content (especially SEO) to drive awareness and user activations.
The onboarding process is streamlined, intuitive, and user-centric, designed to allow customers to navigate and explore the product's features at their own pace.
Education is embedded within the product, with resources and help centers readily available.
The upselling process in PLG is primarily data-driven, with automated cues based on product usage, signaling when a user might be ready to transition to a paid version or explore premium features (often noted as a product-qualified lead (PQL) vs. a sales (SQL) or marketing qualified lead (MQL)) — allowing Marketing, CS, and Sales to dial in the appropriate tactics to get the deal done.
The goal for many product-led companies is to keep metrics like customer acquisition costs (CAC) low to offer competitive pricing and maintain healthy margins and low churn (often measured with metrics like net recurring revenue NRR).
Pro tip: When a freemium option or trial isn’t available, some PLG companies leverage interactive product demos and tutorials to familiarize the prospect with the product enough to activate them at the intro customer level.
Recommended reading: 8 Must-Have Content Types for PLG Companies Investing in SEO [+184 SaaS Marketers Told Us Which They’d Build First]
The sales-led customer journey
In a sales-led approach, the initial discovery often occurs through targeted marketing campaigns, industry events, or direct outreach (ABM strategies).
The sales team works diligently, tailoring pitches to highlight the product's capabilities to address a company's specific needs.
The onboarding process is more structured and often facilitated by a dedicated salesperson or team that includes a customer success manager who guides the customer through a meticulous setup and implementation process.
Education is ongoing. The sales team cultivates a relationship, offering personalized consultations and ensuring the customer harnesses the product's full potential.
The upselling process here is relationship-driven, with the sales team identifying expansion opportunities based on their deep understanding of the customer's business goals and needs.
Why teams choose a mix of both product-led and sales-led motions (aka “product-led sales”)
In the evolving business environment, adopting a flexible strategy that features both product-led and sales-led motions can be instrumental.
Many successful companies have found a harmonious balance between the two, crafting a growth strategy that is both dynamic and resilient.
Here are three renowned companies we’re all familiar with:
At its core, Slack operates with a product-led approach, offering a user-friendly interface that allows teams to communicate seamlessly.
Its free version is an excellent gateway for users to familiarize themselves with the product's functionalities.
However, Slack also incorporates sales-led strategies, especially when targeting larger organizations. They have a dedicated sales team that works closely with enterprise clients, ensuring they leverage the platform's capabilities to the fullest extent. This develops a deeper relationship and encourages upsells and expansion.
HubSpot brilliantly leverages a dual strategy to widen its market reach.
On one hand, it offers a range of free tools that let users experience the product's value from the get-go: a classic product-led approach.
On the other hand, HubSpot has a formidable sales team that engages with potential clients through targeted marketing campaigns and personalized demonstrations, showcasing how their suite of products can be a holistic solution for a company's marketing needs.
Dropbox’s initial growth was predominantly product-led, leveraging a freemium model that encouraged users to invite others and fostered organic growth.
However, as the company expanded, it integrated a sales-led approach, particularly for its business solutions. A dedicated sales team works closely with organizations, illustrating how to use Dropbox as a comprehensive, integrated solution for their storage and collaboration needs.
How do you choose which is right for your company?
Choosing between a product-led and sales-led strategy — or finding the right mix — is important. To simplify the process, here's a checklist that can help you identify the most suitable path for your SaaS company:
🔲 Simple and intuitive user interface (PLG)
🔲 Requires tailored solutions and detailed demonstrations (SLG)
🔲 Catering to a broader, diverse audience (PLG)
🔲 Focused on niche markets or large enterprises (SLG)
🔲 Short, streamlined sales cycles (PLG)
🔲 Longer, consultative sales processes (SLG)
🔲 Self-service resources and community forums (PLG)
🔲 Dedicated personnel for customer education and support (SLG)
🔲 Freemium models offering a clear upgrade path (PLG)
🔲 Customized pricing based on individual client needs (SLG)
🔲 Leveraging user reviews and testimonials (PLG)
🔲 Targeted marketing campaigns and industry events (SLG)
🔲 Organic growth through user referrals, content, and virality (PLG)
🔲 Direct outreach and relationship-building (SLG)
As you make these considerations, remember that the objective is to craft a strategy that aligns with your company's unique offerings and market dynamics.
Looking for tactical product-led, content marketing, or SEO advice, explore our monthly newsletter and see articles like: 3 Product-Led Brainstorming Ideas That’ll Help You Drive Organic User Acquisition
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