Sales-Led + PLG = Product-Led Sales
How to Marry a PLG approach with a Sales-Led Motion
Sales-Led Growth is awesome until it isn’t anymore.
Your reps efficiency continues to decrease as you scale. You spend more and more time in pipeline review meetings. Meanwhile, the product experience suffers.
There’s more than a few products in this situation these days. With the tightening macro environment, Sales-led SaaS just isn’t what it was two years ago.
As a result, a new movement is emerging, a hybrid. It’s Product-Led Sales: where you keep your sales-led growth motion, but also incorporate a product-led motion.
Product-Led Sales (PLS) is a go-to-market strategy that uses self-serve users as the primary funnel for the sales motion
A few standout companies (Hubspot, Adobe, Oracle) have successfully combined the efficiency and scale of product-led growth (PLG) with the expertise of a sales-led strategy. However, there isn’t a blueprint for what a hybrid approach looks like.
Every SaaS founder is left pondering — What does this hybrid approach entail? How do you strike that Goldilocks balance?
So, for today’s post, I’ve teamed up with Jonathan Anderson, Co-Founder and CEO of Candu. Jon and the team at Candu specialize in helping teams build out their product-led growth and product-led sales motions by building on-brand experiments without dev time.
Today’s post aims to fill the content gap and provide insights into how to build your product to support a product-led sales (PLS) approach. We’ll cover:
Why Product-Led Sales Works
The Hubspot, Adobe, and Oracle Examples
How to set the team up for a PLS motion: Company POV
5 First Experiences to Make Your Product More Self-Serve
How to Follow Up with a Core Product Experience: FullStory Breakdown
Let’s get into it.
At 4,900 words, this post was too long for e-mail, you may want to continue reading online:
Why Product-led Sales Works
Product-Led Sales isn’t just a buzzword. It’s the culmination of observing and acting on changing market dynamics. At its core, it prioritizes self-serve users, using them as the linchpin for the sales motion.
Most B2B products were designed to be sales-led, but now many of us are contemplating a shift toward PLG. Before we dive in, let’s clarify that a product-led sales approach is not for everyone or every product. It’s not for you if you are not open to running more than one sales motion at once or simply not ready to open the floodgates to new users and let them experience your product via a free trial.
Achieving a pure product-led approach can feel out of reach for products that require some hand holding. However, integrating PLG elements into your sales-led approach can drive significant growth.
Striking the right balance allows users to experience your product's value through free trials and first-user experiences, reducing the need for constant sales team involvement. Yet, you can still leverage your sales and customer success teams to provide valuable human assistance when necessary.
The benefits can be understood in a few buckets. Let’s break down each.
Financial Efficiency: Cost-Effective Lead Acquisition
One clear financial advantage of PLS is the potential reduction in Customer Acquisition Cost (CAC). With a tilt towards self-serve models and free trials, there's often a diminished reliance on resource-heavy sales endeavors.
This reduced CAC presents businesses with a strategic advantage. Not only does it trim marketing expenses, but it also allows for a redistribution of financial resources. The savings can be channeled back into vital areas like product development or market research.
Moreover, with a more cost-effective lead acquisition model, companies can scale their outreach without a proportionate increase in expenditure. This scalability ensures that businesses can grow their user base while maintaining a steady budget.
Organizational Efficiency: Streamlined Operations
Adopting PLS inherently means a reshaping of organizational operations. Traditional sales funnels, which might be cumbersome and multi-layered, can often be condensed. This consolidation leads to faster lead-to-conversion times and a more agile sales process.
With fewer stages in the sales journey, there's less room for potential drop-offs or friction points. This streamlined process not only enhances the user experience but also reduces the operational workload on sales teams.
Furthermore, by allowing users to experience the product firsthand through trials or demos, the burden on sales teams to "sell" the product diminishes. The product, in essence, sells itself, and the sales team's role evolves into one of support, guidance, and value addition.
Product Efficiency: Enhanced User-Centric Development
PLS instills a unique form of discipline in product development. With a direct focus on user experience, there's an inherent pressure to build and refine products that users not only need but genuinely want to use.
A product-first approach means that feedback loops are tighter. As users engage with the product, particularly during trials or initial usage phases, they provide valuable feedback. This real-time feedback can be instrumental in iterative product development, ensuring that the product evolves based on genuine user needs.
Moreover, this user-centric development often leads to a more intuitive product design. Simplifying complex processes, enhancing user interfaces, and ensuring that users achieve their desired outcomes without significant friction becomes paramount.
The long-term benefit? A product that stands out in the market, not merely for its features but for its usability. Such products often have lower churn rates and higher user satisfaction, driving both retention and organic growth.
Strategic Efficiency: A Unique Competitive Edge
Depending on your market, incorporating PLS can provide a company with differentiated strategic positioning. By allowing users to experience the product without initial commitment, businesses can effectively bypass the traditional barriers that impede software adoption.
This approach can set companies apart in a crowded market. While competitors might still rely on lengthy sales pitches and demos, a PLS-focused company offers immediate value. This immediacy can be a significant draw for potential users, especially those keen on quick solutions.
Other Efficiencies: Holistic Growth Drivers
Beyond the obvious realms of finance, organization, and product, PLS introduces several holistic benefits. For instance, the quality of Marketing Qualified Leads (MQLs) tends to improve. With users experiencing the product firsthand, those that transition to the sales phase are inherently more informed and invested.
Reduced pressure on sales and marketing means these teams can realign their strategies. Sales can focus on upselling or cross-selling, while marketing can concentrate on user education and community-building, fostering a deeper brand connection.
Another subtle yet significant advantage is the reframing of competition. PLS allows businesses to compete on user experience and immediate value rather than just features or pricing. In the long run, this can cultivate a more loyal user base and position the company as a thought leader, constantly setting the bar high for both product and user experience.
Let’s walk through a few examples to see how real this can be.
The Hubspot, Adobe, and Oracle Examples
HubSpot: Mastering the Dual Approach
HubSpot stormed the market in 2006, centered around a clear vision of revolutionizing marketing. By 2014, its inbound marketing tools had earned a formidable presence with 15,000 customers from 90 countries. But as technology and market dynamics shifted, so did HubSpot.
In 2016, they unveiled a free CRM platform, a deliberate tilt towards the Product-Led Growth (PLG) spectrum. This wasn't just a product; it was a strategic maneuver. The free CRM acted as a magnet, drawing potential clients into HubSpot's ecosystem. Users experienced firsthand the platform's efficiency and ease of use.
Today, HubSpot's PLS is unmistakable. After users integrate with the free tools and understand their benefits, HubSpot's sales teams engage. They offer tailored insights, showcasing how transitioning to premium can enhance user experience and business efficiency. This method of enticing with product, then sealing with sales, has been pivotal in HubSpot's growth, with their 2020 revenue growth standing testament.
Adobe: Pioneering Hybrid Market Strategies
Adobe's journey from the early 2000s was marked by robust sales campaigns promoting their high-end software. However, 2013 marked a transformative shift when Adobe migrated to the Creative Cloud subscription model. It was a bold stride into product-led waters, providing users with a taste of Adobe's offerings at a fraction of the previous cost.
But here's where Adobe's genius shone. After luring users with their product, they maintained robust sales campaigns. For instance, individual creators might start with a basic Photoshop subscription. Over time, they're introduced to the broader suite of tools available, and the benefits of transitioning to a comprehensive package. Adobe's sales teams meticulously guide them through this journey.
Their dual approach extends to enterprise clients. Products like Document Cloud offer base functionalities, but sales teams present tailored solutions, highlighting how additional features can drive business value. This synthesis of product attractiveness followed by expert sales guidance keeps Adobe at the industry forefront.
Oracle: Marrying Legacy with Innovation
Oracle has long been a titan, anchored by its heavy sales-driven campaigns. Their legacy, primarily built on database solutions, had an unmistakable sales signature. But the winds of the 2010s brought change, steering Oracle towards cloud services.
Their foray into the cloud was strategic. Oracle Cloud Infrastructure (OCI) targeted developers with competitive pricing, making the initial entry enticing. As these developers began integrating OCI tools, Oracle's sales apparatus activated. They offered deeper insights into how expanded cloud services could empower projects, making them more scalable and secure.
Furthermore, acquisitions like NetSuite were not mere portfolio expansions. NetSuite brought a swath of SMEs into the Oracle fold. Once there, Oracle’s sales teams worked diligently, introducing these businesses to a broader spectrum of Oracle’s offerings. Through product-led immersion followed by comprehensive sales touchpoints, Oracle showcased its adaptability, bridging its sales legacy with a product-focused future.
By integrating product attractiveness with sales expertise, HubSpot, Adobe, and Oracle have carved distinct yet successful PLS pathways in their respective domains.
How to set the team up for a PLS motion: Company POV
Before embarking on your product-led sales journey, there’s 6 things to do. Let’s dive into each. Then we’ll walk through what to do on your actual product surfaces:
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