Product-led vs sales-led vs marketing-led: Which one is best for your business?

by Frederic Melanson in

In business as much as in sports or arts, we look up to leaders.

We look at them in admiration. We analyze them to understand what they're doing differently. What makes them stand out from the crowd.

Every quarterback wants to throw like Tom Brady. Every singer wants to sing like Adele. Every soccer player wants to be Lionel Messi. Every painter wants creativity like Picasso.

The same thing goes for business.

Everyone wants to be like Slack, or Zoom, or Tesla.

We carefully watch what the best are doing, in hopes of applying the same tactics to bring our companies to new heights.

So you might be part of a sales-led organization right now that is facing off against a product-led competitor.

And choosing the wrong growth motion SaaS companies can be the difference between winning and losing the battle.

This article describes the main 3 growth strategies used in SaaS today (product-led, sales-led, marketing-led) and helps you figure out which is best for your business, along with real-life examples and ways to merge multiple growth models together (i.e product-led sales).

product-led-sales-ebook

What is a growth motion?

A growth motion is a strategy that helps achieve distribution in the market by impacting:

  • Acquisition: How do you acquire customers?
  • Retention: How do you activate and engage your customers?
  • Monetization: How do you monetize your customers?
what is growth motion

So we'll describe the 3 main growth motions by how they affect acquisition, retention and monetization, along with examples 🙂

Let's dive in 👇

What is product-led growth?

Product-led growth is when the product itself is responsible for acquiring, retaining and monetizing customers.

what is product led growth

Acquisition

  • External virality: By using your product, customers share the product's value with other potential customers.
  • Internal virality: By using your product, customers share the product's value with colleagues.
  • Internal virality: You need to collaborate with others to gain value from a product, thus prompting colleagues to sign up.

Examples of product-led companies and their acquisition:

  • External virality: When you share a Typeform survey with someone else, they see the value of having a great survey experience. At the end of the survey, they're prompted to themselves sign up to Typeform.
  • Internal virality: When you share a Loom video with a colleague, they say how valuable it can be to their work and sign up.
  • Internal virality: Miro or Figma customers need to collaborate with their colleagues in the product to get value, which results in them inviting colleagues to sign up.
typeform product led growth

Retention

  • Taking an action in the product generates value that prompts users to continue engaging with the product.
  • Taking an action in the product generates value in another solution, which makes you more likely to integrate the product into your regular workflow.

Examples of product-led companies and their customer retention:

  • When you share a DocSend document with someone else and they view it, you receive an email, triggering you to re-engage with DocSend to analyze results.
  • Intercom's onboarding will suggest integrating with a Slack channel. Being able to interact with website visitors easily through Slack increases the likeliness to continue using Intercom.
docsend retention

Monetization

  • Reaching a certain usage level in the product will force you to convert through a self-serve monetization flow to the paid plan.
  • Trying out premium features of a product will force you to convert through a self-serve monetization flow to the paid plan to unlock the functionalities.

Examples of how product-led companies grow paying customers:

  • In HelloSign, if you sign more than 3 documents in a month, HelloSign will prompt you to upgrade to keep using the product.
  • In Zoom, if you want to get a transcript of your meeting with your recording, you have to upgrade to the Enterprise plan.
product led growth example

Who should use product-led growth for rapid growth?

  • You have a free trial or freemium version of your product.
  • Users can get value from the product without help from your team.
  • Users can get value from the product without requiring approval or help from their colleagues or other departments.
  • Engaging customers in product actions result in positive outcomes for acquisition, retention and monetization.
  • You can deliver value to your prospects without forcing them to commit to an expensive enterprise contract.

Who should not use product-led growth?

  • Customers need to go through iterations with your sales or success reps in order to get to value.
  • Implementing your product requires complex integrations, specific knowledge pr compliance.

What is sales-led growth?

Sales and customer success teams engage with prospects/customers in order to drive acquisitions, retention and revenue.

sales led growth

Acquisition

  • Sales development teams (SDRs) find leads, engage them through outbound efforts to book meetings with account executives (AEs).
  • The main call-to-action on the website is "Request a demo" where you enter your information so that a salesperson contact you.

Examples of how sales-led companies drive customer acquisition:

  • Salesforce representatives reach out to prospects via the phone, email, LinkedIn messages and try to book a meeting to start the sales process.
  • To get started with ZoomInfo, you need to enter your information on their website, then within 60 seconds, a sales rep will call you to book a meeting.
sales led growth acquisition example

Retention

  • Customer success engages with new customers to answer their questions, share best practices and communicate value delivered, to ensure that the customer continues to engage.

Example of how sales-led saas businesses retain existing customers:

  • After signing up to Zendesk, a CS representative will contact you to schedule an onboarding call and answer questions.
sales led growth retention example

Monetization

  • Sales teams nurture customers, resulting in contracts being signed.

Example of how sales-led saas businesses monetize leads:

  • You can't unlock ZoomInfo credits until you've signed a Master Service Agreement (MSA) with one of their account executives.

When should you use SLG?

  • Your product requires implementation or approval across multiple business functions.
  • Your product contains intellectual property that is clearly differentiated and cannot easily be replicated by competitors.
  • The price of your product is substantial.
  • Customers get significantly more value from your offering when they engage with your sales or success teams.

Who should not use SLG?

  • Companies that fit the product-led growth model criteria. (Public PLG companies outpace their sales-led competitors by 40% on average, per public filings in the last 5 years).
  • Your price is not high enough to financially justify having sales representatives drive sales.
  • Companies that target consumers or have very horizontal and unclear target customer profiles.

What is marketing-led growth?

Your marketing engages prospects/customers in order to drive acquisitions, retention and revenue.

what is marketing led growth

Acquisition

  • Your content is referred to by other websites or mentioned in social posts, which brings people to your site to give the product a try.
  • Your marketing team utilizes ads to drive qualified traffic to your site and convert traffic into visitors.
  • You initiate partnerships, attend events or organize webinars that drive marketing qualified leads to your website.

Examples of how marketing-led companies drive customer acquisition:

  • Hubspot's marketing team drives thousands of sign-ups by ranking high for marketing-related keywords on Google with their blogs and other forms of content.
  • Asana drives repeatable business with its ad for the google search term "task management".
hubspot marketing led growth example

Retention

  • Your product and marketing team trigger in-app messages and notifications to retain customers, like help documents.
  • Marketing teams send automated emails to your customer base to communicate the actual value of the product, share help docs, case studies and provide human assistance.
  • Content teams produce educational content that is geared towards providing a better customer experience.

Examples of how marketing-led companies drive retention:

  • Most marketing-led companies adopt the strategies described above for retaining customers ;)
  • But a good example is ClickUp. A good proportion of their content is produced to support users in the freemium or free trial.
marketing led growth example

Monetization

  • Marketing use retargeting and email nurture campaigns to generate business growth.
  • Marketing produces case studies showing how existing customers benefit from paid plans and product usage.

Examples of how marketing-led companies drive paid conversions:

  • Hugo sends customer success stories to their self-service users to motivate them to convert.
  • ConvertKit fire Instagram ads with discounts to their customer base so they convert.
  • Surfer uses event-based discounts to upgrade qualified leads without increasing customer acquisition costs.
marketing led growth example

When should you use MLG?

  • The problem you solve is widely recognized and people are looking for solutions.
  • Your free trial revenue model requires a bit of user hand-holding but your pricing model can't justify a sales-led approach with sales reps.
  • Your product-led funnel doesn't have external virality. You need marketing to generate user acquisition.
  • The perceived value of your product can be envisioned by prospects through marketing content.

Who should not use MLG?

  • In 2022, I honestly don't see much reason to not integrate MLG in your go-to-market strategy. However, it's possible for MLG to not be a priority if you sell really expensive solutions to a limited market where the customer acquisition cost is really high, like insurance.

*Although ABM would be a great add-on to your sales motion in this case.

Mix-and-match

Now, you can very well mix the various growth motions described above, depending on your product, business, and market.

For example, you can be marketing-led for acquisition, sales/success-led for retention and product-led for monetization!

Which company fits that description: Hubspot!

One hybrid that has been REALLY popular, is product-led sales.

What is Product-led sales?

Product-led sales is a combination of product-led growth and sales-led growth.

product-led-sales-ebook

Concretely, it's when you assist your product-led motions with sales execution.

what is product led sales

It's very powerful if executed correctly. In fact, most product-led growth companies adopt product-led sales at some point in their lifecycle.

Good examples of companies that adopted product-led sales are Slack, Figma, Zoom, Lemlist & Miro.

product led sales quote

How can you add product-led tactics to your sales or marketing-led motion?

  • Interactive demo on the website

Marketing materials to answer sales objections

  • Add transparency
  • Let your users sign up to give the demo 
  • Investing in your product's virality

How your sales team gets involved

Engage product-qualified leads who fit your ideal customer profile.

Use marketing engagement insights to prioritize accounts in the sales funnel.

Send case studies to product users who send expansion signals in how they use the product.

Collaborate with product marketing to send meeting nudges through the customer experience.

Send contextual emails through the product-led funnel to provide a killer self-service experience.

Collaborate with success teams to help users who need to go through internal hurdles to get to value in the product.

Connect with free trial users on social media and in communities, to drive them closer to starting the sales cycle.

Adjust the sales cycle to where people are in the product, or how they engage with marketing material.

Recap: Product led vs sales led vs marketing-led

Your company's growth motion can make or break your business when it comes to outpacing the competition.

So choose wisely. And look at what the best are doing.

Many of the fastest-growing software companies adopt hybrid models.

The key is the test and iterate until you find what generates the most predictable, sustainable, and defensible results. Always measure success and aim for company-wide alignment.

We hope this article helped you understand the differences and got you one step closer to building a model that'll bring your business to new heights!

Hope this helped :)

Fred

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