First, let’s clear something up:
Product-led growth (PLG) isn’t anti-sales. It just means different sales. In fact, the key to massive growth is product-led adoption with targeted personalized sales.
- Sales are not dead — It’s your secret weapon.
Wait, what is product-led growth again?
Product-led growth is an end user-focused growth model that relies on the product itself as the primary driver of customer acquisition, conversion and expansion. (View OpenView’s amazing article on PLG)
What is product-led growth sales?
Product-led growth sales is when you use the product itself as the main source of new revenue acquisition. It includes lead generation, expansion and conversion to paying customers.
Product-led companies executing this combined strategy are dominating. Slack is increasing its sales headcount by more than 50% every year. The average PLG business has 25% of its employee headcount in sales. Redpoint Free Trial Survey found that salespeople increase free to paid conversion by 3.5x.
We’re in the middle of two powerful market shifts:
- The End-User Era: Now, the end-user has the flexibility to choose software solutions and adopt them without requiring executive approval.
- Work-from-Home Era: People that are now working from home are looking for human connection and will show loyalty to brands who connect meaningfully with their users.
This article outlines how to implement a winning product-led sales strategy to outpace your competitors. It showcases practices, examples, screenshots, stats and quotes from the best PLG businesses out there.
Why PLG matters to Sales Teams
Sales teams need to adjust to PLG because the buyer’s journey is more complex now.
The end-user has more control over their options, so it’s all about delivering value before you ask for financial commitment.
Product knowledge has switched sides. It used to be the salesperson who had all of the information to sell their product/services. Now, it’s the other way around. With online articles, peer reviews, comparison websites like G2 or Capterra, the end-user has all the knowledge available to make a purchase decision. All of these factors need to come into play in order to win more leads for your product.
Prospects want to try before they buy. Would you pay for Netflix before you saw their catalog? Or pay for Spotify premium before listening to a few tunes on the free plan?
Consumer market characteristics are taking over the B2B world. That puts the sales rep in a different position in the relationship.
Salespeople must ask themselves:
- “When should I engage with the customer?”
- “How can I convert this customer from free to paid”
- “How can I increase the revenue from this customer?”
Nothing can deliver value to a prospect better than a great product and interactions with other humans.
Components of product-led sales strategy
- Your offering has a self-service aspect, such as a free trial or freemium option.
- The product should have a land-and-expand referral loop. Prompting users to invite colleagues into the app.
- The product should have a viral loop. Usage of the app generates new users.
- Salespeople engage with prospects once they’re already using the app. They collaborate with marketing and CS on retention and onboarding, too.
- Touchpoints with prospects are focused on getting them to the “aha moment” and then a paid conversion (or other types of investments, examples later in this e-book).
- The sales cycle is heavily focused on the user’s experience with the product and the brand.
- Use the product itself to engage prospects.
- Don’t mention paid offers until the customer has seen value.
- Prospecting is handled by marketing more than by sales. Sales prospecting is more about qualifying which users to go after.
- Focus on revenue churn and revenue expansion more than on new revenue acquisition. (You obviously need to constantly find new accounts, but keeping and expanding existing customers is much cheaper than acquiring new ones and will be your new revenue backbone).
Salespeople can have a BIG impact, and here’s why
No one knows the value of your product better than you, the sales rep.
In today's market, lead acquisition costs are increasing, competitive offerings are growing, and the attention of prospects is harder to grab. By combining the strengths of product-led acquisitions with the ability of sales, product companies can generate more revenue and close business faster.
The result is a game-changing strategy.
In fact, PLG makes the cost of acquisition lower, and increases retention rates and profit margins. Combine that with relationship-based selling and you can boost net new revenue and decrease net revenue churn.
Sales teams are the catalyst in the customer journey and buying process. Sales teams can enable users to be more successful with the product by dealing with legal, compliance, security, contracts and expansion.
Sales and Product-Led Growth go hand-in-hand when implemented correctly: Proof
SaaS leaders are showing us that PLG and sales do go hand-in-hand, and it creates a massive growth at scale.
Slack had a 55% revenue growth in 2020 and is constantly increasing its sales reps headcount. Yet you weren’t introduced to Slack via a crappy cold email, were you?
The image below (credit to this article by Openview) shows how the best PLG companies are doubling down on sales
“If you let the product lead and sales follow, this natural flywheel starts spinning and it starts to click for customers.”
Head of Customer Experience at Notion and ex-Dropbox, ex-Salesforce
You’ve made it this far, so let’s get into the role of marketing & product in PLG sales 👇👇👇
Fred Melanson, Founder & CEO of Bliinx
With participation from revenue & product leaders at: