If you poke around on LinkedIn or social media, I am certain you will find multiple posts of some GTM guru or product guru talk about sales-led or product-led growth (the latter of which is commonly acronymized as “PLG”).
But do you really know what each of these mean and how to actually implement them in your organization?
And better yet, what is the right mix of sales-led vs. product-led growth for your business?
I’ll do my best to put my guru hat on and guide you through it, and provide some practical insight and tips on pulling the right levers for sales-led and product-led growth in your scaling teams and companies.
Master Your Understanding of Sales-Led and Product-Led Growth
I am a firm believer of always starting with the foundation and fundamentals.
In this case, it is best to define each sales-led growth and product-led growth before we dive into finding the right combination for your business and teams.
Sales-led growth centers around simply using your go-to-market organization and resources (sales and marketing people, branding, content as examples) to drive business growth and an initial sale and then eventual retention / expansion / support to a customer.
On the other hand, product-led growth focuses on using your product and services (strong user experience, simple “breadcrumbs” to guide your users in your product, training / support centers) to deliver business growth and initial sales / eventual retention / expansion / support to customers.
This quick graphic gives you all a simple side-by-side of each of the above for you to save and quickly recall.
Key Stages in Customer Journey Compared Between Sales-Led vs. Product-Led Growth
Some Helpful Ways to Implement Sales-Led Growth and Product-Led Growth
Now that you have baseline understanding of sales-led and product-led growth, let’s dive deeper into implementing them in your growing organization and getting to the right combination for your journey.
When focusing on sales-led growth, you will have to invest in your go-to-market organization, which is composed of your sales and marketing functions. This tends to lean heavily in investing in your sales, marketing, and customer success / support functions. This does not preclude R&D / product and engineering investment, but just means that your customer journey is more heavily reliant and dictated by your sales-led model.
This includes hiring strong personnel in sales and marketing roles, and breaking them down into job responsibilities and activities.
Key sales personas to hire and focus on to build a proper sales-led growth strategy include: sales leadership / management, sales operations, new logo sales executives, existing logo / account management, sales development / business development reps, sales enablement, and pre-sales / sales engineers
Key marketing personas to hire and focus on to build a proper sales-led growth strategy include: marketing leadership / management, demand generation, product marketing, content generation, ad / omnichannel reps, marketing analytics
Beyond sales and marketing personnel, you will also want to staff customer success / support managers, as sales-led growth will tend to have a bias to drive more human touch / “white-glove” success models. This is a key and often overlooked function in sales-led growth models, given that customer success / support is not always neatly categorized or within the GTM organization (but is extremely critical and important for customer retention and expansion).
Beyond the people, you will then shift focus on processes and systems that better align with generating sales-led growth. The systems are as simple as finding the right technology stack to drive data, efficiency, and productivity in your organization — tools like CRMs, ad-based marketing platforms, demand generation platforms, support and customer ticketing platforms — are baseline and necessary.
Processes are more unique and differentiated. They differ by business model, size of ideal customer/prospects, end markets, and many other factors.
But a great way to create processes to drive sales-led growth are to simply break down parts of your customer acquisition, renewal, expansion, and support journey and then create standard operating procedures and rules of engagement within each to deliver sales-led growth.
For example, in the graphic shown above / earlier in the article, let’s walk through an example of how sales-led growth can be done for the prospecting stage of the customer journey.
Developing sales-led growth processes for your prospecting model can be explained as hiring BDRs (the “people” in your sales-led growth model), providing them a prospecting / lead generation technology platform (the “systems” in your sales-led growth model), and then creating territory maps, intent scoring, lead dashboards, cadence flows, and development of scripts that BDRs use for outbound outreach via phone and email (the “processes” in your sales-led growth model).
On the product-led growth model front, people, systems, and processes are again the focal points to start with and define / manage accordingly.
But where product-led growth differs to sales-led growth on the margin is that it is biased more towards the product and engineering functions of your business, and tends to have a bias towards automation / self-service vs. a human-driven (aka — sales or GTM driven) approach.
For example, if you are a product-led growth organization, you will likely spend more on the margin for R&D vs. S&M in specific parts of your journey (a great public company reference point / case study of this historically is Atlassian). This is because your focus is on delivering a delightful, self-serve, product-driven experience to customers over their lifetime with your organization — from prospecting to onboarding to renewal and through expansion.
So the people you will focus on are likely product personnel (like design professionals, UX/UI professionals, product managers, and even QA team members) and engineers (full-stack, back-end, front-end, and managers / execs), as well as support team members that can help develop light-touch, training and enablement content for your customers in need of assistance.
This will drive more of a “one-to-many” model with your employees and approach on selling to and servicing customers — one employee, one support article, one training video, one onboarding process for many customers.
The benefit of that is that the product will sell and support itself more without human intervention as much as possible — hence why it is called product-led growth.
Systems in product-led growth to implement and think through include things like AI bots / agents, training and support platforms, and a more robust R&D / product and engineering tech stack for your internal teams that can drive efficiency and productivity to your team members in coding and maintaining the product / suite you possess.
When it comes to processes for product-led growth, let’s continue with the example of the prospecting phase of the customer journey.
In this stage for product-led growth organizations, demos, automated outbound via AI agents / outreach agents (an evolving and exciting space indeed), and automated ads and targeted content will be example processes. You will likely pre-develop landing pages and use tools that encourage all sizes and types of customers to service and support themselves. You will likely develop FAQ and enablement pages or AI agent driven bots that help answer common questions in the prospecting phase or thereafter.
Put simply, sales-led growth will focus on more human-driven processes and higher touch activities whereas product-led growth will focus on automated processes and self-service in every phase of the customer journey.
So now that you have a sample roadmap to implementing both sales-led and product-led growth, you need to better align on the right balance of each or either in your company, and which is more beneficial to your organization.
Sales-Led vs. Product-Led Growth: Which is Better for Your Organization?
The simplest answer to this question is both and neither or more frankly, it depends.
There is no crystal ball or magic bullet to defining whether sales-led or product-led growth is better for your organization.
But both have clear benefits and it is important to understand how to use both to your advantage in your company’s growth lifecycle.
A simplest way to think about finding the right balance for both is through segmentation and organization of your customers and prospects.
From my experience, product-led growth works best with low complexity products or services that have little to no variability between customers.
Think tools like Amazon — it is built so elegantly and so simply that the product sells and supports itself. It is riddled with easy-to-use navigation and breadcrumbs that guide users through their search and purchasing journey. If the customer / user needs assistance, the front-line support will be articles, FAQs, automated agents before reaching a live agent or support line. The human element is buried in these types of tools because it is a product-led growth machine.
Self-service in these use cases helps keep margin and profitability per customer strong and because of sheer simplicity of these tools and use cases, product-led growth fits perfectly.
On the flipside, tools like a CRM or an ERP, more complex and onerous tools that have powerful use cases for sales teams and accounting / finance teams in organizations require longer, human-led onboarding and implementation, a lot of training and enablement typically done by teams of people at the CRM/ERP companies, and renewal / expansion / support stages that typically involve an account manager or support / success rep to help the customer through it.
Rarely are new modules or changes to existing modules managed by the customers themselves — these require an intervention by sales teams (or supporting teams) to drive business change. This is a common example of sales-led growth.
So when you have more complex use cases that require training / enablement and some level of configuration / customization by customer or use case, sales-led growth models and approaches work best.
In summary, product-led growth is best for simpler, “one-to-many” use cases (think tools built for SMB customers, point solutions that do few things / workflows for customers, or customer-based applications like Amazon). Whereas, sales-led growth is best for more complex, “bespoke” use cases (think tools built for larger enterprises, heavy workflow tools like CRMs/ERPs that do many things in one platform, or custom-built applications for very specific use cases / end markets).
TLDR: Neither is better or worse, but they are both necessary to use in your growth journey.
If you liked this article and want help understanding your growth journey in implementing sales-led and product-led growth tactics, follow along, drop us a comment with your thoughts, and shoot me a note at rzacharia@rtdinsights.com.
Comentarios