What Is Product-Led Sales? The Role of a Sales Team in Product-Led Growth

In the ever-evolving SaaS industry, new strategies and methodologies continue to emerge, each with its own set of buzzwords and concepts. One idea that's been getting a lot of buzz lately is product-led sales (PLS). Much like its sibling term, product-led growth (PLG), PLS is changing the way SaaS companies go about gaining, converting, and keeping customers.

This article aims to shed light on the concept of product-led sales, offering a comprehensive understanding of what it entails and how the sales team plays a vital role in the broader strategy of PLG.

Product-Led Sales vs. Product-Led Growth

Before delving into the specifics of product-led sales, it's essential to distinguish it from product-led growth. Although these terms may seem similar, they have easily distinguishable purposes within a SaaS business's operations.

PLG is a strategy that focuses on using the product itself to attract, convert, and keep customers. In this approach, the traditional sales funnel is replaced by a self-serve motion, where users can explore and try the product without requiring human interaction. Most companies focusing on PLG typically employ inbound tactics, such as offering free trials and freemium models, and concentrate on activation and conversion within the product itself without relying on traditional enterprise sales strategy.

To give a real-world example, for companies like CallPage, a product-led approach means allowing website visitors to experience their lead generation solution firsthand. Users can sign up for a free trial of CallPage, enabling them to place requests for callbacks from the company's sales representatives directly from the website.

On the other hand, a product-led sales strategy uses self-serve users as the main entry point in the sales funnel. While it may involve converting self-serve users into paid customers, PLS extends its reach beyond the self-serve channel. Product-led companies utilize PLS methodology for a range of purposes, including expanding customer accounts, up-selling, cross-selling, and ensuring customer renewals.

Key differences between PLS and PLG

Because the difference between product-led sales and product-led growth might appear somewhat unclear, let's clarify the key differences:

PLG is an Ideology, PLS is a Component
Product-led growth is a comprehensive growth strategy focused on enhancing user experiences and product-driven growth. PLS, on the other hand, is a subset of the larger PLG concept, with a primary focus on the sales side of a business's activities.

PLG is Qualitative, PLS is Quantitative
PLG is qualitative and lacks strict numerical measurement. It's more of an ideology that influences business culture. In contrast, PLS is a quantitative approach with measurable impacts, making it easier to gauge its effectiveness in numerical terms.

PLG is an Inward Change, PLS is an Outward Change
Implementing PLG requires internal shifts, aligning the entire organization with new ideas, and educating employees for its seamless implementation. PLS, however, can be applied when an organization is already practicing a PLG model and seeks to enhance potential customer acquisition and growth through the sales cycle.

The Evolution of the PLS Definition

The definition of product-led sales has evolved over time to accommodate the changing SaaS business models. Initially, PLS focused on converting self-serve users into paid customers. However, over the years, it has expanded to encompass a broader set of sales process activities that contribute to revenue growth.

In the earlier stages, many product-led businesses touted their products as capable of "selling themselves" without the need for a sales team. Yet, in practice, the majority of these companies eventually introduced one to accelerate their revenue growth. According to surveys conducted in the SaaS industry, a substantial 97% of product-led companies either had or planned to hire a sales team!

Furthermore, it was observed that PLS teams operate differently from traditional sales teams. Their approach is more product-centric, data-driven, and consultative. This approach allows them to be more effective in achieving their sales cycle objectives.

Key Characteristics of the PLS Approach

A well-executed product-led sales strategy has distinct characteristics that set it apart from traditional sales approaches:

Strong Sales-Assist Motion: PLS employs sales-assist or product specialist teams to engage with existing users of the product. These teams help ideal customers realize the lifetime value of the product quicker, without being overly aggressive or sales-driven.

Clear Rules of Engagement: In a PLS strategy, self-serve and sales specialist teams have clearly defined workflows that avoid overlap or cannibalization of their efforts. This ensures a seamless customer journey.

Emphasis on Product Qualification: Product usage data takes center stage in PLS. It informs the go-to-market playbook and guides when the sales team should engage with customers. The identification of product-qualified leads, based on product usage insights, becomes the primary driver in streamlining the sales process.

Leading with Value: PLS teams are focused on helping customers and solving their problems rather than pushing hard for sales. This value-driven approach contributes to increased customer retention and higher conversion rates for upsells and expansions.

For instance, CallPage allows website visitors to request a callback from a company's sales representative in a matter of seconds, improving the customer experience and enhancing lead conversion rates. This is a classic example of a product-led approach where the product, in this case, the CallPage software solution, becomes an integral part of the lead generation process.

Using Product Signals to Drive Sales

A distinguishing feature of product-led sales is the reliance on product usage signals to inform the sales team when to engage with customers. These signals can take the form of usage spikes, changes in user behavior, increased sign-up velocity, and more. Product usage insights, in conjunction with an ideal customer profile fit and buying intent, aid in defining a product-qualified lead.

Product-qualified leads represent users with a high potential for conversion. They typically convert at significantly higher rates than traditional marketing-qualified leads. By using these signals and data, the sales and marketing team can significantly increase their efficiency, reduce sales cycle duration, improve customer satisfaction, and enhance overall revenue generation.

This approach encourages users to try the software independently while the customer success team steps in to assist users in extracting maximum utility from the product. Converting users into paying customers or encouraging them to upgrade to higher-tier plans becomes a seamless process under the PLS model.

The Role of PLS in the SaaS Industry

A product-led growth strategy has undeniably proven to be an efficient customer acquisition model for SaaS companies. However, the notion of a product that can entirely "sell itself" is an idea that is not always attainable. Achieving a truly PLG product involves various factors, including solving a pressing problem, delivering quick value, providing an intuitive user experience, and incorporating natural network effects and a user-friendly pricing model.

To solely rely on the product to drive revenue growth, a multitude of elements must align perfectly. For many teams, banking entirely on PLG strategy can be challenging in the long run. That's where the product-led sales approach steps in, offering a hybrid solution that combines the best of product-led principles with a modern sales playbook.

Key Advantages of the PLS Approach

Product-led sales bring two primary advantages over traditional enterprise sales strategies:

Superior Customer Experience: PLS prioritizes meeting customers where they are and adapting to their preferred buying methods. When a PLS representative engages with a customer, they are already familiar with the customer's product usage, which reduces the need for repetitive discovery questions. The outcome is a sales process that is more intuitive, smooth, and efficient.

Cost-Efficient Model: Sales representatives are often costly. PLS ensures that sales teams interact with customers who are truly ready to sign up for a paid subscription or enterprise agreement. By identifying the right accounts and users with a high propensity to buy, PLS allows sales reps to spend more time-solving problems for customers. This efficiency translates to a lower customer acquisition cost.

Why Opt for a Product-Led Approach?

Several compelling reasons drive the adoption of a product-led approach, including:

Wider Top of the Funnel: Allowing prospects to have a firsthand experience with a product attracts a broader audience. Whether through free trials or freemium models, this approach streamlines customer onboarding, reduces the need for resource-intensive persuasion, and increases acquisition rates.

Lower Customer Acquisition Cost (CAC): Traditional marketing and sales approaches are becoming less effective, driving up CAC. In contrast, the product-led strategy is cost-efficient in terms of marketing and sales, with freemium or free trial models serving as a zero-cost, high-yield customer acquisition strategy.

Higher Retention Rate: Providing end-users with direct product experience helps them evaluate the product's value proposition. This firsthand experience is more convincing than a sales pitch and encourages users to see the product's value for themselves, contributing to higher retention rates.

Is Product-Led Sales Right for Your Company?

Determining whether product-led sales is the right approach for your company involves analyzing various factors, both quantitative and qualitative. Key considerations include the customer lifetime value, the volume of sign-ups, the presence of a self-serve motion, and your existing sales-led approach.

If you're looking to speed up your sales process and already have a self-serve model, consider a PLS approach if you notice these signs:

• The presence of "hand-raisers" among users with inquiries related to sales aspects.
• A strong bottom-up motion that struggles to transition from user adoption to enterprise-wide adoption.
• Company revenue goals pushing towards mid-market or enterprise customers.
   

On the other hand, for those adopting a product-led culture, PLS may be the right choice if:

• Your product has a use case that is easy for customers to adopt and activate with minimal support.
• Customers show an early interest in free trials or pricing information, indicating a need to shorten the buying process with a self-serve approach.
• There is a clear end-user within the organization who can champion the product.
• Your product exhibits areas of friction that can be addressed through strategies like product documentation and group onboarding.

The Role of Product-Led Sales Teams

In a product-led approach, sales reps play a pivotal role in bridging the gap between the product's capabilities and user needs. Here are some key functions and responsibilities of product-led sales teams:

User Education: Sales reps assist users in understanding the full potential of the product, highlighting its features and benefits that might go unnoticed. They educate users on how to make the most of the software.

Guided Onboarding: Sales reps guide users through the onboarding process, ensuring that they have a seamless experience as they get acquainted with the product. They help users set up and navigate the software.

Maximizing Value: The sales reps focus on maximizing the value users derive from the product. They ensure that users achieve their desired outcomes and experience a high level of satisfaction.

Conversion and Up-selling: While users explore the product, the sales rep identifies opportunities for conversion and up-selling. They help users make purchase decisions or encourage them to consider premium features.

Customer Journey Enhancement: The product-led sales team works to enhance the customer journey, providing users with a smooth transition from initial exploration to becoming paid customers.

Feedback Collection: Sales teams serve as a valuable source of user feedback. They gather insights about user preferences, pain points, and suggestions, which can be used to guide product development and make improvements.

It's important for the sales team to utilize useful tools. Like CallPage's click-to-call pop-up, that helps reach users who are actively exploring the product. It not only provides an immediate and convenient channel for potential customers to connect with sales experts but also allows a sales rep to align with the user's preferences and guide users through the product's value proposition in real time.

READ ALSO: How to Talk to Customers? Client Communication Best Practices

Creating Your Product-Led Sales Strategy

Once you have determined that product-led sales is the right fit for your company, the next step is to craft a comprehensive PLS strategy. This strategy should encompass the following components:

Goal: Clearly define the objectives of your PLS strategy. These goals can include increasing free to paid conversions, expanding into the enterprise market, reducing churn, or a combination of these objectives. Your goals should align with your company's revenue targets.

Team: Identify the specific teams within your organization responsible for executing the PLS model. These may include sales-assist teams, Sales Development Representatives, Account Managers, Account Executives, Decision Makers, and Customer Success teams.

Playbook: Develop a go-to-market playbook that outlines the details of your strategy. This includes specifying the customer segments you will target, when and how you will engage with them, and the messaging and value propositions you will convey. The playbook should serve as a guideline for your PLS teams.

Expanding the Product-Led Mindset

While PLG has its merits, the belief that a product can entirely sell itself has often been oversold. Achieving a truly PLG product requires a combination of factors that align perfectly, including solving a significant problem, delivering perceived value, and creating an exceptional user experience.

In practice, many teams may struggle to meet their long-term targets by relying solely on PLG. This is where the Product-Led Sales approach proves invaluable. It allows companies to blend the best aspects of Product-Led principles with modern sales strategies, creating a hybrid approach that often yields the best results.

In Conclusion

Product-led sales is a dynamic strategy that bridges the gap between self-serve product adoption and traditional sales efforts. It leverages product signals, data-driven approaches, and a value-centric focus to enhance customer experiences and boost revenue growth. Besides, while PLG has its strengths, the Product-led sales approach offers a pragmatic solution, particularly for companies seeking a balance between efficient self-serve models and the power of sales teams.

As a matter of fact, as the SaaS industry continues to evolve, companies must consider how PLS fits into their overall go-to-market strategy and adapt to changing customer preferences. By implementing a well-defined PLS strategy, aligning goals with revenue targets, and emphasizing a customer-centric approach, product-led companies can capitalize on the best of both product-led and sales-led strategies.

Ultimately, the success of PLS lies in understanding your customers, providing value, and guiding them toward the right solutions, all while leveraging the full potential of a product.