How product-led growth and sales-led growth can blend to capture full business’ potential

Product-Led Growth (PLG) and Sales-Led Growth (SLG) are two different approaches to growing a business. While both GTM strategies aim to increase revenue and drive growth, they differ in their approach to achieving those goals. Here’s how they are different. Yet also, how they can be made complimentary.

Product-led growth

Product-Led Growth is a business strategy that focuses on creating a product that is so valuable and intuitive that it sells itself. In a PLG model, the product is the driving force behind growth. The idea is that users will discover the product themselves, find value in it, and eventually become paying customers.

PLG businesses often offer a free trial or freemium model, which allows users to try the product before committing to a purchase. This gives users the opportunity to test the product and experience its value before making a financial investment.

Pros of PLG

• Cost-effective: PLG relies on users discovering the product themselves rather than investing in outbound marketing tactics. This makes it a more cost-effective approach than SLG.
• User-focused: PLG puts the user at the center of the business strategy. By creating a product that is valuable and intuitive, PLG businesses are able to build a loyal user base that will drive growth through word-of-mouth.
• Scalable: PLG is a scalable approach to growth, as the product can be easily replicated and distributed to new users.

Cons of PLG

• Slow growth: Because PLG relies on users discovering the product themselves, growth can be slow in the early stages. It can take time for a product to gain traction and build a user base.
• Limited reach: PLG may not be effective for businesses that have a product with a limited market or niche audience.

Sales-led growth

Sales-Led Growth, on the other hand, is a business strategy that focuses on using sales and marketing tactics to drive growth. In an SLG model, the sales team is the driving force behind growth. The idea is that salespeople will reach out to potential customers, pitch the product, and eventually close deals.

SLG businesses often use outbound marketing tactics such as cold calling, email marketing, and advertising to generate leads and close deals. They may also offer promotions and discounts to incentivize customers to make a purchase.

Pros of SLG

• Fast growth: SLG can result in fast growth, as sales and marketing tactics can quickly generate leads and close deals.
• Effective for complex products: SLG is ideal for businesses that have a complex product that requires explanation and education. This approach requires a strong sales team that is able to effectively communicate the value of the product and close deals.
• Wide reach: SLG can be effective for businesses that have a wide market or audience.

Cons of SLG

• Costly: SLG can be an expensive approach to growth, as it requires investment in sales and marketing tactics.
• Customer acquisition focused: SLG can result in a focus on customer acquisition rather than retention, which can lead to a high churn rate.

Product-led and sales-led growth can be combined to maximize your business’ potential.

While product-led growth and sales-led growth may seem like they are at odds with each other, they can actually work together to capture more of a business' potential.

One way to blend PLG and SLG is to use PLG to drive initial customer acquisition and then use SLG to drive expansion and upselling. This means that the product is designed to be easy to use and delivers value quickly, allowing customers to experience the benefits of the product without requiring a sales team to close the deal. Once customers are using the product, the sales team can step in to build relationships with customers and identify opportunities for expansion and upselling. This framework is often referred to as ‘seed - land -expand’.

Another way to blend PLG and SLG is to have the sales team being also actively involved in the customer acquisition process. The sales team can focus on building relationships with potential customers and helping them understand the value of the product. The PLG platform will typically follow up different stakeholders during trial, and provide warnings when intervention is required. This approach can be particularly effective for businesses that have a more complex product or are targeting enterprise customers, where buying from different departments are not uncommon.

Conclusion

Ultimately, the approach that is right for your business will depend on a variety of factors, including the nature of your product, your target audience, and your budget. By understanding the differences between product-led growth and sales-led growth, you can make an informed decision about which approach is best for your business.

Both PLG and SLG have their own unique advantages and disadvantages. PLG is ideal for businesses that have a product that is easy to use and has a clear value proposition, while SLG is ideal for businesses that have a complex product that requires explanation and education.

The key to blending PLG and SLG is to understand the strengths and weaknesses of each strategy and use them in combination to drive growth. By focusing on creating a great product experience and building strong relationships with customers, businesses can capture more of their potential and achieve sustainable growth over the long term.

Whichever approach you choose, it's important to focus on creating value for your customers which bottom-line eventually drive growth.