Leaderboard

Imagine a product, so incredibly valuable – It does all the selling by itself. Ever used Zoom? Yes? So, how did you learn about Zoom? Advertisement? Banner? Sales email? That’s right, using the product itself got you acquainted to the value it brings, into the “sales” funnel, and then the product did rest of the selling. The most famous product-led success stories like Zoom, Dropbox and Calendly – all witnessed rapid growth, driven by an incredible market fit, stunning product adoption and retention. All that without any sales calls or emails to promote the product. How’s that? In a world of information overload, people control who they want to hear, see or read. And people – they love it when there’s no selling, no spamming. When it feels like a natural inclination to buy-in, when they see value before they pay; That’s when you’ve made a customer that sticks, and even more – spreads the word. Many organizations have their hopes on PLG, dreaming of becoming the next success product-led growth story. That said, there are quite a few reasons why companies can’t just switch to a product-led growth model, some of these reasons include: 1. No self-service 2. No free trial or freemium option 3. No ability to purchase online 4. Complex Pricing model 5. Complex product setup, usage and navigation Perhaps a sales-led approach would be more realistic for such products that fit the aforementioned criterions. Let’s understand what fits where and what works best for your product? PRODUCT- LED GROWTH (PLG) SALES- LED GROWTH (SLG) Suitable Candidates for PLG: Interest generated from the bottom of the funnel Instant Value creating products, leading to instant customer impact Product which is easy to understand, evaluate, adopt and integrate in existing workflows Easy to try and buy option Customer is decision maker and the end-user Suitable Candidates for SLG: Interest generated from the top of the funnel. Product where time to value is long Self-service is not available Suitable for products/ businesses with relatively smaller addressable market Complex product coupled with an enterprise sized client Customer and end-user may be different In initial phases of the product/ category, when your product is not fully established, hand holding customers becomes important. Advantages of PLG: Wider potential top of the funnel, with more customers who will have access to free-trial and/or freemium model (or if you’re offering free trials) Significantly lower customer acquisition cost (CAC) Instant the customer value and experience Increase customer retention and upsells Shorter sales cycle Higher potential for product virality Advantage of SLG: Traditional, yet proven and tested model to acquire enterprise customers Increased conversion rate and faster onboarding for complex products Ability to close high Lifetime Value (LTV) customers High level sales-end user engagement ensures easy learning of usage and relevant features. Customer specific customisation of the product/ solution Closer to customer, hence better access to customer feedbacks Disadvantages of PLG: ·Can only be utilised where product offers trial or freemium model Significant investment in product innovation, design and continuous improvement Disadvantages of SLG: Enormous investment in Sales and Marketing of the product The customer acquisition model is often leaky The organizational structure hinders product development SLG+PLG Approach Many of the successful product-led businesses have eventually integrated the traditional, tried and tested sales-led approach as they’ve have grown. This integration was essentially instrumental in · reaching out to those potential customers can could not have been reached via. product-led approach. · customer expansion such as upgrades, renewals, and allow you to target at an enterprise level. Both product-led and sales-led approaches have their prospects, time and place. Understanding when which works best and how to incorporate them together to bring the maximum value and experience to the customer is the key, because in the end, it’s the customer impact that really matters and drives long-term sustainable growth. References: https://productled.com/blog/product-led-vs-sales-led/, https://productled.com/blog/product-led-growth-definition/