3 Reasons to Move from Sales Led to Product Led
3 Reasons to Move from Sales Led to Product Led
Breezy Beaumont
Insider Tips

3 Reasons to Move from Sales Led to Product Led

Table of Contents:

Text LinkText Link

Moving from a traditional go-to-market motion (often called Sales-Led or Marketing-Led) to a product-led growth strategy is no easy walk in the park. It requires buy-in from across the organization, restructuring the way we interact with prospects and customers alike, and lots and lots of data. 

So, knowing that it’s such a big change, why are many companies still eager to make the swap?

Here are 3 common reasons:

Product-led helps you move down market

One of the most common misconceptions about product-led companies is that they only sell products with a low ACV (annual contract value). Although it’s true that most product-led companies have a free or lower tier for customers to use, many product led companies also sell enterprise deals in addition to their lower tier. Take Snowflake, Datadog, or MongoDB for example. 80% of Datadog’s revenue at $1.2B revenue comes from its $100k+ customers — but its Free edition is still where most customers begin (source: SaaStr).

Let's look at an example

You're a company with primarily mid-market and enterprise deals, and a good amount of coverage in the market. Since the quantity of deals has been decreasing in a saturated market, you may be looking to expand your total addressable market (TAM). You could consider moving into other international markets, which comes with its own challenges, or perhaps you move down market and start to appeal to smaller companies, which would increase your addressable market.

Let's say that given your options above, you decide to move down market. Smaller contract values means that in order to keep your financials strong, you need to increase the quantity of deals, increase velocity, and decrease your costs. A perfect mixture that PLG enables: people can get started with your product on the website, tour themselves around without the need to have a sales representative involved, and then you can send a notification to your sales team when it makes sense to reach out to convert that user or account. 

Learn & share with other product-led leaders

Join our bi-weekly Product Led Revenue call that features experts from leading PLG companies. See you there!

Improve the buyer’s journey with a PLG option

Buyers are technologically savvy

Buyers are more technologically savvy today than ever before, and this is rapidly increasing over time as the next generations move into the workplace. Most buyers in the tech world today have purchased multiple products in the past, and many are hungry to experience a product hands-on before making a larger purchase. Though many founders and leaders may feel like their product is "too complex" for PLG, they often find that's not the case once they bring a self-serve option to market.

Fast-track for repeat buyers

You also have repeat buyers in your funnel who can bypass most parts of the buying process. For example, if someone was a previous buyer or user of your platform and is re-purchasing at a new company they’ve recently joined, they don't need to go through a traditional buying process - they just want to get started.

Buyer's journey vs seller's journey

Last but not least, many buyers are happy to read your website materials and understand the features and benefits on their own. Once they've completed their research, they may want to see the product to better conceptualize how they will use it, how complex it will be, and some of the value they can expect to gain. They may choose not to self-serve, but the option to see the platform helps them understand how it will work.

In all these scenarios, giving consumers the ability to easily log in to the your platform would help to speed up the sales cycle and improve the buyer's journey. In turn, when this option is not available, many buyers will begin putting pressure on companies who are not product-led to to make this accessible, or may simply turn to a competitor who has this option.

Build a competitive moat with product led sales

If your company is at risk for disruption, and debatably every company is, you have to make the choice to either disrupt yourself or be disrupted. This can be on pricing, on the tier of market you serve (SMB to enterprise), giving control over buying options to prospects, and so on. There are rapid advances being made in technology every day: companies releasing new features, changing their own go-to-market strategy, and consumers changing the way we all buy and sell software.

Here are a few scenarios where a product led approach would help you build a moat to reduce competitive disruption:

  • A competitor has a much faster, easier onboarding process
  • A competitor is gaining marketshare down market
  • A competitor has lower pricing and is able to sustain it due to better margins
  • A competitor is product led
  • A competitor already has marketshare that you want to capture

Ready to be product-led?

It's not an easy journey, but it's almost always worth the effort. If you'd like some support along the way, join Correlated's bi-weekly Product Led Revenue calls with other PLG leaders. We also have a Product Led Community on Slack.

Interested in learning about how Correlated can help your PLG company uncover expansion and upsell opportunities?

Sales and revenue leaders at PLG companies, like yourself, are faced with unique challenges. Using tools like Correlated can help sales and marketing teams identify new accounts that are ready to convert, or can help to notify your team for expansion and upsell opportunities.

Schedule a Demo