Uniting product-led and sales-led growth models in the SaaS sphere

It's time to talk about bridging the gap between product-led growth (PLG) and sales-led growth (SLG) SaaS models for companies.

Currently, I'm a Senior Product Manager at Amazon, but I have over eight years of experience in product across Amazon, SurveyMonkey, EAB, and eBay.

I also got my MBA from Booth School of Business in Chicago, Illinois.

With that, let's jump into the agenda. We're going to be looking at:

The battle between product-led vs. sales-led

From what I’ve experienced, there’s a constant battle between product-led and sales-led. For example, who's getting the right leads in? And who's driving more revenue? This is something that goes on in most companies.

In terms of the current state of things, what I'm seeing is that many successful startups and early-stage companies have adopted PLG, and it’s become increasingly popular over the years. This might be because it's easier to get started with PLG, especially if you have a product that’s easy to use.

But that’s not to say that SLG isn’t popular. Many traditional companies like Microsoft and Salesforce use SLG and have been highly successful as well.

Both PLG and SLG are valuable strategies for B2B SaaS companies, depending on the specific needs and goals of the product, and we're going to dive deeper into what those are later on.

But the burning question most companies continue to have is, “Which one should we adopt? Which one is optimal?”

Now I'm going to do a quick deep dive into what exactly a product-led growth model and a sales-led growth model are.

The product-led growth model

When it comes to PLG, it's essentially the product that’s driving everything. There are all of these functions which are aligned with the product, and the product’s driving all these different things.

In terms of customer acquisition, when customers come in, they do self-service channels like free trials. And then within the product, there are built-in levers to go from freemium to any kind of paid tiers. And that's how customers can realize value and then continue to use the product.

All of the functions are pretty much centered around product. That's what a product-led growth model gives us.

Just to give you some examples, companies like Zoom and Slack have successfully adopted this PLG model.

One thing to keep in mind is that the product has to be easy to use and understand. Otherwise, it’s highly unlikely that somebody’s going to buy it or use it directly.

Channels like free trials and freemium are a hallmark for any PLG products out there. Your customers want to try the product out on their own and see if they like it and what value it’s giving before they move forward with it.

And then within the product, there are upsell and cross-sell opportunities. Once you’ve tried out a freemium model, how do you go to paid tiers? So there will be some options that you see within the product.

In PLG, there are smaller sales teams and marketing teams because most of the work is driven by the product itself.

And overall, this is more of a slow and steady growth pattern when we start out. Obviously, it can scale as well, but generally, if it's a newer PLG motion for a product, it’s generally slower to start out with, and then eventually it can pick up.

Now, let's look at the SLG model.

The sales-led growth model

This is the typical model, and traditional companies like Microsoft and Salesforce have used this successfully. Some other companies like HubSpot and GitLab have also started off with SLG, and they might now be going towards more of a PLG model, but they’ve successfully adopted this as well.

One thing to keep in mind with this model is if your product is highly complex. If it’s highly technical and not easy to understand for a customer just by looking at it, then this kind of motion makes sense because you have your sales and customer success teams who can tell them how to use it, what complexities are involved, and how they can get started with it.