Product-Led Sales: Definition, Benefits, and Examples
What is product-led sales?
Product-led sales (PLS) is a hybrid go-to-market strategy that combines elements of product-led growth (PLG) and sales-led growth (SLG). The strategy involves acquiring prospects using self-serve models, such as free trial or freemium pricing plans. Then, it uses a sales-assisted approach to convert these prospects into paying customers.
In other words, product-led sales leverage your existing user base to drive revenue through conversions, cross-sells, upsells, and account upgrades. It helps retain the human touch of traditional sales methods while letting users experience your product’s value first-hand.
Product-led vs. Sales-led growth
Before you start building a product-led sales framework, it’s crucial to understand the differences between sales-led growth and product-led growth strategy. Here are a few things that set them apart:
- Unlike conventional sales processes, PLG doesn’t rely on outbound marketing efforts to attract and convert customers. Instead, it uses the product to drive conversions and even retain customers.
- While SLG relies on direct customer interactions for acquisition and conversions, PLG uses a self-serve model. The idea is to implement targeted in-app flows that let users navigate the product on their own and realize its value.
- PLG relies on word-of-mouth marketing to drive awareness about the product and attract more prospects. That, in turn, offers ample scope for product virality. In contrast, SLG uses extensive lead generation and nurturing tactics.
Benefits of product-led sales strategies
Combining the product-led growth model and sales-led growth strategies into a cohesive framework helps you get the best of both worlds. It allows you to build a sales motion on top of self-service methods, helping nurture high-value clients better and driving more revenue.
Key benefits of product-led sales include:
Lower customer acquisition costs
With this strategy, you can use self-serve models to acquire prospects and demonstrate a product’s value. It eliminates the need for full-fledged sales pipelines involving regular follow-ups and meetings. That, in turn, helps minimize the burden on sales teams and ultimately results in lower customer acquisition costs.
Scalable product growth
Sales reps can provide personalized handholding to marketing-qualified leads as they evaluate your product. However, doing that for every prospect is effort-intensive and time-consuming. PLS allows the sales team to focus on nurturing high-value product-qualified leads while self-serve models deliver value to the rest. It helps you drive product growth at scale.
Shorter sales cycle
A PLS strategy empowers prospects with self-serve resources, making the onboarding process very smooth. It minimizes the dependence on sales reps and helps a user realize your product’s value faster. The result? Shorter sales cycles and faster deal closing.
Efficient resource utilization
PLS provides your sales team with concrete user behavior and product usage data. It helps them identify and nurture prospects who are ready to sign up for a paid plan or upgrade to an enterprise account.
In other words, you can allocate sales team resources to accounts with the potential to generate more revenue. Moreover, when they engage with a customer, they’re already familiar with their usage patterns, pain points, and preferences.
It eliminates the need for basic discovery questions and helps the sales team utilize their time in such interactions better. That, in turn, makes product-led sales a more cost-efficient GTM strategy. It also takes the customer experience up a notch.
Is the product-led sales approach right for you?
Adopting a product-led sales strategy offers several benefits, including faster time-to-value and cost-efficient customer acquisition. It also enhances the customer experience as you engage with them through self-serve models and human touchpoints.
However, this method may not be the right fit for every business. For instance, products with a simple learning curve and low customer lifetime value (LTV) might benefit more from product-led growth strategies.
Here are a few scenarios where it makes sense to consider a product-led sales strategy:
Integrate sales-led motions into your existing self-serve model
If you already have a self-serve model in place, adding a layer of sales-led motion can be helpful in the following cases:
- Customer support teams receive several sale-related inquiries, such as pricing, licenses, enterprise upgrades, etc., after self-serve onboarding.
- You have a product with a steep learning curve. Having a sales rep handhold free trialers through critical steps in their journey can drive more conversions.
- You want to expand your user base to mid-market or enterprise segments.
Integrate self-serve motions into your existing sales-led strategy
If you’ve already implemented a sales-led motion, consider incorporating self-service models in the following situations:
- Customer support and sales teams receive multiple inquiries about product trials. Offering a free trial or freemium plan will encourage more prospects to take your product for a spin and bring them one step closer to conversion.
- You’re struggling with long and tedious sales cycles that require human intervention at several points. Introducing self-serve resources, such as product tours, interactive walkthroughs, and checklists, can help optimize the sales cycle.
- You’re looking for a scalable way to drive product growth.
Product-led sales strategy examples
By now, you have a clear idea of the benefits and use cases of product-led sales. Let’s discuss a few examples to understand how to implement a PLS strategy.
Implement SSO option for self-serve users
Here’s the thing—most customers don’t have the patience or willingness to fill out lengthy sign-up forms. Even if you offer a feature-packed free trial, you might struggle to attract prospects with complex sign-up and login processes.
A clever way to minimize friction and prompt more prospects to opt for a free trial is to implement single-sign-on (SSO). It allows free trialers to sign up and log into your product with a single click.
You can even let prospects sign in with their Gmail or social media credentials. It eliminates the need for users to create and remember multiple passwords and results in a seamless login experience. Plus, it creates a strong first impression and motivates them to return.
That, in turn, helps prospects experience your product’s value without opting for a sales demo.
Several leading SaaS applications, including Monday, use SSO to simplify sign-up and login processes. Here’s an example:
Deliver personalized in-app experiences during onboarding
A personalized onboarding experience with contextual guidance and relevant self-serve resources helps boost free-to-paid conversions. Start by launching a brief welcome survey for first-time visitors. Use it to collect details about a user’s job role, key challenges, and jobs to be done (JTBDs).
Next, segment users into different groups based on their survey responses and design personalized onboarding flows for each segment.
Use hotspots, modals, tooltips, and other UI patterns to create interactive and personalized experiences that walk users through relevant features.
Such targeted handholding helps free trialers experience product value and encourages them to upgrade to a paid plan.
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Use product data to tailor sales interactions across the customer journey
A key benefit of using self-serve motions is that you can collect a ton of data on user behavior and product usage. With a platform like Userpilot, you can monitor in-app user activity and identify common patterns in their behavior.
Moreover, you can create surveys to collect more details from users, including JTBDs and pain points. You can also segment users into groups based on common behavior patterns, demographic properties, and survey responses.
Next, trigger contextually relevant sales messages to nudge users forward in their journeys.
For instance, you can trigger an in-app message to schedule a demo right after a user engages with a crucial feature. You can even send customized demo offers to decision-makers based on their role in a company.
Alternatively, you can build a segment of users who opted for a free trial and completed onboarding without upgrading to a paid plan. Send an in-app message asking them to book a demo and offer a suitable discount for the first month or year.
For instance, Appcues restricts a user’s access to the platform and triggers a demo offer as soon as their free trial ends.
Automate contextual upgrades based on product usage data
With a PLS approach, you don’t have to depend on manual interventions to drive free-to-paid conversions. Instead, you can automatically trigger contextual in-app messages at the right time to prompt users to upgrade/expand their accounts.
For instance, you can monitor user sessions to dig deeper into how they engage with different features. Use that data to identify the right cross-sell and upsell opportunities and educate users about them.
If a user completes a task with a specific feature, you can automatically recommend a paid add-on that’ll help them unlock more value with the feature. Alternatively, if a user has reached or is about to reach their free usage limit, you can send an automated message asking them to upgrade.
A/B test upgrade messages to drive conversions
Timing your upgrade messages is crucial to maximizing their impact. However, you can boost conversion rates further by experimenting with different variations of an upgrade message and identifying the most effective one.
Use A/B testing to test every aspect of an upgrade message, from the headline and body copy to the call-to-action (CTA). You can even test granular details, such as the color and position of a CTA button.
Similarly, you can experiment by adding different types of multimedia elements. For instance, you can show an upgrade message with a GIF to one group of users and another message with a micro-video to a second group. Monitor conversion rates for both groups to determine which version of the message drives more results.
Analyze customer journey data and iterate to boost revenue growth
It’s worth noting that product-led sales don’t work with a one-and-done approach. You must keep an eye on the customer journey to understand whether your strategies are generating the desired results.
Start by setting up and analyzing a conversion funnel that guides users through a set of predefined steps toward a goal. It’ll help you identify friction points within the user journey.
Additionally, you can conduct path analysis to understand what leads users to a specific feature. It even allows you to identify the happy path to a particular goal or feature.
Next, communicate these insights to customer success and sales teams. Accordingly, refine your PLS strategy by planning guidance to help users overcome friction and nudge them on the shortest path to realizing product value.
Conclusion
A product-led sales strategy helps overcome the limitations of a product-led approach and sales-led growth. It eliminates silos between marketing, product, customer success, and sales teams. It also ensures efficient utilization of sales resources and lowers user acquisition costs.
Ready to take the first step to building a product-led sales strategy? Book a Userpilot demo to understand how our platform can help with in-app onboarding, user analytics, A/B testing, and more.
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