How is marketing-led growth different from product-led growth and sales-led growth?

This is the main question we explore in the article. You will also learn how to choose the right growth strategy for your SaaS and how to leverage marketing-led growth to achieve your business goals.

Let’s dive right in!

Summary of marketing-led growth

• Marketing-led growth is a strategy that relies on marketing efforts to drive product growth and retain users.
• In contrast, the product-led growth model leverages inherent product virality and its value to drive customer acquisitions and retention.
• Sales-led growth, on the other hand, is built around the traditional sales process and tactics like trade shows or demos.
• Most companies use all 3 strategies to some extent.
• Content marketing is an effective way to increase brand awareness and educate customers on how to use the product for their use cases.
• Search Engine Optimization (SEO) allows companies to reach more users with their content.
• Paid advertising, like PPC or display ads, is another common marketing strategy used by SaaS companies.
• Personalized emails are an effective way to announce new features and updates, and can be used to win back inactive users.
• Webinars play an important educational role. They allow companies to reach broad audiences and increase brand awareness.
• Userpilot is a product adoption platform with advanced analytics, feedback, and onboarding functionality. Book the demo to see how you can use it to improve your marketing efforts and drive revenue growth.

What is marketing-led growth?

Marketing-led growth (MLG) is a go-to-market strategy that relies on marketing initiatives as the main force driving product success.

To drive customer acquisition, retention, and account expansion, marketing-led companies focus on showcasing the value of their products in their communication with existing and prospective customers.

What are the benefits of marketing-led growth?

Marketing-led growth has a number of advantages over other growth strategies.

First, MLG helps increase your brand awareness and visibility in the market. By pursuing this approach consistently, you can massively improve your authority and establish yourself as a thought leader in your field.

Second, marketing is about market and customer research as much as product promotion. Consequently, it allows companies to gain a better understanding of the customers’ pain points, needs, and preferences.

Such knowledge allows companies to make informed product-development decisions, fine-tune their product positioning, and create tailored marketing campaigns that resonate well with customers.

As a data-driven approach, it can also help you choose acquisition channels with the best ROI.

Understandably, all of this translates into improved customer acquisition. This means not only more users but also the right ones. Better alignment between user needs and what the product offers increases user retention and customer lifetime value.

Marketing-led growth strategy vs. product-led growth strategy

Product-led growth (PLG) is a business strategy that uses the product as the main driver of growth. Its main focus is on creating a product that satisfies customer needs. MLG, on the other hand, focuses on promoting the product.

The differences in focus reflect how marketing-led and product-led companies acquire customers.

MLG uses a range of marketing channels, like content marketing or paid adverts, while in PLG, it’s the product and its virality that attracts customers.

Generally, PLG companies aim to reduce their dependence on marketing or sales teams and rely on the product to drive conversions via self-service channels. This reduces their marketing and sales costs.

This is not the case in MLG companies, where the marketing team plays a pivotal role in generating leads.

Finally, both strategies are different in terms of monetization. In marketing-led companies, this happens early on in the customer journey.

This is different in PLG companies, where users have a chance to experience the product through free trials and free plans and pay only for advanced features or plans, which happens much later in the lifecycle.

Marketing-led growth strategy vs. sales-led growth strategy

Sales-led growth is a business growth approach which, as the name suggests, centers on the sales process. The sales team proactively reaches out to potential customers, nurtures them, and converts them into paying customers.

Such an outbound approach distinguishes it from the MLG strategy, which focuses more on inbound initiatives like content creation and distribution. We can say it baits them to the product with resources highlighting the product value.

Marketing campaigns and strategies tend to involve mostly one-way communication – they communicate the message to the users. In contrast, sales-led growth is all about personalized two-way communication and building long-term relationships with customers.

Finally, while MLG businesses may start generating revenue earlier in the customer journey, the sales cycle tends to take longer, especially in the context of enterprise-level B2B software.

Which growth strategy is right for your SaaS product?

No company is 100% PLG, MLG, or sales-led. Instead, most SaaS companies use a wide range of tactics from all 3 strategies to acquire and convert customers.

For example, lots of PLG companies still invest heavily in marketing and have dedicated sales teams looking after their large companies.

So how you balance them depends on your goals, product, and the market.

Marketing-led growth strategies are well-suited for consumer products in competitive and digitally-driven markets where building brand awareness and quickly monetizing customer relationships are essential.

PLG strategies work well if your product is simple and easy to experience, the market is large, and you have the resources to provide the product for free.

Sales-led growth may be more suitable for complex and enterprise products and highly regulated markets.

What is an example of a marketing-led growth company?

Semrush is a comprehensive digital toolkit that provides solutions for Search Engine Optimization (SEO), Pay-Per-Click (PPC), content creation, and social media marketing.

The above are some of the strategies that they use to promote their product.

For example, the content team publishes in their blog daily articles on various aspects of SEO, SEM, PPC, and content marketing. They also run an academy with free marketing courses and regularly host webinars. Their website contains a GoodContent Hub with valuable resources for content marketers.

All this increases their online presence and subject authority. It also educates their existing and potential customers on how to get the best out of their tools.

How to drive growth through the marketing-led approach?

Let’s look at a few marketing strategies that you can implement at your SaaS, no matter how hardcore PLG or sales-led you are.

Leverage content marketing to educate your target audience

Content marketing focuses on creating valuable resources that educate their audience on industry-related topics.

More importantly, by contextually introducing the product in the content, it also communicates its value to existing and prospective customers and teaches them how to use it effectively in different contexts.

Content marketing isn’t limited to blog posts. With modern AI and audio-and video editing tools, it’s also easy to create engaging audiovisual resources, like tutorials or podcasts.

Use search engine optimization to reach greater prospects

For users to benefit from your content, they first need to find it. That’s where SEO, or search engine optimization, comes in.

Basically, it involves optimizing your content and website performance to improve their performance in SERPs. This can be done by including relevant keywords in the text and adding visuals as well as acquiring backlinks and improving the user experience.

Create paid ad campaigns to boost customer acquisition

Paid adverts are another way to acquire new customers.

This could be in the form of:

• Pay-per-click (PPC) ads, where you pay for your website to appear in the search results
• Social media ads
• Display ads, which are visual banner ads appearing on other websites

Send personalized emails to retain customers

Email is another popular marketing medium that teams leverage to engage and retain customers.

These are normally sent periodically, in the form of newsletters, or to announce new features and share updates with customers. You can also use them to collect customer feedback.

The advantage of emails over in-app messages is that they allow you to reach inactive users and win them back.

The trick to effective email marketing is personalization. Make sure you target users with relevant information. And use their first names, for Pete’s sake!

Host webinars to engage customers

Webinars play an important role in marketing and retention strategies due to their ability to reach a wide audience and foster engagement.

By hosting webinars, businesses can showcase their products or services, demonstrating their value proposition and expertise to a larger audience. This can result in an increase in brand awareness, driving more potential customers to the business.

Moreover, webinars allow for interaction with the audience through features like live Q&A, which can enhance the customer experience and boost customer retention.

Additionally, the content generated from webinars can be repurposed into various formats, like blogs, social media posts, or shorter videos.

Conclusion

Although product-led growth and sales-led growth strategies may marginalize the role of marketing, the reality is that both of them depend on it to some extent. We can safely say then that all companies are marketing-led.

If you’d like to learn how Userpilot can give your marketing efforts a boost, book the demo!