What Is Product-led Sales and How Can You Adopt It in 2024

Do you remember that one episode from the Office where Michael Scott actually makes a sale?

By pushing the work talk to the last minute and having a good time with the prospect first? And they actually end up having a deal?

Well, I get reminded of that one episode almost every day because it is just a mystery to me how someone can buy something WITHOUT first seeing the product and/or experiencing it.

Now I love Michael Scott and if you have watched the entire series, I know you do too. But what he did there no longer qualifies him as the best salesperson.

Because today, the best salesperson you can find is your product.

Let me elaborate on that and talk about:

• Why the traditional sales methods are NOT as effective anymore,
• What we mean by "product-led sales" exactly, and
• How you can use your product as your go-to growth engine,
• How you can start your very own product-led sales team today

Don't have the time? Here's the TL;DR:

TL;DR

👉 The traditional sales process involves prospecting, connecting with prospects, pitching the product, and nurturing the relationship. However, this approach relies heavily on the sales team, lacks a good customer experience, and has high customer acquisition costs.

👉 Product-led sales is a better approach for most SaaS businesses since it focuses on using the product as the main driver for growth and emphasizes a seamless user experience while also aligning sales and product goals, reducing friction between teams, and providing a better qualification model for leads.

👉 Product-led sales is the sales approach of a product-led growth strategy. It incorporates an established sales cycle and various sales strategies while prioritizing product usage in the purchase decision. It allows customers to interact with the product and focuses on selling to product-qualified leads.

👉 Product-led sales is especially beneficial for B2B SaaS companies. It transforms work processes, enhances the product experience for customers, and aligns all teams toward improving the product and driving growth.

👉 To build a product-led sales team, first, determine if it is the right approach for your business. Then, change the mindset of your company, establish a product-led culture, get all teams on board, and continuously optimize and experiment to find the best fit for your approach.

Ready to read the full guide? Let's get to it right away.

Why the Traditional Sales Methods Aren't As Effective Anymore

Let's picture the good old sales model together.

Now, it might be a tad bit different for different sizes of businesses but the typical sales process looks a bit like this:

👉 First is almost always prospecting.

Salespeople find potential customers through various means that might be interested in purchasing/subscribing to their product.

👉 Then, your sales rep connects with the prospect to qualify them and see whether your product is a good fit for them.

Then comes the company analysis to find the best-fitting version of your product for the prospect.

👉 Then, it is time to pitch your product.

Now let me remind you that after this will come a series of calls and emails with the prospect.

👉 Your sales rep will take their objections, craft a solution, pitch again, probably craft another solution, and then make a proposal.

If all goes well, the deal will be made after dozens of calls and hours spent researching and solution crafting.

Then comes the nurturing.

Call it a sales funnel or a sales cycle; it is tough work.

"What is wrong with the sales cycle? ", I hear you ask. Most companies still use it, even product-led companies. So why do we need to address the sales process?

Because you might have a sales-led approach or you might be in danger of adopting it.

I am not saying it's wrong to be a sales-led company, I'm saying that it might not be the best approach to customer acquisition unless your organization is a very particular one.

Why is this so? 3 reasons.

Product-Led Sales vs. Traditional Sales

1- Depends too much on the sales team

Any company would want to grow. But it is few that can handle sales-led growth.

The problem with sales-led organizations is that the sales team means everything and the entire organization depends on their performance.

Need I remind you how differently the salespeople were treated in the Office?

Jokes aside, such responsibility puts a heavy burden on any team, be it a small-sized organization or an enterprise.

Even when the product-led approach is out of the question, a lot can be done to relieve the sales team of a sales-led company.

2- Not the best customer experience

One typical trait of a sales-led growth model is that the pricing is almost never public.

What's more, this doesn't only involve the pricing. There are many tools out there, like WalkMe or Whatfix, out there with which you can't even see the UI without a demo.

I'm not even going to get started on super pricey enterprise software that doesn't even have a clear product value proposition, let alone proof of value 🙄

As Wes Bush puts it, if the only way of buying your product is talking to someone, you have a sales-led approach.

And well, it is not hard to imagine how annoying that sounds.

3- Customer acquisition cost (CAC) too high

You can't drive revenue without investing in it. Revenue growth is practically built on well-strategized revenue loss.

But...

In way too many companies, revenue growth, improving the conversion rate, even ensuring user adoption can fall onto the shoulders of your sales team.

And when your company's fate depends on your sales team, would you entrust it to someone who's willing to work for less?

I don't think so.

The compensation for the team is only half of it too. Depending on your customer acquisition model, it could include anything from salaries, marketing ads, tools, and other costs spent to acquire, especially enterprise customers and others.

Of course, CACs have a direct relationship with acquiring customers with a high customer lifetime value, but this again brings us to the same question:

👉 Why bother with a sales-led model when you can have the best of both worlds?

What is "Product-led Sales"?

Product-led sales is the sales approach of a product-led growth strategy, and it is naturally the go-to-market strategy for companies that prioritize product-led growth. Since product-led growth emphasizes a seamless user experience and emphasizes the importance of product usage in the purchase decision, product-led sales aligns with these principles while also incorporating an established sales cycle and various sales strategies.

👉 In short, we can say that product-led sales is a way of making sure that you don't only tell but also show.

It is saying, "Hey, we have this free trial and a freemium version, go ahead and enjoy our product-led experience, and we'll be here to help if you want more than self-service to see the product's value!"

While a product-led sales model is an especially prominent way of leading the customer journey and acquiring qualified leads for any type of product - and thus driving revenue - it is especially beneficial for B2B SaaS companies.

"How so?" you might be thinking. Let me explain.

Using the Product as Your Growth Engine: How Does Product-Led Sales Power B2B Product-Led Companies

You are a B2B company with a SaaS product.

You have a diverse customer base, maybe a little more enterprise customers, maybe a little less. Your product team is good, and your product managers are working hard.

Maybe you have a good sales team. Maybe you don't have anyone in that department.

No need to panic. Your best salesperson is your product.

When I say "your best salesperson is your product," I mean it from 3 perspectives:

From the perspective of your company, your sales and product teams, and your customers.

👉 What this means for your company

In the context of your company, product-led sales directly means product-led growth.

And product-led growth has the potential to transform your work processes - from user adoption and customer success to your entire organizational structure - completely.

In a company that embraced a product-led sales model as its go-to-market strategy, all teams need to change focus.

In a good way.

While an organization focused on sales as the primary revenue growth engine needs to work in order to bring prospects to the sales team, an organization with a product-led growth strategy requires everyone to bring users to the product itself, not a team.

This way, the hierarchy and friction between teams seriously plummet and every team can just focus on the joint goal of enhancing the product and efficient growth.

👉 What this means for your teams

I already mentioned that a sales-led growth approach puts way too much pressure on the shoulders of the salespeople while also creating friction between them and the other teams, especially sales and marketing and sales and product.

Too often, sales ends up being the bad guy.

Then the question is, "Isn't it the same for the product team in a product-led sales strategy?"

And the answer is: not really.

Let's imagine the 2 main goals of an enterprise-level company that has a product, no matter the industry or user base.

👉 To improve the product, and

👉 To sell to the ideal customer profile, which is essentially product-qualified leads (PQL),

Both in order to essentially grow as a business.

❌ The problem with a sales-led approach is that it lacks the structure to bring these goals together.

A product-led approach, on the other hand, sells to the ideal customer profile BY improving the product. Two main goals intertwined, easier and more meaningful growth guaranteed.

And the echoes of this change are felt in and by the sales and product teams as well.

In the first scenario, all teams work to make it easier for sales to sell the product. In the latter, all teams support the product team to grow as a company altogether.

👉 What it means for your customers and users

There are many things that enhance the product experience for customers when the product-led sales approach is adopted.

For starters, with a product-led model, they can actually interact with the product.

From the customers' perspective, we can also consider product-qualified leads and sales-qualified leads.

➡️ Product-led sales means that your sales team will be seeing PQLs, leads who have already interacted with your product, saw your product's value first-hand, and decided it might be a good fit for them.

➡️ However, with a sales-led approach, your sales team works with SQLs, leads whom YOUR team decides is a good fit for the product.

I'm leaving the maths of how big a change it can make on your customers' outlook to you.

But if we're on the same page about which one is a better qualification model, let's talk about...

Starting a Product-led Sales Team in 5 Steps

Hot take that is hopefully not as hot as it was before you started reading this article: Product-led sales approach is way better than a sales-led one for most SaaS businesses.

Now it's time to talk about how to put it into practice.

So, let's talk about the 5 essential steps to take when building your product-led sales team.

1- Make sure product-led sales is for you

As I mentioned several times previously, product-led sales is the best model for most SaaS and some non-SaaS companies.

And there is absolutely no need to rush into it only to find out it is not the best fit for you.

There are some tell-tale signs to show you are better off with a sales-led approach.

👉 For example, if your business situates itself in an industry where the user base is seriously small with big deal sizes or if the company is seriously niche, you might want to stick to sales-led.

👉 Similarly, you might have your own reasons for preferring sales-led. If your company has an exclusive image, or if you want to secure high lifetime value customers with more ease, it could be a better option.

👉 Your product can also be too complicated for a free trial or freemium model, which can further push away potential customers. Then, to grow appeal and actually showcase your product's value in the buying process, high-touch sales might come in handy a lot more.

Still, there is usually no reason that would hinder organizations from offering a freemium model or sharing demos publicly to enhance positive user impressions.

2- Change the mindset - forever

Changing your market strategy is a huge change, both in the daily tasks of your employees and the impact of these tasks.

You cannot run a rapid growth model with the same growth mindset as the previous approach you adopted. In changing the mindset of your company, the most prioritized teams to address are the product and sales teams.

In a typical growth model working with a sales-led strategy, the product team and sales work almost completely separately. In a PLG go-to-market motion, all teams - including the sales team - work to bring out the value in the product team's work.

If this mindset isn't adopted early on, the consequences might be hard to recover from.

3- Establish a product-led culture

Just like the PLG mindset, the PLG culture means a lot to a successful product-led sales motion.

Firstly, the development of free trial or freemium versions should go underway ASAP.

Now, if your understanding of PLG doesn't involve a freemium version or trial, simply take steps to the closest possibility for you. This might include sharing recorded demos or creating a user experience close to the real product experience in your website or a demo environment.

Similarly, you can now start paying more attention to what the customer experiences throughout their buyer's journey instead of your sales team's tasks and the sales funnel.

Speaking of users, it is also time to put emphasis on the UX. Because you want customers to buy after experiencing the product, the faster they find value in-app, the less friction you experience in the sales funnel.

4- Get the other teams on board

Product-led culture doesn't only include sales and the product team. At the end of the day, PLG is a group effort.

Make sure to introduce the new processes to the rest of your teams and include them as much as possible. It is also a characteristic of product-led growth to create a comprehensive work environment where everyone's effort is appreciated more.

The marketing team can use content wholly related to the product to bring in qualified leads, the customer success team can work towards success directly related to the product and the user experience, and the support team can produce self-service support content to give even more autonomy to the users.

5- Optimize and repeat

There is no one-fit-for-all way of doing product-led sales. Every business is different, be it in size, industry, or market strategy.

So, when starting your own product-led sales team, it is essential to experiment and see what fits your approach the best. You made a mistake? Now you know what not to do.

Because sales is not the only way you can bring in revenue, mistakes don't have such grave consequences.

So when you get the chance: experiment, optimize, repeat.

Wrapping Up...

Product-led sales is a prominent department of a product-led approach, and any business willing to switch to a more flexible, more value-oriented market strategy needs to be aware of the best ways to do product-led sales.

Yet there is no clear-cut way of perfectly applying a product-led sales strategy.

Every business needs to try it for themselves to shape the perfect approach for themselves. Thankfully, switching to product-led is almost always a good decision.

Give it a try, and see it for yourself 😏

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