Do you remember that one episode from the Office where Michael Scott actually makes a sale?
In a Chilli’s?
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
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 will have to 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? Three reasons.
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 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.
As Wes Bush puts it, if the only way of buying your product is talking to someone, you have a sales-led approach.
It is not hard to imagine how annoying that sounds.
3- Customer acquisition cost (CAC) too high
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.
And the compensation for the team is only half of it. 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 department of a product-led growth strategy, and it is the go-to sales model for companies with a product-led approach. Since product-led growth advocates for better user experience and more space for product usage in the purchase decision, product-led sales functions exactly that way while also applying an established sales cycle and different types of sales strategy.
In short, we can say that product-led sales is a way of making sure that you don’t only tell but also show.
While product-led sales is an especially prominent way of leading the customer journey and acquiring qualified leads for any type of product, it is especially beneficial for B2B companies in SaaS.
“How so?” you might be thinking. Let me explain.
Using the Product as Your Growth Engine
You are a B2B company working in SaaS. 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 three 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 completely. In a company that embraced a product-led 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 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 growing.
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.
Then the question is, “isn’t it the same for the product team in product-led sales strategy?”
And the answer is: not really.
Let’s imagine the two 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, 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 way too many things that enhance the product experience for customers when the product-led sales approach is adopted.
For starters, with PLG, 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 the 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.
Starting a Product-led Sales Team in 5 Steps
If we are on the same page about a product-led sales approach being way better than a sales-led one for most SaaS businesses, now it’s time to talk about how to put it into practice.
If not, you wouldn’t be reading this anyway.
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.
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, 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.
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 from 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 separately. In a PLG model, 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 successful product-led sales.
Firstly, the development of freemium versions should go underway ASAP. If your understanding of PLG doesn’t involve a freemium, 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.
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 😏
Frequently Asked Questions
What is a product-led business?
A product-led business is one that locates the main value of a business where it belongs, to the product. The main approach of product-led businesses is product-led growth, while also applying it to other departments, (e.g. product-led marketing, product-led sales) in an attempt to streamline processes and create a comprehensive workflow.
What is a sales-led approach?
A sales-led approach is a sales and business strategy that puts the weight of bringing in revenue on the shoulders of the sales team and typically has a requirement of talking to a sales rep to buy or interact with the product.