Product-Led Growth VS. Sales-Led Growth: Which Works Best?

There have always been sales-led and product-led sales strategies. Nothing new. However, it’s hardly possible to choose just one and blindly rely on either a product-led or sales-led strategy. 

In 2024, it’s a no-go strategy when a company sells its products without delivering sales pitches or sending out cold emails. It sounds like a utopia for most SaaS companies. In fact, the right growth strategy is a mix of all available strategies.

1. Marketers drive new people to sign up for your product 
2. Then, sales step in to turn freemium users into paid ones or negotiate terms with enterprise-level users 
3. C-level executives strategize and identify new business opportunities

However, sales-led growth has always been the key driving force behind the success of FAANG companies. Aggressive sales tactics and personalized customer engagement have long fueled rapid growth and locked user loyalty. 

But wait. The world has changed. And a product-led approach has made its debut and started reshaping the business’ approach to growth. In 2024, SaaS superstar companies like Slack, Dropbox, Shopify, and Figma are leveraging product-led approaches and making them thrive. And they definitely know how to build a product that sells itself. 

In this guide, we’ll explore the difference between sales-led and product-led growth. You’ll learn the benefits and best practices for implementing the right growth strategy for your business. 

Which strategy to choose? Product-led growth vs sales-led growth. 

Want to know how product-led (PLG) differs from sales-led growth (SLG)? To find out, let’s compare and contrast these two approaches. Let’s start with a detailed answer on “What is product-led growth?”.

What is product-led growth?

PLG is all the rage now. First, the term was coined by Blake Bartlett, an investment partner, in 2016 to describe the phenomenal growth of SaaS companies. Blake noticed that such SaaS companies attracted millions of customers without spending millions on sales and marketing. The product did all the jobs. Here’s Blake Bartlett’s product-led growth definition:

“PLG is a growth strategy where the product itself acts as the primary driver of acquisition, retention, and expansion.”

In short, PLG focuses on the value the product delivers to the end user. It is actually about delivering value and solving the customer’s pain points before a paywall. 

All teams work towards improving the product experience. In other words, PLG is the way to detect, prioritize, and nurture the right sales opportunities. 

Your sales and growth team dedicate most of their time and efforts on detecting the actual problem of customers. They need to understand growth opportunities and create the product your target audience asks for. 

Customers can leverage the value of the product before making a purchase, leading to lower churn rates and higher conversion rates. That’s the key goal of PLG – let the customer experience the value through a self-serve model. 

Hence, it may lead to upgrades or conversions following the best product-led growth examples.

PLG can be a great solution, even if you cannot imagine sales without person-to-person interactions. Consider this: Every day, tons of new customers come to Netflix or YouTube Premium without a single salesperson involved. Just take a look at the stats. Netflix has acquired 270 million subscribers without intervention from salespeople. It’s probably one of the brightest product-led growth examples. Just through product–led growth and marketing. 

Number of Netflix paid subscribers worldwide from 1st quarter 2013 to 1st quarter 2024 (in millions)
Source

Key benefits of a product-led growth strategy 

Check out how great products sell themselves and keep customers coming back for more (to give you a deeper meaning of what a product-led growth strategy is all about).

• Faster sales cycles → thanks to self-service onboarding, most of the sales bottlenecks are removed. Users see the real value of the product and get converted into loyal customers. 
• Reduced cost per acquisition → all efforts are focused on the product itself, which lowers customer acquisition costs. 
• Customer loyalty → when you are focused on the product, the real magic happens. Better product translates into loyal customers. That’s simple. 
• Improved profit margins → more resources are dedicated to building a product that sells itself, and fewer resources are spent on sales and support teams. That’s the way you can improve your profit margins. 

What requires extra attention while building a PLG strategy

And here’s the scoop on what really matters when you’re going all-in on B2C or B2B product-led growth (or when you’re trying to understand “what does product-led growth mean”).

1. Product quality

Since the whole strategy revolves around the product and the value it delivers, a modest product won’t just succeed. 

2. Enterprise sales 

Though the product sells itself, enterprise clients may still require extra sales support to catch up with all sales opportunities in the long run. 

How to determine if a PLG strategy is right up your street

For sure, if you’re a SaaS company with an amazing product that everyone falls in love with a few clicks, it’s likely that you can reap all the benefits of product-led growth. But if not? Here’s a basic checklist you can follow to build your product-led growth model:

• Do your customers ask for a free trial during demo sessions?
• Are they satisfied just with a demo, or are they still asking to try the product?
• Can you convince your customers of the product’s value before they try it?
• Does your product have a simple onboarding process? Can you make it simpler?
• Does your success team need to guide your new customers through the product?
• Can AI chatbot take a lion’s share of customer service queries?

This question can help you get an idea of how easily you can turn to a product-led growth strategy and how to achieve stunning results. 

Still, have some concerns about depersonalized sales? Here’s one more UGS you need to know about. (Right, it can leave you speechless).

Tracing back to 2015, B2B buyers preferred the do-it-yourself sale option rather than interaction with sales reps to complete a purchase. Forrester made a strong prediction. However, it could be fully brought to life. But the evidence is clear: buying from a website is more convenient than spending hours with a salesperson.

So, does this mean that a sales-led growth strategy is dead, and you need to choose between product-led growth vs marketing-led growth? (The answer is No.) But let’s find out what a sales-led growth strategy is. 

What is sales-led growth?

As the name implies, the sales-led growth strategy is focused on the sales team driving sales and revenue. It’s a conventional approach that involves moving prospects through the sales pipelines and closing deals. 

This is a sales team that goes out in the fields, finds leads, nurtures product demo requests, and contracts partners. It’s widely used in companies with complex products or services where do-it-yourself onboarding cannot take place. 

Salesforce, IBM, and Oracle are the best examples of companies driving their growth through a sales-led approach. 

Key benefits of a sales-led growth strategy

Here, you can see why pushing sales first can seriously up your game and secure bigger deals.

• Customer touch → sales-led companies are in a close connection with their customers. They can analyze their needs, understand their pains, and respond quickly with the right solution. 

• Adaptability → the sales team can adjust their sales strategies and reshape the sales direction to respond to market changes. 

• Closed deals → by focusing on what customer needs and negotiating the terms to close the deals, sales reps lead the companies and often exceed their growth goals. 

• Live feedback → while delivering demos, salespeople interact directly with customers and can get real-time feedback on their products or services. Then, this feedback can be used for immediate improvement. 

What requires extra attention while building a SLG strategy

And here we are all heads up on the tricky parts of driving a sales-led strategy to success.

1. Investment

Hiring experienced sales reps and maintaining a skilled sales team is costly. Not to mention, extra sales and marketing expenses. 

2. Time-demanding sales cycles 

Closing a deal may take some time from the first touch to closure. These sales cycles can last anywhere from a few months to several years, depending on how complex the sales funnel is. 

3. Beforehand payments 

In 2024, users aren’t so eager to pay before actually using the product and experiencing how they could benefit from it. 

How to determine if a SLG strategy is right up your street

While a SLG approach is a more traditional way to reach your business growth targets, it still cannot fit every business. It’s a ballet of human interaction. It’s an art of understanding, listening, and persuasion. The quintessence of SLG is the value of a meeting, a call, and a handshake. 

Here’s a checklist you can follow to understand if your business can benefit from a SLG or you should take another road to your success:

• Does your product require integration with a customer’s existing systems or processes?
• Are your potential customers typically large organizations with several stakeholders and decision-makers?
• Are long sales cycles common in your industry, requiring persistent follow-up and relationship management?
• Does your company (with a product or a service agency) have the expertise and resources to build and maintain a high-performing sales team?
• Do you need a direct feedback loop from customers to inform product development?

Going through these questions can help you figure out if an SLG strategy really plays to your company’s strengths and meets what your market needs. 

If you answer Yes to most questions, then an SLG strategy might be just what your business needs. 

The good news is that you can blend them two and harness the potential of a hybrid growth strategy. Here’s how you can do it. 

Implementing a hybrid approach. PLG + SLG for your business success

Mixing product-led and sales-led strategies is one of the latest trends making waves in the business world. This combo is shaking C-level managers and making them redefine their strategies. You can start playing to the strengths of each approach while covering their weak spots. It sounds like a win-win plan. 

So, what does a hybrid approach actually look like? It’s like creating a perfect mix. Just imagine. Your product’s cool features drive people in, and your pro sales team steps up. All these activities help tailor the experience and turn leads into dedicated and loyal customers.

But how can you implement such a hybrid model and make it thrive? 

Steps to implement a hybrid growth strategy 

By following these steps, you can create your own killer hybrid growth strategy that mixes the best of sales and product worlds. Just mix up the scale of product-led tactics and the personal touch of sales-led efforts for your maximum results.

This combo can really improve your customer relationships and help you exceed your business expectations. Here’s where to start your journey:

Top tools to support your hybrid strategy and make your sales reps happier 

Handling a hybrid model isn’t easy – you’ve got to juggle several different teams, each with its own vibe and way of doing things. So, you definitely need some rock-solid sales-led and product-led growth tools to keep everyone in sync. Here’s the shortlist (even tiny) of our must-haves for sales:

CRM software

Salesforce or HubSpot can help track all customer interactions, score leads, and give sales detailed information on customer behavior.

Product analytics tools

You need deep insights into how users interact with the product, what they like most, and where they run into problems. So, having Mixpanel or Amplitude can help you understand your users and keep track of your vital metrics. 

Sales engagement tools

Reply can automate key marketing jobs, tailor communications, and manage leads from start to finish. Set up sophisticated campaigns that run themselves. From sending initial cold emails to following up with personalized messages based on user behavior, Reply handles it all, saving you time and increasing efficiency.

Customer success platforms

They can help keep customers happy after the sale, which is crucial for keeping them around and convincing them to spend more.

Collaboration tools

Slack or Microsoft Teams can make sure all departments can talk easily, swap insights, and plan together in real time.

By arming your teams with these killer tools and getting everyone to play nice together, you can totally nail a hybrid growth strategy (there are many successful strategy examples in the market) that blends the best of product-led and sales-led tactics.

This isn’t just about making your customers smile – it’s about pushing for steadier and more dependable growth.

So, it’s a win-win all around!

Summing up 

Deciding whether to go with a sales-led growth vs product-led growth strategy really depends on what you’re selling, who you’re selling to, and what your company goals are.

You’ve got to match your strategy to these factors to really hit your stride. And remember, markets change all the time, so keep an eye on things and be ready to tweak your approach as needed to keep up with the game.