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What is Product-Led Sales?

What is PLS really? Breaking down the buzzword.
Alexa Grabell
June 7, 2022
What is Product-Led Sales?

Product-Led Growth, Product-Led Sales, Sales-Assist…it’s hard to keep track of all the terms.

Just like the term Product-Led Growth, we’re seeing Product-Led Sales get a bit buzzwordy on LinkedIn. So, we’re here to nip this in the bud and provide a real definition.

A year ago, when we started Pocus, we created a pretty simple definition for Product-Led Sales (PLS) based on the hundreds of conversations we had with go-to-market leaders at PLG companies.

Here is that initial definition:

“Product-Led Sales (PLS) is a go-to-market strategy that uses self-serve users as the primary funnel for the sales motion”  

Our desire to define PLS came from a key observation. PLG companies like Slack, Zoom, and Atlassian were touted as shining examples of products that “sold themselves” without the need for sales teams. But, in reality every one of those companies eventually added a sales team to accelerate their revenue growth.

Earlier this year, we surveyed GTM leaders at PLG companies on this question and found that 98% either had a sales team or had plans to hire a sales team soon. 

Source: Product-Led Sales Benchmark Report

But these sales teams behaved differently. They were more product-centric, consultative, and data-driven - making them much more effective. 

The motion did not resemble a traditional sales-led approach, but it clearly didn’t fit the definition of product-led growth either. Product-led growth is both a go-to-market and product strategy that positions the product as the primary channel for acquiring, converting, and retaining customers. It relies on a self-serve motion, where users can try your product without talking to a human first. 

So what is Product-Led Sales and how does it differ from PLG?

(Re-)Defining Product-Led Sales 

Creating a new category is an ever-evolving process. After spending a year building with our customers and community that are evangelizing the future of PLS, we’re ready for the next iteration of the definition. There are two key changes we’re suggesting: 

  1. Product-Led Sales is more than just converting self-serve users to paid customers. Yes, PLS can help GTM convert self-serve users to paid customers, but PLS can also drive sales motions beyond the self-serve channel. Companies use the PLS methodology to convert free trials and drive expansion, upsell, cross-sell, and renewals. 
  1. Product-Led Sales is for more teams than just sales. Every member of the go-to-market team from SDRs and Account Executives to Account Managers, Customer Success, Solution Engineers, and Marketing can drive revenue from product usage insights. 

So, given the above learnings, we’re suggesting a new definition for Product-Led Sales:

Product-Led Sales is a go-to-market approach that relies on existing users of the product to drive revenue, including conversion, upsell, cross-sell, and expansion.

How did we arrive at this revised definition? Over the last year, we’ve worked with a lot of Product-Led Sales teams. We noticed some key themes from the best-in-class companies that informed this new definition. 

The highest performing Product-Led Sales teams… 

Reduce friction for customers. 

A PLS motion reduces friction between customers and value. PLS optimizes human touch-points and only adds salespeople where necessary.

Create multiple paths for the customer. 

PLS is all about meeting customers where they are. Sometimes that means talking to a human, other times it means remaining self-serve to explore the product on their own. 

Use product signals to uncover customer needs. 

PLS relies on product signals (eg. usage spikes, changes to user behavior, increase in signup velocity, etc) to tell GTM teams when to engage with a customer. Product usage data helps teams learn when to reach out (or when not to). 

Lead with value. 

PLS teams help customers - they are never aggressively selling. They are consultative and solve problems for end-users.

Expanding the product-led mindset

Product-led growth is undeniably an efficient go-to-market approach, but the promise of a product that can truly sell itself has been oversold. 

A truly PLG product needs a lot of things to work in its favor:

  • A true hair on fire problem
  • A product that can get users to value quickly 
  • An easy to navigate experience without a heavy implementation process
  • Natural network effects (intentional viral loops) 
  • A pricing model that makes it easy to pay self-serve
  • A product so delightful people will tell their friends 

That is a lot of things that have to go very well in order for you to rely only on your product to drive revenue growth. 

Most teams will struggle to hit targets in the long run if they bet solely on PLG. 

That’s why we love the Product-Led Sales approach, where you can pair the best of product-led principles with a modern sales playbook. 

Key characteristics of a PLS approach

A well-run Product-Led Sales motion is pretty easy to spot. There are a few distinct characteristics that all PLS teams have in common. 

  • Strong sales-assist motion. Sales-assist / product specialist teams engage with existing users of the product, helping ideal customers get to value quicker, without being pushy or sales-y. 
  • Clear rules of engagement. Self-serve and sales should not overlap or cannibalize each other. 
  • Emphasis on product qualification. Product usage data is used to inform the go-to-market playbook, so sales teams engage when the customer is sales-ready. 
  • A healthy amount of friction. Increasingly users want more control of the buying journey and they want to do a lot on their own. But the best PLS teams understand that a carefully placed human touch-point can go a long way. 

Is Product-Led Sales right for you?

How do you know when your company is ready for a Product-Led Sales approach? 

Some experts we’ve spoken to look at a few different metrics to determine whether or not PLS is right for them, but it generally boils down to unit economics. Is your LTV or volume of sign-ups high enough that you can support adding human touch-points to your motion? 

Some other indicators are more qualitative and depend on whether you already have a self-serve motion or if you are currently sales-led and layering in a product-led approach

Self-Serve + Sales Acceleration

If you are adding sales acceleration to your existing self-serve flywheel, you should look for the following indicators that a PLS motion is right for you:

  • You see a healthy amount of “hand-raisers” and their questions are less support related and more about sales (i.e. licenses, pricing, enterprise consolidation, etc.)
  • You have a strong bottom-up motion but struggle to go from user adoption to enterprise-wide adoption of the product 
  • Your revenue goals are pushing you towards mid-market or enterprise customers 

Sales-Led + Product Acceleration

If you are adopting a product-led approach to accelerate your existing sales-led motion, PLS will be right for you if the following is true: 

  • You have an easy to adopt use case that customers can largely onboard and activate with limited support
  • You see customers asking for free trials or about pricing early on, indicating that the sales cycle needs to be shortened with a self-serve approach 
  • You have a clear end-user who can champion the product.
  • Your product has areas of friction that can be solved through 1:many strategies like product documentation and group onboardings.

Defining your Product-Led Sales strategy

Once you have decided it’s the right time to adopt Product-Led Sales, the next step is to begin defining your Product-Led Sales strategy.  

At a glance a Product-Led Sales strategy should have the following components:

  1. Goal: This can be free to paid conversion, enterprise expansion, churn reduction, or all of the above. Choose goals that get you closer to your revenue targets. 
  2. Team: Who on the team will be running the plays to achieve the above goals? Sales-assist team, SDRs, AEs, Account Managers, or Customer Success? 
  3. Playbook: Who will you target, when will you reach out, and what will you say? These are the core questions you should answer with your PLS strategy. 

Need help with your playbook? Pocus can help go-to-market teams pinpoint the right customers to reach out to at the right time with the next best action. Sign up for early access

Join the #1 community for PLS

Want to connect with other leaders adopting Product-Led Sales? Join the #1 community for PLS and get access to frameworks, advice, and frameworks from the best practitioners in the space. 

🔮 Request an invite to join.

👉 While you wait…Check out our 140 page Product-Led Sales Playbook featuring frameworks and best practices from GTM leaders at companies like Slack, Airtable, Dropbox, and more. 

What is Product-Led Sales?
Alexa Grabell
Co-Founder & CEO at Pocus
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