Sales-led growth (SLG) is a traditional top-down sales motion. It involves finding and selling to decision-makers inside companies. Growth happens as their organizations adopt your software and make it available to their wider organization.
SLG is the traditional approach to selling SaaS products. Growth comes from sales and adjacent functions (think business development). Other departments, from marketing to product, support sales.
SLG works… But for the past few years, the SaaS world has been buzzing with a new go-to-market: product-led-growth. Here’s why.
Competitive pricing strategies can come in many forms, a business can choose to always be the cheapest of their competitors or always offer the average price of the highest and lowest priced competitors
A competitive pricing strategy is a price-setting that is based on your competitors’ prices. This pricing method focuses solely on the prices of your competitors that are public, but it does not take into account how much customers value the product or production costs.
A strong competitive pricing model is based on thorough market research. When you know how the prices of your top competitors in your market and how those prices might meet customer expectations, you have a basis for determining the rates of the prices of your own products or services. Competitive pricing strategies can come in many forms, a business can choose to always be the cheapest of their competitors or always offer the average price of the highest and lowest priced competitors - they all count as competitive pricing strategies.
As a bottom-up sales motion, PLG doesn’t rely on sales to decision-makers. The idea is to create a funnel that drives trials, conversions, and upsells.. The product, as opposed to sales, is the main driver of growth.
A great example of PLG is Dropbox. When they first started, they gave users free space to store their files, and gave even more space to users who referred their friends to the service. People really liked using Dropbox, and they invited lots of their friends to use it too. This caused Dropbox to grow very quickly (you can learn more here).
It’s important to understand that “PLG vs SLG” is a misnomer. In reality, you can (and should) use both go-to-market strategies.
Why? Well, product-led growth gives you new users on autopilot. It’s the best way to get sales over time.
PLG takes time to develop and scale. It’s not just something you ask your marketing team to deliver overnight. , And since PLG is geared towards self-serve users, it won’t help you sell large contracts to enterprise clients.
This is where traditional sales come in. They help you make sales quickly, and they help you make sales to large B2B teams. They’re also a lot easier to get started with than PLG.
To learn more, check out our article on product-led sales: a hybrid PLG/SLG approach.
With sales-led growth, a sales team sells your product to decision-makers in other organizations. There’s no expectation a product will acquire new users on its own - even if it’s outstanding.
As a result, organizations focus on sales as the main driver of growth. Strong individual sales reps, strong management, and strong processes all become focus areas.
With product-led growth, sales happen bottom-up. End users start using your software ; fall in love with it; advocate for it. This is what drives sales.
The focus here is on making incredible software that’s easy to access via self-serve channels. What matters most is creating products and PLG-optimized sales funnels to grow them. Sales are either a non-factor or second to product development.
With SLG, you’re using a traditional sales funnel. You need to drive leads, get them on sales calls, and sell to them - in that order.
This means using straightforward marketing tactics like cold mail, paid ads, and nurture flows. It also means using classic KPIs like Win Rate and Number of Opportunities.
With PLG, the sales funnel is different. Usage is what essentially drives growth, so funnels rely on things like free trials, referral bonuses, and sticky features. KPIs that matter change to Time to Value and Product Usage.
Another key difference is that PLG marketing requires close cooperation with non-marketing departments. Customer-facing roles need to provide insights, engineers need to move to adapt products, etc.
SLG allows you to sell an unremarkable product and still generate a huge amount of revenue. This happens a lot; software products in many spaces are considered commodities , and growth is 100% reliant on sales.
With SLG, it's essential that sales processes are fast, effective, and frictionless. Being faster and easier to work with can (and does) win sales. This is why many SLG teams use trial-to-cash software like Salesbricks to, for example, produce quotes in minutes.
PLG products can’t be run-of-the-mill. They have to be outstanding enough to drive adoption from self-serve users. This can mean a number of things: creating incredible results, having a unique featureset, or being easy and convenient to use.
From a sales perspective, PLG products need to have zero-friction, automated sales processes. Interactive, URL-based quotes are one example of a way to reduce friction and accelerate adoption and growth.
Your best option is to use a combination of both approaches, as we explain above. But if you’re choosing to focus between one or the other, here are 5 questions to consider.
Product-led Growth (PLG) sounds fantastic on paper. Sure! Go and make a product that sells itself. Achieve hypergrowth like Dropbox, Zoom!
In reality, making a viral PLG product is both hard and extremely rare. There’s no set formula for making a product that grows itself. You may have the best engineers, product marketers, and designers - and still not hit the mark.
And even if you do make an incredible product, the competition’s offer could be just as incredible.
For example, ClickUp and Monday.com are two incredible pieces of project management software. They’re optimized to drive adoption from self-serve end users… But since their feature set is so similar, they still use traditional SLG tactics to sell.
So the first thing you have to ask is, “is my product good enough to grow without sales?”. If it is, or if you know how to get it there - great. Otherwise, you’ll need to use an SLG approach.
Giving out free trials to a $12/month/seat SaaS product is one thing. Selling 5, 6, and 7-figure subscriptions to enterprise clients is a whole ‘nother beast.
PLG is appropriate and effective for subscriptions that start out free or inexpensive. If signing up to a trial or subscription is low-risk, relying on self-serve users for growth is perfectly fine.
With expensive products, you’re more likely to need buy-in from multiple decision-makers and maybe even the CRO. Getting this buy-in requires more touches and a more personal approach. This is where you’re likely to need SLG to provide help, information, and personal connection to prospects.
In the short term, SLG makes it easier to build initial traction and acquire early users. Just go out, sell the product, and get recurring revenue.
PLG is usually slower out of the gate. It takes time to get initial awareness and get to the point where a product has enough users to keep growing. It can also take a lot of iteration to make a product that end-users love and advocate for.
Long-term, everything changes. With SLG, reps actively nurture prospects and spend time closing sales. This takes time and makes it harder to scale. Growth slows down if you’re 100% reliant on sales to drive it.
The reverse happens with PLG. As your user base reaches critical mass, sales start growing exponentially. This is how SaaS offers like Trello and Zoom took off after years of much slower growth.
Software that’s easy to understand, master, and get value from does well with PLG. When use cases and benefits are easy to see, getting end users to buy in is easy. Quality content - a self-serve knowledge base, with recorded webinars and demos- helps.
Software whose benefits aren’t as clear tends to require more sales support. The same applies to software that has little to no self-serve documentation. The more information and education is needed, the better it is to use SLG.
To a user, opting into a file sharing service like Dropbox requires no buy-in from higher-ups. Signing up is an easy individual decision to make. If your product is like this - no access required - PLG makes it easy to drive adoption and growth.
Now let’s say you have a product that requires a lot of access. For example, complex cybersecurity software that needs high-level database and I.T. system access.
End-users can’t just go and opt into a software product like that. They need to get access and permission. This means that sales decisions are made at a high-level, requiring salespeople to push through the red tape and close deals.
There are two secrets to succeeding with PLG and SLG.
The first is that you don’t have to separate the strategies. You can have a product that drives growth in and of itself. You can also have a sales team that accelerates growth by selling to decision-makers.
This is what giants like Dropbox and Zoom do well… And there’s no reason you can’t use both strategies’ elements yourself.
The other secret is that your go-to market is only as good as the tech supporting sales. With PLG, you need quality, interactive quotes that convert self-serve users. You also need automated processes that manage subscriptions, renewals, upsells, etc.
With SLG, you need to make life as easy as possible for users. For example, you need to send out quotes quickly, manage entitlements seamlessly, etc.
We know most SaaS teams’ sales and subscription processes are cobbled together (usually poorly). This is why we made a modern, seamless solution that helps convert and manage customers at scale. To learn more, sign up for a Salesbricks demo today.