Product-Led Growth and Sales: Navigating the Transition in B2B SaaS

The Evolution of Product-Led Growth in B2B SaaS

Product-led growth (PLG) has become a buzzword in the B2B SaaS industry, but what does it really mean and how does it differ from traditional sales-led approaches? Elena Verna, a growth expert with experience at companies like Dropbox and SurveyMonkey, provides valuable insights into this topic.

Defining Product-Led Growth

Product-led growth in B2B differs from consumer PLG in a key way:

• Consumer PLG: The user is the buyer, requiring excellent self-serve experiences
• B2B PLG: The user is often different from the buyer (e.g. employees vs. executives)

In B2B, PLG involves targeting end users first, rather than enterprise buyers:

"Product-led growth in B2B is instead of going after the enterprise buyer, you actually go after the end user first. You acquire a user, you engage them with the product, and then it starts to spread or take a bigger hold inside the account until it gets all the way to the enterprise buyer and then gets upsold through sales."

The Rise of B2B Product-Led Growth

B2B PLG gained popularity for several reasons:

1. End users revolting against poor enterprise software
2. Employees seeking alternatives to solve problems
3. Companies noticing this trend and providing self-serve options

"It really started becoming more popular because a lot of end users that were forced to use these top-down solutions that were purchased by their companies revolted against how bad they were."

Transitioning to Product-Led Growth

For companies considering a shift to PLG, there are several factors to consider:

When to Consider PLG

1. If competitors are successfully using a bottom-up approach
2. When end users feel the problem more acutely than enterprise buyers
3. To prevent competitors from swooping in at the bottom of the market

"If you leave the bottom of the market open and you don't offer very good self-served products and usability/intuitiveness in the product sense, then somebody will come in and swoop in."

Prerequisites for PLG Success

1. Self-serve trial capability
2. Product team focused on creating intuitive user journeys
3. Marketing team to drive traffic to trials
4. Process for converting trial usage to qualified pipeline

"The first step is allowing for self-served trial, usually because often it's a paid trial so there is a higher intent screen for it."

Talent Considerations

Implementing PLG may require new skill sets:

• Some professionals have experience with both PLG and sales-led motions
• Others are specialists in either PLG or sales-led approaches
• Consider hiring "chameleons" who understand both worlds

"There is a generation of product managers, marketers, and even sales folks that have worked in the companies that are doing both motions - both self-serve and sales successfully."

Product-Led Sales: Bridging PLG and Traditional Sales

Product-led sales represents a shift in how pipeline is created:

"Product-led sales is just a different way to create pipeline for sales. Instead of a marketing team generating cold pipeline through events or through content where this MQL is coming to you, you're going to need to educate this MQL of what your product is about."

Key aspects of product-led sales:

1. Leveraging existing self-serve usage data
2. Approaching enterprise buyers with proof of value
3. Using end-user adoption to drive larger deals

Challenges in Transitioning Growth Strategies

Both PLG companies moving upmarket and sales-led companies adopting PLG face challenges:

PLG Companies Going Upmarket

• May lack enterprise-ready features
• Need to develop new sales motions
• Risk neglecting core self-serve strengths

"We didn't actually build an enterprise product. We went with our self-serve consumer-ish product and we tried to close enterprise deals with it. It took a lot of work on pricing and packaging, it took a lot of work on product feature lists for enterprise buyers."

Sales-Led Companies Adopting PLG

• Require significant product changes
• May face internal resistance from sales teams
• Need to build new capabilities around self-serve experiences

Best Practices for Growth Strategy Transitions

1. Layer new strategies on top of existing strengths
2. Avoid complete pivots that abandon core competencies
3. Recognize that transitions take time and careful planning

"It's never about a hard pivot. It's not a pendulum that you're trying to swing. You're trying to create a layer and slowly go upmarket if you need to, or slowly introduce downmarket if you need to, but never let go of what was your core competency."

The Future of Growth Strategies

Elena Verna predicts continued evolution in how companies approach growth:

1. More companies may successfully balance PLG and sales-led motions
2. Increased focus on helping operators transition to solopreneurship
3. Growing recognition of the false sense of stability in traditional employment

"The moment you start diversifying your career, the more stability you actually have because it's not like you'll never have a full-time job again. You can have full-time jobs, absolutely, but have other options too that you can lean on."

Conclusion

Navigating the transition between product-led and sales-led growth strategies is a complex but increasingly necessary skill for B2B SaaS companies. By understanding the nuances of each approach, carefully layering new strategies, and maintaining core competencies, companies can position themselves for sustainable growth in an evolving market landscape.

As the industry continues to evolve, flexibility and adaptability will be key. Whether pursuing PLG, sales-led growth, or a hybrid approach, companies must remain focused on delivering value to both end users and enterprise buyers while building the internal capabilities to succeed in a changing competitive environment.

Article created from: https://www.youtube.com/watch?v=DtNzlBv9zs8