Through many hours of research, personal experiences, and honest conversations with professionals in the field, I’ve learned a lot that I think can change the way we approach and understand this field.
Today, I’m excited to share the significance and numbers that show how important product-led sales is.
What is Product-Led Sales?
Product-Led Sales (PLS) is a sales hybrid approach that places the product at the center of the sales cycle and uses product usage data to lead sales activities. So what makes it different from traditional sales practices?
The traditional sales models try to convince the users to finalize a purchase. In contrast, PLS makes the consumer experience a priority instead. Before everything, this model promotes the product’s features and how users can benefit from them.
Much of the process is about tracking the customer’s behavior and making sure they are receiving a worthwhile experience. Eventually, sales happen as a natural outcome.
The Significance of Product-Led Sales
From my experience with different sales models, I’ve learned one important truth: in many cases, the product itself is the best salesperson.
While I was working with the product-led sales (PLS) approach, it became clear that the unique benefits of the product were not only good for the business but also really hit home with customers.
Through PLS, I’ve seen products generate interest on their own, connect trial users, and get them to sign up for paid plans with ease, all while giving them a complete product experience.
I thought that taking a product-led approach was the same as putting the product in charge of the company’s growth. But I often wondered, “What should someone really think about before taking this approach?”
Customer-Centric Worth
Your product’s ultimate worth is not in its cutting-edge technology, unique features, or speed and cost. What truly matters to your customers is how it can solve their problems.
This is a common scenario within every company. That’s why the characteristics of a PLS approach are similar in different SaaS organizations.
Sales-Led Vs. Product-Led Strategy
If your company is using a sales-led strategy, it probably looks something like this:
Each department within an organization has its own distinct ‘system of record’ for user data, except for product teams. They usually rely only on their intuition to make improvements or add features.
However, if you are shifting to product-led sales, you’ll be using custom record-keeping solutions.
Becoming Data-Driven
So, what changes? Your entire company’s attitude toward data:
Your database will be a rich mix of user analytics, in-app support, customization, and customer feedback. The sales team will access the same data that are visualized by the marketing, support, and product teams.
This shared data enables product designers to make data-driven decisions and create features that your users are actually waiting for.
Having established a clear picture, let’s move on to the main elements of a product-led sales strategy.
Delivering High Value
The product should prioritize providing value to end users fast and with minimal barriers. Your goal is to create a frictionless experience that converts more users to paying customers.
Apart from adding new improvements, ongoing iterations help brands quickly test and update new features.
Retaining Existing Customers Through Seamless Experience
Creating a seamless customer journey is based on a frictionless and intuitive customer experience throughout the sales process. Additionally, your sales team should focus on using the product’s existing user base as a valuable source of sales opportunities.
Categorizing data-driven Product Qualified Leads (PQLs)
It’s essential to understand which users or organizations are ready for sales engagement. That’s where Product Qualified Leads (PQL) come into play.
A customer-centric strategy relies on collecting and analyzing user interaction with a service or product. This may evolve as the product grows or data insights change to make room for more targeted and effective sales efforts.
Providing Sales Assistance and Not Aggressive Selling
PLS sales teams are not your usual sales reps. Instead of aggressive sales methods, they prioritize user onboarding experience, support, and education to show value. This approach focuses on fewer sales techniques and more on demonstrating how the product helps address the users’ specific needs.
Foster a Built-In Network Effect
As more individuals use a product, its value also increases. It creates a more extensive network that’s supported by user adoption and customer satisfaction.
Self-service plans, freemium or hybrid models, and open trial plans are frictionless ways for users to explore the product and understand its value.
Product-Led Sales Statistics in 2023
Through careful research and my own insights from being on the ground, I’ve noticed a huge change in how businesses will approach sales in the year 2023. This year, the Product-Led Sales (PLS) paradigm has not only become more popular but has also shown some interesting statistical trends.
Companies Investing in Product-led Sales
Bain & Company research conducted in 2022 put light on an important business trend: product-led growth is quickly becoming the main strategy for companies that want to get a bigger share of the market and get more outside investment.
Another poll done by Appcues mentions that 97% of SaaS companies are actively investing in providing a more product-focused experience. Why? So that they can compete and even stand out in the market.
Notably, more than 90% of companies are putting money into the product-led sales (PLS) approach, which shows how important it is in today’s business world.
Software Customers Prioritize Product Experiences
Marketsplash reports that 83% of software customers are more willing to purchase a product that offers a frictionless product experience. Furthermore, even after making a purchase, 80% of clients lean towards self-service options.
This underscores a clear message: 83% of customers prioritize product experience above all else.
All of these facts point to a growing trend. More and more, customers today want to try out and learn about a product or service before buying it. The product-led sales method fits perfectly into this new way of thinking, so everyone wins.
By using this model, customers are given the freedom to look into and test products on their own terms. The benefits of this strategy for businesses are clear. Those that use a product-led strategy see their customer retention rates triple compared to those that focus on sales.
Adoption Rate of Product-Led Sales in Modern Businesses
Over the past years, product-led sales have been the obvious response to the shift in customer behavior. Take these surveys, for instance:
The Forrester survey in 2015, titled “Death of a (B2B) Salesman”, indicated that over 75% of B2B customers prefer to buy via an app or website instead of salespersons. If you think these numbers are higher now in 2023, you are absolutely right.
As a response, product-led businesses have multiplied the public SaaS index’s median Enterprise Value (EV). This has made them more scalable and less prone to logistical or operational problems.
Industries Leading in Product-led Sales
As I’ve been learning about how different industries work, I’ve seen a big wave of PLS (Product-Led Sales) adoption. There are, however, some industries that stand out in the way they use this strategy:
- From what I’ve seen, Software-as-a-Service (SaaS) seems to be leading the way in the use of PLS.
- E-commerce and retail have grown a lot, especially since online shopping is becoming more and more popular.
- The technology and information technology (IT) sectors, which include both hardware and software providers, moved quickly in this direction.
- Also, the PLS trend is not new to the world of Collaboration and Communication Tools, such as project management software, team messaging platforms, and video conferencing solutions.
- Lastly, the trend towards a product-led model in the Education and eLearning sectors has caught my attention.
As I learn more about the market and watch how it changes, I expect to see PLS strategies used in a wider range of sectors.
The Impact of PLS Strategy
From what I’ve seen, traditional sales are often hard. Product-led sales (PLS) has shown a way to smooth out obstacles in the sales process.
Customers seem happier. Since PLS is based on what customers want, it’s not surprising that customer satisfaction has gone up by 68%. From what I’ve seen, customers are happier when they feel like their needs are being met.
It’s better for your budgeting. Companies are saving money because PLS focuses on making processes as efficient as possible. I’ve seen that the cost of adding new customers has gone down by 40%.
The numbers say it all. Customers are staying with a company longer and converting at a rate that is 50% higher, which makes them 25% more valuable.
From where I stand, things look good for the future. I think more people will try out products quickly without long sales pitches. And for businesses? That means more loyal customers, more money, and an easier time growing.
Improving Customer Onboarding
When offering free signups are engaged with your product, the subscribers are more willing to convert into paying or upgraded customers. Statistics show that 76% of users are likely to continue with a brand after a positive onboarding process.
Once onboarded as paying users, the ongoing usage also means that they will be less likely to churn. You can achieve this with an easy-to-use product interface, effortless onboarding, and usage with minimal support.
Here are some features and characteristics that can improve your customers’ experience:
- Self-service/product-led onboarding to allow customers to sign up and onboard themselves easily.
- Personalized onboarding experiences using customer data and insights to deliver tailored onboarding experiences.
- Guided product tours that highlight important features and demonstrate how customers can achieve their desired outcomes.
- Progressive feature discovery that introduces customers to advanced features and functionalities as they progress in their onboarding journey.
- In-app messaging and communication help companies establish proactive communication and engage with customers during onboarding.
- Continuous education and training to maximize the value of the product.
- Feedback and iteration to understand your customers’ pain points and areas for improvement.
The Significance of Product-Led Sales in Business Success
The product-led sales motion is here to stay and probably for the best. Who wouldn’t want a sales approach that fosters a better user experience and greater room for problem-solving in the purchase process?
However, the perks are not just for users. Companies can enjoy significant benefits like creating better products, higher customer retention, and lower costs all around.
Remember, modern consumers have many options and are no longer willing to jump through hoops to complete a sales cycle. That’s why offering a firsthand experience is and will always be an important stage in the purchase process.
Frequently Asked Questions
Product-led sales (PLS) is a sales approach that prioritizes engaging potential consumers through a product experience. It relies on product data for revenue by putting user engagement at the forefront of sales success.
Product-Led Sales (PLS) differs from traditional sales tactics in several ways. PLS focuses on the product and its ability to generate sales and customers. It incorporates offering free trials and self-service, monitoring consumer behavior, and delivering a positive experience.
A product-led strategy improves the customer experience by focusing on their wants and preferred ways of purchase. It also increases cost-effectiveness by setting up efficient sales processes. Overall, this reduces the cost of customer acquisition and customer churn.
