There’s nothing techies love more than a good acronym. (Except maybe a Patagonia vest.)
Two acronyms that’ll come up a lot when building a tech startup are PLG and SLG. This stands for Product-Led Growth or Sales-Led Growth.
Choosing between these growth strategies can feel like picking between two colors of Patagonia vests (seriously, what is it with those vests?) — both look great, but one might better match your eyes.
PLG is all about letting your product do the talking. Users try, love, and buy without much nudging. On the flip side, SLG requires sellers to win hearts and close deals through conversations and connections.
So, which one’s right for you? Whether you aim for a smooth, self-service user experience or a high-touch, relationship-driven approach, we've got you covered. Let’s break down the beats of PLG and SLG and see if there’s a way to pull all the best parts of both. (Spoiler: there is.)
Imagine discovering a new app and, instead of talking to a sales representative first, downloading it and starting to use it right away.
This is the essence of Product-Led Growth (PLG). PLG is a business strategy where the product itself drives user acquisition, expansion, and retention. The idea is that by letting people experience the product directly, they can see its value firsthand, which makes them more likely to become paying customers. It's like offering a free sample at a grocery store—once people try it and like it, they're more inclined to buy it.
In a PLG approach, the product is designed to be so intuitive and useful that it sells itself. Companies using PLG often provide free trials or freemium models to get users in the door. As users explore the product and find it beneficial, they naturally want to unlock more features or invite others to join, driving organic adoption.
This strategy not only lowers the cost of acquiring customers but also creates a strong, loyal user base that spreads the word, making the product popular through word-of-mouth. It's a win-win because users get immediate value, and companies grow more efficiently.
Now, think of Sales-Led Growth (SLG) as the traditional way many businesses have grown over the years.
SLG focuses on having a dedicated sales team that actively reaches out to potential customers, builds relationships, and guides them through the purchasing process. It's like having a personal shopping assistant who helps you understand the product, answers your questions, and ensures that it meets your specific needs. This approach is beneficial for complex products or services requiring more explanation and customization.
In an SLG strategy, the sales team plays a crucial role in educating potential customers, demonstrating the product's value, and closing deals. This personal touch can be incredibly effective for securing larger contracts, particularly with big companies that need a tailored solution.
The sales representatives are there to negotiate terms, offer personalized demos, and provide ongoing support, which can help customers feel more confident in their purchases. This hands-on, relationship-driven approach builds trust and ensures that customers get exactly what they need.
Why would a business choose one over the other? What are the main perks of PLG over SLG?
Oh cool, another acronym.
PLG often leverages a self-service model where users can try the product for free or at a low cost before committing to a purchase. This reduces the need for a large sales team, significantly lowering the cost of acquiring new customers.
With PLG, customers can buy and immediately start using the product, accelerating the onboarding process. This hands-on experience helps users quickly realize the product's value, leading to faster adoption and a shorter time to value.
PLG strategies, which often include freemium or trial versions, can scale more easily than traditional sales approaches. These models allow for rapid expansion as the product can reach a global audience without needing a proportionally larger sales force.
By focusing on the product as the main driver of growth, companies are continually incentivized to improve the user experience. Direct user interaction with the product provides valuable insights and feedback, enabling faster iteration and better alignment with user needs.
When customers experience the product's value firsthand and at their own pace, they are more likely to be satisfied and loyal. The ongoing engagement with the product fosters a deeper connection and commitment, leading to higher retention rates compared to SLG approaches, where the relationship may depend more on the sales representative.
So it definitely seems like PLG is the way to go, no? So why would anyone want SLG?
For products that are complex, customizable, or require a high level of integration, a sales-led approach is often more effective. A dedicated sales team can provide the personalized guidance and support needed to navigate these complexities, ensuring that the product fits the unique needs of each customer.
Enterprise clients often require a more hands-on, relationship-driven approach due to their size and the complexity of their purchasing processes. Sales teams can build and nurture these relationships, negotiate contracts, and provide the level of service and reassurance large organizations expect.
In industries where trust and credibility are paramount, such as finance, healthcare, or high-value B2B sales, personal interactions with a knowledgeable sales team can build confidence and trust. Sales representatives can offer tailored demonstrations, address specific concerns, and create a strong rapport with potential clients.
Many products require significant customization to meet the specific needs of different customers. A sales-led approach allows sales teams to work closely with clients to understand their requirements and tailor solutions accordingly, which can be a significant competitive advantage.
SLG can be more effective in closing high-value deals. Sales professionals are skilled at identifying opportunities for upselling and cross-selling, negotiating higher prices, and demonstrating the added value of premium features or services. This can lead to larger average deal sizes compared to PLG, which often focuses on lower-cost, self-service models.
While PLG emphasizes the product as the primary driver of growth, SLG focuses on leveraging the expertise and relationships of a sales team to drive business. SLG is particularly beneficial for complex sales, targeting large enterprise clients, engaging high-touch customer interactions, providing tailored solutions, and achieving higher average deal values. This approach can be essential in industries and scenarios where the personal touch and deep customization provided by a sales team are crucial to success.
Because both of these strategies provide businesses with unique capabilities, it’s no surprise that people have been working to find ways to combine the best of both.
How can you get all the value that SLG has when it comes to building complex sales processes (especially for enterprises) while also providing your customers with an easy purchasing and onboarding experience like PLG?
Well, this just happens to be why new businesses use tools like Salesbrick, which provides a sales-assisted buying process that keeps the buyer in the driver’s seat.
Innovative quote-to-cash solutions like Salesbricks let businesses easily build out pricing and packaging by breaking down your software’s features into bricks. Then sellers can easily compile these bricks into packages for your buyers.
Order forms, invoices, and billing are all automatically linked to this process, so once you drag and drop the features, licenses, and usage limits the buyer wants, the rest is generated automatically.
The best part is the customer can easily close the deal like they would in a B2C buying process without needing endless back-and-forth emails to finalize payment.
Here are 5 perks of using a platform like Salesbricks:
Let’s start with some math: Easy buying processes plus complex deal shaping equals happy buyers and sellers.
Capitalize on the ability to handle the intricacies of shaping deals for enterprise buyers (or even smaller companies too) plus all the ease and convenience of a product-led growth onboarding.
This can help young startups scale their sales process responsibly as they grow.
“It’s no worries,” you may be thinking. “I have my pricing and packaging all sorted out in a spreadsheet or Google doc.”
Excuse us while we vomit.
While using spreadsheets can work for a very young startup, once your business starts to grow and your sales start to climb, you will need a better way to stay organized.
If your team is using spreadsheets or Google Docs and inventing SKUs and pricing on the fly during the sales process, this will come back to bite you later on as your business scales.
By using the preset pricing and packaging that’s built into the B2C-like buying process provided by a platform like Salesbricks, you can ensure that you stay on top of your revenue for the long haul.
Imagine you have two bills to pay.
One requires you to print out a form, fill it out, write a check, buy an envelope, and stick it in a mailbox, while the other lets you pay with your credit card or an app. Which would you prefer to pay?
This is kind of what your customers will experience when choosing between you and your competition.
They are all busy. They have lives. They don’t want to spend months in a buying process so they will gladly choose the product that is easier to buy.
When you offer your buyer a discount, is it an annually recurring one? How will you remember to change the price when they renew their subscription? What if they want to add a few more licenses to their package?
With a sales-led approach, businesses often rely on sellers to properly follow the company’s guidelines — which they don’t love to do. Otherwise, you’re leaving a mess for finance to clean up.
Now, this may not be a huge problem when you’re a really small company, but as you scale, small mistakes here can quickly become severely costly.
And honestly, as a startup, you don’t have time to figure all this stuff out. That’s why you need a solution that connects with your sales flow and automates all subscription management, billing, and more so that your revenue flow is foolproof.
Protect yourself from embarrassing errors and from losing out on the money you deserve.
When push comes to shove, when you make a sale, you expect to actually get your money.
By adding payment directly to the sales flow, you encourage customers to pay immediately. Likewise, by having the seller involved in the payment process, you encourage your sellers to make sure the business gets their payment before the deal is considered closed.
