Decide Between Product-Led or Traditional Sales

When it comes to sales, it’s safe to say we’ve reached an inflection point. The old way of doing business isn’t likely to be the way of the future. But whether that means going full product-led growth (PLG) in your sales approach or staying the course of traditional sales, business leaders may be wondering what factors to consider to guide their decision.

For a B2B business, aligning your growth strategy to your business goals is more important than ever. Why is that? Because selling software today isn’t a one-and-done deal. It’s core to your infrastructure, and that includes boosting repeat purchases and upgrades. PLG businesses like Dropbox and Zoom wisely design around the needs of the end-user, meaning they’ve got more on-the-ground insight to sell to and continuously build for them. Even if your business hasn’t adopted a PLG motion, there are likely elements of it influencing your business currently, like prioritizing the voice of the customer, building a delightful user experience, and orienting your product to be its own best salesperson. And the numbers indicate this strategy is working, as a recent survey from Openview shows product-led companies are more than twice as likely to experience 100%+ year-over-year revenue growth than sales-led companies, especially those offering a freemium product.

But that's not to say a PLS strategy is right for everyone. If you’ve ever wondered what factors to consider when deciding if product-led sales or a traditional sales approach is best for you, read on to find out.

10 Decision Factors to Consider

When evaluating the best path forward for your sales approach, here are the ten factors every business should take into account:

1. Target market: What are the characteristics of your target market? This can include things like your customer’s level of technical expertise, signals around their willingness to try new products, and their decision-making process. Use this to determine whether a product-led or traditional sales approach is more likely to be effective.

2. Product offerings: Consider the complexity of your product or service offerings. If your product is intuitive or easy to understand and use, a product-led sales approach may be more effective. However, if your product requires a higher level of customization or has a lengthier sales cycle, a traditional sales approach may be more appropriate.

3. Business goals: Define your business goals and how each sales strategy aligns with them. Think of the example of the tortoise and the hare. For example, if you are looking to drive rapid-fire growth, a PLS approach may be most effective. Conversely, if you’re looking to build long-term relationships with customers, traditional sales may work better for you in the long run.

4. Sales cycle: Evaluate the length of your sales cycle to determine whether a product-led or traditional sales approach is better suited to your needs. Product-led sales is often optimal for shorter sales cycles where frequent upselling is woven into the UX, while traditional sales are more appropriate for longer sales cycles or enterprise companies with complex pricing and packaging.

5. Scalability: It’s also important to measure how well each method scales according to changes in demand, as both will require additional investments in order for businesses to capitalize on opportunities effectively. But don’t throw the baby out with the bathwater and invest large numbers in new employees if you don’t have to. You may be able to drive down costs by investing in new technology or training existing staff to adopt traditional approaches respectively.

6. Brand Reputation: Each method has its own significance when it comes to having an impact on brand recognition; product-led strategies typically focus on gaining trust through offering high-quality services while traditional sales relies heavily on building relationships between buyers and sellers that can potentially result in larger profits over time due to repeat customers. Be honest about where you’re at in this continuum to find the solution that works best or you.

7. Customer Experience: It’s important to consider which type of experience provides more value to your customers; while product-led strategies focus on providing an intuitive and frictionless user experience within the product itself, the traditional sales model often involves direct conversations with sellers that can tailor solutions for each individual customer’s needs depending on their requirements. Sometimes a little more friction is a positive thing for your bottom line.

8. Lead Quality: Product-led selling typically involves customers who are already aware of the product and are actively considering making a purchase decision, whereas traditional sales is about generating awareness around products or services and converting leads who may not even be familiar with the brand yet. Ask yourself where you fall in your product development journey. While you can get started with PLS from the get-go, being a little more high-touch with prospects can give you a competitive edge, especially in the early stages of a startup.

9. Time: While traditional sales can drive lead conversions quickly, product-led strategies may take longer to realize ROI. This is due to their customer trial-and-error structure. If you are aiming for quicker and more forecastable ROI, sales-led may suit you better.

10. Resources: Traditional selling typically requires more human resources than a product-led solution. It’s the difference between building in-person sales teams versus leveraging technologies like AI and machine learning that often reduce overhead costs. Yet, over time, the cost of building and running a PLS engine costs time and money. Better to make sure you’re on the right path for your business before investing in tools that won’t support your KPIs.

Can you combine both?

In some instances, combining a product-led sales strategy with a sales-led strategy can be an effective way to maximize the effectiveness of your marketing efforts while staying within budget and scope. Ultimately, businesses should measure the associated costs and risks of both approaches when crafting their strategic plans and make an informed decision that aligns with their business goals.

Conclusion

Whether you’re looking to build a product that gives your users more buying power or you’re wondering if your product has built-in network effects—there’s never a wrong time to consider if taking a product-led sales approach or traditional sales strategy is right for you. Making the switch from one to the other is a big investment, so be sure to evaluate all of the factors outlined to make a well-informed decision. For more insights on product-led sales and getting the most out of your sales efforts, visit us at Userled.io.

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