The TechBullion editorial team has invited Evgenii Zagumennov, Head of Product at Yandex, the largest digital technology company in Eastern Europe, to share insights on effectively combining Product-Led Growth and Sales-Led Growth. This article explores how integrating these approaches can drive the next step in growth management, catering to diverse client needs and optimising customer acquisition and retention.
Two primary tactics dominate the realm of B2B SaaS at present: Product-Led Growth (PLG) and Sales-Led Growth (SLG). PLG involves a model where users can interact with a product through self-service — almost letting the product take charge of selling itself. On the other hand, SLG depends on sales managers who personally take the task of selling the product, which usually entails more customized and involved sales strategies.
Knowledge of the strengths and target audiences for PLG and SLG is key for companies looking to optimize their growth. For small firms or situations where it’s easy to demonstrate the value of a product through user interaction, PLG works best. However, if you have large enterprise customers who need personalized sales efforts and more involvement before deals can be closed, SLG would be more appropriate.
However, B2B SaaS firms can gain a strategic advantage by adopting both PLG and SLG. They will be able to reach many different customers; when both models are understood and integrated by businesses, it leads to optimization of the sales processes, resulting in increased customer satisfaction that finally fosters growth for the company.
Understanding PLG and SLG
PLG strategy uses the product as the main means of getting customers and expanding the user base. The product should be designed for ease of use without much human effort — self-service and easily adoptable. A good example is Slack, which has successfully implemented PLG; they did not need a traditional sales team during scaling because their model allowed them to scale rapidly. Similarly, Zoom did not require intervention from the sales team after its launch due to its simplicity in sign-up and use — this led to quick adoption without any sales team interference. Furthermore, Dropbox had such a great user experience that they did not need any sales team; the product could sell itself effectively.
On the other hand, an SLG strategy is the opposite. It relies on a sales team that’s specifically assigned to take action in approaching potential customers, determining if the leads are qualified and ensuring closure of business deals. Salesforce has excelled using this method — they have managed to reel in large clients from different sectors with high value, which has played a significant role in their revenue growth. IBM is also considered one of the successful SLG examples; the intricacy of their products demands an individualized sales process, which they use to stay visible within their enterprise market and secure long-term contracts with major customers keeping them afloat as well.
Applicability of PLG and SLG
As an inference, the selection between PLG and SLG depends on the company’s market focus and customers’ requirements. Those businesses would find benefit in having a user-friendly product that their potential clients can adopt on their own without any elaborate sales support. The minimal cost of sales allows these companies to achieve scalable growth — as seen from examples of Slack and Zoom.
Alternatively, SLG would be more apt for the bigger corporations needing a personal sales touch. These organizations typically have intricate requirements that can only be addressed through face-to-face interactions with an experienced sales group leading them in their buying journey.
B2B SaaS companies frequently struggle with the difficulty of serving both big and small customers. This implies that they should implement a mix of PLG and SLG strategies. Such a hybrid tactic lets them take advantage of the scalability feature of PLG for those smaller clients, yet also make use of that personalized approach typical to SLG for the larger accounts. By knowing when to use what — and how much — B2B SaaS companies will have found an effective way of steering their way through diverse customer bases towards a successful attainment of their optimal growth potential.
Combining PLG and SLG
Achieving success in a hybrid model implementation means weaving these two approaches together without any visible seam so that the result is a cloth of higher value than either approach individually. An organization can allow smaller clients to self-explore and adopt the product independently — an initiative aimed at driving organic growth through user experience and product value for small accounts. At the same time, a sales team should work with large account customers, leading them through the process by providing guidance and support to secure high-value deals from large accounts. Both ends meet: this dual approach ensures all segments are well catered for, which enhances overall customer satisfaction and retention — a win-win situation for both parties involved in the deal. This is what we do in Yandex Tracker: our approach involves segmenting clients based on company size and behavioral patterns.
Building an Effective Scoring Model
Key to this hybrid approach is the creation of a powerful scoring model that can detect promising clients among small companies. The idea is quite simple: observing those who have already found satisfaction with what is offered and studying their interactions. This unveils valuable information for companies on potential buyers and paves the way for targeted strategies.
By taking advantage of this information, the sales team can concentrate on the most potential leads, which results from the scoring model based on these insights. This methodical strategy not only streamlines the sales operation but also elevates the converting possibilities of high-potential clients, thus allowing for growth and success for the company.
Furthermore, an SLG strategy is such that after the sale point, the client relationship does not die; a customer success team manages it. This special team continues to nurture this customer and ensure his or her success by providing continual assistance guidance and any other resources needed to help them realize their intended benefits from the product. This ongoing involvement is critical for upholding satisfaction among customers.
A significant feature of this strategy is to specify obvious indicators that denote the shift of clients from those handled by the sales team to the customer satisfaction team. The handover typically takes place either when a contract is signed or upon reaching a particular Monthly Recurring Revenue milestone. Having such indicators facilitates a successful transfer so that the customer success team can take control possessing a well-rounded grasp of what the client needs and expects. Such effortless changeover plays a critical role in guaranteeing uniform support, which, in turn, upholds the essence of consistency, whilst also ensuring that clients are able to realize optimum value from the product offering.
Mapping the Customer Journey
Creating the Customer Journey Map has been called an important exercise in understanding customer interactions in various sections of a company. When designed properly, the CJM should detail all points of contact from when a client is first engaged up to when their contract is renewed. This helps paint a clear picture of what the customer goes through at different points in their journey.
Different interactions are involved in each customer segment and the people responsible for these interactions. In addition, the tools employed should be elaborately captured in the CJM. For instance, during the initial stages when clients are yet to show any purchase interest, marketing and sales teams can use targeted campaigns and personalized outreach to engage potential clients. Later on, as clients make steps towards purchase, the sales team significantly increases its effort with demos plus negotiations, among others.
When the sale has been closed, customer success should provide the client with a smooth transition into onboarding, training, and resources that meet their needs. During the client’s lifetime periodic check-ins, performance evaluations plus feedback loops are important to sustaining a strong relationship. In terms of product involvement: it is necessary for customers to use the product in full by encouraging them to learn more about its capabilities through continuous education and support initiatives.
An outline of such interactions allows firms to guarantee that every customer is provided with a consistent, coherent and supportive experience, thus leading to higher satisfaction levels and retention rates.
Conclusion
The fusion of PLG and SLG is a sweet spot for B2B SaaS growth, offering big rewards. When companies can make use of PLG which is cost-effective with SLG that offers the personal touch, they can easily reach out to both small and large clients with ease. With this bifurcated approach in its stride, this ensures every need from all kinds of clients — be it at the point of customer acquisition or retention — is met.
