Curiosity is a powerful thing. So is seeing what a product can do in action. And both are at the heart of product-led growth (PLG) — a go-to-market strategy that allows users to engage directly with a product, rather than going through a formal sales team. Since PLG is typically a cheaper and simpler process than direct sales-led growth (SLG), the former became hugely popular during the pandemic and continues to spread. 

Yet PLG has many risks and downsides, just like direct (or sales-led) growth. Comparing product-led vs. sales-led growth as opposing forces misses the point — many companies could benefit from adopting both. But bringing them together needs to be done carefully, or else customers and go-to-market teams alike will end up frustrated and overwhelmed.

Here’s a detailed look at the benefits and drawbacks of product-led growth vs. sales-led growth, why they synergize so well, and what it takes to bring them together.

Product-Led Growth: Benefits & Drawbacks

It’s not hard to see why product-led growth is so compelling — it’s all around us in everyday life. As consumers, we’re likely familiar with “freemium” smartphone games and free trials of services like Amazon Prime. Carrying these concepts over to SaaS is an especially striking breath of fresh air when compared to the typically lengthy and complicated negotiations of SLG.

“It’s not hard to see why product-led growth is so compelling — it’s all around us in everyday life.” 

Unsurprisingly, adopting PLG often leads to an influx of customers. This is great news for product and engineering teams, who get access to much more customer feedback and analytics. But many of these new users don’t stick around. In the worst case scenario, an initial burst of usage can quickly fall off, and lead to a stagnant bottom line. 

Sales-Led Growth: Benefits and Drawbacks

SLG offers companies what PLG doesn’t: commitment and stability. You know how much a customer will pay, and how long they will pay it. This is a boon for the finance team, as stability affords accurate revenue planning. Plus, the tiered pricing system often associated with SLG offers clear ways and opportunities to upsell. 

“Sales-led growth offers companies what PLG doesn’t: commitment and stability.”

That said, sales-led growth motions are costly and time-consuming. They require dedicated teams and extended negotiations, while offering no guaranteed ROI if a deal falls apart. And some customers disfavor guided demos versus the opportunity to actually try the product themselves.

Combining Product-Led and Sales-Led Growth: Benefits and Drawbacks

Whether your company currently relies on product-led or sales-led growth, there’s much to be said for adopting both strategies. You can drive product adoption via PLG strategies, and then transition customers over to tiered enterprise packages once they reach certain usage thresholds. In addition, this dual strategy can let you shift what you emphasize quickly, so you can adjust your target audience upmarket or downmarket as needed without missing a beat.

“You can adjust your target audience upmarket or downmarket as needed without missing a beat.”

But there is a major challenge: The two growth motions have very different cadences and customer touch points, and bringing them together can be quite difficult. Some companies respond by having separate PLG and SLG systems — but this won’t work out, because then they can't address the other’s shortcomings. If these systems don’t communicate well, this sets up a logistical nightmare, as it necessitates separate head counts and bookkeeping. Plus, it is likely the sales team will miss key indicators that customers brought in via PLG are ready to transition.

It is possible to avoid the pitfall of siloing SLG and PLG in SaaS — but this requires implementing a few very specific strategies. The key is to ensure that maximum continuity exists between both sales motions. 

Create a Single Source of Truth for Customer Data

Product-led and sales-led growth both revolve around customer data. If the data from each growth motion is siloed, upsell opportunities are going to pass by unnoticed. What’s critical here is a source of truth for customer data that all go-to-market teams can access. This facilitates key transitions; for example, turning PLG customers who have experienced hyper-growth into directly managed clients once they pass a certain usage threshold.

“If the data from each growth motion is siloed, upsell opportunities are going to pass by unnoticed.”

This source of truth needs to hold extensive customer data applicable to both kinds of sales motions, including:

• Who the customer is
• What they’ve purchased, and what they’ve been upsold on
• When they purchased it
• Adoption and usage patterns
• Subscriptions, changes, and add-ons
• Monthly and annual recurring revenue
• Retention and churn

Institute Flexible Pricing and Processes

The direct sales process can be long and complex at the best of times. And if you’re a customer accustomed to self-service, a long sales process is likely the last thing you want. Seamless integration between PLG and SLG makes this transition more efficient, decreasing the chance that customers will back out.

“If you’re a customer accustomed to self-service, a long sales process is likely the last thing you want.”

In order to incentivize a transition to towards enterprise pricing tiers, sales reps need the flexibility to: 

• Provide custom discounts (ideally in pre-approved variations for consistency)
• Line item level discounting
• Free units or features from a higher-level package
• (If companies are willing) Full custom packaging

Given the control sales reps have over these levers, it’s also important to have a way to monitor discounts by representative and by product. This can help to ensure that discounts remain consistent across the sales team.

Ensure Sales Teams Are Primed for Success with Product-Led Growth

Unfortunately, at many companies, finding synergy between product-led and sales-led growth is just guesswork. Unless a customer explicitly asks for enterprise pricing, there’s no surefire sense of when someone accessing a product through a self-service portal should be upsold into an enterprise plan, for example. The right time could be reaching a cost or consumption threshold, but determining the “sweet spot” for an upsell through experimentation, rather than data, is prohibitively time-consuming.

“Determining the ‘sweet spot’ for an upsell through experimentation, rather than data, is prohibitively time-consuming.”

Moving past this phase to a more deliberate style of upselling and expansion requires two key components: 

• An integrated system that can identify accounts ready for upselling and furnish sales teams with the talking points needed to make their case. This requires accessing and analyzing aggregated customer usage data, the history of the specific customer, and the customer’s likely future growth trajectory. 
• An incentive structure for sales teams that accounts for both product-led and sales-led growth motions by emphasizing expansion. Given that PLG often produces a large number of low-value leads, sales reps should be encouraged to find the ones most likely to be receptive to upselling, identify product whitespace, and figure out the right timing for expansion. 

If you’re planning to layer PLG on SLG (or vice versa), don’t settle for half-measures. Traditional tech stacks can’t support both kinds of go-to-market motions, and an older stack with piecemeal augmentations isn’t efficient to set up or use day-to-day.

You need a unified, streamlined tech stack if you want to have a clear view of the entire customer journey, enable flexible pricing and packaging, and give sales reps critical tools and incentives. These things are necessary if you want to be competitive in an era where combining both growth motions is quickly becoming table stakes.