Product-Led Sales Guide: The ‘Lazy’ Yet Effective Sales Approach
- CEO at DeckLinks, Speaker, Podcast Host
- Published on August 17, 2024
- Updated on September 13, 2024
Table of Contents
When we just started DeckLinks, our sales enablement platform, we thought we had it all figured out. We’re helping sales teams share and track their sales decks. But there was the problem – we were so focused on building a great product, we forgot to… actually sell it. Classic startup move, right?
That’s when we discovered Product-Led Sales (PLS). Fast forward to today, and we’re not just talking the PLS talk, we’re moonwalking the PLS walk 😀
Product-led sales is the world where your users become your champions, your features become your sales deck, and your onboarding flow is more critical than your golf swing (sorry, sales folks, but it’s true).
PLS literally helped us transform our business and in this guide I’m going to share everything I’ve learned about product-led sales.
What is Product-Led Sales (PLS)?
Product-Led Sales (PLS) is a go-to-market strategy that uses product usage data to identify and convert clients. It blends Product-Led Growth (PLG) and sales-led approaches, using product adoption metrics to signal sales opportunities. PLS nurtures users through product experience before involving sales reps.
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Product-Led Sales (PLS) vs Product-Led Growth (PLG) vs Traditional Sales
Over many years working in the B2B SaaS space, I’ve seen my fair share of product-led growth (PLG) strategies. But product-led sales (PLS) is a whole different ball game. I kinda like to think of it as upgrading from a regular bike to a sports bike. Same basic concept, but way more power and a lot more exciting.
The evolution from product-led growth to product-led sales isn’t just a natural progression, it’s a necessary one for B2B SaaS companies looking to scale. In the PLG model, we’re all about tuning our product and go-to-market strategy (GTM) for self-service and automation.
Product-led growth motion is great for getting new users in the door and solving individual problems. But there’s a ceiling to how much people are willing to put on their credit cards. Depending on the bank and your location, this could be around $5,000 – $10,000.
Product-led sales isn’t just about getting people to use your product; it’s about converting that usage into much larger contracts. We’re talking tens, or even hundreds, of thousands of dollars in deals.
The key differences between PLG, PLS, and traditional sales approaches are all about the user journey and how we monetize it. In product-led growth, we’re focused on individual use cases. Product-led sales takes that individual usage and escalates it to an enterprise-level solution.
For example, many people use Trello for managing their own to-do list, or Zoom for hosting a one-off virtual meetup. They might be using Airtable to organize data for a single department, or Canva to create graphics for their LinkedIn post.
These are all examples of solving individual pain points or tackling specific jobs to be done. It’s about scratching your own itch, if you will. But while these use cases are great for getting people in the door, they’re just the tip of the iceberg when it comes to enterprise-level solutions.
The large ACV (Annual Contract Value) sales start to happen when we start connecting these individual use cases to broader, company-wide challenges. That’s where product-led sales make a big impact on your revenue. But I’m getting ahead of myself. We’ll talk about it later!
Traditional sales, on the other hand, is all about top-down approaches to sales funnel. You’re basically trying to convince the CEO they need a new stapler for the entire company. PLS does it the other way round. At DeckLinks for example, we start with the users who are already getting value from our product and work our way up.
Now, let’s talk about this “bridge” concept in product-led sales. The bridge is basically all about connecting individual usage to enterprise-level problems. It’s about understanding that the person using your product to solve their immediate need might not be the one with the power to sign off on a company-wide deal.
This bridge is built on data, behavioral signals, and a deep understanding of your user base. Your goal is to identify Product Qualified Accounts (PQAs). The accounts that are showing all the right signs of being ready for an enterprise conversation.
But here’s the catch – building this bridge takes time. We’re not talking days or weeks; we’re talking months, sometimes even a year or more. It’s a long game, but trust me, it’s worth it.
The beauty of PLS is that it changes the entire dynamic of the sales conversation. Instead of cold calling and hoping for the best, your sales team is reaching out to users who are already getting value from your product.
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"Product-Led Sales Bridge" Concept - Example
Let me share an actual example of the “bridge” concept in product-led sales.
At DeckLinks, in the product-led growth phase, we might see individual sales reps using DeckLinks to share and track their own sales decks. They don’t invite their team members to their workspace and simply use DeckLinks in “solo mode”. They’re solving their immediate problem: “How do I know if my prospect actually looked at that sales deck I sent?”
The product-led sales stage begins when we start to see patterns in the usage data. Maybe they start creating more decks or their account grow to multiple users. They are getting more value. In our experience working with many sales teams, the most successful sales reps are the ones sharing their insights with their sales and marketing teams.
Suddenly, we’re not just talking about individual pain points anymore. We’re looking at enterprise-level problems. How can the entire sales team improve their performance? How can their marketing team get insights into which sales and marketing collateral got the highest engagement.
This is the “bridge”. We’re connecting the dots between that individual sales rep tracking their pitch deck, sales managers, and the VP of Sales who wants to optimize the entire team’s performance. We’re bridging the gap between the content creator in marketing who wants to know if their latest one-pager is effective and the CMO who needs to demonstrate ROI on their content strategy.
By tracking sales team performance and giving the marketing team insights into how sales and marketing collateral is performing across the entire organization, we’re solving problems at a much higher level. We’re not just helping individual sales reps anymore. We’re transforming how entire departments collaborate and drive revenue growth.
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When to Consider Product-Led Sales Approach?
So when can you go the product-led sales route?
Well, first of all, look for signs that your product is ready for PLS. This isn’t like waiting for a sign from the universe – trust me, we’ve tried that. Doesn’t work!
You’re starting to feel that ceiling on your self-serve monetization. If you’re hitting that cap on credit card transactions and your customers are asking for more, it’s time to consider going PLS route. When your jeans start feeling a bit too tight… time to upgrade!
Another sign is when you start seeing organic demand from your user base. If your support team is getting flooded with messages like, “Do you offer scalable pricing?” or “Is there limit on the number of seats?” that’s your cue. That’s your sign! It’s the universe’s way of saying, “Yo, time for product-led sales!”
So who is your Ideal Customer Profile (ICP) for PLS. Too many acronyms, I know, I know!
Your ICP for PLS 🙂 isn’t small startups or individual freelancers. Your ICP here is basically companies with 200+ employees, or even better, those enterprise giants with 1000+ employees.
Why? Because these are the companies that have the budgets to handle $100,000+ contracts. With that comes complex decision-making processes and multiple stakeholders of course.
But here’s what you also need to understand – your ideal customer for PLS isn’t just about company size. It’s about finding those companies where your product can solve enterprise-level problems.
Also, you need to think about your current go-to-market approach (GTM). If you’re starting from a pure PLG approach, ask yourself: Are you ready to go upmarket? Remember, adding sales means quotas, larger contract values, and a whole new ball game. If decided to enter a hot dog eating contest, you better be sure you’re hungry for it!
On the flip side, if you’re coming from a traditional sales-led approach, consider whether your customers need to see value before they sign on the dotted line. Are your fixed costs of sale becoming unsustainable as you try to go downmarket?
The key is basically to understand where you are and where you want to go. Are you a PLG company looking to capture larger deals? Or a sales-led organization trying to create more efficiency in your sales process?
Implementing PLS isn’t just about slapping a sales team onto your PLG motion. It’s a fundamental shift in how you approach your go-to-market strategy.
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The Product-Led Sales Framework
Let’s break down the key components of the product-led sales framework:
1. Self-serve activation and engagement.
Self-serve activation and engagement is the foundation of our product-led sales framework.
In the self-serve phase, your SaaS gotta get users to their “aha” moment as quickly as possible. It’s basically a speed dating, but with your product. You want users to fall in love fast and hard. This will lead to high user adoption rates and more paying customers. At DeckLinks, we focus on getting users to share their first PDF and see those sweet, sweet engagement metrics.
But activation is just the beginning. You need to keep users engaged, coming back for more. So pay attention to your product usage data. Your product team needs to really understand user behavior.
2. Product Qualified Accounts (PQAs) and Product Qualified Leads (PQLs).
A Product Qualified Account (PQA) is an account that’s showing all the right signals. Maybe they’ve hit a certain usage threshold, or they’re using a specific feature that correlates with enterprise readiness. At DeckLinks, we look for accounts with multiple users and high engagement rates.
A Product Qualified Lead (PQL), on the other hand, are the individuals within those accounts who might be ready for a sales conversation. They’re the ones who can make things happen. But there’s a catch. In the B2B SaaS, your user isn’t always your buyer i.e. the decision maker.
3. The role of Marketing Qualified Leads (MQLs) in Product-Led Sales strategy.
In traditional sales, Marketing Qualified Leads (MQLs) are like gold. They’re leads that marketing has vetted for their sales team. But in the world of PLS, they play a different role.
In product-led sales, we’re not relying solely on MQLs to drive our pipeline. Instead, we’re focusing on Product Qualified Accounts (PQAs) and Product Qualified Leads (PQLs). These are based on actual product usage data, not just marketing interactions.
Still, MQLs still have a crucial part to play. Remember when I said that in B2B, your user isn’t always your buyer? This is where MQLs can be super helpful. They help us identify and engage with those potential customers and decision-makers who might not be using the product themselves.
Think of it this way: our product usage data might show us that the DeckLinks account at ACME Corp is a hot PQA. Individual users from their sales team is using it daily and engagement is through the roof. But the person who can actually sign off on an enterprise deal? They might not even have logged in once!
This is exactly where marketing team can help. Their job is to run campaigns, create content, and generate interest among those decision-makers. They’re trying to create MQLs that align with our PQAs.
So in your product-led sales framework, Marketing Qualified Leads serve as a complementary force to your product-led sales strategy. They help us bridge the gap between user adoption and enterprise sales.
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How to Build Product-Led Sales Infrastructure
Implementing product-led motion isn’t just about tweaking your sales tactics. It’s more like trying to teach an old dog new tricks, except the dog is your entire company, and the trick is “completely change how you think about sales.”
We’re about to build something beautiful… or at least functional. Mostly functional. Let’s aim for functional.
Data and metrics
Data is the foundation of your product-led sales infrastructure. So what kinda of data and metrics do you need?
Well, usage data is the first one. This is the bread and butter of product-led sales. You can track things like the number of documents created, the frequency of logins, and the number of team members collaborating on each project.
Don’t just collect the data – understand what it means. You need to identify the usage patterns that correlate with successful customers. Are they using a specific feature? Do they invite team members?
Also, don’t forget about behavioral signals. Behavioral signals are essentially subtle hints that users drop about their readiness for a larger commitment.
Here’s a few examples of behavioral signals:
- Sudden spikes in usage
- Using advanced features
- Adding new team members to the account
- Accessing your pricing or enterprise pages
Lastly, conversion rates. They tell you how effective your PLS strategy is and how fast you’re moving users through your sales funnel. I’m not just talking about free-to-paid conversion here. Though that’s important too.
At DeckLinks we’re looking at things like:
- Activation rate: How many sign-ups actually become our active users?
- PQA conversion rate: How many of our active accounts become Product Qualified Accounts?
- Sales conversion rate: How many of our PQAs actually turn into closed deals?
These conversion rates are the vital signs of our PLS strategy.
In product-led sales, data is your superpower. BUT don’t wait for perfect data to start. You might be waiting forever. Start with what you have, iterate, and improve as you go.
Sales tools and systems
CRM integration. The key is to integrate your product usage data directly into your CRM. This way, your sales team can see who’s using what, how often, and how engaged they are.
Analytics platforms. An absolute must have for a SaaS company focusing on a product-led sales strategy. There are plenty of these on the market: Amplitude, Mixpanel, FullStory to name a few. All can help your sales and marketing teams, and your product team better understand the user behavior. These platforms will help your team understand the user journey, identify key activation events, and spot important signals that indicate a user is ready for an upgrade.
Just don’t get caught up in analysis paralysis.
PLS specific tools. At DeckLinks, we’ve experimented with a few PLS specific tools. These tools are designed specifically for the product-led sales motion, helping you identify PQAs, track product qualified leads, and automate parts of the sales process. To be completely honest, I haven’t found the one that I’d personally recommend. Once that changes, I’ll update this article.
Team structure and roles
Product managers. They’re not just building features anymore. Product managers at product-led sales SaaS companies craft experiences that convert. Your product managers have to obsess over usage patterns, user behavior, and conversion metrics like I obsess over finding the perfect GIFs for Slack messages. It’s an art form, I tell you! Product managers are the bridge between what users are doing in the product and what sales reps need to close deals.
Sales reps. In product-led sales, these aren’t your traditional “always be closing” types. They’re more like product-savvy consultants who happen to close deals. They need to understand the product inside and out, and be able to translate product usage metrics and market research into value propositions.
Marketing team. In PLS, marketing isn’t just about generating leads, it’s about nurturing existing users and identifying potential buyers within accounts. They’re growing your PQAs and PQLs.
Data analysts. Data analysts in a PLS setup turn raw usage data into actionable insights. They’re the ones who help identify what behaviors correlate with successful customers, what usage patterns indicate readiness for upgrade, and what metrics your PLS team should be tracking in the first place. They’re the glue that holds your PLS strategy together.
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How to Implement Product-Led Sales Approach
Let’s start with intuition and manual processes. I know, I know, in the age of AI and automation, suggesting we start with manual processes feels like recommending mail pigeons for your marketing strategy. But hear me out.
When we first started moving in the product-led sales direction at DeckLinks, we didn’t have access to AI or predictive models. We had gut feelings, HubSpot, and spreadsheets. Lots and lots of spreadsheets.
We started by simply looking at our most successful customers. What was their use case? How often were they logging in? Which features were they using?
This manual approach might seem tedious, but it’s crucial. It helps you understand your data intimately before you start automating things. Trust me, you don’t want to automate bad processes.
Next up, develop your PQA model. When we were developing our PQA model at DeckLinks, we looked at product usage metrics like:
- Number of active users in an account
- Frequency of logins
- Usage of specific features
- Engagement with our onboarding content
We assigned points to each of these behaviors and came up with a very basic scoring system. Your PQA model will be unique to your product. What works for us might not work for you.
Once you figured out your scoring, you need to set up weekly meetings where your sales team. They will tell you exactly which Product Qualified Accounts are good and turn into deals, and which ones are duds.
This feedback will helps you refine your PQA model and understand which signals really matter. Sometimes, what you think is a strong signal turns out to be a deceptive signal.
Finally, iterate and refine your approach. Constantly tweak our PQA model. Adjust your scoring system, and refine your sales strategies and processes.
Don’t be afraid to experiment. Try new things. Sometimes they’ll work great, and sometimes they’ll fail spectacularly. But each attempt teaches you something new about your customers and your product.
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Metrics and KPIs for Product-Led Sales Teams
Just like with any other sales strategy, you need to measure three stages of the customer journey: user acquisition, activation, and retention. Of course, you’ll track standard metrics like customer acquisition costs, sales cycle, and revenue growth. But PLS has its own set of specific metrics and KPIs. I’ve included the most common metrics and KPIs for product-led sales in the table below.
| Metric/KPI | Description | Why It Matters | Target Range |
|---|---|---|---|
| Product Qualified Accounts (PQAs) | Number of accounts meeting predefined usage criteria | Identifies accounts ready for sales engagement | Depends on business model, typically 10-20% of active accounts |
| Product Qualified Leads (PQLs) | Number of users within PQAs showing buying intent | Pinpoints potential decision-makers for sales outreach | 1-5 PQLs per PQA |
| PQA to Opportunity Conversion Rate | Percentage of PQAs that become sales opportunities | Measures effectiveness of PQA identification | 20-40% |
| Time to PQA | Average time for an account to reach PQA status | Indicates speed of value realization | 30-90 days, depending on product complexity |
| Feature Adoption Rate | Percentage of key features used by accounts | Shows product stickiness and value delivery | 70-90% for core features |
| User Activation Rate | Percentage of users reaching key activation milestones | Measures onboarding effectiveness | 60-80% within first 30 days |
| Time to First Value | Time taken for users to achieve their first meaningful outcome | Indicates speed of initial value delivery | Less than 1 hour for simple products, up to 1 week for complex ones |
| Expansion MRR | Additional recurring revenue from existing customers | Shows effectiveness of upselling and cross-selling | 20-30% of total MRR |
| Net Revenue Retention (NRR) | Percentage of revenue retained from existing customers, including expansions and churn | Indicates overall health of customer base | Above 100%, ideally 120-140% |
| Product-Led Growth Rate | Percentage of new revenue attributed to product-led motions | Measures effectiveness of product-led strategy | 30-50% for hybrid models, up to 100% for pure PLG |
| Time to Expansion | Average time from initial purchase to account expansion | Indicates speed of additional value realization | 3-6 months |
| Sales Cycle Length | Time from PQA identification to deal closure | Measures efficiency of sales process | 30-60 days, shorter than traditional sales cycles |
| Customer Acquisition Cost (CAC) | Cost to acquire a new customer | Indicates efficiency of go-to-market strategy | Lower than traditional sales, aim for 30-50% reduction |
| CAC Payback Period | Time taken to recover the cost of acquiring a customer | Measures return on customer acquisition investment | 6-12 months |
| Product-Market Fit Score | Percentage of users who would be very disappointed if they could no longer use your product | Indicates strength of product-market fit | Above 40% |
| Freemium Conversion Rate | Percentage of free users converting to paid plans | Measures effectiveness of freemium model | 2-5% for B2C, 10-15% for B2B |
| Daily/Weekly/Monthly Active Users (DAU/WAU/MAU) | Number of unique users engaging with the product in a given time frame | Indicates product stickiness and engagement | Depends on product type, aim for consistent growth |
| Net Promoter Score (NPS) | Measure of customer satisfaction and loyalty | Predicts growth through customer satisfaction | Above 50 for B2B SaaS |
| Customer Effort Score (CES) | Measure of how easy it is for customers to use your product | Indicates product usability and potential friction points | Below 3 on a 7-point scale (lower is better) |
Most Common PLS Mistakes and How to Avoid Them
We’ve done a fair share of PLS mistakes at DeckLinks. Some of them were pretty costly, others wasted a lot of our time and mental energy. I won’t share all of them. I’ll focus only on the most common ones that I see SaaS companies make all the time.
First and this is quite common unfortunately, treating product-led sales like traditional sales. Here’s what typically happens, and I’ve heard this from so many of my friends in the SaaS industry it’s not even funny any more. A sales team jumps on every new sign-up like a cat on a laser pointer. Doesn’t go well. Users get annoyed. Many of them stop using the product.
One thing you need to remember that in PLS, your product is doing a lot of the heavy lifting. Sales should be more like a helpful tour guide than a pushy car salesman and focus more on customer success. They should be reaching out based on product usage signals, not just because someone entered their email on your website.
Next, neglecting product team accountability. In the world of PLS, your product team isn’t just building features. They’re driving revenue. BUT your product team can’t just keep throwing new features over the wall to sales, expecting them to magically increase revenue.
Your product team needs to own metrics like activation rate, PQA conversion, and maybe even revenue targets. You’re not turning your product managers into sales reps. Your goal is simply to align everyone towards the same goal which is driving revenue through product usage.
Overlooking the role of marketing. At DeckLinks, we initially thought we could rely solely on product usage data to drive sales. We were wrong. Marketing plays a crucial role in educating users, highlighting features, and helping to identify those decision-makers who might not be daily users of your product. They’re the ones who can turn your PQAs into actual paying customers.
Lastly, waiting too long for perfect data. Oh, this one’s a classic. It’s a bit like waiting for the perfect wave before learning to surf. You’re going to spend a lot of time sitting on the beach. When we first started with PLS, we wanted our data to be perfect before we made any moves.
The truth is, your data will never be perfect. Start with what you have, make educated guesses, and refine as you go.
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The Most Common Product-Led Sales Myths
Alright, let’s bust some product-led sales myths real quick.
Myth #1: PLS means you don't need a sales team.
PLS doesn’t eliminate the need for sales. It transforms the role of sales. Your sales team becomes more like product experts and consultants, helping users get the most value out of your product. They’re like tour guides in the grand theme park of your SaaS.
Myth #2: PLS is only for small, simple products.
In my experience, PLS can work for complex, enterprise-grade products too.
Take HubSpot for example. This is a robust, multi-faceted platform, but their team has successfully implemented PLS strategy. They’ve broken down a complex product into digestible, value-driven experiences.
Even traditionally complex B2B products like Atlassian’s Jira or Autodesk’s suite of design tools have embraced product-led sales motion. They’ve found ways to let users experience the power of their products through free trials, freemium models, and self-serve onboarding experiences.
The key to PLS is not to simplify your product, but to simplify the path to value. It’s about creating those “aha!” moments that showcase your product’s potential. Even if the full depth of your product’s features would take months to explore.
Myth #3: PLS means lower deal values.
Totally wrong. PLS can actually lead to higher deal values over time. Why? Because PLS allows customers to grow into your product. Form habits. They start small, see value, and expand their usage.
I’ve seen accounts that started with a single user grow into company-wide adoptions.
Myth #4: PLS is just a fancy term for freemium.
This is like saying a smartphone is just a fancy telephone. While freemium can be a part of a PLS strategy, PLS is much more. Product-led sales is about aligning your entire go-to-market strategy around product usage and value proposition. It’s basically freemium on steroids.
Myth #5: PLS means you can set it and forget it.
Oh, how I wish I wish this was true. PLS requires constant iteration and refinement. You really need to constantly tweak your PQA model, adjust your sales touchpoints, and refine your product for seamless user experience. It’s a never-ending game of Whack-a-Mole. You’re constantly dealing with customer needs and market changes.
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Conclusion
Product-led sales isn’t just a buzzword or a passing trend. It’s here to stay. I think of it like the smartphone of sales strategies. Once you’ve experienced PLS, you’ll wonder how you ever lived without it. Implementing product-led sales is not always easy, but neither is resisting the urge to check your phone every five seconds, and we all manage that… sometimes.
In PLS, every user is a potential champion, every feature a potential goldmine, and every data point a potential revelation.
Currently, we’re testing whether the number of dad jokes in our onboarding emails correlates with user engagement. So far, the results are… punbelievable 🙂
Keep product-led mindset, my friends, and may your conversion rates be ever in your favor!
FAQs
What makes product led sales different from traditional B2B sales?
Product-led sales shifts from traditional B2B sales by focusing on user adoption and product usage data. Instead of outbound tactics, PLS uses product engagement to qualify leads. It prioritizes self-serve experiences, allowing users to find value before engaging with sales, reducing sales cycles and acquisition costs.
How do you identify Product Qualified Leads (PQLs) in a PLS model?
PQLs are identified through product usage data, focusing on engagement metrics and feature adoption. Key indicators include frequency of use, depth of feature exploration, and achieving specific milestones within the product. PLS teams use these signals to prioritize leads for sales outreach.
What role does customer success play in a product-led sales approach?
Customer success is crucial in PLS, focusing on user onboarding, feature adoption, and value realization. They work closely with sales to identify expansion opportunities, ensure customer satisfaction, and drive product usage. Their insights help refine the PLS strategy and improve user experiences.
How does pricing strategy differ in a product-led sales model?
PLS pricing often includes freemium or trial options to encourage initial adoption. Tiered pricing based on usage or features is common, allowing users to start small and expand. The focus is on aligning price with perceived value and usage, facilitating natural upsells as users grow.
Can product-led sales work for complex, enterprise-level products?
Yes, PLS can work for complex products by focusing on specific use cases or features for initial adoption. Enterprise PLS often involves a “land and expand” strategy, starting with individual users or teams and growing through demonstrated value. It requires careful segmentation and tailored approaches.
How does product-led sales affect customer acquisition costs (CAC)?
Product-led sales typically reduces CAC by leveraging product usage for qualification and conversion. The self-serve nature of initial adoption lowers upfront sales costs. As users experience value before purchasing, conversion rates often improve, further reducing overall acquisition costs.
About the Author
Lidia Vijga is a seasoned professional with 10 years of first-hand experience in B2B sales and B2B marketing. She has a proven track record of driving growth for companies across various industries. Throughout her career, Lidia has led numerous successful sales campaigns and implemented innovative marketing strategies that have significantly increased revenue and reduced customer acquisition cost for her clients. Lidia regularly shares her insights and experiences on LinkedIn, webinars, and public speaking engagements. Lidia believes in the power of personal qualities such as kindness, empathy, and the willingness to understand others. She is committed to empowering client-facing teams with tools that enhance their talent instead of automating it, and she firmly believes that teams that show their human side grow companies much faster.
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