Product-Led, Customer-Led, Sales-Led, Marketing-Led Growth: What’s Right for Your Business?

Product-Led, Customer-Led, Sales-Led, Marketing-Led Growth: What’s Right for Your Business?

In this write-up, we discuss whether your business should go for product-led, customer-led, sales-led or marketing-led growth.

Product-Led, Customer-Led, Sales-Led, Marketing-Led Growth: What’s Right for Your Business?
Product-Led, Customer-Led, Sales-Led, Marketing-Led Growth: What’s Right for Your Business?

In SaaS companies, the growth strategy is extremely important. There has been a shift in how businesses work and run. There is a change in how things work from the onboarding process to prospects and customers. A great customer experience is now imperative in the business world. Growth is necessary for any company- be it an early-stage startup or growing one. The right process is to hire a growth marketer or VP of sales. However, it is not possible to engage and employ a C-suite person at an early stage. Growth does not happen out of thin air. To grow your business, you need to keep all the growth possibilities in mind. The four major growth strategies are-

  • Product-led growth
  • Sales-led growth
  • Marketing-led growth
  • Customer-led growth

Let us know which one is best for your business and why? Also, we will discuss the benefits of each of them.

Product-led Growth

Product-led growth is when the product is responsible for acquiring, signing up, retaining, and ensuring the loyalty of customers. The product is what creates the interest and awareness. This leads to the new user signup; the user then reaches the aha moment and converts into a retainer. The main pillars of this approach are customer experience and product usage. They will help acquire customers, retain, and expand the base.

The basic idea is to build a great product and match it with an amazing user experience. SaaS companies like Zoom, Netflix, and Slack offer a great product experience. This leads to lower customer acquisition costs and higher retention costs. PLG or product-led growth also leads to shorter sales cycles, automates user acquisition, and aids in onboarding.

Best for:

The PLG approach is best suited for B2B and B2C companies that are product-based. You can set up a use link like a Zoom call or a Slack channel if that is what your business does. This will help you reduce marketing and sales costs while leveraging product for growth.

Sales-Led Growth

Sales-led growth is a popular growth strategy in which sales processes are the driver in revenue growth. The sales team is primarily responsible for the growth and the company’s success. The impact on the company’s bottom line is mostly with the sales team. Some companies who have used the sales-led growth tactic are Microsoft and Salesforce. The sales process is the most important part of the funnel and hence there is great alignment between teams.

The sales-led growth organizations don’t take customer success and other aspects into account. However, it is to be kept in mind that the sales process involves the human element to a huge extent. Ego, tempers, wars, and psychological mindsets play an important part in the sales process. Sales-led growth has an internal challenge in over-promising and over-committing to the prospect without consulting anyone.

Best for:

Sales-led growth is best suited for service companies. The ones who sell highly technical and proprietary products are the right choice to pick a sales-led growth strategy. It works best if everyone is on the same page with respect to driving growth.

Marketing-led Growth

Marketing-led growth is growth driven by marketing. If someone becomes a customer if they read a blog, watch a video, or download an ebook- it is marketing-led growth. The marketing-led growth needs you to reinvent the narrative and differentiate your brand from others.

Examples include Ahrefs and Hubspot. HubSpot uses content to engage customers and bring them onboard. Ahrefs does not even offer a free trial. The team at Ahrefs has an amazing repository of videos, blogs, courses that show how the tool works. The product experience is great and hence there are more upgrades, social shares, referrals, etc.

You can add value to customers and build a product that meets their expectations. This content also leads to excellent customer feedback that will improve the online reputation of the company. You also stand out among competitors in your niche.

The challenges with marketing-led growth are primarily two-

  • You need to share leads with the sales team so that they nurture and understand the customers better.
  • This pattern of growth makes customer acquisition a priority over customer retention.

Best for:

Marketing-led growth is best suited for service brands who want to be a market leader in organic growth. A sustainable business model is best to increase customer retention. MLG helps with user acquisition and demonstrating the value of the product. It might work with sectors where people are looking for quick self-help solutions.

Customer-led Growth

Customer-led growth is a growth strategy that keeps customer feedback as the core to qualify customer value. You can improve value if you offer an amazing customer experience. The goal is to improve the customer experience so that you can retain customers well. It is keeping KPIs relevant and at the core for-

  • Customer acquisition
  • Customer engagement
  • Customer retention
  • Customer expansion

Customer-led growth offers a sustainable business model with a strategy focused on customers- operational, technical, and commercial. CLD also improves long-term sales and supports users at the end of the funnel. CLG also helps you tailor customer experience, simplify the onboarding process, and offer high level of value. Customer-led growth also helps customers be happy and spread positivity with free word of mouth. This makes customers brand advocates and champions success.

Best for-

Honestly, placing your customer at the core of business growth will only help you grow. This method of growth strategy works for everyone. You use customer insights to drive product improvements, tailor sales and marketing strategy. CLG is the most sustainable form of growth since your customer retention and customer loyalty are the most important growth metrics.

Bottom Line

In product-led growth, the product drives all the KPIs to grow. In sales-led growth or SLG, the hard sell approach is responsible for sales volumes and upselling. Marketing-led approach is when you use market research to create a product that meet customers’ needs. In customer-led growth, you deep dive into customer insights and develop your product. You need to pick the one that works best for you. The way the company moves sets the motion for a lot of aspects like outpacing competition.

Many companies are now choosing hybrid models like product and sales led to grow. The key is to test and see what generates the best results. Sustainable results are the ones who will help you grow in the long run. In all, you need to use data from any strategy and combine it with tactics that work to ensure growth. Collaborate with teams, connect with other departments, adjust sales cycles, make the right contacts, send the right emails and look at offering a great product experience. you need to ensure people get the best value from the product and prioritize accounts to ensure greater engagement.

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