What is Product-Led Sales?

An intro to Product-Led Sales. Why it works and how to make it work for you.

What is Product-Led Sales?

B2B SaaS is easier to use than ever. Within minutes of signing up, anyone can attend a meeting on Zoom, ping a coworker on Slack, and make project plans on Airtable. Product-led growth (PLG) lets people self-serve onto a product–and it’s become the hottest customer acquisition channel. But how does this large user base become monetized?

Product-led sales is a go-to-market motion where sales teams leverage product usage insights to engage and retain end users. It all starts with a product that’s open for free signups. This delightful, easy-to-use product acts as the ultimate lead generation machine. The best part comes next: sales teams (also called “sales assists”) do warm outbound onto an existing account base to increase conversion rates and expand deal size.

Product-led sales combines a product-led acquisition model with a sales-led monetization model. The upsell motion works by uncovering a key business case, and then mapping it to a team or enterprise plan. Higher paid plans allow users to unlock additional features, integrations, and usage, while benefiting the organization with security and custom SLA's.

Sales teams enable existing end-users to become enterprise champions, who do the internal selling for you. This future champion comes from certain users known as PQLs.

PQL → The new lead type for Product-Led Sales

Product-led sales teams “fish” for certain types of leads in the account base. Sales reps still prospect for Ideal Customer Profiles–but they use product usage insights to find buying intent. Highly engaged users who meet your Ideal Customer Profile are known as PQLs. PQLs convert 5x better than MQLs that haven’t tried the product.

When your signups have high product engagement, they are far more likely to convert into paid or upgrading customers. Even after these accounts become paid, the widespread bottoms-up usage means they’ll be less inclined to churn. Since PQLs predict who will be your best customer, increasing PQL conversion is the best use of salespeople’s time.

These tiers are ranked by the expected value of the account converting (eg high probability of close and high value deal). Tiers change how sales teams should approach the leads.

Tier 1: This group has a very high propensity to buy. They are using product intensely and fit your customer profile. These accounts should be sellers #1 focus. They are likely to close faster than any other deals.

Tier 2: This group is fits your customer profile well but is using your product in a limited way. A salesperson should definitely reach out and figure out how to get the account more engaged. This is where new motions of product-led selling and product evangelism are  successful.

Tier 3: This group may or may not be worth your time depending on deal size. They are very active accounts but may be smaller or not ideal use cases. You need to figure out if the deal size warrants a salesperson getting involved or just let the accounts self-serve with marketing nurture.

PQLs turn into product champions when sales teams equip them with value-add product education and business cases. Product champions help roll out the product to the rest of the organization. This turns into a word-of-mouth land and expand motion.

Benefits of Product-Led Sales

Product-led sales is a win-win strategy for buyers and sales teams. Prospects quickly get value out of the product, which informs their purchase decision and increases deal velocity.

📈 Reach and Monetize an Entire Market

Having a product open to a large volume of free signups increases market reach. At the same time, sales teams make sure this volume of customers is engaged and retained. They sell fast: instead of worrying about a big upfront transaction, sales reps quickly land deals and expand usage overtime.

The bottoms-up, product-led acquisition amplifies the sales team’s lead volume. Sales teams in turn amplify the product-led upsell conversion. These two pieces don’t oppose each other–it’s all about GTM at scale.

😁 Improve Buyer Experience

Modern SaaS buyers do not want to jump through hoops to see the product. They don’t want  discovery calls prior to signup. They want to get their hands on the product as fast as they can. This quick time-to-value helps show–instead of tell–the product’s value.

Sales reps then reach out, offering to help users unlock maximum value from the product. They act as a resource for use cases, blockers, and product education. They assist users along their product adoption journey. Consultative selling is about both evangelizing the product and solving specific problems–a far bigger value-add than the typical hard sell.

🏎 Drive Sales Efficiency

When users can immediately access the product, they are able to self-educate themselves. This saves sales reps’ time and lowers customer acquisition cost (CAC). Rather than doing traditional lead nurturing or worrying about implementation details and timelines, sales teams focus their time on self-qualified users with clear product usage signals that they are ready to purchase.

🙌 Increase Expansion Opportunities

Early user activation and self-nurturing leads not only helps land the initial deal–it helps with expansion efforts to increase lifetime value (LTV) too. There’s momentum to upsell into management for team/enterprise deals when end users are already sold. That creates a much stronger sales pitch than the dozens of cold emails executives receive daily telling them to adopt completely new organization-wide tools. By starting with product usage instead of ending with it, buyers are already assured that their team is actually going to use the product.

This upsell momentum is so powerful that 55% of customers who reach Zoom's enterprise plan–the customers spending over $100k–had started with one free user. Today's free gmail user can be tomorrow's enterprise tier.

Product Data = Sales Advantage

Product-led sales is a healthy and efficient self-serve flywheel that is layered with top-down sales. Sales teams accelerate deal velocity by converting a high volume of warm signups. Instead of waiting on one decision maker to inform them on key updates, they are proactive in monitoring product usage signals.

That’s why it’s so important to have actionable product insights along with your CRM.

Calixa powers your product-led sales motion by combining CRM and product insights into streamlined sales workflows. Sales reps can live within Calixa’s interface for deep dive PQL research, or set automations which complement your CRM. Our platform enables you to prioritize PQLs and increase upsell conversion rates.

Ready to find sales-ready users? Sign up today.