Debunking the top product-led sales myths

March 16, 2023
Debunking the top product-led sales myths
Justin Dignelli

Product-led sales is a relatively new concept, and it has gained a lot of attention in the B2B SaaS world over the past year.

While product-led growth is still the darling of founders, CEOs, and VCs alike, many companies have found a hybrid go-to-market motion more effective. A hybrid GTM relies on product-led growth to efficiently acquire customers at scale while overlaying a product-led sales motion where complexity, risk, or customer preference requires it.

When executed successfully, a hybrid GTM can keep customer acquisition costs (CAC) low while unlocking larger deals and higher customer lifetime value (LTV).

For most SaaS businesses, this is the holy grail.

But with any hype comes myths and misconceptions. Product-led sales is no exception.

So, let's separate fact from fiction when it comes to product-led sales and hybrid go-to-market motions.

Myth 1: Product-led sales is primarily about growing existing customers

One of the most common myths about product-led sales is that it focuses solely on growing existing customers—either through increasing their usage or expanding to other users within the company.

While it is true that a product-led approach can have a massive impact on driving retention and incubating upsell opportunities, this is only part of the picture.

In fact, one of the main benefits of product-led sales is its ability to convert new customers. By using data gathered from product usage, you can identify which free users (whether they're using a free version of your product or on a free trial) may benefit from sales assistance.

We talk about how to figure out which prospects should be sales-assisted in our post on lead qualification and PLG.

As one of the five product-led sales motions, free-to-paid conversion is a significant part of a product-led sales strategy and shouldn't be overlooked.

Myth 2: Product-led sales is only a fit for low-ACV products

Another common myth about product-led sales is that it is only suitable for low-ACV (annual contract value) products.

While it is true that product-led sales can be highly effective for the volume and velocity of low-ACV products like consumer apps or low-cost business software, it is a mistake to assume this approach can't be applied when contracts move into the 6 and 7-figure ranges.

In particular, product-led sales can help a customer transition from disconnected, self-service usage into company-wide agreements. This practice is called "consolidation" and is another one of the five product-led sales motions.

Ultimately, the success of product-led sales has a lot more to do with how users uncover value in your product than the price alone.

Myth 3: Product-led sales eliminates the need for an enterprise sales team

One of the most persistent myths about product-led sales is that it eliminates the need for an enterprise sales team. Said another way: introducing product-led growth changes the role of sales.

While a product-led approach can help reduce the reliance on traditional sales tactics, it is not a replacement for a skilled sales team. In fact, it can help sellers focus on what they do best: distilling the challenges of disjointed teams into cohesive business pain points and thoughtfully deploying the right tactics and resources to build consensus.

If anything, a dedicated product-led sales strategy can help offload what would be more transactional deals to a low- or no-touch channel. Meanwhile, a skilled enterprise sales team focuses on developing high-value accounts requiring more bespoke and consultative tactics.

Myth 4: Product-led sales is a replacement for customer success

Another common myth about product-led sales is that it replaces customer success teams.

While a product-led approach can undoubtedly help reduce churn and improve customer retention, it cannot replace the critical role of a dedicated customer success team.

This myth comes from the fact that, in some cases, product-led sellers take on some of the work that historically might have been done by customer success—for example, by sharing how-to guides and documentation or by removing technical blockers for customers.

However, ensuring customers are successful has never been the job of a single team. Particularly for complex products or large customers, CS will continue to play a critical role in ensuring customers are developing into healthy, happy, and vocal product advocates.

Product-led sales has the potential to revolutionize organizations’ approach to selling their products. By challenging and debunking common myths, teams can better understand how product-led sales works and how it can help them achieve their goals. With the right strategy, organizations can break through traditional selling methods and boost their customer experience in new ways.

Get the latest articles from Pace directly to your mailbox.

Now Subscribed!
Oops! Something went wrong