The 5 Core Principles of Product Led Sales

Published in

Hetz Ventures

7 min readNov 6, 2022

In the last few years PLG (or ‘Product Led Growth’) has gained a lot of attention and many startups are building with a bottom-up go-to-market motion — without any sales. Practically, many PLG companies have found it hard to close large deals with exclusively self-serve motion, thus Product Led Sales (PLS) was born. In response to the market downturn, many early stage startups are adopting PLS motions early on to create more revenues faster. Let’s take a deeper look at how it works, core PLS principles and the role of sales in this scenario.

An introduction to Product Led Sales

Product-Led Sales (PLS) is a bottom-up go-to-market model that leverages existing product users as the main customer funnel for the sales team. With PLS, the sales team is focused on targeting existing users who have already interacted with the product and have clear interest in using it. This is based on the clear assumption that users who are already familiar with the product are more valuable and reliable than prospects who are just discovering it.

The playbook for PLS is different from the typical top-down enterprise sales approach, where there are many outbound activities, a lot of up front demonstrations and relationship development. Similar to PLG, PLS products are discovered by the user and not presented to the user. Therefore, PLS can be considered an extension of the PLG model. In addition to the product-centric approach, PLS companies also have sales teams that leverage the existing self-serve user base. The main difference from pure PLG companies is that PLG companies aim to achieve zero-touch growth while PLS companies include an active sales team.

The PLS model is especially beneficial for B2B SaaS companies, as one of the main principles of the model is easy and quick onboarding to hook the user with high and fast value. Similar to the PLG model, PLS is a product-centric model where go-to-market relies on product signals (eg. usage spikes, changes to user behavior, increase in signup velocity, drops in funnels etc). Product usage data helps teams learn how to structure the product and the pricing model so the users will gain enough value to have a hook but will be easily converted to a paying customer.

PLG motions gained a lot of attention in recent years, and many aimed to build companies without any sales. Practically, many PLG companies found it hard to close large deals with zero touch, self-serve motion — thus PLS was born. A few examples of companies that have been laying sales on top of PLG motion include Slack, Monday, Atlassian, and Zoom.

Benefits of the PLS model

The PLS go-to-market model is designed to leverage the combined strength of the PLG model and proactive approach of inbound sales teams. Through sales, companies can leverage existing user bases to accelerate revenue and provide sales with product-qualified leads instead of cold leads, which will convert at x times the rate of marketing qualified ones.

Top benefits of the PLS model include:

Shorter sales cycles — PLS is built on the principle of self-service and an easy-to-use product. In this way, highly engaged users can upgrade themselves and start paying quickly without involving a salesperson, while other users (Product Qualified Leads) can be targeted by the sales team when they have already tried the product and understand its value. SDRs can leverage the analytics they have on the PQLs — knowing the user’s use case and usage will increase their chances of closing the deal.
Lower customer acquisition cost — PLS companies invest less in marketing and sales as they do not do outbound cold outreach. They can stay in hyper-growth mode at scale because they are not bound by time-consuming lead generation, sales, and customer success processes. PLS companies focus on creating products that are self-explanatory and deliver meaningful value quickly. Many of the customers will convert themselves to paying customers and some will be targeted by the inbound sales team.
Product focused for better user experience: in PLS, the product is accountable for attracting, retaining, and growing new and existing customers. To do that the product must deliver immediate and continuous value to the user easily.
Analytics: data is the key to a rapid growth in a PLS product and this is why it is a must from day one. In order to gain a deep understanding of user behavior, PLS companies invest in data infrastructure.

The 5 core principles of Product Led Sales

Deliver high value fast: The product must be focused on delivering value to the end user fast and with minimum friction. Like with PLG, the product is in the center and the goal is to create a zero-touch and zero-friction funnel to convert as many users.
Use the existing user base as the pipeline for the sales team: The sales team should focus on converting users that are already engaged with the product, gaining value but with the potential to expand their usage.
Utilize data to understand when the user is a Product Qualified Lead (PQL): There should be a clear definition of which users or organizations are sales ready. It is likely that this definition evolves as the product develops and the data changes.
Sales assist: PLS sales teams are different from typical sales teams. They are focused on helping users gain value from the product by providing support and education. Their sales process does not depend on marketing materials, but rather on the user experiences and value. Naturally, the interaction is much less pushy than a typical sales meeting.
Built-in network effect: In order to accelerate growth and top line of the funnel, the product should have a built-in network effect — as more people in an organization use the product, the value for a single user should increase.

Which companies are relevant for PLS?

PLS is especially beneficial for B2B SaaS companies with a button-up motion. Here are some characteristics of companies that are good candidates for PLS:

The product is more valuable at the enterprise/team level, than with a single user.
The company has a strong bottom-up motion but struggles to go from user adoption to enterprise-wide adoption of the product.
The revenue goals are pushing the company towards mid-market or enterprise customers.
The company has a strong bottom-up motion and users’ questions are less support related and more about sales (i.e. licenses, pricing, enterprise consolidation, etc.).

At what stage should a company build a sales motion?

A key question is at what point a company decides it is a PLS company. Many PLS companies originate as PLG and add the sales motion later on when they hit a certain growth ceiling. However, it’s crucial to make this call as early on as possible. A product led motion affects the structure of a company and product prioritization decisions. A few examples include whether to hire a sales team, which background is required of them, how much to invest in UX and marketing, and which features to develop first.

The most important factor to consider is whether LTV is high enough to support a combination of self-serve and sales motion. For example, If a company is charging 5$ per user per month, it may be better to fully self-serve. If the company can convert accounts into more than $500 per year, product-led sales make sense. The company can invest in even more high-touch product-led strategies if its ACV is 6 or 7 digits. According to research by Pocus, 48% of respondents made their first sales hire between $500K and $1M in ARR and that hire typically reported directly to the CEO/Founder. This means that many PLS companies start by building value for end users and converting them with zero touch.

The roles of salespeople in a PLS company

Sales reps are expensive. To be cost effective, they must engage with customers who are actually ready to sign up for a paid subscription or buy an enterprise contract. Product-led sales achieves just that. With PLS, sales reps know (using data) which accounts and users have a high propensity to buy, so they can spend time on those users. The PLS sales process enables more efficient sales reps, leading to a lower cost to acquire each new customer.

The roles of salespeople look a little different in PLS environments. The salesperson is less ‘on the hunt’ and does not base their selling on tailored marketing materials. The product-led sales reps adopt a collaborative approach to working with users. In this buying and selling process, the product-led sales team plays a crucial part as they understand the customer’s challenges and suggest solutions to minimize them. The context that the salesperson provides can trigger potential customers to make a purchase.

Final thoughts

In the last few years PLG gained a lot of attention and many built startups with bottom-up go-to-market motion with zero touch approach. Deciding on establishing a sales motion in addition to that can accelerate the revenue and the growth of the company but can also create challenges. We saw companies starting from day one with the PLS model like Aligned and companies who added the sales motion only after gaining a lot of traction like Anima.

To achieve PLS, two go-to-market motions must be built in a coherent manner: The sales team must leverage the product usage data in order to be cost affective.

If you are a founder and would like to meet, shoot me a note at LinkedIn. We at Hetz Ventures, are looking for top-notch PLS companies with Israeli roots.