Should you go from Sales-led to PLG?

Here’s the transformation orgs. would need towards adopting to PLG (Product Led Growth) from being marketing / sales-led…

Oct 10, 2024

→ To put it bluntly, it is GROWTH!

Although we are surrounded by start-ups (majorly SaaS) that stand testimony to PLG, using that as a primary driver to disrupt the landscape they are operating in, there are still a few who seem entirely reliant on marketing & sales towards fuelling their growth, not that those teams have no place in the PLG scheme of things.

The differences between the way these orgs. function could be quite significant. The product start-ups are known to employ PLG (product led growth) practices stacking up the right features, working towards offering a great UX as a GOTO towards revving their growth up, hitting those ascension points, onboarding & riding the growth waves thereof, when orgs. who are predominantly marketing-led / sales-led are known to rely heavily on those respective teams to help them take the product to the targeted users / user groups & the markets.

But here’s a question:

→ should you change your growth model to PLG from whatever else you are relying on now?

When changing a growth model / a strategy by pitting it against the ones who are employing PLG is the result of shiny-object-syndrome, one could be in for a nasty shock. When altering a growth model is a mammoth change & may get more pronounced given the size of the orgs., the more important area to tap is whether or not such a change is needed in the first place.

For starters, the growth strategy ought to depend on factors like:

What is the product all about?
Which category / type of business are we into?
Who are the major customers we are selling to right now or plan to in the future?
What’s the time users take to realize the value of our product?
What’s our pricing strategy?
At what frequency are we receiving payments right now?

“Shifting the product strategy ought to be a decision that’s deeply motivated & driven by changes in organizational / business strategy”

Firstly, lets run over a few of these growth strategies employed worldwide:

📚 FACT: Usually the orgs. that hinge on a sales-led strategy for growth would have a product / suite of products that are totally similar in their offering when pitted in comparison to the ones of their competition!

Let’s now dive into a case study to understand what a sales-led strategy would look like, explore if that really needs a change & how they can shift to PLG if they ought to.

CASE STUDY: Insurance Orgs. & their product suite

An org. that provides insurance has a diverse set of LI (Life Insurance) & GI (General / Non-Life Insurance) products. They currently are totally dependent on their call centre executives whom they employ across the length & breadth of a given geography directing them to COLD-CALL towards building awareness about these products & intern drive sales.

If you happen to be a salaried (working) professional you know exactly what I’m getting at here. Given how most individuals are bombarded with those cold calls on a daily cadence to brief them about insurance in spite of the recipient expressing absolute disinterest, the focus as for the org. is to reach out to as many people as possible from that database / list. Post that they may narrow it down to the ones who expressed something of an interest, moving them across the sales funnel taking them stage-wise from prospect to a paying customer.

If we look closely, this growth model could be fraught with a few problems like:

Now, supposing the leadership get together & come to an understanding that there are problems at the ground level that need some weeding out, a decision that stems from a realization that the initiatives undertaken so far & the yields is no match to the huge potential there was for growth. They also understand how the model they are operating in may need a relook & perhaps a change to fit into the current scheme of things & how the market largely seems to be buying insurance today, which is largely across online channels.

This situation now totally justifies a move from the current sales-led model to PLG & here are a few steps for the org. to affect that transition successfully:

1. Re-shift focus to core product

Having an online presence is a major shift & a first step for this organization now. Shifting focus on THE product here would mean listing out all information there is to share about each of the products in the suite they have to offer. But, given the fact that an insurance org. may be dabbling with a total assortment of policies right from LI (Life Insurance) / GI (General Insurance), the one thing they also need to sort out prior to going online is to rethink on the purpose of each of those products.

And that may involve introspecting with questions like:

why is this product needed?
what would this product offer that’s prehaps unique?

2. Understand your target market & audience

To be operating as an insurance org. simply ought to translate to an acute understanding of the target market & also ought to lean into knowing who would exactly fit the ideal customer profile (ICP). It’s true that one org. may be dabbling with many insurance policies but so are the other competitors in the market. Unless one gets back to the board, analyses a thing or two about the markets, the customers & their problems in detail, one can’t be thinking of shifting the strategy.

So, at the very top one ought to have answers to these questions:

who fits the description of my “ideal customer”?
who are my competitors (major / minor)?
what choices does the market offer to them right now?

3. Research & Discovery

Once the ICP is built, it ought to open up an opportunity to gauge / understand the customer behaviour over many a deep-dives. Conducting a host of market studies to learn the inclination existing markets have towards some products & glean insights into why it is that way ought to follow suit. When those studies would lead to an understanding of the markets, one would obviously need more insight if they are to be ideating, designing & building new products. So, earmarking a few people who essentially belong to the sample space, fit the perfect description of the ICP & are willing to participate ought to be hit with deeper follow-up questions to decipher those behavioural patterns.

Post this step, one ought to have the answers to these questions in order:

what’s my ICP?
what are the reasons that prompted users to buy the policy right now?
what gaps are prevalent in the whole customer journey?
are there any prominent pain points & how major are they right now?

4. Relevant products / features

Given the understanding you carry at this juncture about the market, the users, you probably know that if it is an insurance product it ought to offer something that nobody else in the market is doing. When this seems like a challenge (and a BIG ONE too), it really isn’t given how there could be so many channels to explore & ideate to come up with something that the users consider valuable. For instance: insurance orgs. could combine with partner orgs. & explore how they could line up their products / services to add value to the users.

A thorough deep-dive ought to lead to clarity over:

what is it that can differentiate our product from the rest of the market today?
can we come up with a list of such things & strategically plan releases at regular cadences?

Share 🎯 "The Product Web"

5. Delivery channels

Earlier it was entirely dependent on the call centre & their cold calling. But given how the users ought to be able to discover, onboard & use the product themselves, it is important to understand the channels & earmark a few to take the product ahead into the market. The fact that it is an insurance product ought to make the placement pretty easier given how it is all linked to finance / health / assets. But instead of hitting all those channels all at once, one could leverage finding from the research to zero-in on one of those.

At this stage, one ought to have clear answers to these questions:

how will the market discover the product?
is there a specific channel that we’re going to sell on?
what other channels could be tapped into?

6. Offer Product Trials

YES! The product ought to do the talking here. But that doesn’t mean you ought to do away with marketing entirely. Marketing still ought to be a front-runner here given how there is a need to float content targeting mass awareness, helping people discover the product & the value it can add. But the proof of the pudding happens to be in the eating. One sure way to approach that is to offer FREE TRIALS for a certain period. If it is a health insurance product the user may not know the effectiveness / the value addition until such time that they apply for a claim. But, given the partnership with the other orgs. one could easily get the users to realize the value much early by offering them suitable services / packages, ensuring that they are covered under the very policy, cutting the whole TTV short.

But, here are questions you ought to have answers to first:

ideally what period should the trial be for?
is there a way to help users realize the value before they apply for their first claim?
what kind of a relationship / understanding would that require from our partners?

7. Iterate & Refine

The one common trait of successful products is how the teams ask their users for feedback, gauge it well, iterate over it & see that it refines the product offering. If the feedback pool is pretty large it could be selectively picked & that could be sped up with the advent of Gen-AI. But in case of insurance orgs. their main product offering could carry a significantly large cycle time. So, iterating & refining it on feedback from the markets in general & the users in particular become paramount. One way to tackle this is to keep a close tab on the markets, study the other products tracking those amendments to the policies at a granular level in reasoning them out suitably.

The success of your iterations & whether or not it led to some refinement depends on the feedback you obtain to these questions:

does this latest product release solve the problem you had earlier?
any other major / minor problems you are facing right now w.r.t the policy?
what else would you say can be improved thereof?

8. Encourage Reviews, Referrals

Alright, you have reached a stage where your users are glued to the product & you seem to have an existing user base that’s sizeable & consistent. That’s not the end of it, it’s just a bend. You got to ensure you employing the loyalty you have from your existing user base to effectively improve your metrics leading to continual growth. Incentivization of the users for each referral in some way could also help the cookie crumble. Stuffing a nudge like “refer a friend now” could really work wonders with your loyal customer base. And of course, resorting to metrics like C-SAT, NPS could work really well here to paint an actual picture of the happiness quotient of your market.

Effectively it could be down to asking them one simple question:

based on your experience how likely are you to recommend us?