A Go-to-Market strategy isn’t one size fits all, it should be tailored to your business. Factors like business model, product type and audience will all affect how you go-to-market. The direction and style of your Go-to-Market strategy is also known as a motion, the most common being product-led, sales-led, and content-led, although there are many others.
In this article, we’ll be breaking down what a product-led strategy is, how it works, and what it looks like in practice, with a little help from Derek Osgood. Derek’s the Founder and CEO of Ignition, the GTM ops platform, as well as an experienced product marketing leader. Earlier this year, we caught up with Derek to discuss how a product-led Go-to-Market strategy has helped his business succeed, and you’ll find the best bits from that conversation below.
But first things first…
What is product-led Go-to-Market?
In a product-led Go-to-Market model, your product is doing the hard selling, not your sales team. Ever heard the expression show not tell? Normally we use it to talk about writing, but it’s a great way to understand the difference between sales-led and product-led GTM.
With the traditional sales-led method your sales team tells the customer why the product would benefit them and why they should buy. With product-led, the product does the talking by showing customers the value it adds.
For this reason, free trials, freemium models and subscriptions are the favored tools of the product-led organization. With these tools, customers can experience products first hand and discover their true value for themselves.
This can be very effective but it relies on customers being able to get enough value out of a product to commit to a purchase. So, your product either needs to be self-explanatory or you’ll need to put some serious work into your customer onboarding to make sure new users find that value.
A product-led Go-to-Market doesn’t mean you don’t have a sales team. Your product might be driving growth, but a sales team is still needed for bigger, high-cost deals and nurturing customers who aren’t quite ready to buy. While SaaS users increasingly opt for self-serve models, there will also be clients who need that human contact.
Product-led is a very user experience based Go-to-Market motion. Although it's the product driving growth, customer acquisition and Go-to-Market activities, the customer journey is what’s really crucial here. The purpose of leading with the product is to take the customer on a seamless and efficient journey and extend customer lifetime value.
Product-led Go-to-Market strategy, with Derek Osgood
In what circumstances would you choose a product-led Go-to-Market strategy?
- When your price point dictates it and you can’t afford to have sales touching your customers.
- When you’re confident your product will deliver value in and of itself without needing explanation.
- The effectiveness of your onboarding motion and where you think you’re going to see channel market fit.
If you’re by and large seeing advertising working well chances are you aren’t going to want a sales-motion. That advertising will convert better if customers can quickly go through a funnel, and it's easier to do downstream optimization on growth channels. If companies can do a product-led motion they should bias that way because it's the way software buyers are moving, but over time you’ll probably end up having both product and sales-led.
What are the benefits of a product-led Go-to-Market strategy?
With product-led, there are theoretically lower acquisition costs and it allows you to create a larger customer base. You can then activate that base both from an upselling perspective down the road and from a communication perspective in creating more advocates who will go out and sell the product for you. It’s cheaper to run, easier to maintain and less enablement work is involved, although you do have to put more into customer onboarding.
Are there any risks with a product-led Go-to-Market strategy?
There are downsides. One, it can be a lower pace of learning. One of the biggest things you’re sacrificing is the live feedback on what is and isn’t working that you’d usually get because you're not having live conversations with customers and prospects. So you need to be really tight on your analytics and create other mechanisms to go and collect that feedback from customers.
It also requires a lot more product resourcing, you have to be able to prioritize and reroute product resources away from new feature development to be able to continually optimize and update onboarding and product experiences and what your cross-sell looks like. The other downside is it's very challenging to effectively onboard people on a complex product and can hurt you if you have a long time to value.
Can you give an example of a time you successfully used a product-led Go-to-Market strategy to beat out a competitor or set yourself apart in the industry?
We don’t see Competitive Intel tools as competitors in most cases. However, often their sales-led motion acts as an accelerant for us to sell our broader product, because of our PLG motion. Users will come to us with a need around broader Go-to-Market, but in their initial signup discover that we support lightweight competitive tracking, and it’s a “bonus” that causes them to take action immediately on buying the other stuff. They experience that value quickly vs. the alternative of having to go jump on a sales call to buy a more robust platform for it, it just makes the purchasing process much simpler.
How did you decide product-led Go-to-Market was right for your company?
The long-term plan was always to be freemium. We believe in the value of the product and that it’ll become essential in a customer’s workflow once they start using it, which makes it well suited to a freemium model. It also offers a lot of opportunities for upselling which again makes it best suited to a freemium model.
This interview was taken from our Go-to-Market Motions Playbook. To find out more about GTM motions, and read our full interview with Derek, download your free copy now.
A product-led Go-to-Market strategy means your product is driving your sales, growth and profit. Rather than a sales team, the product itself does the talking.
It’s best used for:
- Products with a price point that negates your ability to afford a sales team.
- Products that demonstrate their own value.
Product-led is particularly popular with B2B SaaS companies, but is beneficial for anyone with an audience that prefers self-serve business models, as there is less interaction between the customer and sales reps.