What Does PLG Mean in Sales?

DEFINITION
PLG in sales refers to applying product-led growth principles to the sales function of a company to achieve sales acceleration. It provides product-qualified leads (PQLs) to the sales team and improves conversion and retention.

💡Understanding PLG in sales

With the wider industry now waking up to the benefits of PLG, the debate between sales-led and product-led strategies has also intensified. But sales and PLG don’t have to be mutually exclusive. 

PLG as a go-to-market strategy has been used by various SaaS companies like Calendly, Slack, and other software giants to relentlessly position their products as their primary acquisition and expansion channel.

But the benefits of PLG aren’t limited to the most successful SaaS companies. Every organization that targets individual or enterprise users with a software product can utilize this new approach to sales and unlock increased conversions, improved retention, reduced customer acquisition cost (CAC), and a considerable uptick in customer lifetime value (CLV).

It’s true that the sales function traditionally works with colder leads as compared to a more product-led approach. But once your organization has adopted PLG, your sales team stands to gain immensely from the resultant access to actionable data and warmer, product-qualified leads. 

Sales acceleration is a natural consequence of dealing with better leads, customers who have already realized the value of your product by discovering their own ‘Aha’ moments or activation points. 

The goal of PLG in sales is to accurately identify such users, enhance their experience by providing additional value, and use the insights gained to convert the ones still on the fence.

🖋 Takeaway

Leveraging PLG in sales hinges on offering tremendous value to customers before they hit a paywall and making your product indispensable to them. This can work for both individual and enterprise users.

Considering the level of competition in the SaaS space, offering best-in-class products and customer experiences is important for any successful sales strategy. This is exactly what PLG enables your sales team to do.

And, by focusing on offering the best product experience and UI/UX, your CAC stays low. Customers see the value of your product on their own and take a step toward becoming committed users, representing an increased CLV for your organization.

What is PLG In Sales?

Implementing PLG in sales is a surefire way to increase sales and, by extension, revenue. The central goal of leveraging PLG in sales is to qualify your most promising leads, offer them additional value, and convert them to paid customers. 

A conventional sales cycle begins with cold outreach through calls and emails and ends with a sub-par conversion rate. When your sales team is armed with targeted data about every user, they’re better prepared to use tailor-made conversion strategies with an increased probability of success.

You can provide your sales team with data on users’ onboarding experience, in-app activities, and key PLG metrics. This information will prevent your sales team from shooting in the dark and, instead, put their best foot forward.

How Do You Know You Need To Incorporate PLG In Sales?

Knowing when to integrate PLG with your sales function is equally important as realizing that you need to do it. As with other facets of PLG, it again comes down to data, that is, tracking key PLG metrics and deciding your next course of action based on the observations.

One of the most important PLG metrics is Time to Value (TTV). It denotes the time taken by a new user to reach their activation point or Aha moment. If your average TTV numbers are consistently hovering around a few days, it’s high time you integrate PLG strategies into your sales function. 

TTV should ideally be a few minutes, if not seconds, for you to be able to capture and retain new users in your product. 

Another metric you should track is the net revenue churn:

[Net revenue churn =  Revenue lost – (new and expansion) revenue] / Starting revenue

Net revenue churn should ideally be negative, indicating that you’re bringing in more sales compared to the amount you’re spending for acquisition. If it’s positive for your product, things need to be turned around fast, and you should look at incorporating PLG strategies in your usual sales cycle.

How To Incorporate PLG In Sales

Incorporating PLG in your sales cycle means providing your sales team with the most promising leads to work on. These are the PQLs that have experienced your product and have already realized its value. They’re primed for conversion with contextual and data-driven sales strategies.

Here’s a quick primer on the specific steps you need to follow to do this:

• Identify your PLG sales KPIs
• Identify your PQLs
• Track in-app user behavior
• Provide value front and center
• Re-activate the non-PQLs

The intricacies involved within each of the above steps will need further elaboration, but this 5-step overview can help you align your sales team and product teams toward the common goal of using your product to optimize sales and achieve better acquisition, retention, and expansion.