Product-led vs. sales-led growth: Choosing the right strategy

Effective growth strategies are crucial for a product's success, with product-led growth (PLG) and sales-led growth (SLG) as two primary approaches. PLG emphasizes using the product itself as the main driver for customer acquisition, typically through freemium models, free trials, and intuitive onboarding processes that encourage users to upgrade independently. In contrast, SLG relies on direct interactions through outbound sales efforts or inbound inquiries, often targeting larger enterprises with high-value offerings that require personal engagement and tailored guidance. While PLG is noted for lower customer acquisition costs and scalability, it demands a highly intuitive product and often experiences lower conversion rates. On the other hand, SLG is characterized by higher revenue per customer and retention rates but involves significant costs and scalability challenges. Choosing between these strategies depends on factors such as product complexity, market size, target customers, scalability needs, and product maturity, with the recommendation to test both models to determine the most effective approach for a specific business context.