SaaS Go-to-Market (GTM) Strategies — Product-Led Growth, Marketing-Led Growth, and Sales-Led Growth

Globally, the market for most SaaS products and services can be described as being quite crowded and full of noise. In order to stand out and grow, SaaS companies tend to adhere primarily to one or a combination of three go-to-market (GTM) strategies — Product-Led Growth, Marketing-Led Growth, and Sales-Led Growth.?

While these methodologies have become commonplace within SaaS companies the world over, knowledge about these GTM strategies and/or experience in executing them is lacking in Bangladesh, which is hindering the growth of tech businesses and, by extension, the ICT sector in Bangladesh.?

Building great products is important but knowing how to market and sell them is no less difficult and important. As Peter Thiel writes in ‘Zero to One,’ this Field of Dreams conceit that “if you build it, they will come” doesn’t work in real life. Therefore, for tech startups in Bangladesh, it’s crucial to learn from global best practices on the strategies to achieve growth and scale.?

What is Product-Led Growth (PLG)?

Product-Led Growth (PLG), as the name suggests, refers to a strategy where the product itself acts as the force that drives acquisition, activation, retention, and revenue. In this approach, you need to open up your product for free use either in the form of a free trial or by providing access to a limited number of people or a limited number of features.?

Then you need to ensure that all functions of the company — marketing, sales, customer success, engineering, design, etc. — are aligned on ensuring that the product is so good that users can’t help but become paying customers and become loyalists and advocates for the product, thus driving retention and growth.?

Does that mean you can get rid of your sales and marketing entirely if you choose to go the PLG way? The short and emphatic answer is no. In a PLG approach, marketing is crucial because you still need people to discover your product. Marketing can help drive more traffic to your website, app, or landing page. Sales, on the other hand, can help accelerate revenue growth and the transition from initial discovery and acquisition to revenue.?

What Are the Key Characteristics of Product-Led Growth (PLG)?

Some of the key characteristics of PLG strategy include:?

• Products tend to be easy to access and sign up to?
• Free users get access to a few features or get access to the entire suite of features but for a limited time only
• Products are generally collaborative in nature, e.g. project management tools like Monday.com and ClickUp, to ensure further product-driven conversions

What Are the Relative Strengths and Weaknesses of Product-Led Growth (PLG)?

Strengths

• Relatively less costly method to scale and grow.?
• This strategy is not relevant for all business and product types.?
• Lower time to value, customer acquisition cost, and payback period.?

Weaknesses

• You will still require solid sales and marketing capabilities to scale.?
• Quick product adoption due to low friction.
• Product needs to be 10x better than competitors and ensure constant innovation to prevent churn.?

What Are Some Examples of Companies That Follow the PLG Strategy?

Some well-known companies that have grown using the PLG approach include:?

• Slack

Founded in 2020, Slack has become the numero uno player among workplace communications solutions. Today, it is used by more than 100,000 organizations globally, which includes more than 70 of the Fortune 100 companies.?

To this day, Slack offers a free plan through which you and your small team can enjoy the most essential features of Slack for life without paying a cent. Once users are signed into the free plan, Slack ensures that they are delighted by a superb set of features, exceptional customer experience, and constant data-driven innovation that make paying for the product seem like a no-brainer.

• Zoom

At this point, who doesn’t know Zoom? Post-pandemic, Zoom has joined the illustrious list of brands like Kleenex, Aspirin, ChapStick, and others, to become the generic name for video conferencing platforms. Whether it be in news channels or everyday conversations, virtual calls are invariably referred to as ‘Zoom calls.’

Used by over 200,000 organizations and millions of individuals, Zoom is often said to be the pioneer in the PLG approach. For the first few years of its existence, it had no marketing team at all.?

While it did later onboard a marketing team, Zoom has always made its product the force that drives business growth. Like Slack, Zoom made adoption extremely easy and attractive with free users getting lifetime access to a limited set of features and then being enticed and encouraged to pay for the product by its features, data-driven improvements, and ease of use.?

• OpenAI

At the moment, Artificial Intelligence (AI) is perhaps the most talked about subject, in tech at least if not across the board. The company largely responsible for this — OpenAI, the company behind ChatGPT — is a good example of the PLG approach. The company generated a lot of buzz and achieved the most virality in a short period of time for any product in recent memory without almost any marketing.?

The basic model of the product — GPT 3.5 — is available for free for users to discover the extraordinary capabilities of the chatbot. For those who then wish to unlock more advanced features, the ChatGPT Plus subscription is available for a monthly fee of around $25.?

What is Marketing-Led Growth?

In the same way that Product-Led Growth relies on the product to drive growth, Marketing-Led Growth (MLG) is an approach where the marketing function is primarily responsible for driving product and business growth.?

In this approach, companies need to invest heavily in content marketing and other forms of digital marketing to build awareness among the target audience and generate demand.?

What Are the Key Characteristics of Marketing-Led Growth (MLG)?

Some of the key characteristics of MLG strategy include:?

• Heavy investment in content marketing efforts to educate, build awareness, and generate demand across the buyer journey?
• Strong reliance on digital marketing channels such as Search Engine Optimization (SEO), social media, email marketing, paid marketing, etc.?
• The marketing function is responsible for the main growth metrics?

What Are the Relative Strengths and Weaknesses of Marketing-Led Growth (MLG)?

Strengths

• Helps establish brand authority and trust among the target audience.?
• Requires heavy investment in marketing.?
• Content marketing educates and generates demand, often unlocking untapped market potential.?

Weaknesses

• Requires high-volume content production and the need to constantly innovate.?
• Easy to adapt this strategy to fit the needs of changing dynamics in the market.?
• Requires being agile to quickly adapt to the evolving trends and market dynamics.?

What Are Some Examples of Companies That Follow the MLG Strategy?

Some well-known companies that have grown using the MLG approach include:?

• Ahrefs

Founded in 2011, Ahrefs is perhaps the most powerful Search Engine Optimization (SEO) software suite that encompasses tools for link-building, keyword research, site audits, and competitor analysis, among other things. Most marketing agencies that offer some form of SEO services tend to find this the most reliable and useful tool. This is not necessarily the most value-for-money tool for individual users or even many small businesses.?

Therefore, they have consciously adopted a heavily marketing-driven GTM and growth strategy. The product is expensive, starting at $129 per month. There is no free plan, which is not a problem since most SEO experts are kind of convinced by now of the tool’s superior capabilities either through Ahrefs marketing or word-of-mouth.?

Today, Ahrefs is probably akin to being the Bible of digital marketing, particularly SEO, on the internet. It has some of the best blogs, videos, and guides for SEOs and digital marketers which rank highly for relevant keywords and are pumped out on social media and direct emails. Its help center is full of useful materials to help users navigate the platforms and become advanced users, all of which help them educate the audience about their product, generate demand, and foster growth.?

• Semrush

In neck-to-neck competition with Ahrefs for the title of the most powerful and capable SEO software suite stands Semrush, a company that was founded in 2008 but has now grown to become a publicly listed company with 1,000+ team members.?

In terms of their GTM strategies, there is a huge overlap between Semrush and Ahrefs. However, in the case of Semrus, they do offer a very limited free version of the product through which users can get a first-hand glimpse into the product.??

Apart from that, like Ahrefs, Semrush produces highly authoritative content at a massive scale. It probably has a stronger and wider content library than even Ahrefs which it leverages to fuel its social and email marketing campaigns.?

• Notion

A multi-functional note-taking and project management tool founded in 2016, Notion has become wildly popular among productivity enthusiasts and entrepreneurs, thanks to the viral marketing campaign they launched in collaboration with influencers in the productivity, technology, and entrepreneurship niches.?

Notion is a good example of the right combination of two different strategies — Marketing-Led Growth (MLG) and Product-Led Growth (PLG). Most companies actually combine two or even all three strategies to achieve growth.?

Most of the essential features of the product are free for individual users as well as small teams for life. An extremely easy-to-use and intuitive interface, widely available free templates, and a wide plethora of tutorials created by Notion and Notion enthusiasts make the transition from amateur to relatively advanced users quite seamless and quick. It becomes easy to get hooked on the product, eventually leading many to convert to paying subscribers to unlock the advanced features.

What is Sales-Led Growth?

As opposed to a Product-Led Growth strategy and a Marketing-Led Growth strategy, a Sales-Led Growth (SLG) strategy involves the sales team owning the key growth KPIs like acquisition, retention, etc., and driving business growth.?

This approach, based on following a traditional marketing funnel, involves qualifying leads into marketing-qualified leads (MQLs), then sales-qualified leads (SQLs), and then turning them into opportunities and converting them into paying customers.?

What Are the Key Characteristics of Sales-Led Growth (SLG)?

Some of the key characteristics of SLG strategy include:?

• Unlike PLG and even MLG, there are no “try before buy” options. There may be money-back guarantees.?
• The only way for users to get a glimpse into the product is through sales demos.?
• Since the product involves a high upfront cost, adoption is generally top-down.?

What Are the Relative Strengths and Weaknesses of Sales-Led Growth (SLG)?

Strengths

• Works best for high-ticket products targeted towards enterprise organizations.?
• Requires a large sales team, which can be very expensive.?
• Helps build direct relationships with customers, engendering greater loyalty.?

Weaknesses

• Sales cycles for products needing the SLG approach tend to be quite long.??
• Allows the most accurate projections for pipeline and revenue, ensuring better predictability in terms of business performance.
• Exclusive or over-reliance on SLG can hinder the scalability of the business.?

What Are Some Examples of Companies That Follow the SLG Strategy?

Some well-known companies that have grown using the SLG approach include:?

• Salesforce

Founded in 1999, Salesforce has emerged as the king among software applications catered towards managing customer relationships for marketing, sales, and customer service functions within enterprise organizations.?

Primarily recognized as a Customer Relationship Management (CRM) platform, Salesforce is an advanced and customizable software application that is best suited for enterprise clients due to its advanced capabilities as well as high price point. Therefore, its growth strategy tends to be heavily sales-driven, though it invests in content marketing as well.?

The sales team drives growth by finding and nurturing leads within the target market, educating them about the product through content but mainly direct demos and conversations, and trying to establish the ROI of the product to convert leads into paying customers.?

• ServiceNow

ServiceNow is another cloud-based software company that offers software applications mainly targeted toward enterprise organizations to help them automate, streamline, and digitize workflows and processes like customer service, HR delivery, DevOps, etc.?

Like Salesforce and other SaaS companies relying on SLG for growth, ServiceNow comes at a high price point and is primarily geared toward enterprise organizations.?

• SAP

Sales-led organizations tend to be primarily high-ticket products aimed at enterprise organizations and SAP is no exception. Founded in 1972, this German company has become incredibly resilient and today it’s considered the leading Enterprise Resource Management (ERP) software in the world but now provides a wide range of software solutions including but not limited to CRM/CX, SCM, HCM, and others.?

Since the market for the products is limited to an identifiable set of organizations, the sales-led strategy fits best. Once the total addressable market has been identified, the sales team, perhaps backed by a little needs to cultivate and nurture the leads working within those organizations, build awareness, and generate demand among them.?

Which GTM Strategy is Best?

Now that you hopefully have a sound understanding of the three main GTM strategies proven to work in the SaaS industry, the obvious question might arise in your mind — which one is best??

There is no easy answer to this question as there is no one-size-fits-all solution. Most businesses actually choose to have a mix of two strategies and many even mix all three strategies in relevant proportions. For instance, most product-led organizations will actually need a decent amount of marketing because they still need people to discover their product and be enticed to sign up for a free plan. The same is true for a lot of sales-led organizations, which may need to invest in content marketing to help sales in the lead nurturing and demand generation process.?

Therefore, you need to figure out, given the nature of your product and the market you are going after, which strategy would be best suited to help you succeed. Generally speaking, a combination of PLG and MLG is suited for most SaaS businesses. Avoid a predominantly SLG approach if you do not have a clear value proposition for a clearly defined market.?

Conclusion

The ICT sector in Bangladesh has been slowly but steadily growing over the years with lots of software companies gearing up to serve solutions for not just the domestic market but also the international market.?

In order to scale in the global marketplace, Bangladeshi software companies need to have solid knowledge of the proven GTM strategies and cultivate the expertise within their teams that can help them execute these GTM strategies.?

Barring this, lots of companies with great potential to shine and stand out in the global marketplace will not achieve enough scale and Bangladesh will have a harder time creating five unicorns by 2025 and 50 by 2041.?

• Originally published on my blog.