Here's why your product-led efforts will fail

Warning signs on how not to self-sabotage your PLG motion

This goes out to those B2B companies who started as self-serve, saw some success, raised another round, and then started their upmarket journey to close those high ACV (annual contract value) midmarket and enterprise deals.

Switching to sales-led while letting go of PLG is a recipe for disaster. And before you realize it, it is probably too late to get back your PLG motion.

Here are the common reasons that lead to that failure:

1. You stopped at a free plan or a free trial.
   With self-serve, you allow customers to create an account in your product by allowing a free plan or trial. But are you continually improving the self-serve experience? How does your product onboarding and freemium evolve to activate and convert customers? Does your product deliver on the promise of your marketing quickly? You need to continually iterate on that onboarding and activation journey, getting a new user closer to the promised land and monitoring how new leads convert and retain.

2. You forgot to align product value with pricing.
   Because you saw early wins with a simple SaaS pricing model, you started the sales motion with the same structure and forgot to innovate on pricing. Meanwhile, your competitors kept their ears to the ground and knew that product-led companies scale pricing with customer usage. This gave them an edge over you, and before you can switch gears to identify a new pricing model, it is too late.

3. Misalignement on internal KPIs
   When you hire a sales team and incentivize large account closes without putting necessary guardrails, you end up with teams that work in silos. Marketing's success is based on the volume of leads generated. Sales are incentivized to close as many leads as possible. Eventually, every team is optimizing for a different metric - ideally, marketing's success should be based on leads activated and sales on the success of product adoption.

4. Not leveraging product usage data.
   This ties back to the previous point, but using marketing leads and not tying in product usage data to qualify leads could cannibalize your self-serve motion. This is an absolute waste of your resources and a dangerous feedback loop to the product team from sales that continually requires new features to be added to suit the requirements of larger clients.

5. Your focus shifted to acquiring more customers rather than retention
   Swinging your resources too far towards the sales-led to acquire customers could mean losing sight of retention. You might lose feature parity against the competition or a new player. A product-led mindset ensures you never lose sight of retention and innovate to deliver continual value.

Ultimately, you need to balance both. Layering one motion on top of another makes for a winning strategy. Growth done this way is sustainable. Otherwise, you are leaving the doors open for innovation in your category, and before you know it, you’ve lost your market share.

Related Reading:

If you are going the opposite route, here are the pitfalls to avoid.

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