The primary concept to understand when trying to find the best marketing and sales strategy is that a small business has three basic strategies to drive revenue. They can be sales-led, market-led, or product-led.
However, before we dive in, I once saw a great definition of sales vs marketing that can help make the points discussed in this post clearer.
- Marketing is an effort defined by the business to communicate to the masses. (One on Many)
- Sales, by contrast, is a sales rep from the company communicating with a prospect in a face-to-face fashion. (One on One)
But where does product-led fit in? Not sure what they mean? This post endeavors to define the answers.
Most Business to Business or B2B companies employ a sales-led approach based on the fact that most sales are complex sales. Sales-led businesses employ sales reps who pick up the phones and make cold calls to fill the sales pipeline. Being sales-led is a person on person approach where the salesperson can tailor their sales pitch based on the customer’s unique situation and position in the company and the salesperson is provided the latitude to construct a unique solution for each customer and situation.
Moreover, many small businesses tend to be sales-led since their business lacks much brand awareness or collateral material and requires a more personal touch in selling to fill in the gaps. Marketing efforts in a sales-led organization act more in a support rather than a lead role.
Sales-led companies spend the vast amount of their effort creating sales collateral such as datasheets. They participate in industry events as a way to generate sales leads. Every lead is worth pursuing in a sales-led organization, as very few lead qualification strategies are employed. Sales-led organizations frequently use pressure-based email marketing tactics, and the main metric used to assess performance is getting the sale.
Many Business to Consumer or B2C companies employ a market-led approach. Market-led organizations use content to create leads and use systems, often automated, to shepherd a prospect through the buyer’s journey.
Marketing collateral is made up of papers and eBooks to educate the prospect and helps to establish the credibility of the business as a thought leader in their industry. The content produced by market-led companies is often displayed using a “Take One” box where prospects gather and use strong calls to actions to move prospects through the sales funnel.
Since there is less reliance on a person on person sales rep to close deals, marketing efforts include ways to nurture and qualify the leads as they progress down the sales funnel. Multiple pathways exist for a lead to travel through the sales funnel based on their pain points and personas. Most sales are closed without the need for a sales rep. If a sales rep is required to make the final sale, rest assured only the most qualified leads make it to sales.
Most Software as a Service or SaaS companies employ a product-led approach. Product-led organizations use a bottom-up approach to make sales. Instead of trying to educate the customer or just telling them what they would get if they bought the product, product-led companies offered the user access to the product so they could create their own “Aha” moments by actually using it.
Product-led strategies rely heavily on network effects in the hopes that their usage will make the product go viral.
The design of a product-led strategy starts with focusing on users rather than buyers and targets the pain the user experiences and provides an immediate solution to address the pain.
Often product-led organizations employ free trials or Freemium versions to get the product in a prospect’s hands at no initial cost to remove the friction of price and trust before making a sale. Product-led strategies rely on the use of up-selling to remove restrictions on the product’s usage.
Marketing and Sales Strategy Conclusion
In conclusion, a small business as three options when it comes or is marketing and sales strategy.
The sales strategy for a sales-led revenue model is to rely on a salesperson to close deals and provides them with lots of collateral material to aid in making sales.
The sales strategy for a market-led revenue model relies less on an actual salesperson and more education and nurturing a prospect until they are ready to buy.
The sales strategy for a product-led revenue model also relies less on a salesperson and focuses on offering a free version to create gravity and then use a value ladder to drive users fee-based offerings.
Of the three strategies to drive revenue, sales-led, market-led, or product-led, which marketing and sales strategy makes the most sense for your small business?