With buyer journeys becoming more and more complex, many companies have begun re-thinking their growth models from PLG to SLG in 2023 — and this in turn is changing the way companies build demand generation.
Product-led growth has always worked wonders in a bull market, but current bear market conditions have demonstrated that sales-led growth models are something more companies should be paying attention to.
According to research by Tomasz Tunguz, public PLG companies have seen a 5–10% dip in profitability compared to companies relying on Sales Lead Growth (SLG) models. We are also learning that PLG has a revenue ceiling. Once companies reach a certain threshold (at the $50-100M ARR mark), growth hits a very real ceiling.
While PLG models are very effective startup activators, additional routes are required for scale-based growth.
PLG companies routinely face higher research & development expenses, and driving user acquisition, expansion and further product investments cost money. Revenue generated through PLG is often burned up in infrastructural costs and the burden of building new sales motions. Effectively, saving money in one area costs in another.
SLG Proves to be More Successful thanks to Hyper Targeting
Understanding your niche — how your product or service is the most efficient solution to a prospect’s very particular need — allows you to parse the wheat from the chaff during the sales sequencing process.
Today’s lead generation market needs to be focused on profit at scale, and that means separating the 10% SOM from the larger, less obtainable SAM and TAM.
The PLG model’s focus on building easy-to-use and easy-to-understand products that traditionally drove self-service channels proved reliable in the past. That is, until the bull market put the brakes on things.
SLG models, meanwhile, are proving to be more successful in driving bear market growth thanks to a focus on hyper targeting — engaging with up-market prospects who can afford to, and want to, spend.
BitWide believes that generating qualified leads requires research, testing, and data-based conclusions. We consider prospect’s tech stacks, organization size, as well as other technographics which allow us to pinpoint better leads by sequentially removing outer rings until all that’s left is the bullseye.
With the perfect alchemy of data and coaching, our BDRs then execute on the message, ensuring that we’re spending more time on qualified leads and less time chasing prospects that will never open their wallets.
The MidMarket and Enterprise Customer Journey is Evolving
MidMarket & Enterprise require a motivating reason to start a buying journey, and evolving your outbound sales strategy (in addition to older PLG strategies) helps build a more robust pipeline, focusing on the quality of leads over quantity.
BitWide’s outbound sales strategy experts drive better growth by creating journeys that align with prospect pain points as well as a strict focus on ROI.
Consider the insights provided by Gene Cornfield from the Harvard Business Review, who discusses the ‘democratization of interaction channels’ and how it relates to prospect journeys. He tells us that companies buy, but individuals decide, so the messaging of your sales team needs to inform your prospects and make them aware that your product exists to solve their specific problem.
The demand engine should be an iterative and comprehensive process that attracts, engages, and converts qualified prospects at every stage of the lead generation funnel.
Outsourcing Sales Efforts to Experts Helps Spike Sales Led Growth
BitWide’s sales experts understand your niche. And by focusing your efforts on leads with a higher likelihood of conversion, we help save our clients valuable time and money.
The focus should be on creating messaging that addresses the specific challenges, concerns, needs, and interests of your target prospects to attract warmer leads. This, of course, makes the job of closing a lead easier for you. This is why BitWide works diligently to understand the precise needs of the prospect based on their job title, the ins and outs of their specific organization, current market conditions, and other considerations. This focused lead qualification process helps your internal salespeople waste less time engaging with low-quality prospects who aren’t ready to convert.
At BitWide, we understand how to generate leads in sales — and we understand that unqualified leads create a misalignment between your expertise and what your prospect is looking for.
Targeting leads who are actively seeking your solution increases the efficiency and effectiveness of the entire lead qualification process, and generates more sales-led growth to help you grow your business even in a bear market. A specialized, outbound sales team like the one here at BitWide has the time and the resources to conduct the research into the ideal prospect that will most benefit from your niche product or service, bringing you warmer leads, and better results.