How to measure PLS (product-led sales) motions

We cover the differences between measuring product-led sales and product-led growth motions, and what metrics to define for each

Hi! This article is written by Sarah, a data engineer turned marketer. She advises companies on marketing and analytics and is the Director of Growth Marketing at Prefect, where they have shifted from a PLG to a PLS motion.

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Product signups are the holy grail–or so you’ve heard from the last decade of PLG-is-the-future communities. In reality, not every product is suited for a PLG motion. Some are best fit for product-led sales (PLS), and some even use both for different ICPs. We’ll dive into each motion and how to measure their performance.

A comparison: PLG (product-led growth) vs. PLS (product-led sales)

To fully understand each motion, we must define its core acquisition, activation, and monetization principles.

Defining PLG and PLS

Product-led growth (PLG): A go-to-market motion that positions the product as the main driver for top-funnel acquisition through bottom-funnel monetization.

• Acquisition is product-forward, driven by product-forward activities like content and community efforts. The goal is to be product-led; let the product speak for itself and have users try it out.

• Activation is necessary for the user to monetize. The product is primarily self-service, and the user is aided by in-product guidance like onboarding and templates.

• Monetization is driven by a user hitting a wall in their current product tier. This could be a limitation in functionality (like the availability of certain integrations), usage (like compute events running out), or trials (expiring after X days). This is when the user is encouraged to upgrade.

The same brand can have both PLS and PLG motions, as we can see with the Snowflake example

Product-led sales (PLS): A go-to-market motion that positions the product as the main drive for top-funnel acquisition, but leverages a sales team to perform more guided monetization.

• Acquisition, similarly, is product-forward, but more focused on hand-raisers across various channels. They could be product users, but could also be from forms, webinars, and more.

• Activation is less important for all new users. Product users should show some level of activity, but it is their activity plus their firmographic information that makes them open to monetization, not hitting a product limitation.

• Monetization is driven by sales intervention at the activation step and occurs if the sales team successfully proves the product's value.

Each motion functions differently for acquisition, activation and monetization

By breaking down these steps, we can clearly see the similarity: being product-led. However, the motions differ in how hands-on vs. off the product and sales teams need to be with new users.

Why not PLG? 

The product selling itself may sound like the dream, but what if it doesn’t match the desired go-to-market motion? These are two common use cases where PLS is most applicable:

PLS for enterprise-size deals with regulatory and security requirements.

While champions in large companies could appreciate a self-serve experience, their managers usually have more high-level questions that a sales team is best positioned to answer in addition to stricter security protocols.

For example, Snowflake’s biggest source of ARR is large clients with all their data in Snowflake. Many of these clients are in highly regulated industries that usually have a strict procurement process that requires vendors to involve sales, engineering, legal, and more. They will not be importing production-critical data into Snowflake until procurement happens.

PLS for custom use cases that have a steep onboarding 

Horizontal PLG products may struggle with showing all the possible vertical features in a self-serve manner. Because of the variety of use cases, the user may get overwhelmed and not activate. A hand-holding approach that is specific to the use case in a PLS motion will mitigate this complexity until the product is more mature per use case.

Consider Common Room, a product to aggregate sales signals. The integrations and usage will vary across sales vs. community efforts, industry, etc. Ensuring the integrations and workflows serve the customer pain point is critical for trial success.

The measurement complexities of PLS motions

Any good sales leader will have their core Salesforce dashboards built out: booked meetings; forecasted revenue; deals won. But Salesforce data alone  doesn’t answer the core question: how do leads appear and what makes them good leads?

Long sales cycles. In traditional PLG motions, a user signs up; activates; and pays easily within a week or two. In a heavier-handed sales motion, that is largely unheard of. Feedback loops are longer, so metrics that are higher up the funnel are important to evaluate activities and tests.

Metrics that are higher up the funnel are more important to evaluate activities and tests in PLS than in PLG due to long feedback loops.

Champion vs. account. Starting with a PLG experience, the person who signs up usually adds anyone else from their company and creates the account. There is explicit tracking of those involved in the deal. With a sales-led motion, the account can be acquired through multiple champions or buyers. The champion is harder to define and doesn’t always present themselves explicitly.

Qualitative data collection. In a self-serve motion, the user gives their email and the product usually will have usage analytics. Sales-led motions rely more heavily on human notes or call transcriptions. More data work is required to measure properly.

Marketing and sales partnership. The hand-off between marketing to sales leads is less clear than a product signup. Marketing needs to meet quota on delivering sales leads, but also must deliver quality leads. Making sure the correct metrics are in place for top and bottom of funnel, for both PLG and PLS, will ensure all teams are optimizing for the most effective outcomes (like ARR).

Tracking different data sources. With PLS, you won’t be as concerned with community metrics as you will with sales call recordings in Gong. The input data sources in PLS are different than PLG.

Contact enrichment. Alignment around what is a good lead is largely dependent on firmographic information. Given a PLS motion is a heavier one, it is largely focused on enterprise and particularly with buyers (not users). Firmographic information is an implementation and data quality project.

Without proper measurement, marketing risks acquiring leads the sales team doesn’t care about or even deprioritizing valuable initiatives. 

Metrics are the backbone of any motion: be it sales-led or product-led

As a starting point, choose one metric for each one of acquisition, activation, and monetization and then expand. Choosing too many metrics can lead to internal misalignment,data complexity, and goal sprawl; where you must choose between what to optimize for.

Acquisition

Goal: Understand how top-of-funnel efforts are performing. Are you getting people to be aware of and interact with your product/team?

PLG: Product signups. While measuring higher-level website visitors is relevant, website visitors are only as good as the action they take. 

• Data: signups are usually stored in the backend production database.

• Tools: usually through product analytics tools like Amplitude/Segment or dashboard developed by the data team.

PLS: The top-of-funnel of a PLG motion is fairly linear: a product signup hits a wall and needs to upgrade. Sales-led acquisition comes from a wider variety of sources, not just the product: webinar signups, form submits, gated content interactions. 

• Data: usually in a CRM like Salesforce (calls booked) or Hubspot (for marketing leads).

• Tools: CRMs have reporting great for teams that live in the tool, but I would recommend additional reporting developed by the data team to get features like more custom attribution measures, conversion percentages by segment, and more.

Activation

Goal: Evaluate the match between the potential user and product. This will help inform whether the product value is sticking and if the person is the right persona to be engaging with.

PLG: Product activation. Each product will have its own definition of an “aha moment” - in a data tool it could be moving data, in a commerce tool it could be starring favorite products.

• Data: product analytics conversion data (like connecting an integrated data source or visiting certain web pages)

• Tools: usually in a tool like Amplitude/Segment, occasionally also exists with first-party actions in the backend database. Dashboards are built by the data team.

PLS: Product POCs completed. Similar to product activation, but guided with the sales team. The potential customer shows willingness to evaluate and use the product.

• Data: product analytics conversion data - tracked in a sales CRM too, but should be product-forward.

• Tools: usually in a tool like Amplitude/Segment, but a sales CRM would have more context as to steps along the POC process.

Different metrics are important to track in PLG and PLS motions

Monetization

Goal: Measure willingness-to-buy. Does the target persona believe the product in its current pricing and state is worth paying for?

PLG: Product free-to-paid conversions. Whether it be free tier or free trial to paid, ultimately the product should have limits in place to ensure production and high tier usage is paid usage only.

• Data: billing software data (like Stripe), but oftentimes in disparate systems due to various payment arrangements, seat counts, etc.

• Tools: usually through dashboarding built by the data or finance team.

PLS: Sales deals closed. Given the product is focused on enterprise companies, usually measured in ARR.

• Data: Sales CRM opportunities and pipeline (like Salesforce)

• Tools: CRMs have reporting that’s likely going to be the gold standard for opportunities and close rates. Other ARR deal desk tools exist as well.

PLG and PLS measure fundamentally different things

While PLG and PLS metrics have similar roots in the acquisition, activation, and monetization journeys—they measure fundamentally different things. PLG metrics measure the success of the product with the individual user, while PLS metrics measure the success of the product rollout within an enterprise company.

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