Advertising for Product-Led Growth vs Sales-Led Growth Companies
Discussion of PLG and SLG on Twitter
B2B Advertising Strategies
So, you’re running marketing for a B2B SaaS company. Your company either uses a Sales-Led Growth (SLG) strategy or a Product-Led Growth (PLG) strategy. There’s guides to what each of these terms mean all over the web - this article is not a primer on these concepts.
This article is about what makes B2B advertising different for SLG and PLG companies.
And I do mean advertising. At Right Percent, we have a hammer, its called digital advertising, and we’re going to use it. This article is not a guide to a full Go-To-Market B2B plan. It’s one tool in your toolkit.
Everything in this article is from what we’ve learned managing advertising for 50+ B2B companies with both SLG and PLG strategies.
What’s similar in PLG and SLG advertising?
To answer that question, let’s first talk about how advertising works nowadays.
With B2B advertising, you want to get in front of the small percentage of people out there with both the intent and qualification level needed to become your customers.
Modern advertising is an iterative learning function, where both for your team and the ad platform algorithms learn how to drive people with intent and qualification to your brand.
So what’s the same for both PLG and SLG ad strategies?
There’s a lot of ways to reach your target market, but the three best ad channels are Google, FB and LinkedIn.
On paid social channels like Facebook and LinkedIn, making and testing B2B ad creative is very important.
Conversion signals are key to success.
The only way for both you and the ad platform to learn what works to drive qualified clickers is to have really good conversion signals. What do I mean by that?
Conversion Signals can be almost anything that happens on your site (or on the ad platform). Someone clicked a button. Or filled out a leadform. Or filled out the leadform in a way that shows they’re a big lead. Or they completed step 4/10 in your free trial. Any of these can be an event.
You can send a record of these events happening to the ad platforms, via pixels or API. The ad platform uses these events in two different ways:
To present data to you and your team. I.E. Google shows you that Campaign A had 4 lead form fills and Campaign B had 6.
To train the ad platform AI, so that the platforms can go find more users who look and act like that ones that converted on your site.
There’s three rules for making effective conversion signals in B2B in both SLG and PLG:
You need at least 30 conversions per week per ad-set for ad platform algorithms to optimize properly. Each conversion event can’t be too rare.
It has to correlate to revenue. If “leads” or “sign-ups” has too much quality variation to reliably correlate to revenue at some point in the future, it is not a great signal to learn from.
It’s best if the conversion signal happens within 24 hours of user clicking the ad. This helps the ad platforms learn effectively.
This is the capstone of modern advertising, and choosing the right conversion events is more important in B2B than anywhere else. But conversion event strategy has some key differences for SLG vs PLG that we’ll go into below.
Advertising for Sales-Led Growth (SLG) Companies
Sales-Led Growth is the more traditional B2B growth strategy.
In SLG, the name of the digital advertising game is Marketing Qualified Leads (MQLs), and the way you play best is through gated content.
The core of your job as an SLG advertiser is to get the customer to raise their hand. Its sales’ job to take this warm, real person who is raising their hand and make them convert.
People are surprisingly amenable to upsells from content if the content is right.
They two keys to content ad success are to make content that is:
Laser focused on your target audience
Closely related to your value prop
Great SLG Content Ad Examples
For clients we often see content with the above characteristics close at 60% the rate of “get a demo” MQLs, but at 30% of the cost per MQL.
Once you have good content, you have to focus on your optimization event. In SLG, any bad leads that slip to the sales team has a real price to the business, because bad leads waste sales time and lower morale.
Instead of optimizing on any lead that comes in, try to use your pixel or server integration to fire lead events only when the lead is qualified - IE, the lead has 50+ employees, or signed up with a work email.
If you can’t do that, you’ll need your ad creative to help qualify clickers. You can:
Add pricing to your ads, to discourage unqualified clickers.
Add the brand names of competitors or complements that have a similar price point to you.
Call out features that only high value users care about.
Call out the industries and titles of your target market in the ad in big text.
Non content ads (demo ads) can work but your biggest problem will be fatigue. Demo ads work best when there is a really compelling offer associated with them, like a killer tool, free trial or straight up cash for qualified leads demoing.
Advertising for Product-Led Growth (PLG) Companies
PLG means your company doesn’t have a big sales team, which means raw MQLs or “leads” (people who fill out a lead form and nothing else) are not very useful to you. Instead, you want people to use your product.
It would be great if the people using your product were from big rich companies. But it doesn’t make that much of a difference if people who can’t afford your product use it, since your marginal cost per user is very low, and they might convert to be big users one day anyway.
So your conversion events to prioritize are more about usage than qualification. You need to create and optimize on a event that you think will correlate to revenue at some time scale.
There’s two contenders for this conversion event for PLG companies:
Account Created. This is pretty straightforward, if a new user creates an account, that’s good, so you can optimize on it.
Remember, you need at least 30 conversions per week per ad-set to let the ad platform algorithms learn. If you don’t get 30 new accounts per week, you have to optimize on something higher in the funnel, like step 2 out of 6 in the sign-up flow or something like that.
One major risk even with Account Created is that many people create an account but never actually use the product. You really don’t want to trick yourself into thinking you’re driving engaged users when you’re not. Often if customers don’t at least test the product within 24 hours they never will. Which leads us to contender #2.
Product Usage. This means you optimize when the user actually does something in the free trial. “First Trello Board Created” or “First Invoice Uploaded” or “First Team Member Added”. This is usually a really powerful signal and one we recommend often.
One way to try to aim for bigger companies signing up is to add another variable before counting the signal - like “First Team Member Added + Company Size > 50 Employees”. The risk to this is you can get too few signals to optimize on, the gain is that if you get enough signals the algorithms will start sending you bigger and more valuable leads.
Often, developer teams balk at adding pixel tracking to the product. Ideally, you can convince them. If not, you’ll have to rely on only server to server integrations to send conversion events directly to the platforms.
Getting this right is 100% necessary to your success. It lets you iterate correctly on campaigns.
You can make creative that qualifies and attract users for PLG the same ways we talked about for SLG. Pre-qualification through creative is less important for PLG though since the marginal cost of a bad sign-up is lower.
The Takeaways on SLG vs PLG Advertising
Google, LinkedIn and Facebook work for both. For paid social, creative is very important for both and you should follow B2B best practices.
For SLG, use effective content to find hand raisers for your sales team, optimize on big leads and pre-qualify with creative.
For PLG, optimize on a conversion event that demonstrates product usage and correlates to revenue eventually.
That’s it! I hope this was useful.
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