The following is an excerpt from The Product-Led Organization by Pendo CEO Todd Olson, now available wherever books are sold.
Successfully delivering a product-led experience to your users starts with common data, common language, and common definitions of success. This means that product-led organizations have a leg up when it comes to collaboration. After all, what could be a better unifying source of data, language, and success than the company’s own product?
This is the essence of the product-led approach. Instead of keeping different departments separate, it encourages collaboration between every team by placing the product at the center of the business. Each team’s goal, expressed as complementary KPIs, is to make sure that the product is delivering maximum value to the customer and the business alike.
For example, traditional companies may partition customer success and engineering, figuring there’s little overlap between the two functions. But a product-led organization considers them two ends of a successful product experience. As the team closest to the customer, customer success can help engineering create a scalable product by keeping them aware of both short- and long-term needs. Engineering, meanwhile, can keep customer success informed of bug fixes, help them solve more technical customer challenges, and offer a better overall understanding of the product and its capabilities.
Similar opportunities exist for every team. By tying together each team with the common thread of the product, a product-led strategy promotes a much deeper level of cross-functional collaboration. This can help remove silos and reveal unexpected benefits for both the company and its customers. Adopting a product-led strategy fundamentally changes how individual teams function throughout your organization. Knowing how a product-led approach affects different roles is key to a successful transformation.
Here’s what becoming product led will do to your customer success, marketing, and engineering teams:
The rise of the subscription economy means that it has become easier than ever for customers to switch between vendors or even back out of contracts with few, if any, consequences. This has made customer retention an integral aspect of growth. And because growth begins with products that deliver ongoing value, remaining competitive increasingly depends on the presence of an effective and responsive customer success team.
This is why customer success represents the eyes, ears, and heart of a product-led organization. They live on the front lines, listening, watching, and helping customers find their way to value. And since a product-led strategy is based on a continuous dialogue with the customer, the success team does not have to depend on instinct and anecdote. They can measure and monitor customer health and happiness using hard data and then communicate customer needs to the entire company.
More than this, a product-led customer success team creates a close partnership between the company and the customer. This involves meeting them at every step of their journey, beginning with their earliest interactions and continuing throughout their relationship. Doing so not only positions this team at the front lines for customers, but also turns them into a pivotal link in the product feedback cycle. They can pair quantifiable usage data with customer feedback and stories, providing crucial context to the improvement process. This helps strengthen the link between customer success, product, and every other team, bringing the entire company into closer alignment.
Marketers could once create a compelling campaign to mask an underwhelming product. Not anymore. Social media, user-generated content, and easy access to information have tipped the scales. Users are savvier, and customers won’t take you at your word. In place of a sales process, they want hard proof. As a result, the product needs to double as a sales and marketing tool.
Product-led organizations make product the star of the show. By insisting on a product that the customer will both need and love to use, and then introducing it through a free offer or self-service trial, they transform the product into its own vehicle for sales. They can further improve this experience with in-product guidance and communications that show customers around and encourage habits to form. This makes it possible for customers to discover the value of the product for themselves and on their own terms.
So, what do product-led marketers do if the product is essentially selling itself? They watch and learn, identify key activation points that drive usage and conversion, and use these insights to improve messaging and strategy within the product.
This could include building a better onboarding experience for new users or helping them return to the product after a few days. As customers become hooked, product-led marketers use their understanding of usage and sentiment to identify power users and potential advocates hiding in plain sight. This turns the customer into a megaphone, helping to promote the story on the marketers’ behalf. Growth becomes a natural part of the product experience.
Shipping new features can feel like a black hole for engineering teams. How widely are users adopting them? How useful are they? These are often frustratingly unanswerable questions, but not at a product-led organization. By continually measuring usage and talking with their customers, engineering teams can easily see how their efforts are paying off. However, beyond questions of simple curiosity, knowing these answers has a practical use. As products mature and features proliferate, the cost and complexity of maintenance grows exponentially. Understanding product usage helps engineering teams identify parts of the product that they can consolidate or even retire. And, as the backlog of bugs compounds, understanding usage, sentiment, and revenue impact help development and QA teams prioritize their bug fixes. They can use their time to produce the highest yield for both the customer and the business.
Product-led organizations are also data-driven in how they roll out new features. Their engineering teams can begin with a controlled release behind a feature flag or an A/B test and then use this to assess uptake and sentiment within a narrow segment of users before releasing these features more broadly. And, as they adopt Agile and DevOps approaches that let them continuously deploy new features, they can work closely with product and customer success teams to develop in-product mechanisms that ensure customers find value with every change.
Becoming product-led doesn’t happen overnight. It requires intent, practice, and ongoing calibration. It is less a destination than a state you must deliberately maintain.
But neither is it an abstract goal. You are not simply trying to improve your product or become a market leader, both of which can feel ambiguous. You are putting in place a series of practices, behaviors, KPIs, and solutions that ensure that everyone in your organization is focused on the product as an engine of growth, retention, and expansion.