When business leaders hear the term “product experience software,” what comes to mind is usually the many ways it improves, well, the product experience. Think automated, customized onboarding that happens within the app and scales easily. Or comprehensive feedback management that lets companies align their product roadmap with customer priorities and needs. Or product analytics that gives teams insights into how users engage with the product and what could be improved. You get the picture.
All of this is true as far as it goes. But there’s another reason businesses are increasingly turning to product experience solutions: to cut costs, grow revenues, and improve overall business health—in other words, for a better bottom line. When budgets and headcount are frozen or shrinking and every deal closed (and customer retained) matters more than ever, product experience software is a critical tool for ensuring the best possible business outcomes.
More money, fewer problems
Product experience software is a great means for increasing revenue and maximizing ROI on the money you spend. Using this kind of platform, businesses can better identify expansion opportunities, create more effective, targeted cross-sell and upsell campaigns, and optimize their product roadmap so that what they build aligns with what customers want to buy.
Let’s say a company has a freemium version of their product and they want to improve their conversion rate to paid among trial users. The robust analytics that a product experience solution such as Pendo provides lets them get actionable insights into what kinds of user behaviors are most likely to lead to upgrading. Once a business has those insights, they can then deploy in-app walkthroughs and guidance to other free users that encourage the same kinds of feature usage and engagement—and watch their conversion rate tick up and up.
Citrix, for example, leveraged Pendo Analytics to discover a pattern in trial usage correlated with conversion to paid much more strongly than others. Once it had that data, it was easy to create an in-app guide that pointed new free users toward those features most likely to lead them to convert. As a result, they saw a 28% increase in conversions using this kind of targeted onboarding.
When churn = cash burn
Consider the problem of combating customer churn. As any business leader will tell you, it costs much more to attract new customers to compensate for churn than it does to simply retain existing accounts. In other words, every customer retained is money saved, especially at a moment where customer churn in the SaaS industry is up 18% vs. last year.
We’ve found that customers who leverage the kind of product analytics that the best product experience solutions offer can understand and improve customer health across their product portfolio better. If a customer success team sees that an account is no longer logging in regularly or isn’t adopting new features that would benefit their business, for example, they can proactively check in and see what’s going on, offer guidance and support, or take whatever steps are necessary to get that customer back on track. When leveraging product analytics in this way, companies see on average a 5% reduction in customer churn and report an average 15% increase in net revenue retention.
The road(map) to spending less and building more
Another common way businesses waste time and money is building the wrong things—and spending a lot of time and funds doing it. Not only does this hurt the business’ bottom line, it alienates customers who don’t see the product as aligned with their own priorities, thus increasing the risk of low satisfaction and churn.
This kind of blindness to customer wants and needs is avoidable with the right product experience solution. First, product analytics can give deep insights into which of your products and features users are engaging with, and how. Combine that with comprehensive feedback management, and you get a full view into how users feel about their experience, what they want to change, and what they think should be prioritized.
The result is a streamlined roadmapping process that does away with wasteful spending on the wrong features. Pendo, for example, has found that customers who use analytics and feedback data to inform their product development plans spend 30% less time on roadmapping activities, freeing up teams to spend more time actively building the right things. This same analytics and feedback data is also key for deciding which products or features to deprioritize or sunset.
The benefits are clear: Product experience software is a critical tool that helps businesses cut costs and grow revenues. Don’t take the risk of doing nothing—start creating a healthier business today. Ready to see how Pendo can transform your bottom line for the better? Take a tour or get a custom demo.