How to drive growth through product-centricity

Your first impression upon unboxing the Oculus Quest, Facebook’s virtual reality system, might include a bit of confusion. It’s a headset and two strangely-shaped controllers. How are you supposed to pick things up that ping-pong paddle in front of you, or move around the virtual environment?

Within minutes of powering the device on, you’ve got your answer. You’re guided through a quick series of orientation tasks, from bouncing balls on the paddle to dancing around the room. Soon, you’re hooked on the device and find yourself returning, again and again, to scale cliff faces, visit outer space, and wander through zombie-infested cities. You never spoke to a single Oculus employee, and at no point did you feel that you needed to. That’s the power of a truly product-led experience.

Oculus’s easy-adoption approach puts their product at the center of their customer’s experience to get users engaged and keep them engaged. For the most part, the product is the entire experience. The games and apps that run on it can be purchased right through the product’s in-app dashboard, and help resources can be pulled up at any time in the same fashion. The system has been extremely popular amid coronavirus restrictions, becoming one of the best-selling VR devices available.

“Being product led is about creating an experience where your customer can have a fantastic relationship with your brand through the product. The first step is making sure your customer falls in love with your product,” said Jon Pappas, director of product management at Pendo. 

Pappas recently joined Melinda Gonzalez, Pendo’s VP of customer success, for the third webinar in our series “How to build a product-led organization in 2021” to discuss how strategies like Oculus’s have become popular among highly successful organizations and how to implement them to drive growth through product-centricity. Here are some of the session’s highlights.

Product is the new marketing

To deliver a product-led experience like Oculus’s, you need to integrate every function in your organization into your product. Sales, support, marketing, onboarding—Oculus puts it all right there in your headset, right within your (virtual) grasp at all times.

Marketing is a great example of this, Pappas said. Word-of-mouth and positive reviews are some of the best ways to drive up awareness of your product and bring in leads. In-app guides can solicit these sorts of reviews while users are actively in your product, solving problems and experiencing moments of delight, and the experience is fresh in their mind.

Freemium strategies that let you user try your product before they buy it, whether that’s an interactive tour or a full-on free version of your product, are a powerful way to to generate product-qualified leads, which are scored based on product engagement, as opposed to marketing-qualified leads, which are scored based on interaction with marketing materials, Pappas said. 

“Many people these days simply just don’t want to be sold to if they can’t try it before they buy it,” Pappas said. But, you need to strike a balance here: Don’t give away so much that there’s no reason to pay for more, and don’t give away so little that you stifle the experience. Netflix and Adobe are examples of companies that have successfully struck that balance, as are many news organizations like the Los Angeles Times and San Francisco Chronicle that offer a set number of free reads before asking you to subscribe.

“The San Francisco Chronicle gives you access, but also at the moment of encouraging you to buy, they give you the value reason,” Pappas said. “Buy not just because this has great articles produced by the San Francisco Chronicle, but because you’re supporting local businesses as well. And that was important to me. I want to be able to support my local business.”

Freemium experiences give you a great channel to engage your users and lead them to “aha!” moments—the behaviors that cause them to realize the true value of your product and become long-term users.

At Pendo, our segmentation feature that allows you to break users up into groups based on various attributes and examine the differences in their behavior and target specific messaging and guidance to them, is one such moment. “We take you on a journey from setting up Pendo and introducing you to segments as being foundational and getting you on the right path right out of the gate,” Pappas said.

In-app progressive disclosure campaigns, where users are nurtured with in-app announcements, best practices and tips, and information about advanced features, are another avenue for using your product as a marketing and growth tool.

Embrace self-service customer success

At many organizations, Customer Success acts as a Band-Aid or glue for holding together a less-than-ideal product design, when they could be focusing on larger strategic problems or expanding customers. “Often they’re really kind of leveraged as either checklist takers and focusing on product launches, helping customers understand how to navigate the product, or setting up training sessions,” Gonzalez said.

Product-led approaches to support and success are excellent ways to shift these time-intensive and repetitive tasks toward an in-product, self service approach, Gonzalez said. Usage analytics and support ticket metrics can help you understand the most common stumbling blocks or points of confusion, and in-app onboarding flows and tooltip or lightbox guides can provide users with support and help they need to work through them. Persona-based analyses around the user journey and understanding what a user’s path might look like can inform various iterations or versions of your in-app guidance flows and identify places where engineering fixes may be necessary.

With this sort of proactive support in place, your customer success team can focus more on expanding and renewing your customer base to drive growth and retention.

Stop the leak

Product-led strategies for cross-sell, upsell, and expansion can also lead to a situation known as negative churn, defined as when revenue gained from those initiatives exceeds revenue lost to users leaving the platform, either by failing to renew or cancelling subscriptions.

Creating negative churn starts with understanding how and to what extent users are engaging with your product. At Pendo, we use the Product Engagement Score, a composite metric based on adoption, stickiness, and growth rates, for this purpose. Customer health scores, user feedback, and metrics like NPS and CSAT can also inform here, and this data can be fed into CRMs to rate a customer’s likelihood of expansion and renewal or predict churn risk, allowing Success teams to follow up.

“Customer sentiment and advocacy, leveraging NPS and feedback in a targeted way, collecting feedback from your customers and then really leveraging these strategies for retention and growth over time ensure that you don’t have a leaky bucket situation in your business,” Gonzalez said.

Want to learn more about becoming a product-led organization? Check out our co-founder and CEO’s new book, “The Product-Led Organization.”

To watch the full webinar with Jon and Melinda, check out the recording here: