Life used to be predictable. 

Take TV, for example. For decades, popular shows like The Simpsons and Law & Order delivered a new season of episodes every year. But these days, your favorite new Netflix series might get canceled after a single season—1899, I’m looking at you! 

The world of SaaS has similarly been turned upside down. Gone are the days when growth at any cost was the most reliable road to success. Simply enlarging your customer base year over year is no longer a viable business model. Now, companies that want to survive—and thrive—are focused on maximizing revenue from their existing customer base.

Drive Net Revenue Retention With Product Experience

In this new economic environment, successful tech businesses are leveraging product experience (PX) to drive durable growth in their digital offerings.

These companies are delivering more value to customers, and they are being rewarded with increased adoption, expansion, and most importantly, Net Revenue Retention (NRR). Here at Gainsight, we have seen the results firsthand, as many of our customers have pivoted their product focus to a more customer-centric model.

We also know that many companies are still waiting to take the next step.

There are lots of reasons for that. Resources are stretched thin, and everyone is juggling lots of priorities. We get it. 

But the thing is, there’s no time to wait. That’s because the longer you take to get proactive about customer needs, the more likely it is that they will churn. 

Another way to think about it is that your customers use your product every day. That means every day is a new opportunity to give them a fantastic experience. And every day you don’t is a wasted opportunity. 

Improving your customer’s product experience in real time requires agility, but it doesn’t require complexity. As a matter of fact, simplicity is your secret weapon. 

Adhering to the following principles is a good place to start:

• Keep it simple. A good product experience is a simple product experience. 
• Rely on data. Product experience starts and ends with facts, not speculation.
• Iterate early and often. The market is constantly evolving, so you don’t need to worry about getting the product experience “right” the first time.

So be smart, stay simple, and don’t be afraid to pivot on a dime. But what does that look like in practice? How can Product and Customer Success teams actually improve the product experience?

Deploying In-product Communications to Guide the User Experience

Guides, knowledge centers, and surveys are well-known and widely used tools to help customers learn and succeed with a product. The challenge is that too often, these tools exist in a vacuum, disconnected from the customer experience. 

The truth is that when customers are not actively using a product, they probably are not thinking about a product, and they are much less likely to engage with product-related content.

The best time to engage with customers is while they are actually in the product itself. That’s when they are going to be most receptive to instructions, advice, and announcements. It’s also when they are most likely to give meaningful feedback. 

But engaging customers in-product is only the first step. You also need to ensure that whatever engagements pop up fit seamlessly and meaningfully into the product experience. After all, there is no point in ruining the product experience with the very tactics that were intended to improve it. 

In general, engagements should be concise, precise, and timely. To accomplish that, we advise that you start with the principles we talked about above. But we also want to share some specific best practices that we discovered during our research.

In-product Guides

According to our research, in-product guides up to five steps resulted in >30% completion rates. 2–3 steps are optimal. 1-step guides had a completion rate of 75%.

In-app guides can be used to give instructions, inform users of support issues, capture sentiment, announce new features, and much more. But what is the best way to keep them short and sweet?

While in-app guides should cover key moments in the customer journey, they don’t need to cover every moment. Some features are obvious enough to users that they will naturally use them without prompting. You don’t want to spam your users. 

Throttling – or limiting – the frequency and amount of engagements can help make sure users are not overwhelmed. Throttling settings impose strict controls over how many guides a user can view during a single session and/or over a certain time period (for example, 5 days).

In-app Knowledge Centers

Our research found that guides launched from in-app knowledge center bots with up to 5 steps had a >50% completion rate. The completion rate was >30% with up to 8 steps.

A knowledge base or knowledge center bot is an in-product assistant that guides users to learn a product via embedded checklists, articles, and linked in-app guides. This quick, self-service content helps users overcome obstacles and makes it more likely they will complete desired actions in the product. 

The key word here is “quick.” Users like self-service because they don’t want to wait for Customer Support when they are stuck. By the same token, they don’t want to go down a knowledge center rabbit hole when they just need a quick solve. 

Because knowledge center guides are self-service, they can be slightly longer than normal in-product guides. Knowledge center engagements are perfect for tasks like onboarding, as they are highly effective for educating users on complex features.

One way to deliver compelling self-service value from a knowledge center bot is to fill it with embedded video content. Video is highly recommended because it helps users quickly grasp concepts and functionality.

Surveys

While NPS surveys are heavily used, Boolean and CES Rating Surveys achieved close to 40% response rates, compared to 25% for NPS. 

In-product customer surveys are an effective way to get insights into customer opinions and sentiment about a product. Deploying surveys in-product can greatly increase survey response rates, giving you a more trustworthy picture of real sentiment from a wider, and thus more accurate, sample size.

Among our customers, we have seen survey response rates increase exponentially when they are moved in product. For example, Dealerware increased their responses by 2700%, while ReviewPro increased theirs by 3900%.

Defining a clear goal that keeps a survey precise can help with completion rates. Too often, longer surveys are essentially a fishing expedition because the company is not sure of what information they are trying to obtain. To help streamline your surveys, ask yourself the following questions when creating a survey:

• Who is the survey targeting? Usage data can help you identify the appropriate group of users and create specific questions for them.
• What features am I interested in? Timing a survey around a specific action—without disrupting user workflows—will help you hone your questions.
• Do the survey questions make sense as a group? Conditional survey branching allows you to skip unrelated questions based on previous answers, so users are only presented with highly relevant questions for a better experience.

Delivering an Effective Product Experience

In uncertain economic times, effective product experiences have become the North Star for companies in search of revenue stability and scalable growth. Reorienting your digital product experience around the needs of a customer doesn’t have to be complicated, but a roadmap can help any business get started.

To learn more about Gainsight’s research insights into this topic, you can check out our latest ebook, Best Practices for Effective Product Experiences.

The post Achieving Predictable Revenue in an Unpredictable World With Effective Product Experiences appeared first on Gainsight Software.

They’re investing in product experience (PX) and product-led growth (PLG) strategies to efficiently chart a path to durable growth—and smooth sailing when market conditions improve.

In a recent Harvard Business Review (HBR) report sponsored by Gainsight PX, researchers found that 81% of survey respondents strongly agree that a strong digital product experience positively impacts business growth. According to the report, “Today, the most successful digitally powered B2B companies are built with a combination of product-led growth for acquisition and adoption, customer-led growth for expansion and retention, and community-led growth for advocacy and engagement. The common thread between these three approaches is the product experience.”

If your company has its eye on product-led growth, Gainsight has good news for you. We compiled our best product experience resources from last year, including blogs, ebooks, webinars, and more. This list is filled with the help you need to deliver the ultimate product experience for your customers. You’ll learn everything from utilizing product analytics and product adoption strategies to career advice for product management professionals.

Product Experience 

• Are Product Managers Chief Executives of Their Product? It Depends
• Instagram Proves Product Experience Is Customer Experience
• What Is Product Education?
• The Connection Between Product Experience and Net Revenue Retention
• How Product Experience Drives Net Revenue Retention
• Achieving Growth With Positive Product Experiences
• Benchmark: Product Roadmapping With Product Experience Data

Product Led Growth

• Product-Led Growth Index
• Terms Every Product-Led Growth Pro Should Know
• Why the SaaS Downturn Will Accelerate Product-Led Growth
• What’s PLG Got To Do With Efficient Growth?
• Three Product-Led Growth Trends to Start Tracking Now
• What You Need From a Product-Led Growth Tool for an Effective GTM Strategy
• Why You Need a Product-Led Growth Tech Stack
• The SaaS Durable Growth Kit for Product Leaders
• The Five Stages of SaaS Product Management Maturity
• Product-Led Growth Through Market Volatility
• Best Practices in Enterprise Product Management
• Building a World-Class Trial Experience That Drives “Predictable” Growth

Product Analytics

• Power Ahead of the Competition With Product Benchmarking
• Getting to Know the “Real” User With Behavioral Analytics
• Product Usage Analytics: Actions Speak Louder Than Words
• Using Product Analytics to Drive Product Roadmaps
• Three Business Efficiency Metrics Every Product Manager Must Know
• Product Qualified Leads (PQLs): A Use Case in CS/Product Collaboration
• The Importance of a Data-Driven Product Roadmap
• Five Tracking Measurements to Help Build a Better Data-Driven Product Roadmap
• The Enterprise Roadmap to Data-Driven Multi-Product Growth
• Six Ways to Use Product Analytics to Drive Your Product Roadmap

In-App Engagements and Product Communications

• User Segmentation: The Best Tool Product Managers Can Deploy to Design Targeted Product Experiences
• Top Ten User Engagement Metrics to Measure Product Performance

Product Adoption

• How to Have a Successful New Product Adoption for Customers

The Relationship Between Customer Success and Product

• Five Product Analyses That Put Customers at the Center of Your Product-Led Growth
• The Future Is Now: Driving Value by Integrating CS and PX Efforts
• Fueling Your CS Strategy via Product Experience
• Aligning Product and Customer Success Teams to Fuel Success
• Product-Led Customer Success

Gainsight PX

• Kount Transforms Its Product Experience (and Time to Value) With Gainsight PX

Do you like what you’ve read? Great! We have more information in our Resource Library. You can also subscribe to our email newsletter to be the first to get our insights on product experience strategies and access to events, webinars, articles, ebooks, and more!

The post The Ultimate List of Product Experience Resources for 2023 appeared first on Gainsight Software.

It’s said that every company is now, at least partly, a software company, which is undoubtedly changing the IT landscape. As a result, Product Managers (PMs) have more opportunities and are more important than ever.

Yet it’s often wondered, by everyone from the Chief Information Officer to the Help-Desk Technicians: What exactly does a PM do?

The traditional answer is that a Product Manager is the Chief Executive of their product. Like all clichés, this one is both true and false. Let’s see if we can separate fact from fiction.

Why PMs Are Not CEOs

On the one hand, this comparison is specious. First, as a CEO, you oversee all employees; ultimately, everyone works for you (or the shareholders if your company is publicly traded).

By contrast, as a PM, very few people actually report to you (or are even in your dotted line on the org chart).​ ​Indeed, asking for it to be otherwise is ​a ​surefire way to ​burn bridges, isolate yourself, and get nothing done.

As a CEO, people (generally) follow you because you’re the big boss. Of course, it’s best to listen to your staff and explain your thinking, but at the end of the day, you set the rules. And if someone doesn’t follow them, you’re empowered to show them the door.

The post Are Product Managers Chief Executives of Their Product? It Depends appeared first on Gainsight Software.

This article was originally published in Fast Company.

Interest rates are soaring. Currency pressure is mounting. A recession may be looming.

These macroeconomic headwinds are hard enough to deal with on their own. But if you’re a fast-growing product company—for which the traditional playbook is to grow at all costs—then times are doubly difficult.

As a Chief Product Officer with over two decades of experience, I can tell you with certainty that in the current market, all product managers (PMs) should be thinking in terms of efficiency—how can we do more with less? For example, can engineers increase their velocity? Or their productivity? How about both?

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One of our favorite characters is Starlight, who starts out as a normal young woman who happens to have superpowers but then becomes a real “supe” with a costume. In her early days, she had no super-peers to compare herself against. She trained hard, but she could only measure her progress against her own past performance.

The way we see it, creating a successful SaaS product feels a bit like being Starlight. You’ve got a special set of powers that enable you—and your users—to do amazing things. But in the early days of the company, you’re mostly concerned with your own performance metrics—have you improved based on what you delivered last quarter or last year? This is important information, but no product exists in a vacuum, especially in the crowded field of SaaS. 

When Starlight joins the superhero group “The Seven”, she suddenly has to compare herself against other supes who can also do amazing things. Now she has real data on how she stacks up. This is the same challenge that product managers face when they start comparing their product’s capabilities to those of their competitors. They are forced to expand their focus from simply improving their own performance, to improving their performance relative to the other options in the market. 

This process of external comparison is called product benchmarking, and when it’s done right, it opens up a new universe of possibilities for product optimization and revenue growth.

Product benchmarking measures how your product performs against industry standards, based on the size and sector of your company for specific KPIs. 

Typically, the standards are calculated by analyzing hundreds or even thousands of other companies to create percentiles. Each benchmark measures a specific metric or key performance indicator (KPIs) that indicates how engaging and successful your product experience is. 

Product benchmarking is important because it gives you valuable insights about your product experience. You can discover where your product is succeeding, and where it is falling short, relative to the sector. It gives you visibility into the latest trends, strategies, and ideas in the market. And it gives you hard data you can use to make decisions and prioritize efforts as you work to improve your product. 

Finding the product metrics that matter

Effective product benchmarking tracks metrics that indicate whether or not your users are finding value. The top metrics range from measures of pure usage to more sentiment-driven measures. But no matter how new or established your product is, these metrics will tell the story of how you stack up against the competition. 

Activation. In general, activation means the “aha” moment when a user truly experiences the value that your product can bring. Activation doesn’t automatically mean they will become a power user, but it is the first crucial step. This metric is different for every product, depending on your product’s features. Finding the right metric usually requires some digging into customer feedback. 

Feature adoption. Feature adoption is sort of the next step after activation. This metric tracks how many key features your users are adopting. The more key features adopted, the more likely the users are to renew and expand, and the less likely they are to churn. Because you are measuring multiple inputs (the features), it is important to how long it takes to adopt a feature, and the typical order in which they are adopted.

Stickiness. Stickiness is the sweet spot for measuring product engagement, based on how often users return to the product. The time period may vary based on the type of product, but typically is measured in terms of Daily Active Users (DAUs), Weekly Active Users (WAUs), or Monthly Active Users (MAUs). The more returning users you have, the more certain you can be that you are delivering value, though stickiness doesn’t necessarily give you insights into why. 

User retention. User retention measures whether first-time users are returning to the product within a designated time period, for example, how many first-time users are still using the product three months later. Low user retention is usually a sign that you need to improve onboarding or push users toward activation. 

Net Promoter Score (NPS). NPS is a sentiment metric, derived from surveys, that tells you how your users feel about the product and whether they would recommend it to others. For B2B SaaS companies, you will want to measure account-level NPS, which indicates how the purchaser rates the product, rather than the individual users at the company. 

Product engagement score (PES). The PES measures how popular your product is with your users based on the combination of adoption, stickiness, and growth metrics. PES provides a more well-rounded, but still rigorous, way of understanding the product experience. PES is a reliable way of visualizing user engagement over time. 

Using product benchmarking for adoption and expansion

Once you have determined how your product is performing against industry benchmarks, you can identify the right moves to make to improve your product experience or to take advantage of your strengths. Remember that product benchmarking provides nuance and context that you don’t get from internal benchmarks. The best product experience strategy will vary based on the reason why your product is succeeding or lagging against competitors. 

Features. It sounds basic, but sometimes the differences between competing products comes down to the quality of the features. If a feature’s quality is not up to industry standards, you need to determine whether it is possible to improve, or if you need to pivot away from that feature. If your feature is superior, you can explore pricing or market share–building strategies to take advantage of the edge you already have.

Engagements. If your product performs well or poorly against benchmarks, but your features are up to the standards, the cause may be your user engagements. If your features are great, but activation is low, it may be because your training, onboarding, and in-product engagements are lacking. On the other hand, high quality engagement and customer success capabilities may be helping you punch above your weight in terms of product experience. 

Sentiment. How customers feel about your product and your company can also be seemingly divergent from the nuts and bolts of the product. This could be because of the quality of your marketing, sales, or customer success efforts, or just your brand equity as a whole. Setting expectations up front and providing a consistent product experience throughout the customer journey can go a long way to generating positive sentiment among your customers, independent of the product’s features.

Power up your product benchmarking with Gainsight PX

As an industry leader in product experience, Gainsight is at the forefront of thought leadership in understanding industry standards, trends, and best practices. Benchmarking with Gainsight will give you deep insight into how your product stacks up against the competition. And our powerful platform gives you the tools to act on those insights, including actionable user data, effective engagements, and relevant user feedback—all available without writing a single line of code. 

Learn more, schedule a demo today!

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1. Adoption Analysis

Whether you want to examine new launches or existing features, adoption analysis points out how those areas of your product are paying off in revenue. Since higher adoption rates lead to higher retention, it’s important to examine how well your adoption efforts are paying off. And since nearly 60% of SaaS leaders say customer renewals are a high priority, understanding adoption is essential.

Adoption analysis shows you which users are embracing and adopting your product’s features. What’s more, it reveals which features are being adopted and which aren’t. It also makes it easy to see what customer segments or user groups are not adopting your product—and you can use that info to create a plan to drive higher adoption.

With Gainsight PX, you can dig into several adoption analysis reports. 

Here are a few:

• Examine feature usage trends to measure success and improve launches. 
• See the top features within a given cohort and increase upsells. 
• Track adoption success rates to predict and cut down churn. 
• Spot sticky features and get more out of the features users love. 
• Identify top accounts as well as leading locations and devices. 

Nearly 60% of SaaS leaders say customer renewals are a high priority. 

2. Retention Analysis

Retention is critical because recurring revenue models rely on long-term customers to survive and thrive. Many users will walk away from a product after using it just once. For example, 1 in 4 mobile apps is abandoned after one use. Retention analysis can change that. 

With retention analysis, you can see which features are reducing churn and increasing long-term growth. 

1 in 4 mobile apps is abandoned after one use. Retention analysis can change that. 

Within Gainsight PX, you can use retention analysis to boost retention in a few key ways: 

Track retention. By setting up a baseline and monitoring your product’s features over time, it’s easy to identify how your product—and the moves you make—are turning into long-term growth. 

Accelerate TTV. First, you can map out time frames that express when users need to realize product value. From there, you’ll have the foundation to back and measure those decisions that speed up time to value (TTV).

Prove your hypothesis. You can root all of your retention roadmap plans in data. That means you’ll see how features or enhancements are turning into long-term product-led growth. And you can use that proof to secure even more support from stakeholders. 

3.Path & Funnel Analysis

With path and funnel analysis, you can spot and eliminate any friction points that are keeping users from taking the actions you want. Path and funnel analysis visually map how users and product qualified leads are moving through your product. 

At the same time, you can use funnel analysis to see where users are getting lost. For instance, if users are reaching a purchase page and dropping off in significant numbers, you may want to dig into the reasons they’re getting spooked. Once you adjust your product to solve the problem, you can then use funnel analysis to see how well your decisions are working. 

4. Targeted User

The most successful Product teams nudge their users to take the actions within their platform that they know will limit frustration and lead to success. They do this by predicting pitfalls and dropping user engagements into the user’s experience at strategic points. 

User engagements are clear-cut tools that can smooth out friction in your user’s experience. For instance, if you see users are dropping off before engaging with a new feature, you may be able to encourage interaction by inserting an in-app guide at a strategic point. Targeted user engagement analysis lets you track how often users are viewing, interacting with, and completing engagements. 

User engagements are clear-cut tools that can smooth out friction in your user’s experience. 

In Gainsight PX, that means you can examine several key analytics performance reports: 

Ultimately, that means you can see how well your engagements are performing and tweak messaging or your strategy to drive more interaction. 

5. User Sentiment & Feedback Analysis

Before you analyze sentiment and feedback, you have to collect it. Gainsight PX allows you to gather feedback and understand your users. The more you understand your users, the easier it is to craft a product experience that they love. That’s the power of user sentiment and feedback analysis.

User sentiment and feedback analysis looks at the valuable feedback and feelings your users hold about your product and packages it in a way that you can use to drive better outcomes. In addition to keeping your product decisions laser-focused on the user’s needs, this type of analysis shows users you care about their opinions. It’s also a clear way to identify your user’s biggest challenges, so you know how to deliver a better experience through your product. 

In Gainsight PX, you can collect and analyze feedback in a few important ways: 

• Examine real-time actions and feature completion. 
• Target reports to identify usage rates, stage, entitlement, and account. 
• Break down reports by frequency segments, such as first-time usage versus mature usage. 

Within Gainsight’s PX user feedback API, you can analyze feedback results that go beyond quantitative data. It also allows you to examine qualitative data that you can rely on to develop products in a way that inspires better user experiences—and sparks product-led growth. 

The more you understand your users, the easier it is to craft a product experience that they love. 

See How You Can Use In-Depth Analysis To Grow Your Product

With the right product analysis lighting your path, you’ll have what it takes to buff out the friction points in your user’s experience, enhance your product, and boost product-led growth. Ready to start using your product’s analytics to power your plans? Try out a free PX trial now to see how Gainsight PX works for your team. 

The post 5 Product Analyses That Put Customers at the Center of Your Product-Led Growth appeared first on Gainsight Software.

In the tech industry, competition is driving the adoption of a new growth model. Increasing investments make it easier than ever to launch a new business, but the proliferation of new products in the market means it has never been more challenging to achieve growth. A traditional model based on the marketing and sales funnel no longer works effectively to build sustainable growth for subscription-based SaaS. Instead, companies are searching for ways to successfully maximize customer lifetime value by lowering Customer Acquisition Cost (CAC) and improving Net Revenue Retention (NRR)—but do so without drastically increasing spending with high-touch resources. The solution? Make the product itself a key player in the customer lifecycle and experience. 

At the center of this new philosophy is product-led growth (PLG). PLG is a go-to-market strategy that transforms the way products are designed and delivered. This strategy puts the product at the forefront of the customer journey to drive conversion, adoption, retention, and expansion. PLG achieves these objectives by leveraging product usage data to deliver immersive product experiences at scale. 

With PLG, companies align their products to the customers’ needs at every stage of their journey. From delivering early value using free trials and freemium models, to driving product adoption that accelerates time-to-value and stickiness, this strategy produces engaged customers who are much more likely to be retained and primed for expansion. Growth-minded companies are looking to PLG strategies to help achieve maximum customer lifetime value—it’s not a question of if, it’s a question of when your company will adopt this model or get disrupted by it. 

While not effortless to implement, PLG leads to stronger units of economics, like Net Dollar Retention (NDR), Gross Revenue Retention (GRR), and CAC. This model uses the product as the primary vehicle to drive end-to-end value realization, build consumption-based pricing, prioritize the product roadmap to optimize customer outcomes, and unlock organic expansion using self-serve provisioning. 

We have seen companies achieve durable growth and success by deploying a PLG model across different market segments in B2B and B2C. We wanted to track and understand where companies across all verticals fall on the PLG spectrum. Along with RevOps Squared, a benchmarking research firm, we surveyed over 600 companies of various sizes, with varying annual contract values and across multiple industries, to learn about their journeys towards implementing PLG strategies. We wanted to discover what solutions they use and how they measure success. 

We’ve included current data on the state of PLG, the defining metrics, and the tools companies are using to leverage their new strategies. We hope that you find this information not only useful but inspiring as you set your growth goals for 2022 and beyond. 

Mickey Alon
Chief Technology Officer of PX, Gainsight

Key Findings

The State of Product- Led Growth

Majority of Companies Are Adopting Product-Led Growth

91% of Companies With a PLG Motion in Place Plan to Increase Their Investment in PLG

Almost All Companies Without Existing Product- Led Growth Models Will Invest This Year 

Product Teams Must Lead Company-Wide Product-Led Growth Initiatives 

42% of respondents without PLG strategies cite product readiness as the primary reason. 

24% of respondents cite product complexity as the roadblock for implementing PLG strategies. 

Only 4% reported PLG as irrelevant to their industry. 

Free Trials and Freemium Experiences Dominate Product-Led Growth Strategies 

Freemium is a product-led growth strategy where a company provides a potential customer free access to a limited number of features within their product. While they can use the limited version of the product as long as they want to, they can only access additional features by upgrading to a paid account. 

A free trial is a product-led growth strategy where a company provides a potential customer unlimited access to the features of their project for a limited time. Typically, these are 30-, 60-, or 90-day periods, after which the potential customer either upgrades to a paid account or loses access to the product. 

Product-Led Growth Responsibilities 

Companies Need Broader Organizational Alignment in Order to Realize the Full Potential of Product-Led Growth Strategies 

The Product organization is responsible for monitoring free account customers in 28% of cases and converting free accounts to paid in 18% of cases.

Conversely, Sales is involved in conversion 25% of the time. 

90% of Companies Can Increase Revenue by Involving Product in Upsell Opportunities 

Defining Metrics of Product-Led Growth 

Product-Led Growth Metrics Tracking Is in Its Infancy 

Product Usage Metrics Are Leading Indicators of Business KPIs 

The difference between product usage data and product experience data is small but critical. Product usage data tracks raw behavior, such as clicks, sessions, etc. This data is useful but does not allow for meaningful analysis. Product experience data combines a wider data set, such as user sentiment, that allows teams to pull insights about intent, quality of user’s customer journey, and effective ways to expand each user’s product adoption.

Product Teams Prioritize Analytics, Surveys, and In-Product Engagement to Drive Product Strategy 

72% are using product analytics to gain visibility to usage data. 

57% use surveys to conduct user research and feedback. 

46% use in-product engagement to drive adoption. 

Companies That Use Product Experience Tools Increasingly Leverage the Data to Build More Informed Product Roadmaps 

Of companies that use product experience data, 57% use it to develop product roadmaps. 

Only 36% of respondents use in-app data to predict retention, and 38% use in-app data to identify expansion opportunities. 

Only 17% of respondents use data to serve in-app recommendations. 

Product Qualified Leads (PQLs) Must Be Better Defined to Improve Sales Qualified Leads (SQLs) 

Free Trials Using PQLs Result in 2.8x Higher Conversion Rate Than Freemium 

Use of PQLs dramatically improves free to paid account conversion rates 

Final Thoughts

The business opportunities and growth potential available to companies that focus on PLG initiatives are immense. Product-led growth companies are now growing at a rate that is 2x faster than traditional SaaS companies. Yet, PLG is still very aspirational for most businesses. Thus, the future success of many organizations will rely on Product organizations more than ever. This will require Product teams to not only lead in product development, but in driving cross-functional business outcomes that put the product at the center of the customer experience, from acquisition to expansion. While the data in this report shows that some standardization and reorganization are necessary, companies are committed to making investments to drive core business KPIs—such as CAC, GRR, and NRR—that are tied to the company’s overall valuation. 

We found that understanding and tracking PLG metrics is in its infancy; however, businesses both with and without a PLG strategy are beginning to track important product data points as leading indicators for retention and expansion. 

In addition to tracking basic product metrics only some of the time, businesses may not have the right product stack in place. Only 37% of respondents reported using a product experience tool, while 66% of companies are still using web analytics to measure product performance. This limited approach leaves out some of the more critical elements required to drive a PLG strategy. Product experience tools vary in their ability to collect the right type of data to inform product decisions, and opportunities exist to deploy better systems to contextually gauge user experiences. 

Additionally, less than half (only 46%) of respondents reported leveraging in-app engagements, meaning most companies are not yet leveraging in-app messaging with their customers to create engaging experiences, accelerate time-to-value, and speed the adoption of sticky features. 

Interestingly, most respondents reported using a wide range of tools within their product, meaning they are managing an exhaustive tech stack to conduct various independent functions such as surveys, UX research, analytics, and in-app engagements. With a wide range of tools needed, product managers may face challenges to create compelling and cohesive user experiences in-product. 

Free trial or freemium experiences (collectively, used by 75% of respondents) are dominant as the primary PLG acquisition strategies, likely because many companies, even without an official PLG strategy, use them for customer acquisition. Free trials are more common than freemium in products with higher ACV and deeper feature sets. The free trial conversion rate is higher than the free-to-paid model, which means freemium requires a high volume of subscriptions that might take a longer time to convert. 

The most exciting takeaway from all the data is that there is still so much opportunity for PLG to drive durable growth for SaaS businesses. As businesses mature their PLG strategies, the result will be a stronger unit of economics and progression beyond acquisition-led growth to retention- and expansion-led growth. In the subscription business, the traditional marketing funnel will be replaced with a flywheel that allows companies to deliver value that meets the customer’s expectations at every stage of the customer journey. Shifting toward more incremental revenue by leveraging consumption-based pricing tied to outcomes will allow you to organically grow with your customers. We look forward to seeing these numbers climb in next year’s report. 

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The problem for software companies in today’s economy is that it doesn’t matter which one you sell—the traditional sales funnel no longer works effectively. That’s because, in a recurring revenue business model, selling comes with a high customer acquisition cost (CAC) that eats into customer lifetime value (CLV) and does nothing to increase net retention rate (NRR). If Mr. Wheeler was alive today, he’d have a different piece of advice: Let the steak sell itself. 

In other words, adopt a product-led growth (PLG) model. PLG is a go-to-market strategy that transforms the way products are designed and delivered. This strategy puts the product at the forefront of the customer journey to drive conversion, adoption, retention, and expansion. By leveraging product usage data to deliver immersive product experiences at scale, PLG aligns products to customer needs. Aligned customers experience more value from the product and are much more likely to be retained and primed for expansion.

At Gainsight, we believe PLG is one of, if not the most important trends in the tech industry. That’s why we collaborated with RevOps to produce the Product-Led Growth Index 2022. We surveyed every level of management at over 600 companies across a wide range of company sizes, annual contract values, industry segments, and geographic locations. And the results were fascinating. We encourage you to download the report, but in the meantime, we wanted to share three key trends that you’ll want to put on your radar ASAP. 

Almost All Companies Without Existing Product-Led Growth Models Will Invest This Year

This trend is about commitment. 57% of companies plan to implement PLG strategies this year. And 39% of companies are researching ways to implement PLG strategies. In terms of both investment and implementation, an overwhelming majority of companies are committed to PLG. It’s clear companies understand that in order to reach their revenue goals, the focus must be on ways to use the product to improve the customer experience. The 

90% of Companies Can Increase Revenue by Involving Product in Upsell Opportunities 

Companies are leaving upsell revenue on the table. Product is only responsible for upsell (growth) opportunities 10% of the time, with 29% being handled by Sales and 28% by Customer Success. That means that too many companies, despite having adopted PLG, are still repeating the mistakes of the old Sales-led model. 

If Product isn’t driving the upsell process, it is likely a high-touch effort operating without crucial data regarding customer usage and sentiment. Instead, companies should leverage product analytics to uncover insights into how customers are using the product and what they might be missing out on. That leaves teams less dependent on qualitative feedback to understand their customer’s journey. 

Product-Led Growth Metrics Tracking Is in Its Infancy

Metrics are an untapped resource. Despite the fact that PLG motion exists in 58% of companies, most companies are not effectively tracking PLG metrics. Only 17% of respondents reported tracking time-to-value (TTV), only 26% track activation rate, and only 24% track product-qualified leads (PQLs). 

This lack of data collection indicates an opportunity for Product teams to sharpen their focus on buyer behavior to improve conversions. Metrics like time-to-value, free account sign-up, organic and inorganic acquisition channels, and lead-to-conversion are just a small fraction of the data that could be leveraged for better revenue growth.

Opportunity Is Knocking for PLG and Product Teams

The most exciting takeaway from the index is that there is still so much opportunity for PLG to drive durable growth for SaaS businesses. As businesses mature their PLG strategies, the result will be a stronger growth, a higher CLV, and lower CAC as the products truly begin to sell themselves.

You can read the full report here.

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Too often, product leaders start building their roadmap plans only to be bombarded with conflicting feedback in all directions. And all that noise can make it impossible to make any decisions, let alone choose the best one. 

So, how do you get beyond the distractions to build a roadmap you can defend and align around? Let product analytics illuminate the best path forward. Incorporating product data is necessary, but not all product analyses provide the same advantages. This article focuses on five key product analytics measurements to help you build a masterful product roadmap. 

What Is a Product Roadmap?

Product roadmaps are tools that product leaders and managers use to guide product plans and chart progress. It’s a master strategy that maps out long-term goals and outlines a vision of progress for your product. Product roadmaps are important because they unify your teams around a standard set of approaches, actions, and benchmarks. 

Why You Need Data to Back Your Product Roadmap

The best product roadmaps are rooted in product data. That’s because product analytics give you a few essential advantages when you’re building your roadmap:

• Clear direction: Product data shows you what your users’ needs and objectives are. It also can reveal the most significant obstacles they’re currently facing. With that information at your fingertips, it’s easy to make decisions that help improve your users’ experiences. 
• Reliable feedback: Collecting user feedback captures important qualitative data and gives you the tools to improve, then monitor your product roadmap’s impact. Feedback helps identify what’s working, what needs improvement, and what tweaks you can make to supercharge your user experience.
• More buy-in: In-product data gives you something concrete to lean on as you implement your roadmap and measure progress. But it also hands you proof that your plans are helping your company hit its goals. That makes it easier to acquire buy-in from other internal stakeholders. 

5 Product Analytics Measurements To Fuel Your Product Roadmap

When formulating your product roadmap, it is vital that you use the right types of product metrics and reports. If you’re using vanity metrics that just look good to leadership but do not tell the real story or encourage future strategies, it could lead to a stagnant product and stunted growth. Here are five essential product analytics measurements designed to propel a growth-centered product roadmap:

1. Retention Analysis 

Before you can capitalize on ways to grow your product, you first need to understand what available features are compelling your existing customers to stay with you. A fundamental measurement is your retention rate. This metric tells you what proportion or cohort of customers have continued using your product within a specified time period and ultimately renewed their services. By analyzing retention rates regularly, you can correlate product usage dropoff rates to intervene and prevent customer churn. It can also address more significant needs within your product roadmap.

By analyzing retention in conjunction with specific feature usage, personas, or other factors, you can pinpoint which types of users are being retained, what is influencing retention, and identify the most impactful ways your product fuels overall retention rates. A signal of product progress will be seen in company-wide growth, improved net revenue retention rate (NRR), and reduced churn, which are lagging metrics. 

2. User Sentiment

Collecting user feedback through in-app surveys gives you a direct line of sight into your users’ sentiments. It is valuable to capture what your users think needs improvement. You can identify exactly what your users want, need, and are missing by continually measuring user sentiment through Net Promoter Scores (NPS) or Customer Effort Scores (CES).

Take it a step further by creating continuous feedback loops. Continuous feedback means gathering information, using it to make informed decisions, and then pulling in more feedback to refine your decisions and releases. As a whole, this iterative process aligns your product roadmap closer and closer with your users’ needs. The better you improve user experiences, the more your product will grow. 

3. User Path Analysis

User path analysis digs into in-product analytics and shows how your users typically travel through your product. Path analysis can reveal what features your users are flocking to and what friction points stop them from taking desired actions. By seeing these behaviors clearly, it’s easy to craft a product roadmap that helps users blast through any friction points and pull more immediate and long-term value out of your product. 

4. Time-to-Value (TTV)

Proving TTV is critical to product-led growth because the quicker your customers realize value, the more engaged they will become. This process begins with immediate adoption and engagement, continuing with improved product usage, leading to better retention and expansion opportunities. Product analytics make it easier to measure this process and improve TTV by keeping a close eye on usage metrics, including daily and monthly active users, activation rates, and feature adoption rates. 

By using a product analytics platform, such as Gainsight PX, which instantly captures user actions as they take them, it’s possible to spot how your product roadmap decisions affect TTV in real-time. With that, you’ll have the right resources to quickly adjust plans, lower TTV, and drive more product growth. 

5. Feature Adoption Analysis

The sooner your user picks up product features and the more they immerse themselves in the product, the more value they’ll gain—and the stickier your product becomes. That’s why feature and overall product adoption rates are so important as you build your product roadmap. 

These metrics measure how often your users engage with your product or features and how deep they’re diving into the product experience. By measuring adoption rates in conjunction with user data, such as comparing adoption by user persona, you can pinpoint when, why, and how specific types of users are engaging with features. You can also identify which features are driving compelling experiences and build roadmaps that align with what users value and need. 

Build a Product Roadmap That Accelerates Growth

A well-crafted product roadmap won’t just enhance your product. It can also drive company-wide growth and help your Product teams catapult past your goals. The best product roadmaps create unbeatable product experiences that your users love. Read our “Building Winning Product Experiences” whitepaper to learn how to use your product to boost your user’s experience and speed up growth. 

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You need technology to empower your team, but you don’t want a bloated tech stack clogging productivity. 

Product leaders and managers, in particular, need lean, efficient tech stacks to operate effectively, especially when it comes to product-led growth. The right combination of technology is the key to Product teams, Customer Success teams, and entire organizations unlocking product-led growth without wasting time and resources to manage convoluted, disconnected, and repetitive technologies. 

How do product-led growth tech stacks work?

Product-led growth (PLG) tech stacks aren’t like other technology groupings. PLG tech stacks are designed to fuel a complete product-led growth strategy. They’re meant to be hyper-focused and purpose-built for one goal: using technology to improve your product and drive growth. 

The technology of a PLG tech stack must include the capability to gather product analytics data to identify user behaviors and what they need to be a success with your product. At the same time, your tech stack should also encompass in-product engagements to increase adoption, improve onboarding, create retention, empower Customer Success teams, and enhance your product. 

Your PLG tech stack should be used to inform, create, and measure in-product engagements. Ultimately, you want your customer to have a faster time-to-value (TTV). However, you must first find a single software platform that offers combined integration capabilities to save time and significant resources needed to integrate separate tools.

Do you need a product-led tech stack?

There was a time when SaaS companies could get by without having a product-led growth strategy and corresponding tech stack in place. However, as traditional sales models give way to more user-focused, recurring revenue models, using the product as a growth driver is increasingly necessary. To effectively leverage the product to implement PLG, the right technology stack is critical. 

What are the essential product-led growth tools for your tech stack?

As you’re building out your product-led growth tech stack, it’s essential to keep two broad goals in mind:

1. Your product-led growth tools should be interconnected, ideally run through a single platform. This technology will make it easy for your teams to work together, share data, and stay productive while giving them an edge in efficiency.
2. Make sure to integrate beyond just your Product teams with technology that is easily leveraged to inform holistic customer efforts. By using a tech stack that easily integrates across departments, you’ll be able to deploy PLG strategies organization-wide and approach cross-functional efforts, such as retention, as a larger team.

With those essentials in mind, here are a few tools to add to your product-led growth tech stack: 

• Product Analytics–Product-led growth is all about improving user experiences, and product analytics will reveal user needs. For instance, path and funnel analysis tools show you exactly what steps users are taking as they move through your product. Feature adoption reports can showcase what product features are or aren’t getting used. And tools such as retention analysis can help determine which types of users or features influence retention most. 

When these product analyses are combined, they help spot sticky features, determine product-market fit, and measure how well your PLG strategies are paying off. By watching your users’ behaviors, it’s easy to spot friction points and eliminate the obstacles standing in the way of users’ objectives.

• Closed-Loop Feedback–Another critical piece of the product-led growth puzzle is customer feedback. And if you want to be successful, it’s vital to adopt tools that close the loop by taking action on user feedback. Closing the loop is a process where feedback is gathered through surveys or analytics and used to make decisions. Then more feedback is aggregated to see how those decisions affected your users, and the product is refined even more. Adding customer feedback tools to your tech stack allows you to assess user sentiment and build product features they love.
• In-App Engagements-Another important tool in your product-led growth tech stack is in-app engagements. These adoption boosters let you interact with users in the product to drive behaviors and promote feature usage. For instance, imagine you observe that a group of users isn’t adopting a new feature as quickly as you would like. In-app engagements can prompt users by highlighting that desired feature in context or guide them strategically past a friction point to adoption.

Whether you drop in a guide, have a pop-up dialogue box, direct them to a linked help article, or other helpful in-product interactions, you have the power to lead your user in the right direction. Ultimately, that makes it easier for your user to enjoy your product and discover value—and your product will grow in the process. 

Start building your ultimate product-led growth tech stack.

An efficient product-led growth tech stack will maximize your resources and push growth to a whole new level. Are you looking for more secrets to building your ideal tech stack? Learn more by reading “Mastering Product Led Growth.”

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