It should come as no surprise that digital transformation is impacting every aspect of our society. In this book, we are guilty of referencing some of the most overused examples, such as Amazon and Netflix, to explain the force behind this transformation. But that’s because most of us can relate to how the customer experience has changed because of these visionaries.
What if your company could join their ranks by delivering such memorable customer experiences? It’s possible that you’ve been trying to figure out just how to do that. But like many other businesses, we bet you’ve been going about it the wrong way. The right way — the way that is proving effective for the newest generation of SaaS companies — is to embrace the product-led approach and philosophy we’ve outlined in this book.
You can argue that new technologies have enabled the incredible growth trajectories of companies like Uber and Airbnb, but when you drill down, it becomes obvious that customer experience is what fuels such rapid growths. Uber did not make a better dispatch for taxis; Uber reinvented the entire process of getting from one place to another. Airbnb did not make it easier or more convenient to book hotels; it reinvented the whole travel experience.
A similar transformation happened in the enterprise software industry when companies began offering their software via the cloud, but today, the SaaS business model is par for the course. To stand apart, SaaS companies must do more than provide more features and lower prices. They must understand how their products solve customer needs and change processes. Just as importantly, they must understand how to satisfy customer expectations for an Amazon-like experience. Welcome to the customer experience era!
Designing for the customer experience is crucial to your success as a SaaS company, but the first step is putting your organization in the shoes of those that buy your product. That means your sales marketing team, sales team, customer success team, and even your product team must understand what your customers are trying to achieve, how they buy, and what experience they want from your product.
Arriving at this understanding is essential, and it needs to happen before you do anything else — before you create any marketing content, design your sales process, outline your customer success operations, or develop all your product features.
Do this well, and your company will transform to become truly customer-focused, truly experience-driven, and truly product-led. It will focus more on overall customer journeys than on individual interactions; more on the customer lifecycle than the sales funnel; and more on the end-to-end customer experience and CLV than on individual department goals and the size of the deal.
If there is one idea that we want you to take from this book it is this: Delivering a personalized customer experience is critical for your survival, and the transition to a product-led GTM gives your organization the best chance to succeed.
A product-led GTM is proving to be a better alternative than the traditional customer acquisition approach. Many of today’s fastest-growing enterprise software companies are implementing product-led GTM strategies. We named a few of them throughout this book: Slack, Zoom, Asana, InVision, Expensify, and Dropbox. These companies realized that nothing is more valuable than understanding how customers use, interact with, and feel about their products. Not even NPS and customer satisfaction surveys can provide as much insight as actually monitoring and analyzing how customers interact with your product and service in the real world.
That’s why Google doesn’t ask you how it can improve its search capabilities. Instead, it monitors billions of searches — and your specific requests — to improve the search results.
That’s why Facebook ignored the outrage against News Feed when it was first introduced in 2006. Despite the uproar, data showed that users viewed 10 billion more pages just two months after the feature was introduced.
That’s why Netflix doesn’t ask its customers what movies and shows they want to watch. Instead, Netflix recommends shows based on your prior behavior, and the preferences of people with similar tastes.
The insight that companies can extract by analyzing how prospects and customers use their product is by far the most important element of building a highly successful company. We are not advocating against the use NPS and customer surveys. We are simply arguing that product behavioral data uncovers more insights faster, and is the cornerstone of delivering a great customer experience.
It’s no longer enough for a SaaS company to know the demographics of its target customers. In-product behavioral data is the key, and a product-led GTM strategy wrapped around a freemium or free trial enables SaaS companies to collect this data sooner in the buying process.
That said, to succeed with a product-led GTM strategy, SaaS companies must do more than simply provide a freemium or free trial. They must embrace an organization-wide strategic mindset that enables their teams to get prospects using the product early in the customer acquisition process, and then guide them through their in-product journeys. To achieve that goal, SaaS companies must do three things:
- Assemble unified customer profile data (including in-depth product usage data)
- Invest in tools that enable near-real-time customer engagement
- Design experiments that yield deep and continual insights
Freemium and free trials can certainly increase the virality of your product and reduce CAC. However, without focusing on behavioral-driven product adoption, the cost of providing a free offering almost certainly outweighs the benefits. That is why so many companies still stick with lead forms and gated free trials that require a sales touch. These organizations know that their processes and approach weren’t built to enable a product-led strategy. As a result, they can’t profitably guide prospects in-product before they are ready for a conversation with a sales team.
As SaaS companies transition to a product-led GTM strategy, the role of product leaders will expand. Product managers will become part of the customer acquisition process, and will need to build agile operations to help their organizations succeed in a dynamic market. The pressure to build the right features and processes will force product managers to pay increasingly more attention to behavioral data.
Product adoption is a continuous process. It never stops, just as there is no final destination to an excellent product experience. Technologies improve quickly and they push the standard further. More product leaders will be responsible not only for product experience, NPS and satisfaction scores, but also for growing customer lifetime values and reducing signup-to-win rates by enabling quicker time to value and excellent onboarding.
We’ve already seen how sales organizations had to adapt during the sales-led era of early SaaS, and how marketing automation shifted organizations to a marketing-led approach. Now, with a product-led approach, we are witnessing how product organizations will need to adapt to shoulder growing responsibility for customer experiences and the acquisition process.
Every few years, we hear about new sales or marketing tactics such as content marketing, demand generation, social selling, or account-based sales and marketing. Our intent is not to contribute to the noise. Whether the industry will ever use the term “product-qualified lead,” or whether or not a “product-led GTM strategy” becomes the new industry standard. is not the point.
Regardless of nomenclature, in the next decade, product will be the primary tool enterprise software vendors use to create compelling customer experiences. The next wave of successful software companies will use their product to monitor and engage prospects and customers contextually. By doing so, they will deliver the experiences required to succeed in the customer experience era.
Frankly, we don’t know if people will start hiring “customer lifecycle managers” to oversee customer experience, or whether product teams will assign “product operations managers” to manage unified data sources, product engagement, and experimentation tools; but we are willing to bet that the forces behind rising customer expectations will yield very big and meaningful changes.
You can be sure that machine learning and Artificial Intelligence (AI) will enable the next generation of software companies to better predict future customer behavior and act on this data in a real-time, omnichannel, and automated way. Why shouldn’t we expect SaaS companies to learn and adapt to our goals and preferences? If Amazon and Netflix can do it, so can any other company. The AI revolution promises to enhance our experiences and make them more personal and engaging.
In fact, these technologies, along with behavioral data generated via a product-led strategy, make it possible to more accurately predict the prospects most likely to convert and the customers most likely to renew and upgrade. In other words, it empowers SaaS companies to better predict prospects with the highest CLV potential, and take actions with customers to increase the likelihood of achieving that goal. Simply put, adding predictability to the equation enables SaaS companies to take their businesses to new heights faster than ever before.
The bottom line: Whoever is closest to the customer wins, and a product-led strategy puts companies closer to their customers than ever before. That said, every company is different and each product is unique, so no single process or prescription applies to every case.
Throughout this book we have outlined multiple ideas that could be helpful in your quest to deliver more personalized products and implement a product-led GTM strategy. Some ideas we covered in more detail than others. This book is just a starting point, and we hope to spark an ongoing discussion that will lead to deeper coverage of many concepts touched upon here. Please use these ideas as inspiration and a starting point — take what’s useful, ignore what’s not, and add anything that’s unique to your product and company.