If you decide to embark on the product-led growth (PLG) path, you are also making an implicit agreement to make your product itself the center of attention. PLG brings clarity and focus to the product planning process but can also increase the risk of taking a wrong turn—metaphorically speaking.
In the old enterprise-style, sales-led model, a good sales team could often cover up many product defects and poor user experience with expertly crafted demos and masterfully led sales processes. In particular, a top-notch sales engineer can misdirect and paper over issues that would trip up any user trying to learn a product on their own (I should note that I am a proud, former sales engineer).
It is a capital mistake to theorize before one has data.”-Sherlock Holmes
When you commit to the product-led growth model, you also commit to a product experience that can stand on its own without the constant support of human interaction. If your product does not stand on its own, you will see a direct impact on revenue growth – so tread carefully.
This leads to an important question. How do you create a product that can stand on its own?
To assume that one can completely predict what the right product experience should be is the height of folly in the age of the impatient and opinionated consumer. And here we get to the heart of the advances in product planning and user design over the last twenty years…you will get it wrong the first time. And the next several times too, in fact.
So back to our question. How do you create that perfect product experience?
The answer—one tiny step at a time. You need to try, get feedback, learn, and try again. Build it, and they will come, and they will tell you what you did wrong. If you listen and iterate, you can find the right product experience to drive the inbound leads you want. And that is where metrics come in. How can you possibly learn if you can’t measure success?
So, let’s consider three key pillars to using metrics to fuel your product-led model.
Pillar 1: In the beginning… there were metrics
There are few things as exciting as the creative process of designing and building new applications and services (Yes. Former product manager here). It is murder mystery meets hospital drama.
You have to discover the customer’s pain, uncover the roots of that pain, and then seek out the right remedy. Once you get started, it is very easy to become so absorbed in the minutiae of user requirements and user experience design that you lose sight of the forest for the trees.
If there is one thing I learned from years of product management, it is to slow down in order to speed up. You need to take your time at the beginning of planning a new product or feature to clearly outline the user pain, the problem being solved, and how to measure success. You and your team need clearly lay out what your users are expected to do to find value and measure the value-creation process. So, metrics.
In most cases I have seen, metrics are usually one of the last items considered before a launch. As the product team is wrapping the last few bugs and getting sign-off to launch, they suddenly realize they have no way to measure how the product is being used. They are most likely drowning in metrics about the underlying infrastructure and services. If they are lucky, they may have data about user clicking buttons or page loads.
Unfortunately, none of that data gives real insight into the mind of the user. To do that properly, you need to measure progress and consider more complex multi-step actions. Those kinds of metrics are very difficult to create at the last minute, so they get axed from the plan to meet deadlines.
So, how do you avoid this unnecessary, metrics-less future? You include user metrics as a crucial part of your product requirements and non-functional requirements. User experience measurements need to be at the same level of importance as feature completion, quality, reliability, etc. If you have measurement front and center from the beginning, it will be at the forefront of your engineers’ minds. You won’t get the metrics right the first time, like anything else, but you will have visibility.
Pillar 2: It’s all about the journey
You have decided to embrace the metrics, and now you have all these button clicks, page loads, and response time metrics. While that data is useful, it doesn’t tell your users’ stories, does it?
This issue becomes only more acute in the world of product-led growth. You have to be hyper-focused on user experience and removing any and all obstacles from your potential customers’ quest for value. In particular, the onboarding process is now core to the success of the product. Onboarding itself is a multi-step process that can stretch over minutes, hours, or even days. And how do you measure that?
To start, you need a description of the expected user journey. While a customer journey map helps, you often need something much more detailed – user interaction design. As part of your design process, you want to describe the path your users will take.
In the past, I have done this as a flowchart or even just a simple list of steps. If possible, you should test this process out with real user testing – preferably before you even write a line of code. While these “flows” will never be perfect, you can clearly outline the primary steps in the process.
Now that you know the steps, you can work on measuring the process. For short processes, your engineers can mostly likely directly instrument the measurements in code. For example, maybe your user needs to interact with a particular form and enter data.
For longer processes, it can get more complicated. How do you measure a process that stretches over minutes or even days? The first step is to make sure that each step of the process generates a clear event (e.g. “user pressed the button to start the process“). Next, you need to make sure that those events are tied together with some kind of common identifier (e.g. ”user started job 1234“ and ”job 1234 ended successfully“). Once you have those distinct events, you can use analytics tools to pull those events together and create a new ”uber event“.
For example, a video conferencing service could generate several events throughout a video conference call (e.g. start, status update, end, etc.) and then stitch those into a single event about the call. The new event could include metrics about call length, call quality, number of participants, etc.
When you have these new, more representative events and measurements, you can begin to think about the holy grail of product-led growth – measuring if the user has achieved value and shown intent to buy (a Product Qualified Lead, or PQL). With most enterprise and B2B products, this evaluation can often be complex and need adjustment over time. So, it should be pretty clear why you need to keep metrics front and center from day one.
Pillar 3: Measure, Measure, and Evaluate
So, you’ve got your metrics and the right metrics besides. So, what’s next?
Well, you have to track them and track them against your goals. If we go back to the first pillar, we know that we should establish key metrics from day one. We should also set goals for adoption, user experience, and performance.
Starting with the adoption, we want to know if features are being used, and are customers getting value from them. A common mistake here is equating activity with adoption. Just because a user is “using” the product does not mean they are gaining value.
In pillar 2 we saw that you want to measure the expected user journey, not merely clicks and page loads. So, you want to track adoption by how well your users are achieving value. If you are going to show your advanced metrics ninja skills, you can build several adoption metrics into a scorecard. This is a valuable asset since you can use it both to qualify leads in the onboarding process as well as understand customer behavior. You can look for increased adoption as a sign to offer upgrade options. You can also look for drops in adoption to get ahead of bad situations where a customer may churn.
Bottom line, your adoption metrics are the lifeline of your product-led business.
Next, you want to measure and track user experience. This will vary considerably with adoption, but you may look at other elements as well.
What actions do users take in sequence? Do you see unanticipated usage patterns? While these metrics can be complicated to measure, it is worth taking the to find metrics that determine how users are really using your product. Additionally, it is highly beneficial to conduct user experience testing on a regular basis. There is nothing like watching real users to humble any product manager, engineer, or designer.
Also, it can be helpful to measure user satisfaction with Net Promoter Scores (NPS). While it is easy to misunderstand these numbers, it is a good way to measure how your users feel about your product.
Finally, it is essential to measure performance. The core expectation of any modern SaaS user is reliability and performance. Both of these concepts can be subjective, but it is important to establish expectations internally. I recommend looking at the Site Reliability Engineering concept of Service Level Objectives (SLOs).
You need to identify key measures that quantify product performance and set expectations for those. For example, for an analytics product, it might be query response time and the time it takes to render a chart. For a chat product, it might be the responsiveness of the chat interface. Regardless, you want to measure things that are key to the users’ ability to achieve value in your product—basically the technical underpinnings of the adoption and user experience metrics. These measures are essential to track since users will only tolerate so much in the pursuit of their goals on your product.
Let metrics fuel your Product-Led success
There is very little leeway between amazing success and outright failure in the competitive world of modern software.
If you adopt a product-led philosophy, you have already decided to invest in user experience and product excellence. The takeaway here should be that you don’t want to wait until the end to ask how you will measure your progress towards these goals.
Every time you make a product goal or business goal, you need to immediately ask you will measure and track progress on those goals. A well-executed metrics strategy will allow you to nimbly adjust your path as you go while motivating your team to celebrate successes and avoid disaster.