Companies across industries, from banking to health care, to retail, and even home improvements are turning to software products both web and mobile applications to drive customer experience, largely because we are in an era where customers expect to engage with brands digitally. The most successful companies have something in common — they put their product at the center of everything they do, in other words, they are product-led. This article through the lens of Trisha Price, chief product officer at Pendo takes a look at product-led organizations and how AI can lead to transformational outcomes like improved growth, efficiency, and beyond. It is transcribed from the AI for Product Management Course from Pendo x Mind the Product x Google.

What is a Product-Led Organization?

A product-led organization is one that rallies the entire company around the product, enabling them to leverage it to better support and retain customers, control costs and achieve their most important outcome In practice, sales teams let their software do the talking through freemium and free trials, marketing teams promote new revenue-generating features through the product, and support teams provide help in-app. In all of these cases, touchpoints between the company and its customers that previously took place in a variety of other ways, new moves inside the product. In doing so, frictions are eliminated and the product becomes more engaging for the users. But the impact doesn’t end there, a recent study found that compared to their non-product-led peers, companies that embrace product-led practices see a 28% increase in total active users, 30% more qualified leads, and a 15% increase in net revenue retention amongst other benefits. To help paint a clear picture of what sets these companies apart, let’s go over six characteristics of product-led organizations.

Product-Led Organizations Align Each Function Around the Product — Instead of viewing the product as the sole responsibility of the engineering teams, product-led organizations make the product experience the driving force behind every function throughout the business. They align their engagement strategy with how customers use the product and empower employees to leverage the product to better engage with the users at every stage. For example:

i. The Customer Success team may build onboarding inside of the product to improve onboarding.

ii. The marketing team can leverage in-app messaging for the cross-sell and upsell.

Product-Led Organizations Make Decisions with Data over Gut Feeling — They live and breathe data, teams use product usage data to know what is happening around the app, things like where users are struggling or which features are being used the most, they also pair quantitative data with qualitative user feedback and use the holistic view of the customer experience, to inform their decisions. Teams across the organization easily access product data and leverage it in their work.

Product-Led Companies Use the Product as a Marketing Channel — When companies are product-led they leverage the product as the ultimate marketing channel, using in-app messaging to communicate in real-time throughout the customer journey. This way, teams can tailor their outreach by segment, targeting specific user groups and providing specific guidance to the users who need it most. In-app communication is highly effective for campaigns like event promotions, social proof, and also helps marketers communicate important information in a highly contextual format, making it perfect for launches, product updates, or sunsets.

Product-Led Organizations Have Amazing Onboarding — They prioritize first impressions and create incredible onboarding experiences for their users, they look to in-app tools to create scalable and easily repeatable enablement and lean on the products to augment their human-led program. In addition to that, the best onboarding programs are highly personalized. For instance, If your software or digital experience serves multiple types of users with different job titles, you can tailor onboarding to the specific workflow that is most important for each role.

Product-Led Organizations Help Users Help Themselves — More than ever, users want to find solutions to problems on their own without talking to support or disrupting their workflow. Product-led organizations allow users to self-serve by making the resources readily available to meet users wherever they are. For instance, teams can embed support documentation and resources in the product navigating widget and other useful resources within the product.

Product-Led Organizations Collect and Use Feedback From Customers — In the past product ideas mostly come from the top-down, leaving users feeling unheard and left out, but product-led organizations understand that their user feedback is critical for building the best product possible. They create scalable, two-way feedback processing to help them form their roadmap and innovation strategy. It is best to both proactively collect feedback from users within the app surveys and polls, and include a way for users to submit feedback directly within the product at any time.

Benefits of AI in a Product-Led Organization

Product-led organizations operate a bit differently from other companies, instead of viewing the product as simply the thing they build and sell, every team sees it as an engagement channel and foundation of customer experience. It is because of these qualities that product-led organizations are uniquely positioned to benefit from artificial intelligence. At a high level, the benefits fall into three categories:

i. Getting Smarter — In order to be successful, product-led organizations need a foundation of data that’s clean, accurate, and easily accessible. These businesses are likely already routing product decisions and customer engagement strategies and data and AI can improve these data-driven practices by helping separate signals from noise and analyzing data faster than humans can on their own.

ii. Helping Humans Be More Effective — Companies that are Product-led offload human tasks to the product; everything from onboarding to support to sales interactions like cross-sells and upsells with AI, teams can do this even more effectively and replace repetitive human-led workflows like sorting through product data during discovery with Ai powered processes. This way AI can help augment humans so they can generate insights, answer questions, and take actions faster than ever before.

iii. Improve Products Delivery — Product-led organizations rethink how they deliver products instead of singularly focusing on shipping codes. They care more about downstream adoption and whether users are actually finding value in what they have built. AI can help supplement this work in many ways but here are a few examples (a) automatically creating launch plans and materials like in-app guides to support smaller but more frequent releases. (b) finding trends in qualitative data to help shape future development and improvements and © suggesting ways to take actions and quickly iterate on new product features based on adoption data.

Leveraging AI Across A Product-Led Organization

Being product-led doesn’t involve only the product team but the entire company rallying around the product as a way to better understand and engage customers and drive key business outcomes. Marketing teams can leverage AI tools to analyze product usage and customer feedback and build hyper-targeted campaigns to drive featured options, webinar registrations, free trial conversions, and more. Product-led marketers also utilize product usage data to analyze customer sentiments and insights to identify power users and potential advocates and engage with them to solicit reviews and testimonials that can contribute to the product going viral. AI can speed up this analysis and even automatically suggest which users are potential power users and this should receive the appropriate in-app outreach. Identifying all these is no small feat. Leveraging AI to more effectively identify patterns that signal high engagement and intent, from their sellers can focus their efforts on those that are likely to become paying customers and even use AI to generate personalized outreach copy.

Customer success in product-led companies can also be helped with AI, for example, use AI to analyze more product usage data and customer feedback than ever before and then quickly provide insights on when customers are at risk or which accounts are prime for an upsell. AI-powered experience platforms might then be able to auto-generate in-app guide campaigns to drive conversations, expansion, or adoption.