It’s about users and product!
In order to grow and innovate, companies need to be running a customer-centric product model and stop throwing money and time at the top of the funnel on more sales and marketing.
This is a paradigm shift in thinking. It’s a model that changes our perceptions of the traditional sales and marketing model and puts the user and the product front and centre. Product shapes strategy, decision-making and organisational culture.
If you’re working in a company that spends all its time focussing on sales, marketing and pushing out features without understanding your customer’s real problems, needs or wants – it’s highly likely that your core product has been well and truly forgotten.
In this article, I’m going to explain what the customer-centric product-led model is and why it is a necessity for companies to go from surviving to thriving. This article is meant for those not already working in empowered product teams – to bring the understanding of what “good” looks like into more organisations.
So what is the magic of the “product-led model”?
Or as Marty Cagan simply calls it – the “product model” – means working like the best companies, and moving away from working through a feature-filled backlog to a much more strategic view of what matters to users and what has the biggest impact for your business.
I keep hearing teams in organisations of varying sizes refer to product as a kind of feature factory, where the business stakeholders request a feature and the product manager is the one herding the cats and delivering, managing timelines. However, a true user-centric product organisation is definitely not that!
“In most companies, technology teams exist “to serve the business.” That is very often the literal phrase you will hear. But even if they aren’t explicit about it, the different parts of the business end up driving what is actually built by the technology teams. However, in contrast, in strong product organizations, teams exist for a very different purpose. They exist “to serve the customers, in ways that meet the needs of the business.”― Marty Cagan, Empowered Product Teams
When you think “product,” think “customer at the core.”
This shift in mindset from business-first to user-first lies at the centre of doing product well and enabling an organisation to keep innovating and providing value propositions that matter to your users.
And this mindset should be applied throughout the organisation, across all departments and teams.
Product and users are at the centre
In the product-led model people stop asking – when will I be able to sell this new feature to my client (that I think s/he needs)? And instead, start asking more questions about real user and business needs, in order to better define the problems that need solving.
People move away from – what needs fixing in order to just deliver what we promised we would – to: is this even the right solution, and if it is how can we make it better and deliver real value?
To do this, it is crucial to separate “problem space” and “solution space”, and here are some of the key elements that should form part of your “mental scaffolding” when changing to a product-led model.
Introducing the triple diamond
- Research & Discovery – Problem space
Ensure you get feedback and insights from real customers early and often to feed into the problem space and the business/user requirements. Or in other words – instead of going really fast in the wrong direction, spend a little more time asking questions, understanding and defining the problem and the requirements. And only going into concepting possible solutions (note the plural!) once the requirements from both users and the business are clear and defined.
- Proof of Concept – Solution space
The second key element is building a proof of concept, often in the form of a prototype – as part of the work in the solution space. Here it is crucial to go broad and explore different concepts and routes prior to honing in on the value proposition that seems to have the best product/market fit. At this early stage and while concepting, the cost of exploring and amending based on user feedback is always much lower than when having to change functionality once it’s built-in code.
Build & Test – Build space
Once you’ve solidly explored your proof of concept and know you’re going in the right direction – you can get into building. But unlike in companies focusing on delivering lots and lots of output – in the product-led model it’s all about the outcome. To determine the outcome, however, teams need to know what to measure and how to measure it in order to fully understand the outcome and course-correct if needed.
“In the model I’m describing, it is management’s responsibility to provide each product team with the specific business objectives they need to tackle. The difference is that they are now prioritizing business results, rather than product ideas. And yes, it is more than a little ironic that we sometimes need to convince management to focus on business results.”― Marty Cagan, INSPIRED: How to Create Tech Products Customers Love
And crucially the work is not done after delivery – this is when the test & learn phases starts, in order to be able to iterate and improve so that products get better over time and not just “launched and left”.
But what are the key benefits?
Show don’t tell
Fundamentally the product-led model shakes things up internally.
Cagan argues that if the product culture is properly ingrained then the role of sales and marketing changes. Instead of having teams flogging the product, the product should be such a great fit, and so intuitive that it needs no selling.
With an effective product-led growth strategy you are speaking to users early and often. So it means that you become less dependent on traditional sales and marketing, and better able to let the product itself do the legwork.
Product-led organisations use their product as the principal vehicle to acquire, onboard, and retain users. As an added bonus, the sales & marketing teams can focus on dealing with more complex clients.
When following a product-led model another benefit is the early identification of product/market fit through the creation of concepts and prototypes. The earlier you test hypotheses with users the more you can reduce the risk of delivering failures.
Improved customer satisfaction
If you’re actually solving user problems and providing value-propositions that match user needs – your customers will be happier, but more importantly, happy customers tell other potential customers. And you increase word-of-mouth advertising and the creation of brand advocates.
Have I made the case for the product-led model yet?
To fully convince you, let’s look at some real-world examples.
Product-led business examples
Let’s take Tesla for example: the company is very much the brainchild of Elon, but it is also rooted in the “product model” with customers driving all development.
Tesla also sells direct to customers so they are right up close to their customer’s journey and behaviours. Dog mode, driver profiles and dynamic personalisation are all features that have been developed because Tesla was listening to their customers intently.
And the benefits?
“The company has the highest customer satisfaction rate of any car manufacturer. Tesla customers tend to be incredibly loyal, and 91% of customers plan to buy or lease another Tesla for their next car. Customers are so fanatic about the brand that they are often willing to wait years for the next model.”3 Ways Tesla Creates A Personalized Customer Experience Blake Morgan – Forbes
What company wouldn’t want that?
Dropbox and Zoom, both utilised the freemium, direct-to-consumer sales model and both are very close to their customers.
Product iterations in all these companies are intuitive and grounded in what their customers and customer data tell them.
This approach has worked. The evidence is clear to see as it is these product-led companies that are growing and filing for IPOs. Slack, Shopify, DocuSign, Hubspot, Zendesk, Zoom, Wix.
Avoid getting your lunch eaten.
Avoid getting surpassed by your competition.
Avoid haemorrhaging customers.
Move towards the product-led, user-centric model.
Companies can no longer just build the latest shiny thing and hope that it’s shiny enough for users to want it. Instead, companies should, first of all, be clear about their core value proposition. Then be certain that it solves key user & business problems. And once you’re clear on your core, all additional services or products you offer should align with your business and product strategy.
That also means that product leaders are enabled to ignore the feature someone at C-Level thought was a great idea – if there is no further evidence supporting the need for it.
Feature requests should be shunned without discovery work or customer research backing them up, or knowing where they fit within the wider product strategy.
Being product-led and user-centric means adopting a mindset that:
- prioritises user needs
- sets problem definition above feature requests
- values outcomes over output
- rates showing over telling (users and stakeholders)
The benefits are massive and varied. These range from better product/market fit to a better, more collaborative working culture if done well.