#6 - Todd Olson @ Pendo
#6 - Todd Olson @ Pendo
Using in-app messaging for tailored user experiences
“If you think about it, a decent part of the humans in our Go-to-Market are teaching people how to use the product. Because people do want to try things before they buy." - Todd Olson
Audio links
The audio will be released on April 11th 2024
Video
Podcast notes
[00:24] Introducing Todd Olson and Pendo
[01:02] The Power of In-App Messaging for Growth
[02:21] Exploring PLG Strategies
[04:25] Efficient Growth and Customer Expansion
[10:36] Advanced Implementations
[14:36] The Future of AI in Product-Led Growth
Transcript
To set the stage, can you give a brief overview of how companies are using Pendo today to grow their business?
Pendo is a platform to help drive usage and adoption of software. It has a variety of components, starting with product data and analytics on the user journey. We then combine that with a broader set of capabilities.
You could use that data to target users for in-app messaging, like step-by-step guided tours or widgets in the corner for self-service. And we have a set of qualitative features, like asking people what worked well, or what features they want.
We support a broad range of customers, from startups to large enterprises. We see folks use us a lot for Product-Led Growth. This is everything from providing guidance when they're coming into a freemium product, to driving nudges to advertise areas of a product that a user is not yet taking advantage of.
I also see a lot of our customers using Pendo to drive a more efficient go-to-market. Let’s for example say I have Customer Success Managers in a scale motion, where they have hundreds of accounts. They’re not going to call a hundred accounts every single week, you just can’t. But you can use signals from the product to help inform where you spend that time. This is something pretty common I see in our customer base.
You're touching on something interesting there. Combining Product-Led Growth with the human touch of a Sales or Customer Success team. A big topic nowadays is efficient growth. What are you seeing in this space that’s working well? Can you mention some examples of what companies are doing?
I'm going to take some simple abstractions how people can think about it. Let’s say you're a company that serves a broad set of the market, meaning you serve both small customers and big customers. In order to drive a more efficient go-to-market motion, I’m seeing companies trying to find a way to create much more automation around servicing customers under a certain size of employees, revenue or spend. Both on the acquisition side as well as on the post-sale side.
Then there’s a large enterprise company we work with that does enterprise sales. They started using Pendo to do product-led sales engineering. They wanted to make sure that within a trial, the prospects are doing five things. They know that if they do these five things within a trial, they're more likely to convert to a customer. So they’re using a set of organized guides, nudges, and guidance like try this first, try this second, and so on.
That's an awesome way to reduce the reliance on humans, by making sure people are seeing the product. If you think about it, for a decent part of the humans in our go-to-market, their job is teaching people how to use the product. Because people want to try things before they buy it. And that is something that frankly is a commodity, teaching someone how to use something.
I'm seeing a lot of success with finding ways to offload that task from the humans. Then the humans are being used more for the value or the negotiations or the heavy differentiation from competitors or things like that.
If we look beyond that, you already mentioned expansion before. There's different ways that a contract can grow after customer has bought a product. Can you talk a bit about how that can be done?
There's a couple ways to think about expansion. First, every product has natural levers built in that are going to drive expansion. For a lot of SaaS companies, historically speaking, that has been seats. These are well-defined expansion levers. As I hit certain thresholds, the product itself can start warning the customer, which is a good experience.
The last thing any customer wants is being surprises that you’re going to charge more money. It's great when the product can start warning you. A lot of our customers will use our messages to warn customers they’re within 75% of their contracted seats. And then of course, as they run out of seats, there could be button to upgrade or they present an offer. That's one level of expansion.
The other level of expansion is net new functionality or capabilities. We're seeing all sorts of cool stuff there. Citrix is one of our main reference customers, and they are a heavy user of this. Citrix's strategy was to buy up a bunch of companies, mostly in the collaboration space, and try to cross-sell across all of them. And they have dedicated marketers to just do in-app marketing.
They’ll have customers using their signature product and want them to use their file sharing product. So they present the benefits of having file sharing combined with the signature product in the same platform and offer to unlock that functionality for 30 days. That's a great experience.
The other thing that we've seen people do is have the menu items for other products available, but when you click on it, it shows a flyover that says this is locked and allows them to unlock it for 30 days. It could also invite them to talk to an account manager, where they can learn about the value of this and go down a more human-led path.
I think those are great ways to expose people to new capabilities. We're even seeing this with banks. I was talking with a large bank recently. They were onboarding new customers. And what they realized is if they just pulled a customer into a simple checking account, that they aren't the stickiest of customers. As opposed to showing them rates on CDs and getting them into a CD product, which has some sort of like lifespan to it. That locks you in to a stickier customer. And that's something that we see banks doing. Which is super cool and fully product-led.
And if we look beyond expansion, so like beyond what we just discussed, what are some of the more advanced implementations that you're seeing happening with the tooling that you have available. Especially when it involves a combination with customer-facing teams?
We're seeing folks using our signals in internal apps, like Salesforce and other parts of the sales stack. I'll given an example of banking again, because it's actually a pretty interesting one. When a new customer joins a bank, the bank asks them “What do you care about? Debt consolidation. budgeting, etc”. Let's say you choose budgeting. The system then tells a banker, a human that owns that geography.
When that banker is logging into their CRM, they get a notification that Todd signed up and said he's interested in budgeting. This leads to a really positive human experience. Imagine a banker calling me and saying, ''Hey, I just noticed you are interested in budgeting. Would you like to set up a consult with me? You could do it online, but I'd be happy to do it personally.''
That's a great experience. Someone proactively reaching out to me who knows exactly what I want. That's the stuff that I think is super interesting because in general, people like personalized experiences. And the more personalized we can make it, the greater chance of conversion, and honestly, the more pleasant it is.
That's why this combination of data and messaging is just so powerful. We have some customers develop advanced onboarding flows. asking the user “what do you care about?”. “Oh, I care about this feature” and it takes you on a bespoke onboarding flow that shows you that part of the product and gets you involved in that use case.
Another derivation of that use case that I'm also seeing is we can look at website behavior. Todd was surfing these features on our website. Todd signs up for the product. And then it just immediately prompts me “hey, we noticed you were looking at trailers, let me show you the trailer part of our website”.
The kinds of experiences that are highly personalized and it knows exactly what I'm looking for. That's ultimately a great experience. And technology is starting to evolve to do that.
So what’s next? What opportunities should companies think about in this space?
I think AI is going to play a really interesting part. We have amazing signals in our data because we know when people perform a conversion event in a piece of software. We can start understanding the behavior that precedes it and start auto suggesting that customers that have this sort of experience automatically are five times more likely to convert from free to paid. Those are the kind of things that I'm very excited about.
Right now there are growth marketers and growth PMs, that spend a lot of time sifting through data. They spend a lot of time trying to formulate well-formed experiments to drive growth within their products. And look, there's smart people but I think AI will start auto suggesting campaigns and ideas that, frankly, the other folks just won't find.
Because it's highly inefficient to go through all of the data and looking for some of these signals. So usually what happens is a growth person will have a thesis. And they go get some data and validate it with an experiment. I think the cool piece will be if AI could come up with different campaigns based on different desired outcomes.
Free to paid is one outcome. Another outcome is retaining a customer. We can look at all the customers that stopped coming to our product in the last 90 days. Let's compare all their behavior versus people that did come back. And try to get a model of these people and then let's design onboarding flows around it. Let's make sure that we get a list of people who haven't done that so we can go proactively reach to them.
There's a lot of automation we can drive. We still want humans to be checking it and validating it, but I think we should be able to increase the pace and number of experiments dramatically, which should have an impact.
Potentially fully AI driven campaigns. People are already doing it and manually, and I think we can drive a lot of automation to augment this and allow them to experiment faster with more confidence in the data.
Is there anything you want to share before we end?
This is an exciting time. I think if you aren’t thinking about ways to use some level of product-led techniques, then there's a risk of being left behind. In part because, regardless if you're talking to a large company or a small company, you have to meet users where they are. And we see people using technology at odd times of the day and on weekends.
That means you can't rely 100% on human beings to be there to support and serve your users. You need to find other ways to augment that. And I think product-led techniques are a great one. And I think it's only getting more exciting with the advancements of AI and other technologies.
All right, thanks so much for joining today, Todd.