The product-led way to digital transformation

Have you checked your investment account balance today? Do you know how many steps you’ve taken so far? How about that grocery delivery order? Chances are none of these tasks required a phone call or trip anywhere beyond your couch.

Businesses are recognizing that nearly every task in our to-do list, both as customers and employees, has a digital solution—albeit, at different degrees and speeds. And polls found that more than 70% of US-based companies plan to introduce a new digital technology platform, digitize existing products, or digitize their innovation processes.

As more businesses begin to build, update, or reimagine internal- and external-facing software offerings in order to succeed in this new era, the people responsible for these efforts play a critical role in the digital transformation that’s taking place.

A reinvigoration of digital transformation

The idea of digital transformation has been around for decades, resurfacing at different points in time (in the mid-2000s, for example, with the rise of social media platforms) and under different names (e.g. “digitization” or “digitalization”). The one constant? The term “digital transformation” is vague. And it doesn’t have a single, universal definition. Everyone talks about it, but no one really knows what it is.

For our purposes, we’re defining digital transformation as the transition of the customer and employee experience from analog (i.e. manual or requiring human-led intervention) to digital.

It’s difficult to find a business or industry that hasn’t taken on digital initiatives in some capacity. In the past, it might have been enough to create one shiny “digital-first” offering—a mobile app, for example. Today, that won’t cut it. Instead of digital being one of many experiences, it’s becoming the experience, both for employees and customers. It’s also becoming the best source for competitive advantage.

Customers and employees expect more

As technology replaces manual processes and these digital experiences bleed into nearly every part of our lives, the ways businesses interact with their customers has to shift, too. For example, users are no longer satisfied with one-way communication. They want to be able to provide feedback and engage in ongoing dialog about their experience with a product. Companies need to ensure they’re not only delivering on the value they originally promised, but adapting to users’ unique (and changing) needs.

In a Harvard Business Review article exploring the need for industrial businesses to embrace digital capabilities, the author explains how customers’ expectations have created a “make or break” moment for the industry: “Unless [companies] can accommodate customer demands for digital tools and capabilities, using them to enhance every phase of the customer journey, they may well find themselves struggling to compete with faster-moving peers or new entrants for whom digital is a way of life.” 

What’s more, it’s not just customers whose expectations have changed. Employees now demand the same quality and ease of use from their digital experiences at work as they do from their experiences as consumers. It’s no wonder that HBR found (in a report sponsored by Pendo) that the majority of executives agree: It’s impossible to provide a great customer experience without also providing a great employee experience.

4 pillars of great digital experiences

So how can businesses create great digital experiences for their users? Here are four core areas where people who concentrate on digital transformation should focus.

1. The importance of product data

If you’re tasked with managing a software product, whether it’s one you’ve built or one you’ve bought, think of data as your foundation. The power of product data comes from the ability to make decisions that will improve your end users’ experience. The more you measure, the more you’ll gain insight into which areas of the product people access the most, which are underutilized, and where you may be falling short. Rather than basing decisions on word of mouth or gut instinct, lean on product data to guide decision making.

Marrying quantitative and qualitative data

While product data is important, it’s equally crucial to combine these quantitative measures with qualitative data, for example from customer and employee feedback or user interviews. If you lean too heavily in one direction, you might not be getting the full picture. It’s particularly beneficial to combine product data with direct feedback in order to decide what users really need.

One example of this is using product analytics to validate whether problem areas that most often arise in customer calls or employee surveys align with how users are engaging with the product. Ideally, your team should be focused on improving the product areas that are accessed the most, not just listening to the “loudest” customers or employees. Similarly, combining quantitative (e.g. product usage) and qualitative (e.g. support tickets) data is key for helping teams optimize the onboarding experience. The intersection of both types of data helps product, customer success, and enablement teams steer new users toward the right features and functionality to get them to value quickly.

2. Understanding journeys and workflows

Beyond product data, improving customers’ and employees’ digital experience with your business requires a deeper understanding of the paths users are taking, and, more importantly, what will deliver the most value. It’s not just about the number of clicks on a certain button—it’s identifying the objective users are trying to reach by clicking on that button, and optimizing their experience accordingly. For example, if you’re rolling out a new internal product, examining user workflows as you begin training will be paramount to understanding how employees interact with the tool and where the experience can be improved. 

As you begin analyzing your customers’ and employees’ digital journeys, think about what ideal engagement looks like. Not every product is meant to be used every day, every week, or even every month. Identify the value you’re trying to provide and examine existing patterns to better understand the engagement level you should be striving for.

3. Effective in-app communication

Once you have a clear understanding of how users are engaging with your product, the work doesn’t end there—the next step is to take action on the insight you’ve gained. One of the most effective ways to do this is by communicating with users within the product or application itself. 

If you see that users are getting stuck in a certain area of the product or filing support tickets about a specific feature, you can use in-app guides to provide the right information at the right time to proactively answer questions and eliminate confusion. More importantly, you don’t have to wait six months to push an update through a release cycle if users are struggling in a common area of your product. Use in-app guides as a temporary stop-gap to inform and/or enable users about the product issue in question. 

The onboarding experience is also a crucial time to ensure new customers or employees understand how to use the product and to help them find value in it, fast. With in-app onboarding guides and walkthroughs, you can accommodate varying technical skills and levels of support needed, ensuring each user is met with resources to help drive their success.

The power of personalization

Instead of serving your entire user base the same in-app messages, segmentation offers a way to cater to specific subsets of users and deliver the information that will be most relevant to them. And this isn’t just a nice-to-have. Today, customers and employees expect this level of personalization. Whether you have multiple types of users with different needs or certain product features that are especially useful for specific personas, think about how you can customize your in-app communications accordingly.

4. Test, measure, iterate, repeat

As you utilize product data to understand your users’ journeys and improve their experience, be mindful of the fact that this should be an iterative cycle. Metrics like stickiness, feature usage, and retention all matter. But depending on what the data shows as users’ biggest needs, the definition of “good” engagement can change over time.

One way to help foster this iterative mindset is to tie the work you’re doing to metrics that are meaningful to the business. Even if your work impacts only part of an overall business initiative, it’s still important to connect it to the larger purpose and experiment with the best ways to contribute to that goal. You can also think of it as having in-process measures (e.g. product adoption or engagement) and outcome measures (e.g. cost savings or revenue).

Digital transformation is an ongoing process

Any type of digital transformation is an ongoing effort. This is true both tactically—for example, in the way you serve customers or employees through digital products—and culturally within the organization. Digital transformation isn’t a sprint, but a marathon.

Digital transformation isn’t a sprint, but a marathon.

While changing a company’s culture may take some time, product-led principles are uniquely suited to help teams drive digital transformation. And through this work, digital transformation leaders can rally the entire organization around the product to better serve both their internal and external customers.