What does it mean to put (something) on the long finger”? It’s a classic Irish expression meaning to delay or postpone something indefinitely. Being born and raised in Ireland, this is the expression that pops to mind as I observe the behavior of many B2B XaaS Product Management teams when it comes to instrumenting their products with the appropriate analytics to gain customer behavioral insights and then leverage these insights to influence the customer journey.

Customer Behavioral Insight is Essential for Growth

Let’s start with the obvious. The more you know about how your customers are using your products, the more you can influence that usage for the better to ensure customers are receiving real value, become big fans of your solutions, and ultimately pursue a product led growth strategy. No doubt you have personally experienced Microsoft Office Assistant (remember “Clippy?”) suggesting templates to help you write a letter or structure a resume better. Most consumer products on the market today are instrumented to understand and positively influence your usage patterns. Would Amazon be as successful if it did not intensely study your usage and guide your experience?

B2B Businesses Have a Low Degree of Customer Insight

Likewise, for B2B companies offering subscription-based offers, it’s paramount to know how customers are using the products and influencing that usage. To not have these insights is flying blind and simply hoping for the best. While 74% of companies take input from Engineering and Customer Success in advising the product roadmap, according to TSIA’s recent XaaS Product Management Practices Survey, just 15% of Product Management teams use available product adoption analytics for product roadmap decision-making. Customer Success teams in these same companies are craving the insights that only telemetry can provide to guide their customer engagements and influence adoption.

Just 15% of Product Management teams use available product adoption analytics for product roadmap decision-making.

TSIA 2018 XaaS Product Management Practices Survey

Despite the Benefits, Why is Customer Behavioral Insight Low?

As already noted, product telemetry will drive the insights that enable more contextually relevant moments of engagement, like in-app messaging, optimally timed outreaches by your Customer Success team, targeted cross-sell proposals to name a few. So why is the behavior so low? Perhaps the benefits aren’t so obvious compared with addressing the needs of screaming customers? Perhaps the complexity is perceived to be too high? Perhaps the investment is not palatable to senior management?

Granted in some B2B business, the technology is more complex, with more vertical solutions, personas, and use cases and therefore, the process of capturing the customer engagement is likewise more complex. That being the case, the imperative of, and ROI from, instrumenting the solutions with effective telemetry is even higher. However, prioritizing this investment can face strong headwinds in an organization that’s short term driven and (ironically) highly responsive to customers.

I can hear the Product Manager’s rationalization: “I know I should allocate time on the roadmap to instrument the product with smart telemetry, but this release is the most important one yet to introduce (feature) to the market, and there’s simply no capacity in this release vehicle.” No doubt, the single biggest challenge for product managers is prioritizing their product roadmap. Traditionally every release vehicle is an exercise of trying to fit 20lbs of capability into a 5lb bag and instrumenting the product with the appropriate telemetry often doesn’t get the prioritization it deserves, getting dropped in favor of new features demanded by the loudest and biggest customers

Pay Now or Pay (Even More) Later

The more recurring revenue is derived from sale and renewal of your solution, the bigger your motivation should be to acquire a high degree of customer behavioral insight to drive engagement, loyalty and long-term revenue growth.

To continue to make the case, let’s use an analogy that Product Management is all too familiar with—the cost of identifying and fixing bugs during the product life cycle. As depicted in the chart below, when bugs are found and fixed in the design phase the cost to the business is low and the ROI of the effort to find and fix that bug is high. When bugs are not found or fixed until after a product is released into the market, the cost to the business is high when factoring the potential for customer dissatisfaction, support escalations, likelihood of code redesign, re-development, retesting, patch releases, customer communications, lowered development capacity and related cost of missed opportunity for other priority developments.

product development phase  

The cost of finding and fixing bugs during the product development cycle.

So too, the cost of allocating capacity for product instrumentation from the beginning is significantly less than redesigning for instrumenting telemetry later. Why? Not only for the development cost savings, but the customer visibility provided, the insights derived, and the resulting product decisions will return dividends to the business in terms of increased usability, adoption and growth. As depicted below, deferring this activity on the product roadmap can cost the business big time and the resulting ROI will be diminished.

product life cycle  

The cost of telemetry instrumentation over the product life cycle.

If Not Telemetry Instrumentation, Then What?

So, we’ve established that, done effectively, there are business growth benefits to instrumenting your products with the appropriate telemetry. We’ve further established that B2B technology vendors are not aggressively doing so. Perhaps they believe that a different approach alone will get the results the need?

If you are the product manager leader responsible for revenue growth over the long haul and your technology is not effectively instrumented to understand and influence customer behavior, what is your strategy to systematically grow usage, loyalty, revenue gain market share?

  1. Can market share capture be achieved by focusing on the needs of biggest and loudest customers alone?
  2. Can revenue growth be achieved by guessing what capabilities your customer value the most and the least about your products?
  3. Can scale be achieved through qualitative feedback alone?

The time is NOW to create and execute effective product instrumentation to develop customer behavioral insight to drive product roadmap decisions, fuel effective customer success engagements and drive timely cross-sell/upsell opportunities. The cost to defer this will be unacceptable to the long-term growth of the business.

Talk to TSIA Today to Get More Product Management Resources

As the head of TSIA’s XaaS Product Management research and advisory practice, I’m dedicated to helping TSIA members with proven operational practices for growth and profitability. Contact us today to learn more about membership in XaaS Product Management and you’ll receive access to the following members-only resources that will assist you in establishing the most appropriate game plan for exposing product consumption, use cases, and workflows.

 
 
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Laura Fay

About Author Laura Fay

Laura Fay  is the vice president of XaaS product management research for TSIA. She is a technology industry veteran with over 30 years' experience driving business growth in the enterprise software industry via leadership roles in product management, general management, product development, and customer success.

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