In this episode of McKinsey on Building Products, a podcast dedicated to the exploration of software product management and engineering, McKinsey partner Rikki Singh speaks with Trisha Price, chief product officer at Pendo.io. Together, they discuss the importance of product instrumentation, gathering the right customer feedback, and using this data to inform critical product decisions. This interview took place in July 2023 as part of the McKinsey Product Academy speaker series. An abridged version of their conversation follows.
Why measurement matters for product managers
Trisha Price: Remember Google Glass and the fanfare and excitement attached to its launch? There was a lot of news and hype around it, but it ultimately failed because very few people bought or used it. It goes to show that applause and fanfare are not the right measures of a successful product. You need to measure the value that your product is delivering to customers and users.
I believe this will be a big area of concern with all the hype around AI right now. I believe in AI, but I also think there are a lot of product managers and C-suite executives who are launching AI for the sake of it. It’s important to make sure that you’re not just trying to get applause and excitement—you’re also delivering real value and solving real problems. Measuring the right data will help you do that.
I also believe that putting your product at the center of everything is important. Product management has changed a lot over the past few years. When I first started in product management, the field was centered on shipping features. Now, product people have become more like business leaders, not just technical resources, and the job is more about driving outcomes. Being product-led is an example of that change.
Creating an experience with a product at the center relies on understanding the customer’s journey, from the time they learn about the product to the time they’re onboarded. Then, after a sale, it’s important to think about how you can help them and allow them to interact with you. The more you can do that and measure it, the more successful you’ll be. Customers don’t want to go to another site for help or learn how to use a product through an academy or a course. They’ll appreciate more-centralized guidance within the product and a curated experience. Again, measuring will help you enhance their experience.
An example of a product where measurement was critical was iRobot’s Roomba. This company really focuses on the “why” and seeks to solve a real problem and drive value for each of its customers. About a year ago, iRobot set out to drive engagement with its mobile app through better personalization. They realized customers scheduled the cleaning times of their Roombas, so iRobot allowed them to do that through a mobile app. They wanted to do this efficiently, without any heavy lifting from their engineering team. So, they started by analyzing existing usage patterns of the mobile app and mapped the ideal customer journey based on that usage. They focused on finding moments that mattered to their customer base and possible friction points in the mobile app.
To create personalized experiences, iRobot created user segments based on usage patterns and other demographic and channel data. This data informed an action plan to send a tailored in-app announcement to their 14 million users, which resulted in a 43 percent increase in engagement. They also met their second goal of reducing engineering effort by 75 percent. This example shows why measurement and a product-led approach matter.
Rikki Singh: Many product managers think about product instrumentation as something they can do as new products get built or rolled out. However, product managers who work for large organizations have often had these products for a while, either on premises or as SaaS [software as a service]. So why don’t they get started right away on the product instrumentation journey?
Trisha Price: I think every company is a software company now, not just a SaaS company or a software company with an on-premise product. What company doesn’t have a digital channel? Even if you work at a bank, for example, you have to worry about the same things that I mentioned. To your question about where to get started, it doesn’t matter what kind of company it is; the first thing a product manager can do is define the business objectives. Let’s say you’re launching your first cloud product—maybe you want 5 percent of your customer base to be moved over to your cloud product in a certain amount of time. Or you’re launching your first SaaS product, and you want to have a certain number of users in your design program and make sure they’re coming back week after week. The best way to start is by writing down the two or three most important outcomes.
The next step is collecting the data. Collecting everything doesn’t necessarily mean measuring or analyzing everything and tying it to your outcomes. But if you’re not collecting data, you can’t measure the outcome or drive the outcome. The third step is to determine which data should be measured. You can experiment to see which data is helping you achieve your goals.
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Deciding what to measure
Rikki Singh: There are so many things that we could measure. Do you have guiding principles to prioritize the metrics you measure at any point?
Trisha Price: It depends on the maturity of the product that I’m measuring. If it’s an early-stage product and I’m trying to get it launched, I just want people to use it, and I want them to use it frequently. So I have a dashboard for a product that I have in beta that I look at every day to see how many design partners I have, if they come back, and if they used features we think matter in our hypothesis. In that early stage, I’m trying to get to product–market fit, and that’s all I think about.
If it’s a mature product that’s been launched for a while, then it’s more important to track the general breadth of feature adoption, the increase in the number of users of my product, or if the number of users is tracking with the ARR [annual recurring revenue]. For example, if gross ARR is going up but usage is just OK, something’s off. Either these people aren’t getting onboarded quickly or they bought the product in its shelfware and I’m in trouble at renewal time. So, for a mature product, I’m not relentlessly focused on product–market fit, and I’ll start looking at higher-level metrics.
Rikki Singh: Right, I think once you identify the top markers, you’ll more easily begin segmenting and viewing metrics at the next level. I like the idea of choosing two or three trends to watch out for. Then, as you get more data, you can fold in some of the additional metrics.
Trisha Price: And different members on the team will look for different things. For example, I may look at the products’ metrics at an aggregate level, but the portfolio product manager may look at metrics around adoption rates for a new feature she shipped.
Rikki Singh: Yes. The parallel is cascading OKRs [objectives and key results]. Similarly, you’d have your overall metrics to guide you, and each person contributing has their own set of metrics based on their area of focus.
Trisha Price: For most CROs [chief revenue officers] and even for salespeople, this approach was very natural; these roles have clear quotas. But in product, OKRs have historically been a little fuzzier. Usage data and these analytics we’re talking about drive the ability to put some operational rigor into product roles.
How data drives alignment
Rikki Singh: It can be difficult for PMs [product managers] to drive cross-functional stakeholder alignment between sales, marketing, and operations. Have you used instrumentation to help with alignment? Otherwise, what are some best practices for doing that?
Trisha Price: I have a product scorecard that shows the success of me and my team over the year, and I share it with the whole cross-functional C-suite. When we set it up for the year, the scorecard is aligned to all my peers’ goals. For example, if my chief customer success officer’s goal is to reduce the number of support tickets that team gets, or if the revenue operations team’s goal is to launch in a new market, then my goals should match those. Product adoption requires sales to have sold what’s on the truck. It requires professional services to onboard your customers and educate them on how to use the product. So goals are often cross-functional in nature.
Rikki Singh: Who should be overseeing product usage analytics? PMs often wonder whether they should advocate for a tool to embed and track usage or if a central team should set up and own usage analytics.
Trisha Price: One pitfall I see is when product managers own the tool, leaders may not know how to use it to drive the outcomes on their team. Say a product manager is using the data to build an amazing experience, but the leader doesn’t understand how to align the outcomes to individual contributors’ work. I’ve heard product managers say, “My manager is obsessed with outcomes but is forgetting the route to get there.” As a leader, it’s our job to help take these outcomes and cascade them so the team can create a frictionless experience. Taking five steps out of a workflow for your customer base makes them happier, helps them get business value out of the product, and makes them want to renew and expand with us.
It’s best not to make analytics too bottom-up. That way, leaders can focus on the most relevant findings from their team to track progress and incorporate goals into everyday dialogue and approval processes [for new products].
The art of connecting with customers
Rikki Singh: How do companies effectively adopt product instrumentation? What is the difference between companies that do it well and those that are struggling?
Trisha Price: It’s not just one thing. Successful companies are bold and have frameworks to describe how the job is to be done. The people who build great products understand their ICP [ideal customer profile] rather than trying to build for every customer who could ever use their product. They understand the job to be done, and they’ve done the research. They take the time to innovate and validate their product. Critically, they can get customers interested in the product quickly. If it takes years to get customers and get feedback, then the company will probably be in trouble. They won’t be able to experiment and meet their goals. That’s where the data piece comes in.
Rikki Singh: What can companies do if feedback from customers is limited or if they don’t have as much access to the end customer?
Trisha Price: There are a lot of ways to get access to customers, but sometimes customers don’t have the time to spend with you, so you have to be thoughtful of their time. But it’s important to validate a product with customers, prospects, and the market. There are many tools and ways to do that at scale. And there are ways to do it that aren’t overly time-consuming for your customer base. It will be difficult to hold yourself and your team accountable to outcomes if you’re not talking to customers.
Leadership in product management
Rikki Singh: How have your experiences shaped your approach to understanding the diverse needs, thought processes, and preferences of your product users? Has this perspective influenced your leadership style with your product teams?
Trisha Price: For many years and at different times in my life, I have been the only woman in the room. It’s important to me that representation at all levels looks like the world we live in. I try to advocate for what is right and fair in every aspect of my life. I believe you get better business results with a diverse group of people in the room. That’s also true for how you use your products, how you conduct research when you’re engaging with people about your products, and how you launch your products.
Rikki Singh: How can middle managers accelerate their career growth?
Trisha Price: First, know what you’re asking for. Each major jump in your career is as much of a lifestyle choice as it is your career choice, especially in terms of what you’re giving up or what the job requires. So make sure you really want it. Second, make sure you have a support system around you. I have two high school–age boys, and I wouldn't have been able to make the choices that I’ve made without my husband. The personal part of making the jump to the next stage in your career is equally important, and it’s often discussed less than the responsibilities you have at work.
Third, be willing to learn, read, and ask questions. Being curious has helped me get to where I am. Getting the job done and driving things forward can look different for different personalities. I don’t think there’s a right or wrong way, but a relentless focus on driving outcomes separates the middle-management layer from the next. It takes being bold, not being afraid to put your opinion out there, and not being afraid of rejection.
