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How to Drive Product-Led Growth with Customer Feedback?

Slack went from zero to a $7 billion valuation in just five years, Dropbox gathered sales of $1 billion in less than 10 years, and Hubspot has a current valuation of $19.76 billion.

While these companies are making revenues in billions, the data around their paid customer base is surprising. While Slack recorded an active user base of 18 million and Dropbox has 700 million registered users, their paid customers are only 156,000 and 15.48 million as of 2021.

How are these companies then able to generate revenues in such high numbers?

All product-led companies swear by one simple strategy: incorporating customer feedback at every touchpoint to enhance customer experience and retention. 

By leveraging customer insights and using product-qualified leads, these scaled-up companies have grown organically and significantly increased customer acquisition and retention. With the rise of product-led companies, customer satisfaction has now taken center stage, and one way to measure it is by taking customer feedback. 

Measure Product Feedback & User Insights 💻

With Product Feedback Surveys, understand what users need and learn ways to delight your customers.

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In this blog, we will delve deeper into how to drive product-led growth with customer feedback by looking at examples of poster children of the PLG approach. So, buckle up and get ready to take your business to the next level with the help of your most valuable asset - your customers.

What is Product-led Growth?

Product-led growth (PLG) is a go-to-market strategy for expanding the business that puts the product experience at the forefront for driving customer acquisition, expansion, and retention. 

In simple terms, it means that companies prioritize creating a compelling product that creates and expands the customer base. Some popular examples of companies thriving using product-led growth methodology with customer satisfaction and engagement at its core include Slack, Hubspot, Zoom, Calendly, and Canva. 

In simple terms, it means that companies prioritize creating a compelling product that creates and expands the customer base. Some popular examples of companies thriving using product-led growth methodology with customer satisfaction and engagement at its core include Slack, Hubspot, Zoom, Calendly, and Canva. 

Here are the key differences between sales-led growth and product-led growth that you can consider:

Factor

Sales-led Growth

Product-led Growth

Approach

Sales-centric/top-down

Customer-centric/bottom-up

Primary Focus

Revenue

User engagement

Target Group

Generally mid-market, enterprise clients

Generally smaller businesses and startups

Investment 

Primarily on marketing, sales, and advertising campaigns

Primarily on product research and development

CAC 

High

Low

Price

High per account

Low per account

Leads

SQL/MQL

PQL

Sales Cycle

Longer

Shorter

Customer Acquisition

Active outreach and promotion, one-on-one assistance to clients, personalized demos

Organic, self-serve, virality, free trials, and freemium 

How does Customer Feedback fuel Product-Led Growth?

Customer Feedback is one way that you can reevaluate your product performance. In product-led growth companies, the growth is driven by product usage and data. By listening to the voice of the customer, you can create a product that meets the market's demands, resulting in increased adoption, usage, and revenue. 

Here are the top ways customer feedback helps PLG companies grow in the market: 

  1. Product Improvement: Analyzing customer feedback allows businesses to understand what features are most important to customers and which must be improved or added. This insight enables businesses to prioritize product updates and focus on delivering a better customer experience.
  2. Customer Engagement: Collecting and acting on customer feedback helps businesses build stronger relationships with their customers by showing that they value their input and are committed to improving the product based on their feedback.
  3. Retention: Businesses can identify and address customer pain points and prevent customer churn by collecting and analyzing feedback. Improving the product based on customer feedback can also increase customer satisfaction and loyalty.
  4. Product Market Fit: By collecting feedback from different customer segments, companies can tailor the product to better meet the specific needs of different groups.

Companies that aced Product-led Growth through Customer Feedback

Many companies have leveraged customer feedback as a part of their PLG strategy and have achieved remarkable growth. From startups to established brands, businesses prioritizing customer feedback have been able to deliver an exceptional user experience that meets the evolving needs of their customers, resulting in increased customer engagement and revenue.

Let’s dive into some examples of companies that have leveraged the voice of customer methodology of collecting customer feedback to drive business and grow faster:

Slack

Slack benefitted mainly by acting on customer feedback when it added a feature that allowed users to customize the platform's color scheme. This seemingly small change was highly requested by users and significantly improved the user experience, leading to increased adoption and customer loyalty. 

Slack has also added the option to add custom emojis and allowed seamless integrations with third-party applications, which users had demanded. 

Slack prides itself on responsiveness and customer satisfaction. “I get worried if I see customer satisfaction scores dip below 97%,” said Ali Rayl, Slack’s head of customer experience. By keeping its average TAT for a query to less than an hour, Slack uses user forums closely monitored by the company’s product team to drive customer feedback and satisfaction.

Canva

Canva has created a dedicated "Customer Happiness" team that is responsible for responding to customer feedback and addressing user concerns. 

When users requested the ability to work collaboratively on design projects, Canva introduced a collaborative feature that allowed multiple users to work on the same design simultaneously. This feature was a game-changer for many users and helped to solidify Canva's position as a leader in the graphic design market.

Zoom 

In response to feedback from users experiencing "Zoom fatigue" from long video calls, the company added a feature allowing users to hide their video feed during calls. Based on customer feedback, they also added features like virtual backgrounds, breakout rooms, and noise suppression. These small changes significantly improved the user experience and helped to further cement Zoom's dominance in the video conferencing market.

Zoom's founder, Eric Yuan, would often personally respond to customer feedback emails and use that feedback to improve the product. He suggests looking at growth from the customer’s perspective and says, “solicit their feedback, talk with them, understand their pain points, and think about things that you can do differently to add more value to customers. Then you can drive up the growth.”

Spotify

Spotify has made personalization a crucial part of its product strategy. By collecting feedback on user preferences, listening habits, and machine learning, Spotify makes tailored recommendations to each user based on their interests. In this app, users can provide feedback on individual songs, albums, and playlists, which helps it to better understand what users like and dislike. This feedback improves the recommendations algorithm and ensures users are served the most relevant content.

Spotify's success in personalization highlights the importance of investing in product strategy services that cater to user needs and preferences.

Spotify gives immense importance to customer satisfaction, which has helped it to differentiate itself from other music streaming services and improve the overall user experience. Oscar Stal, Spotify’s Vice President of Personalization, says, “What we’re really working towards is creating a more holistic understanding of listeners by optimizing for long-term satisfaction rather than for short-term clicks, offering them a more fulfilling content diet.” 

Currently, Spotify boasts around 299 million users, out of which 138 million are enjoying the paid service, which means it is successfully able to convert almost half of its users into paid customers. 

Top Strategies to Drive Product-Led Growth through Customer Feedback 

Successful companies don’t just get there by fluke. It involves teams brainstorming and implementing the right strategies to clearly focus on the goals. 

Let’s dive into what you can implement to follow in their footsteps. 

Frictionless Customer Onboarding with Feedback 

About 86% of customers are more inclined to remain loyal to a business that 
creates onboarding content that provides a welcoming and educational experience for them. 

By streamlining the onboarding process and reducing friction, businesses can increase the likelihood that customers will adopt the product and continue to use it over time. 

Taking feedback in-product at all touchpoints is crucial for businesses looking to grow in a product-led growth model, as it will give insights into customer needs and preferences. This feedback can then be used to improve the product and the overall customer experience, thereby driving growth. 

Here are some tips on creating a smooth onboarding experience for customers:

  1. Keep the onboarding process shorter: If the onboarding process is long, users might lose interest and abandon the product altogether. Keep it short and engaging so users can immediately engage with the product.
  2. Send welcome emails: Welcome emails will help the users understand how to use the product even before they begin. Here is a welcome email that Zonka Feedback sends to its customers who sign up for a trial that highlights how the users make the most of the software.
  3. Add onboarding videos and interactive walkthroughs: Adding a quick demo video or guiding the user through an interactive product tour can significantly ease the onboarding process as they act as visual aids that make it easy for users to understand how to use the product. By providing a hands-on experience, users are more likely to remember how to use the product and feel more confident in using the product.
  4. Use checklists: Adding a simple feature like a checklist or highlights through colors can direct users in understanding the roadmap and track the progress of how much onboarding process they have completed instead of leaving them lost. 

Product Roadmap Building with Feature Requests 

Using feature request forms, you can collect feedback from users on what new features they want to be added to your product. This feedback can be used to prioritize feature development, ensuring that the most important features are being worked on first. 

For feature request forms, you can include the following questions:

  • What is the name of the new feature you are requesting?
  • Please describe the new feature in detail.
  • Are there any existing features in the product that currently meet your needs? If so, which ones?
  • Have you seen this feature in any other products or software? If so, please provide examples.
  • Are there any specific requirements or constraints that should be considered when designing this feature?
  • Would you be willing to participate in a beta testing program for this feature?

Involving customers in your product building is the best way to profit your business. Slack has redefined its roadmap by improving file sharing and expanding integrations based on its KPI, which includes user engagement, and has constantly communicated via emails, blog posts, and community events.

By witnessing the feedback incorporated in redefining the product roadmap, customers feel valued and would actively participate in not only offering feedback but using a product that meets their needs. This approach will improve the customer experience, leading to higher user satisfaction and retention rates.

Measure Product Feedback & User Insights 💻

With Product Feedback Surveys, understand what users need and learn ways to delight your customers.

Get Started

Issue Resolution with Easy Bug Reporting 

Bug reporting forms provides an easy and structured way for customers to report issues they encounter while using the product. Resolving issues through bug reporting forms can help identify patterns and recurring problems, leading to enhancements in product quality.

For bug-reporting form questions, you can incorporate the following questions: 

  • What is the title or summary of the issue you encountered?
  • What is the expected behavior of the feature or application?
  • What is the actual behavior you observed?
  • Did you encounter any error messages? If yes, please provide the exact error message.
  • What browser or operating system did you use?
  • What version of the application are you using?
  • Would you like to share screenshots or additional comments that you think would be helpful to the development team?

With Zonka Feedback, you can easily create bug-reporting forms using web surveys and distribute them by choosing web widgets or by embedding them into the website to collect product feedback

Increasing Feature Adoption with New Feature Feedback 

By using in-product surveys to gather feedback from users, product-led companies can improve feature adoption by making improvements and enhancements to their products, identifying issues, increasing user satisfaction, and driving product-led growth. 

Say, you have rolled out a new feature that allows teams to collaborate on tasks in real time. You can use in-product surveys to gather feedback from users who have tried out this new feature. The in-product survey questions like "Did the real-time collaboration feature help you complete your task more efficiently?" or "What improvements would you suggest for the real-time collaboration feature?" can help to gather feedback on customers’ experience. 

Following up with users to let them know that their feedback is appreciated and how it will be used to improve the feature will help to build trust and loyalty among users, which can lead to increased adoption of the new feature.

Gauging Satisfaction with Relationship NPS 

By sending a relationship NPS survey to customers, whether in the app or via email, companies can understand the bottlenecks in the performance of their products and improve their performance by providing a quantitative measure of customer satisfaction and loyalty.

Zonka Feedback allows sharing the relationship NPS survey via the app or email, where it can be sent immediately or scheduled for later. You can also set up email signatures or trigger via third-party apps and APIs.

Preventing Churn with Unsubscription Feedback 

Collecting unsubscription feedback through pop-up surveys can be an effective way to understand why users are canceling their subscriptions and address their concerns. 

Every year, companies lose $1.6 trillion per year due to customer churn. While acquiring new customers cost 5 times more than existing costs, retaining even 5% of customers leads to a 25-95% increase in profits.

Given below are some tips that can help to reduce churn with unsubscription feedback:

  • Identify the reasons for unsubscription: To create an effective popup survey, you should first identify why users cancel subscriptions. This can be achieved by analyzing customer support inquiries, user behavior data, or conducting user research.
  • Time the pop-up survey strategically: PLG businesses should time the pop-up survey strategically so it does not disrupt the user experience or annoy users. The survey should appear when users are attempting to cancel their subscription, but before the cancellation process is completed, giving businesses an opportunity to address any concerns or issues that users may have.
  • Keep the survey short and focused: Unsubscription pop-up surveys should be short and focused on the reasons for cancellation. This can include questions about pricing, product features, customer service, or other factors that may have contributed to the decision to cancel.
  • Respond to feedback quickly and effectively: Once you have received feedback through the churn survey questions, respond quickly and effectively to address any concerns or issues that users have raised to increase user satisfaction and reduce churn.

Conclusion

Customer feedback plays a critical role in product-led growth, allowing companies to understand their customers' needs, preferences, and pain points. As demonstrated by Slack and Canva, listening to your customers can be the key to dominating the market in the PLG segment. By continuously collecting and analyzing customer feedback, product teams can gain valuable insights into customer needs, pain points, and preferences, which can be used to inform product development and marketing decisions.

Moreover, by adopting a product-led growth mindset, companies can shift their focus from customer acquisition to customer retention and expansion. By leveraging the power of customer feedback, companies can build better products, improve customer experiences, and ultimately drive revenue and long-term growth.

Sign-up for a 7-day free trial to ace the product-led growth by taking customer feedback. Gain access to areas that can be worked upon to improve your product and offer a seamless customer experience. 



Kanika

Written by Kanika

Mar 30, 2023

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