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<p><em>Are you considering integrating <a data-mce-href="pendo.io" href="pendo.io" target="_blank" rel="noopener">Pendo</a> into your organization, or are you in the midst of these challenges? Leveraging Pendo's powerful product analytics can transform the way you understand and engage with user data to make informed decisions. For product leaders and managers, mastering product analytics is imperative to achieve success in today's competitive market. Interested in exploring this together? Let's chat!</em></p><blockquote><h3>In today's fast-paced digital world, it's imperative that product managers are a part of any product analytics design/implementation efforts to ensure that the specific data tracked in Pendo is actually going to help them make data-informed decisions.</h3></blockquote><h3>Introduction&nbsp;</h3><p>Welcome to the next chapter in our blog series, where we transition from the technical nitty-gritty of integrating Pendo to the crucial planning and oversight considerations for Product Managers and the product analytics reporting that will meet their needs. In today's fast-paced digital world, it's imperative that product managers are a part of any product analytics design/implementation efforts to ensure that the specific data tracked in Pendo is actually going to help them make data-informed decisions. This post focuses on metadata design, a key aspect that can make or break the effectiveness of your Pendo integration.&nbsp;</p><h3>Why Metadata Matters</h3><p>Pendo has several important metadata capture and tracking capabilities of which Product Managers should be aware. In this post, we use "metadata" as an broad term that refers to Pendo's Visitor and Account attributes, its page / session context augmentation to URLs from its LocationAPI call, and event and custom properties. As you can see, there are many ways to pass "metadata" to Pendo that should be considered.&nbsp;</p><p>But why does this matter, especially to Product Managers? These elements enable robust segmentation and filtering, making life easier for those creating reports, planning targeted guides, and more. Getting metadata right from the start is crucial because retrofitting it later can be a time-consuming process, often resulting in weeks of setbacks in reporting insights.</p><h3>Visitor and Account Metadata Design</h3><p>Product Managers should have a comprehensive understanding of their customers. This knowledge is vital for defining what attributes about specific users or their companies will be needed for detailed reporting. Pendo's Visitor and Account attributes are populated at initialization and/or when specific update calls are made throughout a user session.</p><p><strong>Questions to Consider</strong><br>1. What customer segments using my product matter most? How might these segments be represented in code that could be used to feed Pendo?<br>2. How will I want to filter or segment my reporting on my product? How will leadership want to see the reporting?<br>3. Are there already defined user attributes that we track for our product that can be ported into Pendo?</p><p>Once you have these details sorted, collaborate with your engineering team to detail what specific user or account attributes are tracked in the code. These attributes can then be used to populate Pendo attributes during the pendo.initialize() call, ensuring a seamless data flow.</p><h3>Product Experience Metadata Design</h3><p>Product Managers should know their product inside and out. They should understand which paths or funnels are crucial to the success of their users and product goals. They should know which features are most important to optimize engagement. Based on this intimate understanding of the product, PMs can translate what matters most into Pendo-specific metadata (and of course metrics that matter most to track). When it comes to feature engagement, pathing analyses, or funnel optimizations, Pendo's metadata capture capabilities with Location API, Event Properties, and Custom Properties via Track Events should be evaluated.</p><p><strong>LocationAPI as a Metadata Tool</strong><br><a data-mce-href="https://agent.pendo.io/advanced/location/" href="https://agent.pendo.io/advanced/location/">LocationAPI</a> is a way for engineers to provide additional context or metadata as part of the URL that Pendo captures when users visit various pages of the product experience. This method enables sophisticated page tagging, segmentation, and filtering capabilities that can be leveraged for pathing analyses, funnel optimizations, or other user session navigation throughout the pages of the experience.&nbsp;</p><p>There are best practices we learned over two years in working with LocationAPI that can help optimize the usability of the data that is captured. For example, sending metadata as query parameter extensions rather than additional pathing elements of the URL makes page tagging and filtering much easier. (There's a lot here, more than we can cover in a blog post... Reach out for more details about LocationAPI best practices if you're in the midst of implementing it!)&nbsp;</p><p><strong>Click Event Properties and Custom Properties</strong><br>Pendo's out of box <a data-mce-href="https://support.pendo.io/hc/en-us/articles/360031950492-Tagging-and-viewing-Features" href="https://support.pendo.io/hc/en-us/articles/360031950492-Tagging-and-viewing-Features">Feature Tagging</a> capabilities are great, most of the time, for simple aggregated click engagement tracking. But occasionally, feature tagging doesn't offer enough depth of context. Product Managers need to identify those cases and consider one of two approaches:</p><p>1. Use Click Event Properties<br>2. Use Track Events and Custom Properties</p><p><br><a data-mce-href="https://support.pendo.io/hc/en-us/articles/7710433678619-Event-properties" href="https://support.pendo.io/hc/en-us/articles/7710433678619-Event-properties">Click Event Properties</a> is a subscription-wide setting in Pendo that gives admins the ability to specify certain property values (ie: metadata) at the time a specific feature is engaged with. These specific Feature Tags, when they are triggered &amp; tracked by Pendo, will then contain additional metadata context about the state things were in when the user engaged with that feature. This is a quick/easy way to capture additional context that extends Feature Tags.&nbsp;</p><p>Pendo also offers a custom event capability called <a data-mce-href="https://support.pendo.io/hc/en-us/articles/360032294151-Track-Events" href="https://support.pendo.io/hc/en-us/articles/360032294151-Track-Events">Track Events</a>. These are custom events triggered programmatically. In some cases, more robust &amp; detailed tracking is needed for proper analysis by Product Managers. In such cases, PMs should work with engineering to define and implement Track Events. The added benefit of Track Events is that they extend Pendo's metadata capture capabilities by allowing teams to pass custom properties as part of the event call in code. This allows teams to define their own metadata and programmatically pass it with these events. For example, tracking granular Search dropdown and results capabilities using Pendo's feature tagging can be limited. However, with custom Track Events that trigger around a user's engagement with the Search UI, you can gain deeper insights into user behavior, such as search terms and clicked results. The custom properties passed into these Track Events are powerful metadata that can be used for deeper analysis into the Search UX via Pendo reporting.&nbsp;</p><h3>Conclusion</h3><p>Product Managers are essential in translating their knowledge about product strategy, users, and the product experience into meaningful metadata that can be captured in Pendo. Their involvement from the outset ensures that the metadata design is strategically aligned and implemented before it's too late. The worst-case scenario is when user segmentation or filtering isn't possible due to the lack of proper metadata capture, leading to delays that could span weeks.&nbsp;</p><p>By thinking critically about the metadata needed for their products and leveraging Pendo's robust tracking capabilities, PMs can significantly enhance the effectiveness of their product analytics tracking and reporting tool.&nbsp;</p><p>Are you ready to elevate your Pendo integration? Start thinking about your metadata strategy today. Your future self will thank you.</p>

Pendo, Product Managers, and Metadata Design

<p><em>Are you considering integrating <a data-mce-href="http://www.pendo.io" href="http://www.pendo.io">Pendo</a> into your organization, or are you in the midst of these challenges? Leveraging Pendo's powerful product analytics can transform the way you understand and engage with user data to make informed decisions. For product leaders and managers, mastering product analytics is imperative to achieve success in today's competitive market. Interested in exploring this together? Let's chat!</em></p><blockquote><h3>Integrating analytics tools like Pendo within SPAs can present unique challenges that need to be taken into consideration.</h3></blockquote><h3>Intro</h3><p>Many product-focused companies today build single-page web applications (SPAs), because they offer a seamless user experience by dynamically loading content without refreshing the entire page. Integrating analytics tools like Pendo within SPAs can present unique challenges that need to be taken into consideration. This guide aims to help you understand these challenges and provide practical solutions to ensure accurate data capture and reliable insights.</p><h3>Understanding the Basics of Single vs Multi-Page Applications<br></h3><p>When dealing with web applications, it's crucial to distinguish between single-page and multi-page frameworks. In a multi-page web application, each page change results in a full reload within the browser. This reload action typically triggers the `<a data-mce-href="https://agent.pendo.io/public/Agent#initialize" href="https://agent.pendo.io/public/Agent#initialize">pendo.initialize(options)</a>` call, capturing the current values of any visitor and account attributes, and passing those to Pendo seamlessly.</p><p>Conversely, in a single-page web application, page transitions are handled dynamically, eliminating the need for a full page reload. This dynamic nature poses a potential pitfall for Pendo integration. If any changes occur to visitor or account attribute values due to state changes, Pendo might not capture the most recent values, leading to data integrity issues. This can result in event data being associated with outdated visitor or account attributes, compromising the accuracy of your reports and insights.</p><h3>The Importance of State Changes in Your App<br></h3><p>Understanding state changes within your app is pivotal for effective Pendo integration. Users interact with various elements, transition between pages, and perform actions that might alter their user profile, account, or other aspects tied to visitor and account attributes (metadata). In a single-page application framework, it's essential to identify all possible points where state changes can be triggered.</p><p>For instance, if a user navigates to their profile page and updates their email address, this constitutes a state change affecting a visitor attribute. Recognizing these state change points allows you to coordinate with your engineering team to ensure that Pendo captures these attribute changes accurately.</p><h3>pendo.updateOptions(options)<br></h3><p>Once you've mapped out all potential state change points across your single-page application, the next step is to collaborate with your engineering partners. It's crucial to integrate the `<a data-mce-href="https://agent.pendo.io/public/Identity#updateOptions" href="https://agent.pendo.io/public/Identity#updateOptions">pendo.updateOptions(options)</a>` call at these state change points. By doing so, you ensure that the latest attribute values are passed to Pendo during the user's session, preventing any data integrity issues.</p><p>Your engineering team can help identify the best places to implement `<a data-mce-href="https://agent.pendo.io/public/Identity#updateOptions" href="https://agent.pendo.io/public/Identity#updateOptions">pendo.updateOptions(options)</a>`, ensuring that attribute updates are captured in real-time. This collaboration is key to maintaining accurate and trustworthy data, which is essential for making informed product decisions.</p><blockquote><h3>Our insights come from real-world experience working with a client on their single-page web application.</h3></blockquote><h3>Real-world Lessons Learned<br></h3><p>Our insights come from real-world experience working with a client on their single-page web application. Early on, we faced challenges with Pendo reporting accuracy due to the dynamic nature of this client's SPA framework and changing states from users' sessions. By closely monitoring state changes and implementing `<a data-mce-href="https://agent.pendo.io/public/Identity#updateOptions" href="https://agent.pendo.io/public/Identity#updateOptions">pendo.updateOptions(options)</a>`, we ensured that their data events and attributes were associated correctly.</p><p>This led to accurate and reliable reports, providing valuable insights into user behaviors. The success of this integration highlights the importance of understanding state changes within SPA web apps and ensuring Pendo is always updated properly throughout users' sessions.</p><h3>Conclusion<br></h3><p>Integrating Pendo within a single-page web application framework requires careful consideration of state changes and collaboration with your engineering team. By paying close attention to attribute updates and ensuring accurate data capture, you can achieve reliable insights and make informed product decisions.</p><p><br></p><p><br></p><p><br></p>

Pendo and Single-Page Applications

<p><em>Are you considering integrating <a data-mce-href="http://www.pendo.io" href="http://www.pendo.io" target="_blank" rel="noopener">Pendo</a> into your organization, or are you in the midst of these challenges? Leveraging Pendo's powerful product analytics can transform the way you understand and engage with user data to make informed decisions. For product leaders and managers, mastering product analytics is imperative to achieve success in today's competitive market. Interested in exploring this together? Let's chat!</em></p><h3>Intro</h3><p>This is the third post in our series on Product Analytics Integration and Rollout Best Practices. As your engineers work on integrating the Pendo code snippet into your product's code base, there are a few noteworthy configuration settings to pay close attention to that we'd like to highlight today. Drawing from two years of experience working with a large client across 15 distinct development teams, this post aims to shed light on these potential gotchas and provide you with the insights needed to avoid them.</p><blockquote><p>By proactively addressing potential gotchas related to CNAME configuration, CSP settings, and HTML identifiers, you can ensure a smoother integration process and maximize the benefits of using Pendo.</p></blockquote><h3>CNAME Considerations</h3><p>One of Pendo's configurations allows teams to specify CNAME records in their DNS entries that use their company's or product's specific domain name, instead of Pendo's default hostnames (ie: pendo.io). This configuration is important because it allows Pendo's network activity (sending events, serving guides, etc) to flow through a known domain to customers who might have certain security capabilities like ad-blocking, firewalls, VPNs, filters, etc enabled.&nbsp;</p><p>This is an important configuration to consider early because of the time and effort required to work with your IT team to review, approve, and configure DNS entries. Depending on your organization's size and your IT team's workload in the moment, this could cause delays in data flows between your product and Pendo.</p><p>To avoid delays and complications, it's best to kick off CNAME conversations as early as possible with your IT team. Provide them with all necessary information about why this configuration is essential to capturing data with Pendo for certain customers, and also reference Pendo's specific <a data-mce-href="https://support.pendo.io/hc/en-us/articles/360043539891-CNAME-for-Pendo" href="https://support.pendo.io/hc/en-us/articles/360043539891-CNAME-for-Pendo" target="_blank" rel="noopener">CNAME configuration documentation</a>, which is well documented.</p><h3>CSP Considerations</h3><p>A Content Security Policy (CSP) helps engineering or IT teams prevent various security attacks on your product by controlling / restricting which resources can be loaded within a web application's set of pages. While CSPs are essential for managing security of your web product, they can sometimes interfere with third-party tools like Pendo, by preventing certain scripts/activities from running.&nbsp;</p><p>A strict CSP can prevent Pendo's tagging designer and guides from functioning correctly within your product. This issue might surface across all of your environments, including development, testing, and staging, or it may only surface in production.&nbsp;</p><p>To avoid the surprise of certain Pendo functionality not working as expected, it's important to engage engineering and/or IT leadership in a conversation about the implications of your current CSP settings on Pendo. Gaining the approval from these leaders and coordinating proper changes to the CSP as early as possible during the integration phase will save your team time diving into using Pendo's tagging and/or guides designers. Just like CNAME configuration above, Pendo's <a data-mce-href="https://support.pendo.io/hc/en-us/articles/360032209131-Content-Security-Policy-CSP" href="https://support.pendo.io/hc/en-us/articles/360032209131-Content-Security-Policy-CSP" data-mce-selected="inline-boundary" target="_blank" rel="noopener">CSP configuration documentation</a> is well documented.&nbsp;</p><h3>HTML Identifiers Considerations</h3><p>Pendo offers configuration settings to include specific, custom HTML identifiers that are unique to your code base. Savvy teams will either build custom identifiers specific to product analytics use cases (recommended), or will leverage existing custom identifiers that they have reasonable confidence won't change even as frontend changes are made to the UI (for example, automation specific identifiers). By configuring Pendo to include these identifiers, tracking clicks on specific UI elements (Pendo's Feature Tags) for user engagement reporting becomes easier for the team.&nbsp;</p><p>What happens if the team misses configuring Pendo to include these identifiers? For some UI that are not standard HTML elements, Pendo might not capture clicks or interactions. So Pendo might be missing out on certain user engagement activities for these non-standard UI elements UNTIL the team tells Pendo what custom identifiers to look for... This is one "data gap" issue that teams can encounter: there will not be historical events to use when defining Feature Tags until those specific identifiers are included in settings.</p><p>To avoid this issue, make sure to identify and add any custom identifiers to the Include list in Pendo settings. Regularly review and update this list to ensure that all relevant identifiers are captured. Collaborate with your development team to understand the identifiers they use and keep them informed about Pendo's requirements.</p><h3>Conclusion</h3><p>Pendo offers powerful configuration settings that can greatly enhance your product's user experience and data collection capabilities. However, overlooking or underestimating the importance of some of these settings can lead to delays and complications down the line. By proactively addressing potential gotchas related to CNAME configuration, CSP settings, and HTML identifiers, you can ensure a smoother integration process and maximize the benefits of using Pendo.</p>

Pendo: Configuration Gotchas to Consider

<p><em>Are you considering integrating Pendo into your organization, or are you in the midst of these challenges? Leveraging Pendo's powerful product analytics can transform the way you understand and engage with user data to make informed decisions. For product leaders and managers, mastering product analytics is imperative to achieve success in today's competitive market. Interested in exploring this together? Let's chat!</em></p><blockquote><h3>Integrating Pendo.io into your product can seem like a straightforward process, but there are several best practices we learned over a two year engagement working with a large client that should be taken into consideration.&nbsp;</h3></blockquote><h3>The "Tip of the Iceberg"</h3><p>Integrating Pendo.io into your product can seem like a straightforward process, but there are several best practices we learned over a two year engagement working with a large client that should be taken into consideration. This is the second in our series on Product Analytics Integration and Rollout Best Practices, that will dive deep into the technical aspects of the initial Pendo integration. By the end of this post, you’ll have a solid understanding of how to successfully integrate Pendo.</p><h3>First: Get the Right Team in Place</h3><p>To get started, make sure you've assembled the right team. In our experiences working across a large client with several business units and many product teams, you will need a minimum of 2 specific roles. You'll need a Product Manager who understands the product well enough to identify what data matters most and can align with your product strategy. You'll need an Engineer who can do the technical integration work (usually a strong Frontend Engineer). These two roles are non-negotiable. Additionally, we recommend ensuring a Senior Leader is engaged who can provide insights into the strategic vision and leadership's needs when it comes to analytics reporting. Another role that can help is a Project Manager, who can help shepherd the integration work initially but will be instrumental in coordinating training and other broader team rollout activities later.</p><p>By forming a well-rounded team, you set the stage for a smoother integration process and ensure that all aspects of the project are covered. Each team member brings a unique perspective and set of skills, which collectively contribute to a successful Pendo integration.</p><h3>Second: Put a Solid Plan in Place</h3><p>Before you start the technical integration, it's essential to build a strong data and analytics plan. Identify the strategic goals or KPIs related to your product. What questions need to be answered for leadership? For Product Management? Design the ideal reports or dashboards that will help answer these questions. Wireframing can be particularly valuable at this stage to visualize the end product.</p><p>Once you have your goals and designs in place, back into the specific product metrics that need to be captured. This can serve as an engineering spec when integrating Pendo and for the Product Manager when configuring it. Having a clear data and analytics plan ensures that everyone is on the same page and that the integration aligns with your overall product strategy.</p><h3>Third: Get the Data Flowing!</h3><p>Now that you have your team and plan in place, it's time to get the data flowing. The easy part is integrating the Pendo code snippet. Less straightforward is making other decisions on how to best configure Pendo. Do you have specific HTML identifiers you can dedicate toward analytics instrumentation? Or perhaps you need to exclude specific identifers because they are dynamic in nature? Do you have specific CNAME needs or CSP policies that you need to comply with? etc. These config details will need to be hashed out with your engineer.&nbsp;</p><p>One approach we always recommended with new teams integrating Pendo was to just get the code snippet in as fast as possible to begin capturing the "out of box" data that Pendo automatically collects on integration, even if further work is required by engineering to customize and/or configure. Why? One of Pendo's coolest capabilities is capturing data that can later be identified (tagged), organized, etc. The Pendo marketing folks call it "Retroactive Analytics" - which is true to some extent; by capturing data as quickly as possible, your team will have more to work with in retrospect as you really dive into Pendo tagging and reporting.&nbsp;</p><h3>Fourth: Your Metadata is Critical</h3><p>If you are to take anything away from this post, it should be this: while integrating Pendo is technically straightforward, the biggest challenge we faced was figuring out what additional metadata each team needed in order to achieve their specific product analytics goals. (NOTE: we will devote specific blog posts to each of these topics in the coming weeks)&nbsp;</p><p>Pendo has visitor and account metadata, both of which need careful consideration. Additionally, Pendo's concept of "historical" metadata (attributes updated at the event level) versus regular metadata ("last in, first out") is important to get right. Ensuring that your metadata is accurately populated will enable you to make the most out of Pendo’s analytics capabilities.</p><p>Another advanced metadata capability that Pendo offers is its Location API, which enables teams to update the URLs passed into Pendo at the page event level. This can be used to send extra context about the session or the page itself. For instance, you could use the Location API to pass additional user context directly in the URL to Pendo for extra flexibility in segmenting or filtering.</p><p>Pendo also has custom events capabilities called Track Events. These are events that engineers need to explicitly instrument into the code, giving even more flexibility to pass additional properties for context. For example, adding Track Events around user search queries or the results they choose can provide Product Managers with extra visibility into how users are interacting with the search UX.</p><p>Tying your analytics &amp; reporting needs to the technical metadata captured in Pendo is one of the most important and challenging design considerations we encountered over two years of integrating across 16 distinct product teams.&nbsp;</p><blockquote><p>If you are to take anything away from this post, it should be this: while integrating Pendo is technically straightforward, the biggest challenge we faced was figuring out what additional metadata each team needed in order to achieve their specific product analytics goals.</p></blockquote><h3>Conclusion</h3><p>In this blog post, we've covered best practices for the technical integration of Pendo, from assembling the right team to ensuring your data flows correctly. However, remember that the technical integration is just the beginning. The real challenge lies in configuring Pendo correctly, focusing on the right data, and embedding product analytics into your team's day-to-day operations.</p><p>Upcoming posts will cover technical gotchas to beware of, as well as the more challenging aspects of bringing product analytics to a team or organization. This includes rollout, training, and establishing best practices for the team to develop and cultivate over time. Stay tuned for more insights and practical tips on mastering Pendo integration for your product’s success.</p>

Pendo: Technical Integration Best Practices

<h3>Series Introduction</h3><p>Starting from scratch with product analytics can feel like a daunting challenge, especially when you're navigating complex corporate environments. This blog series aims to break down the process of introducing product analytics capabilities and practices to an organization, sharing best practices and real-world insights through the lens of <a data-mce-href="http://www.pendo.io" href="http://www.pendo.io" target="_blank" rel="noopener">Pendo</a>, a product analytics platform.</p><p>Whether you're a product manager, senior leader, or an executive at a product-based company, understanding the intricacies of Pendo integration &amp; establishing strong analytics practices are crucial for leveraging data to drive better product decisions.&nbsp;</p><p>This series will distill these insights into actionable advice, focusing on areas such as:</p><p>- The technical nuances of integrating Pendo<br>- Establishing strong product and stakeholder expectations<br>- Techniques for rolling out Pendo best practices across diverse teams<br>- Strategies for building trust and reliance on product analytics<br>- Designing strategic approaches tailored to your team's needs</p><blockquote><h3>The technical integration of Pendo is merely the tip of the iceberg. The real work lies in educating teams, developing trust in data, crafting strategic approaches, and ensuring meaningful adoption.</h3></blockquote><h3>Real World Learnings</h3><p>Our experience with Pendo integration is grounded in real-world scenarios. We worked with a large corporate client, starting from zero and building a comprehensive product analytics capability. This wasn't just about plugging in a tool; it involved aligning over 50 development teams across multiple business units, each with unique needs and goals.</p><p>When we say "0-1," we don't just mean with Pendo, but with the concept of product analytics as a whole. The technical integration of Pendo is merely the tip of the iceberg. The real work lies in educating teams, developing trust in data, crafting strategic approaches, and ensuring meaningful adoption. Over two years, we gathered extensive insights into the challenges and best practices of bringing product analytics to an organization.&nbsp;</p><h3>Stay Tuned...</h3><p>In the coming weeks, our blog series will cover various aspects of Pendo integration, each post designed to provide valuable takeaways for your organization.&nbsp;</p><p>Keep an eye on Modern Product's <a data-mce-href="https://modernproductconsulting.com/blog" href="https://modernproductconsulting.com/blog" target="_blank" rel="noopener">blog</a> and <a data-mce-href="https://www.linkedin.com/company/modern-product-consulting" href="https://www.linkedin.com/company/modern-product-consulting" target="_blank" rel="noopener">LinkedIn page</a> for upcoming posts. We're excited to share these learnings with you.</p><h3>Conclusion</h3><p>We believe that our experiences and insights will be invaluable for teams in similar situations, helping you avoid common pitfalls and achieve successful Pendo integration. If you're considering integrating product analytics into your organization, let's chat. Modern Product is here to help you every step of the way. Contact us to set up a time for a discussion.</p><p>Stay tuned for the first post in our series, where we’ll dive deep into the initial steps of Pendo integration and setting the foundation for success.</p>

Pendo "0-1": Lessons Introducing Product Analytics to a Large Organization

<p>We’ve all heard the saying “Hindsight is 20/20.” &nbsp;Well this certainly applies to product development - as Product Managers and leaders of product organizations, we can all think of a time when things didn’t pan out as we had expected. &nbsp;But, how many of us actually calculated the cost impact to the organization from those poor outcomes? My guess is not many of us have ever figured out just how painful it was financially to the org. &nbsp;&nbsp;</p><p>This article is an attempt to identify, quantify, and visualize the hidden costs that impact organizations from product development, and then provide some suggestions on how to approach minimizing these costs. &nbsp;Today we look at three scenarios that I assume has impacted us all:<br>​<br>1. Inefficient execution that leads to slow/delayed releases.<br>2. Building a poor product experience or the wrong thing for the wrong customers.<br>3. Hiring the wrong person or onboarding poorly.</p><p>Before we dive in, please note I have taken the liberty of simplifying the analysis with certain assumptions, in order to streamline the main points/arguments I’m trying to get across. &nbsp;There are certain process metrics/measurements that I will assume exist. In reality, not many organizations have these metrics in place, which is why Modern Product offers the services that we offer. &nbsp;But for this article’s sake, please be gracious in these assumptions and focus on the primary point (spoiler alert): It’s REALLY expensive to execute inefficiently or to make the wrong decisions! (not really a spoiler alert...)</p><h3><br>Scenario 1: Inefficient execution that leads to slow/delayed releases.</h3><p><br>Let’s assume your product team has a 3-month project to build out a new capability that has a decent revenue opportunity of ~$50k/week (incremental $2-3MM annual), with initial adoption forecasted at 10% week over week. &nbsp;Let’s also assume your team, today, executes at 50% efficiency and costs the organization ~$50k/mo in general base salary expenditures. &nbsp;</p><p>The question: How much are the hidden costs to the organization of the team running at 50% efficiency instead of, let’s say, 80%?</p><p>Well, a 3-month project executed at 50% efficiency means it will take the team 4.5 months to complete and launch. &nbsp;At 80% efficiency, it would take 3.6 months. This is a 0.9 month delta, which is where the hidden costs lie: additional costs to pay the team and the opportunity cost of lost revenue from the delay. &nbsp;(NOTE: there is also the opportunity cost of the team not working on the next big priority which I do not model in this analysis) &nbsp;</p><p>The analysis shows that it costs $49k to pay the team and that the company loses $18k in incremental revenue for that period of delay, for a grand total of $67,000. &nbsp;</p><figure id="figure-7icdna2sh9lswnhj78"><img id="7icdna2sh9lswnhj78" src="https://cdn.durable.co/blocks/20kjfcZqR6A7UOxoAlNRnHDexZCwibhrx4pPcuA4IRk0PRPEMRM8eceASSBSTB3f.png" alt="hidden costs" class="object-cover bg-gray-100 rounded-sm md:rounded-md lg:rounded-lg" style="aspect-ratio: 3/2; object-position: center center;" data-corners="default" data-aspect="3:2" data-caption="Hidden Costs Calculated" data-positionx="undefined" data-positiony="undefined" data-fullwidth="false" data-mce-src="https://cdn.durable.co/blocks/20kjfcZqR6A7UOxoAlNRnHDexZCwibhrx4pPcuA4IRk0PRPEMRM8eceASSBSTB3f.png" data-mce-style="aspect-ratio: 3/2; object-position: center center;"><figcaption class="body-normal text-gray-500 mt-2">Hidden Costs Calculated</figcaption></figure><h3><br>&nbsp;&nbsp;<br>&nbsp;<br>Scenario 2: Building a poor product experience or the wrong thing for the wrong customers.</h3><p>Let’s assume the team has recently released a new product capability to market that turns out is only 60% “on target” to your customers you expect to adopt*. &nbsp;Let’s assume there’s a decent incremental revenue opportunity of $50k/week (incremental $2-3MM annual), with initial (ideal) adoption forecasted at 10% week over week. &nbsp;</p><p>The question: How much does the organization lose in revenue if what’s built and released to market is only 60% “on the mark” versus 90% “on the mark”? &nbsp;And, how much does it cost to swarm/pivot to address the issue?</p><p>A product can be “off the mark” for many reasons, such as poor quality (instable, buggy, unusable), or simply that the wrong capability was built that doesn’t really address the true need of the customers. &nbsp;Whatever the reason, customer adoption will be impacted negatively which will have a negative impact on revenue opportunity. In this scenario, being “off the mark” by 30% resulted in a -22% impact in revenue over 8 weeks to the tune of $12,000. &nbsp;That’s just opportunity cost of lost revenue - we also must consider the costs of swarming to address the issue (and the disruption to the roadmap). A team that swarms to either address quality issues or to pivot the feature capability to better address the needs of the customer will likely spend several weeks, which, as shown in the last exercise, can easily add up to several $10’s of thousands of dollars. &nbsp;</p><p>​All in, we’re likely talking $50,000-$100,000 of hidden costs.</p><figure id="figure-t39721q5sylswnk2cv"><img id="t39721q5sylswnk2cv" src="https://cdn.durable.co/blocks/28BTo2WUqrtDgsABPMajeEVPp9J0Ulh5wg5GsAIKyPl2VVNtobECv4a4pYPU0RtS.png" alt="hidden costs" class="object-cover bg-gray-100 rounded-sm md:rounded-md lg:rounded-lg" style="aspect-ratio: 3/2; object-position: center center;" data-corners="default" data-aspect="3:2" data-caption="Hidden Costs" data-positionx="undefined" data-positiony="undefined" data-fullwidth="false" data-mce-src="https://cdn.durable.co/blocks/28BTo2WUqrtDgsABPMajeEVPp9J0Ulh5wg5GsAIKyPl2VVNtobECv4a4pYPU0RtS.png" data-mce-style="aspect-ratio: 3/2; object-position: center center;"><figcaption class="body-normal text-gray-500 mt-2">Hidden Costs</figcaption></figure><p><br>&nbsp;&nbsp;<br>* This is simply a score to illustrate that product releases can be “off the mark” in terms of the quality of the product UX, how well the feature set meets customers’ true expectations, or how well the *right* customers were targeted in the first place.</p><h3><br>Scenario 3: Hiring the wrong person or onboarding poorly.</h3><p>Let’s assume you hire a Sr. Product Manager at a base salary of $140,000, but that this person, for whatever the reason (poor fit or poor onboarding) ends up leaving the organization after 6 months. &nbsp;Assume it takes ~3 months to recruit, interview, and hire a new replacement for this role and that it takes ~3 months to reasonably onboard a new Sr. PM employee. &nbsp;</p><p>The question: How much does it cost the organization when the wrong person is hired into a leadership position like a Sr. Product Manager role?</p><p>In this scenario the analysis shows a 9 month period in which the product team is lacking a full-strength leader, which results in a -20% impact in efficiency of execution, which as we show in the first scenario results in hidden costs of extra execution and delayed releases. &nbsp;Additionally, there are operational costs incurred to recruit, interview, and hire a replacement Sr. PM (of the research I reviewed, I used a $7,000 estimate). &nbsp;</p><p>​If you model out 9 months of inefficient execution of a product team, along with the additional costs of replacing that Sr. PM role, the hidden cost impact to the organization adds up to approximately $100,000! &nbsp;</p><figure id="figure-9jml40jyhclswnlm4g"><img id="9jml40jyhclswnlm4g" src="https://cdn.durable.co/blocks/26SC9hPxbS0orjE4WRoouFs6wfBMI9y8rhOglJedQqhqqaTuSwjSgYS4rKIYbFQd.png" alt="hidden costs of replacing talent" class="object-cover bg-gray-100 rounded-sm md:rounded-md lg:rounded-lg" style="aspect-ratio: 16/9; object-position: 100% 100%;" data-corners="default" data-aspect="16:9" data-caption="" data-positionx="100%" data-positiony="100%" data-fullwidth="false" data-mce-src="https://cdn.durable.co/blocks/26SC9hPxbS0orjE4WRoouFs6wfBMI9y8rhOglJedQqhqqaTuSwjSgYS4rKIYbFQd.png" data-mce-style="aspect-ratio: 16/9; object-position: 100% 100%;"></figure><h3><br>&nbsp;<br>The Punchline: It’s EXPENSIVE to execute poorly or make the wrong decisions.</h3><p>Having worked in software tech for the last 18 years across several industries, all technology stacks, and every company stage of growth, I can say the scenarios I cover above are real and happen all the time. &nbsp;My guess is that you would agree, these are all too common issues that product organizations experience in the normal course of execution. Yes, these featured scenarios used hypothetical numbers, and big simplifications to how measurements were taken. &nbsp;All that being said, I believe the numbers are within reason and paint a picture that puts some quantification to what we all know intuitively, that it is very expensive to execute poorly and/or make the wrong decisions. To the tune of tens or hundreds of thousands of dollars! &nbsp;</p><h3><br>Now What?</h3><p>Obviously, the question is, how can we MINIMIZE these hidden costs our organization incurs BEFORE they come about? &nbsp;How can we avoid the “Hindsight is 20/20” moment of realization? Here is some practical advice that you can consider:</p><p>1) Establish the right measures - each scenario above assumed the ability to measure team efficiency, product quality or market fit, or hiring/interviewing or onboarding effectiveness. &nbsp;Do you have these types of measures in place organizationally? Are you actively working to optimize these measures? If not, this is the first step. Without the ability to baseline or benchmark how your organization is doing, you will have no clear idea of how, if at all, you are improving.</p><p>2) Consider bringing an outside perspective to the table - There are many benefits to bringing an external perspective to assist in optimizing execution efficiency, strategic decision-making, or even in hiring/onboarding practices. &nbsp;One major benefit is the very fact this person is external - unbiased, immune to internal politics, etc. Another benefit: if this external person can help you avoid these hidden cost scenarios, even just one, it is very likely the ROI to bring on this person will be very high. &nbsp;</p><p>If you are a Product Leader within your organization, consider how you can influence the changes necessary to identify, measure, and minimize these scenarios that ultimately cost your organization tens to hundreds of thousands of dollars. &nbsp;Keep in mind that Modern Product exists to partner with executives and product leaders as that outside, unbiased perspective with a ton of industry experience. We can help you measure and minimize these hidden cost scenarios to the tune of an ROI of 2-5x. &nbsp;Reach out today to explore how we can help!<br></p>

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