Focus on the User
- On December 1, 2015
- In General
- By Michael Bamberger
5 keys to successful products in the new era of business
There’s one resoundingly simple reason for why most products ultimately fail: no one wants them. But those of us constantly advocating for user testing and product validation can sometimes get too fixated on this notion.
So how are some companies able to continuously produce winning products? What’s their secret? Our research and experience show that it has to do with adapting to the rapidly evolving mindset of consumers, but it’s not as simple as generating user feedback before building products.
Whereas efficiency and scale once determined the fate of products and companies, customer satisfaction is now the driving force. In a time with nearly perfect user metrics and lower barriers to entry, focusing on your customers and their experience using your product and working with your organization are essential to long-term success.
Zappos, Southwest Airlines, Uber, and Chipotle are all great examples of companies that have adapted to this new landscape by redefining the conventional wisdom. Zappos, for example, calculated that the lifetime value of satisfied customers far outweighed the shipping costs to return disliked goods. By offering an unprecedented 365-day free return policy (unless of course you made a purchase on February 29, in which case you have four years to make a return), Zappos captured the hearts of their budding consumer base and rode the trend all the way to become the top online seller of shoes.
There were existing leaders in each of these industries, yet the aforementioned new entrants were able to flourish. The reasons why are not hard to discern: these are customer -centric businesses competing in spaces where margins and efficiency were the hallmarks of success. By focusing on satisfying the customer and innovating to meet their needs, each of these businesses was able to achieve seemingly impossible success.
There is no 100% foolproof way to build an organizational culture adept at launching products that are guaranteed to succeed. However, there are several integral steps you should take to increase the likelihood of success. These steps involve a change in mindset, activity, and engagement with your target customer.
Based on this understanding, we’ve compiled a list of 5 key strategies for product managers to build successful products in the new era of business.
We’ve compiled a list of 5 key strategies for product managers to build successful products in the new era of business
1. Listen to what customers say, but, more importantly, watch what they do
There is no such thing as talking to your customers too much. A single conversation with a current user or just someone in your target demographic can be an incredibly eye-opening and informative experience. If communicating with your target userbase isn’t a standard part of your operating procedure, you should be sure to incorporate the constant solicitation of input as quickly as possible.
Running surveys, hosting in person interviews, and simply picking up the phone to talk to your customers are effective ways to start the process of soliciting feedback. Though it can be time-consuming to do all of this work yourself, the payoff is tremendous. You should constantly be seeking the input of your target market on current products and new product concepts to understand what pain points and challenges they have.
James Surowiecki’s “Wisdom of the Crowds” encapsulates the idea rather well, noting that what emerges from a critical mass of feedback tends to be as close as one can get to the absolute truth. Surowiecki would be correct if your only tool was listening, but we’ve found that observing user behavior is even more critical and informative. Oftentimes, there is a large divide between what people say and what they actually do. Malcolm Gladwell’s book, “Blink” and his TED Talk on “Spaghetti Sauce” capture some of these mistakes. In response to the idea that customers should provide input on the preferences, he says “The mind knows not what the tongue wants.” Only by putting together actual usage tests and monitoring and measuring behavior will you get real insight into what problems exist and how to solve them.
For example, we recently ran some tests for a client to understand what features should be included in an app where users seek venues to attend. When asked if customer reviews were important to them in making their decisions, the consensus was clear that reviews were far less important to them than other information (like prices. location, etc.) However, when we ran an actual user test to see how people decided which venues to attend, every tester immediately went to the customer reviews section to evaluate a venue.
This is a simple example of a complex issue. Listening to customers is very important and can provide a lot of incredibly valuable insight. However, unless you augment listening with observing. you’ll likely have blind spots and misinformation about what satisfies users. Feedback from users needs to be put in context of behavioral data to provide a complete picture.
2. Your job is to learn by building, not just to build
If a typical product manager were to define her job, a likely description would go something along the lines of “developing and launching new products to market” or “capitalizing on market opportunities through innovation.” However, in our experience, the most successful product managers don’t focus on building or launching in a vacuum — they focus on an end goal of learning.
According to Pragmatic Marketing’s 2014 State of Product Management and Marketing report, 35% of product managers report missing launched dates. Further, product managers on average believe they should spend less than 45% of their day on tactical activities but end up spending more than 70% on them. Learning can take a back seat to ‘doing,’ when your job is tactical (that is. actually building stuff and getting things done), even though they need not be mutually exclusive.
By reframing deliverables in terms of experiments, you can transform launching into learning. while also meeting tactical goals. “Little Bets” by Peter Sims documents this strategy across companies like Pixar and Apple. On our blog, we discuss how building up to a minimum viable product through experiments can limit your risk as you optimize product concepts up to a launch.
In addition to getting into the habit of experimenting, it’s important to cultivate multiple sources of customer insight outside of the product department. From the feedback customer success teams get from current customers to the objections sales people hear from prospects, getting out the door is critical to learning.
3. Never settle for good enough
In the modern digital environment, products are forced to change quickly or become outdated overnight (sometimes they’re even outdated before they launch). Take for example the default screen on your smartphone. The image below shows its rapid progression through the years.
iOS 5 was released just three years ago. Based on a survey of product managers at Fortune 500 companies, the average product development process takes more than a year. That means that by the time you release an app, you already have to get started on a replacement or upgrade to stay relevant.
And more than just design changes constantly. The devices customers use and their capabilities (from gestures to speed to integrations) are also constantly evolving. The pace of change has never been faster, so your product development process needs to catch up.
The most effective way to ensure your products stay relevant is to adopt an iterative approach to building and improving products. Treat each product launch as an opportunity to collect data. You’ll learn what’s working and what’s not working and can plan accordingly. Budget multiple iterations into your product roadmap.
While an iterative approach does require more frequent releases of products and the necessity of keeping your finger on the pulse of industry change, you’ll save more time in the long run by building and adjusting instead of building with a more traditional product release cycle.
4. Redefine your metrics for success
A lot of companies make internal decisions to be more customer-centric. They circulate an updated mission statement, send an email to the entire staff declaring the customer as the most important person in the company, and mention it consistently at group meetings. But at the end of the day. the top and bottom lines are how people are held accountable and decisions are made.
If the success metrics you track and use to make decisions aren’t related to how satisfied and engaged your customers are, you’ll never truly be focusing primarily on the customer. Developing metrics based on how satisfied your customers are and holding people accountable for improving them can change an organization overnight.
Revenue per customer and profit margins are important, but in the modern age, long-term success is tied to metrics like Net Promoter Score, in-product engagement, and retention.
After laying off 10% of his company during his first year as CEO of eBay, John Donahoe realized that if he wanted to avoid a 10-year spiral the likes of Yahoo or AOL, he had to make aggressive changes. He tied 10% of senior management’s pay to changes in the Net Promoter Scores of customers using their products. Just a short while later, eBay recorded its biggest quarterly growth in more than a half decade.
Jony Ive, the renowned designer of Apple’s most successful products, admitted once that he was unaware of revenue figures. TechCrunch remarked :
“…the celebrated designer is known for his focus on product design, and the fact that he doesn’t pay much attention to the company’s fiscal performance is a credit to the company’s long-stated belief of putting product before a desire to make money, with the argument being that customers will reward top-quality device design.”
Ignoring revenue altogether is probably too extreme, but the philosophy is noteworthy.
5. Consider the entire user experience –in and out of the product
A customer’s interaction with your organization does not begin and end entirely inside your products. If you don’t consider the entire customer journey – from when they learn about your product all the way through dealing with customer support – you’re not positioning yourself to succeed over the long term.
In the modern age, social proof and online reputation can make or break a company and its product.
When it comes to customer service and support, startups consistently outperform larger organizations. When evaluating a product, a potential customer would often like to talk to a person to answer their questions rather than rely on online resources. Even in startups without dedicated personnel, a phone number that will reach someone on the product team is usually available.
If you’re in a large organization and you don’t have a dedicated customer support representative for your specific product, it could make sense to actually list your phone number in the support materials. Giving users an easy way to chat with a live person will not only increase their likelihood of becoming a customer, you’ll keep your finger on the pulse of what users are thinking and how your product and marketing can be improved.
The user experience doesn’t begin or end within a product. It begins with marketing and sales and continues through to customer service and tech support. Product management is actually in the middle – treating it like the conductor instead of a stop along the way can make all the difference.
Great change doesn’t happen overnight. Setting realistic expectations and deadlines is key when it comes to adapting an organization’s culture to be more responsive to the modern consumer.