Focus on the User5 Keys to Successful Product Management

in the New Era of Business

Presentation2015 Insights

There’s one resoundingly simple reason for why most

products fail: no one wants them.

So how are the world’s most innovative companies able to

continuously produce winning products?

Our research and experience show that it has to do with

adapting to the rapidly evolving mindset of consumers.

Whereas efficiency and scale once determined the fate of

products and companies, customer satisfaction is now the

driving force.

A new era

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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.

But it’s not as simple as generating user feedback before

building products. Excessive user testing and product

validation is not always the right solution.

Focus on the user

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Zappos, Southwest Airlines, Uber, and Chipotle are all

great examples of companies that have adapted to this new

landscape by bucking conventional wisdom. 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 success against the odds.

The new innovators

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Zappos 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,

Zappos captured the hearts of their budding consumer base

and rode the trend all the way to become the top online

seller of shoes.

Zappos conquered a competitive market, not just through

business model innovation, but through customer centric

innovation.

Case study: Zappos

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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 that can be taken

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....

How to build products users love

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We’ve compiled a list of 5 key strategies for product managers to build successful products in the new era of business:

Listen to what customers say, but, more

importantly, watch what they do

Your job is to learn by building, not just to

build

Never settle for good enough

Redefine your metrics for success

Consider the entire user experience – in and

out of the product

1.

2.

3.

4.

5.

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There is no such thing as talking to your customers too much.

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 learning is invaluable.

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.

1. Listen to what customers say, but, more importantly, watch what they do

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James Surowiecki’s “Wisdom of the Crowds” notes 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 you’re only tool was

listening, but we’ve found that observing user behavior is even more

critical and informative.

Oftentimes, there is a massive divide between what people say and

what they actually do.

Malcolm Gladwell’s book, “Blink” and his TED Talk on “Spaghetti Sauce”

illustrate this reality. In response to the idea that customers should provide

input on their 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.

Actions speak louder than words

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Tests we’ve run for clients consistently show that what people say

they would do and they actually do with a live product is very

different.

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 users want.

Feedback from users needs to be put in the context of behavioral

data to provide a complete picture.

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2. Your job is to learn by building, not just to build

If a typical product manager were to define her job, a description

would likely include words like “developing” and “launching.”

In our experience, the most successful product managers focus on

an end goal of learning.

By reframing deliverables a experiments, you can transform

launching into learning, while also meeting tactical goals.

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Learning by building

“Little Bets: How Breakthrough Ideas Emerge from Small

Discoveries” by Peter Sims illustrates how this strategy was used by

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 to meet user needs leading up to a launch.

In addition to making a habit of experimenting, it’s important to

cultivate multiple sources of customer insight outside of 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.

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3. Never settle for good enough

In the modern digital word, products are forced to change

quickly to avoid becoming outdated overnight.

Sometimes they’re even outdated before they launch.

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.

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What Steve Jobs can teach us

Look no further than the evolution of the iPhone to be

reminded of the pace of product change.

The devices customers use and their capabilities (from

gestures to speed to integrations) are constantly evolving.

The pace of change has never been faster, so your product

development process had better catch up!

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How to stay relevant

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.

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4. Redefine your metrics for success

A lot of companies make internal decisions to be more customer-

centric. But at the end of the day, the top and bottom lines are how

people are held accountable and decisions are made.

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.

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Case study: eBay

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.

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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.

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5. Consider the entire user experience –in and out of the product

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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.

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David vs Goliath

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When it comes to customer service and support, startups consistently

outperform larger organizations.

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 begins with marketing and sales and continues

through to customer service and tech support.

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Key takeaways & additional resources

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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.

We hope this presentation gave you insight into the strategies and philosophies

adhered to by customer-driven companies. For more resources, click the links

below.

Alpha UX Blog

Infographic: The tools and services lean

organizations use to build better products

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