The most successful companies are good at providing what their customers want. However, because the world is changing quickly, what customers want also keeps changingDiscover a new way to develop products so that you can always meet your customers’ changing needs.
Learn how to come up with new ideas, understand the difference between what your business offers and what your customers truly want. From brainstorming to researching the market and working as a team, this is your resource for making better products that make your business stand out from your competitors.
Prioritizing outcomes over outputs
To make the right products for your customers, it’s crucial to understand the difference between “outputs” and “outcomes.” Outputs are tangible things, like the products or features you create. On the other hand, outcomes are the actual changes that result from those products. These changes could affect your business’s profits, customer behavior, or satisfaction levels.
The key question is whether your company should prioritize outputs or outcomes. The answer is clear: always focus on outcomes. This means placing your customers at the center of your business strategy. Instead of starting with a product idea, begin by identifying the desired results for your customers. Then, figure out what products or adjustments can achieve those results.
When you emphasize outputs, your product team comes up with a product concept first and later considers how it might meet customer needs. This approach is not as effective.
Consider the example of a custom dog food company. They aimed to improve customers’ understanding of the health benefits of their dog food, with the hope of increasing customer loyalty. By focusing on this outcome, they experimented with ways to enhance customers’ knowledge about their product. They modified their explanations and measured how these changes impacted customer retention. This outcome-driven approach kept customer needs at the core of their operations.
In summary, prioritizing outcomes ensures that your products are tailored to meet customer needs and produce meaningful results. It’s a customer-centric approach that can lead to better business success.
Maximizing your business performance
Shifting your product team’s focus from mere outputs to tangible outcomes can significantly boost your business’s overall performance. However, it’s crucial to be aware of common pitfalls that might hinder this transition. Let’s delve a bit deeper into these challenges:
Overloading on Outcomes: One common mistake is trying to tackle too many outcomes at once. The pressure to achieve multiple goals in a short timeframe is understandable, especially when senior management assigns various priorities. However, spreading your team thin across numerous outcomes can be counterproductive. This approach may result in some progress on all fronts but fails to make a substantial impact on any of them.
Consequently, your overall business performance remains stagnant. To overcome this, prioritize just a few key outcomes, allowing your team to dedicate their energy and resources effectively.
Constantly Shifting Priorities: Another challenge arises when teams frequently switch from one outcome to the next due to recurring crises. In many organizations, firefighting seems to be the norm, with teams being urged to drop their ongoing priorities to address the latest emergency. However, this constant firefighting approach prevents your product teams from making substantial progress on any outcome. Meaningful results typically emerge around the six- to nine-month mark when working on an outcome. Rapidly changing priorities disrupt this journey, wasting the initial learning and efforts. Patience in continuous discovery is crucial for achieving lasting outcomes.
Outputs vs. Outcomes: It’s essential not to confuse outputs with outcomes. This confusion often occurs when teams fail to grasp the distinction between the two. For example, consider a student-recruitment team at a university that claimed to be outcome-focused but was primarily concerned with increasing the number of student reviews for courses on the university’s website. The problem here is that online reviews are merely an output. They don’t necessarily lead to a change for the customer. A more outcome-focused approach would involve increasing the number of website views that included a review, directly affecting the customer experience. To ensure your team remains aligned with genuine outcomes, consistently ask the question: “What impact will this change have on our customers?”
In conclusion, choosing to prioritize a select number of outcomes, granting your team the time and resources needed for substantial progress, and maintaining a strong focus on customer-driven outcomes rather than outputs are essential steps in enhancing your business’s overall performance.
Why product teams should focus on possibilities, not just problems
The best product teams are careful about identifying chances for creating new products. If you’re in the business of making new things, you’ve probably heard that your job is to solve problems for your customers. But in reality, you’re not just a problem solver; you’re in the opportunity business. Let’s explore the many possibilities for making products that customers will really enjoy.
So, why should product teams focus on opportunities rather than just fixing problems? Think of it this way: Imagine you’re in the ice cream business, and your goal is to create a new ice cream flavor that people will love. Making this ice cream isn’t solving a problem because people can get their nutrition from healthier options. Instead, you’re fulfilling a desire your customers have. Your delicious ice cream represents an opportunity to make your customers happy. Think of all your customers’ needs, wants, and challenges as chances to make their lives better in some way.
Your product team’s first step is to figure out what goal they want to achieve. Once you’ve identified the goal, the next step is to find opportunities that can turn that goal into reality.
When mapping out opportunities, it’s important to include a wide range of ideas. If you only consider what everyone on the team already knows, you’ll come up with limited solutions.
Once you’ve identified all the opportunities, it’s time to test them. This is where market research comes in. You’ll talk to customers and gather their feedback to see which opportunities might work best in real life. In the next step, we’ll discuss how to make the most out of market research and ask customers the right questions.
The importance of asking the right questions in market research
Effective market research is about posing the right questions. Understanding what your customers truly desire from your products is crucial. Although it may seem logical to ask them directly, it’s not always that simple. In the world of ongoing discovery, customers often can’t provide reliable information.
This is because customers often don’t know what they want until they see it. To illustrate, Henry Ford, the famous car maker, once joked that if he had asked his customers, they would have requested faster horses. This clever remark underscores the need for caution in conducting market research. Customers often struggle to pinpoint the best solution for their own needs and desires.
Another challenge in market research is that people often don’t fully comprehend their own behavior. For example, product consultant Teresa Torres conducted research with corporate recruiters to understand their preferred candidate profiles. The recruiters claimed they wanted to hire people who were already employed (passive candidates), rather than those actively seeking work (active candidates). They believed passive candidates were of higher quality. Based on this, Teresa developed a recruitment product for passive candidates. Surprisingly, the recruiters didn’t want it; they continued hiring active candidates. When asked why, they revealed that they faced pressure to fill job openings quickly, and active candidates could start work sooner.
So, why did the recruiters express one preference but act differently? This discrepancy is rooted in basic human psychology and the gap between our ideal and real selves. In an ideal scenario, the recruiters would always choose the best person for the job, even if it took longer. In reality, they had deadlines to meet and opted for the most readily available candidate. In our discussions, we tend to emphasize our ideal selves rather than our practical selves. For product managers who ask customers what they want, this can lead to building the wrong product.
Fortunately, there’s a way to avoid this pitfall: ask your customers the right questions. Instead of directly inquiring, “What do you want from a product like this?” prompt them to recount their recent experience purchasing a similar product and explain why they chose that particular item. By having them reflect on an actual experience, you ground their responses in the real world rather than the ideal one. This approach can help you make more informed product development decisions.
Choosing the right opportunities for your product
Product teams need to come up with lots of ideas, both from their customers and themselves. However, when you talk to customers, you might face two different challenges: some may give very short answers, while others may overwhelm you with too much information.
First, why do customers sometimes give brief answers during interviews? It’s because of a social norm that suggests in a regular conversation, both parties should talk about 50% of the time. So, if you ask a short question, they might give a short answer. To counter this, it’s helpful to let the interviewee know at the start that you want them to talk more and share all they have to say.
On the other hand, when you’re doing market research, you might discover numerous opportunities, especially in digital consumer products. The question is, how do you choose the right ones to focus on? You might have many customer desires and pain points, but you need to pick the opportunities that will have the most significant impact on your goals. For example, if you want more subscribers for your streaming service, you should find out which opportunity will motivate customers to sign up.
Once you’ve decided on an opportunity to work on, you need to figure out how to make an impact. For instance, if you choose to solve the problem of customers running out of episodes of a TV show, you’ll brainstorm ideas on how to fix it. It’s essential to generate as many ideas as possible during this brainstorming phase, even if they aren’t all great. The more ideas, the better because research shows that the number of ideas (fluency) is related to the quality and originality of ideas.
For the best results, your product team should initially brainstorm ideas individually. This way, team members are more likely to come up with unique and creative ideas without self-censoring themselves. Later, you can come together to share your ideas.
It’s important to understand that continuously improving your products and customer experiences takes effort. However, the benefits are worth it for your business and the people it serves. By solving customer problems and meeting their desires, you can set your products apart from the competition and create more satisfied customers.
In conclusion, as your customers’ needs, pain points, and desires evolve over time, it’s essential for your products to adapt in response. While it may be tempting to solely rely on customer input to enhance your offerings, it’s important to recognize that customers may not always be aware of their precise needs. This is where a thoughtful discovery process becomes crucial. Your product team plays a vital role in meticulously identifying opportunities to better serve your customers and making well-informed decisions on which opportunities to pursue.
Inspired by a book “Continuous Discovery Habits”; Teresa Torres”