Customer-Focused Product Management

DRAFT V0.3

Customer-Focused Product Customer-Focused Product ManagementManagement

Geoff HuckleberryGeoff Huckleberry

September 3, 2003September 3, 2003

DRAFT V0.3

Discussion TopicsDiscussion Topics

My ProfileMy Profile Value of Customer ResearchValue of Customer Research Key Success FactorsKey Success Factors

– How to Get Most Value Out of Research You Do?How to Get Most Value Out of Research You Do?

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My ProfileMy Profile

11 Years of Product Management Experience 11 Years of Product Management Experience with Software Products and Serviceswith Software Products and Services

15+ Years of High Tech Experience15+ Years of High Tech Experience Blend of Fortune 500 Experience (Intuit, CCH Blend of Fortune 500 Experience (Intuit, CCH

Incorporated, American Express) and Startup Incorporated, American Express) and Startup Experience (ChemConnect, Instill)Experience (ChemConnect, Instill)

Success Launching New Products and Driving Success Launching New Products and Driving Revenue Growth (566% growth in 18 mos. at Revenue Growth (566% growth in 18 mos. at Intuit, 200% growth in 12 mos. at ChemConnect)Intuit, 200% growth in 12 mos. at ChemConnect)

MBA (UCLA Anderson) + BSEE (UC San Diego)MBA (UCLA Anderson) + BSEE (UC San Diego)

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Product Manager ProfileProduct Manager Profile

Lots of Accountability but No AuthorityLots of Accountability but No Authority Must Convince People with Lots of Authority but Must Convince People with Lots of Authority but

Limited Accountability to Support Your Limited Accountability to Support Your DecisionsDecisions

Accountability Includes:Accountability Includes:– Product Success (# Customers, Customer Product Success (# Customers, Customer

Satisfaction, Revenue, P&L)Satisfaction, Revenue, P&L)– Making Important Tradeoff Decisions with Incomplete Making Important Tradeoff Decisions with Incomplete

Information Information – Translating Customer Needs into Executable Translating Customer Needs into Executable

RequirementsRequirements

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Customer Knowledge is Product Customer Knowledge is Product Manager’s Key Success FactorManager’s Key Success Factor

The Better Your Customer Knowledge, the Better The Better Your Customer Knowledge, the Better You Can:You Can:

Focus Development on Product Attributes Focus Development on Product Attributes that Will Most Significantly Impact Product that Will Most Significantly Impact Product SuccessSuccess

Convince Others of Your Product DecisionsConvince Others of Your Product Decisions Predict Product Performance Predict Product Performance Identify New Product OpportunitiesIdentify New Product Opportunities Stay Ahead of CompetitionStay Ahead of Competition

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You Have Deep Customer Knowledge You Have Deep Customer Knowledge When…When… You Can Consistently Predict What Target Customers You Can Consistently Predict What Target Customers

Will Say Before They DoWill Say Before They Do

How to Develop Customer Knowledge:How to Develop Customer Knowledge: Understand User Profile Understand User Profile

– Function (What Trying to Accomplish)Function (What Trying to Accomplish)– Education LevelEducation Level– Affinity for TechnologyAffinity for Technology– Prioritization of Activities, BenefitsPrioritization of Activities, Benefits– Pain Points (General and Related to Your Product)Pain Points (General and Related to Your Product)– EnvironmentEnvironment

Understand How Product or Substitute is Being Used Understand How Product or Substitute is Being Used TodayToday– What Works/ Doesn’t Work and WhyWhat Works/ Doesn’t Work and Why

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Key Success Factor #1: Begin with Key Success Factor #1: Begin with the End in Mindthe End in Mind Create Customer Research Plan Including:Create Customer Research Plan Including:

– Objective (Key Findings)Objective (Key Findings)– Decisions to Be Made Based on ResearchDecisions to Be Made Based on Research– Target Profile and Sample SizeTarget Profile and Sample Size– MethodologyMethodology– Key Questions to be AskedKey Questions to be Asked

Benefits Include:Benefits Include:– Clarity of Goals, Target, Decisions Leads to Superior Clarity of Goals, Target, Decisions Leads to Superior

ResultsResults– Buy-in from Peers, ExecsBuy-in from Peers, Execs

Cost of Not Doing It:Cost of Not Doing It:– Trite or Useless FeedbackTrite or Useless Feedback

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Key Success Factor #2A: Plan for Key Success Factor #2A: Plan for Research Even Under Tight DeadlinesResearch Even Under Tight Deadlines

Benefits:Benefits:– Greatly Increases Chance of Success (small percent Greatly Increases Chance of Success (small percent

of new products succeed)of new products succeed)– Improved Customer Response to LaunchImproved Customer Response to Launch– Focus Development on Key Value DriversFocus Development on Key Value Drivers

Cost of Not Doing ItCost of Not Doing It– Increased Likelihood of Product FailureIncreased Likelihood of Product Failure 90% of Effort Follows Definition Phase and is 90% of Effort Follows Definition Phase and is

Potentially WastedPotentially Wasted– Opportunity Cost of Mis-applying ResourcesOpportunity Cost of Mis-applying Resources– Support and Training CostsSupport and Training Costs

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Product Development Timeline – Product Development Timeline – Errors in Definition are MultipliedErrors in Definition are Multiplied

True True Customer Customer

NeedNeedDefinition Definition Needs Needs

AssessmentAssessment

Concept TestingConcept Testing

DevelopmentDevelopment-Usability TestingUsability Testing

-Beta TestingBeta Testing

TestingTesting Sales/Marketing Sales/Marketing RolloutRollout

Implementation Implementation & Support& Support

Range of Possible Error

Range of Possible Error

Product Launch/Re-launch is Expensive Product Launch/Re-launch is Expensive (Time/Money/Opportunity Cost)(Time/Money/Opportunity Cost)

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Key Success Factor #2B: Avoid Relying on Key Success Factor #2B: Avoid Relying on 22ndnd Hand Feedback in Place of Research Hand Feedback in Place of Research

Benefits: Benefits: – Your Decisions Are Not Exclusively Based on Other People’s Your Decisions Are Not Exclusively Based on Other People’s

InterpretationsInterpretations– You Can Directly Translate Customer Need to Engineering You Can Directly Translate Customer Need to Engineering

RequirementRequirement– You Are Capable of Detailed Tradeoff Analysis Because You You Are Capable of Detailed Tradeoff Analysis Because You

Experienced Customer Need and Prioritization of NeedsExperienced Customer Need and Prioritization of Needs– Role Bias – Client Services, Sales, Support will bias data based Role Bias – Client Services, Sales, Support will bias data based

on their perspective/filteron their perspective/filter Cost of Not Doing This:Cost of Not Doing This:

– Suspect Information. 2Suspect Information. 2ndnd Party Probably Was Not Aware or Party Probably Was Not Aware or Diligent about seeking right targets and asking the questions in Diligent about seeking right targets and asking the questions in proper context.proper context.

– Loss of ControlLoss of Control Case Study: AnyCase Study: Any

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When Using 2When Using 2ndnd Hand Research Hand Research Always Ask…Always Ask…

What is profile of interviewee. Are they part of What is profile of interviewee. Are they part of the target?the target?

How many people actually requested this? How many people actually requested this? Recent mentions often get over-stated so best to Recent mentions often get over-stated so best to be clear. This is especially true of Support, be clear. This is especially true of Support, Client Services, and Sales.Client Services, and Sales.

What specifically did they say?What specifically did they say? How did you specifically state the question?How did you specifically state the question?

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Key Success Factor #3A: Tightly Key Success Factor #3A: Tightly Define Your TargetDefine Your Target

Benefits: Benefits: – Useful Feedback That’s Predictive of Market Useful Feedback That’s Predictive of Market

Response to ProductResponse to Product– Opportunity to Correlate FeedbackOpportunity to Correlate Feedback

Cost of Not Doing This:Cost of Not Doing This:– Irrelevant FeedbackIrrelevant Feedback– Product Failure (impossible to optimize for unknown Product Failure (impossible to optimize for unknown

customer)customer)

Case Study: CCHCase Study: CCH

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Key Success Factor #3B: Include Key Success Factor #3B: Include Target User in ResearchTarget User in Research

Benefits:Benefits:– Greatly Increases Likelihood of Product Being UsedGreatly Increases Likelihood of Product Being Used– Increases Customer SatisfactionIncreases Customer Satisfaction

Cost of Not Doing This:Cost of Not Doing This:– Focus on Irrelevant Issues (purchaser/influencer Focus on Irrelevant Issues (purchaser/influencer

often doesn’t know user issues)often doesn’t know user issues)– Poor Penetration of User CommunityPoor Penetration of User Community– Negative Impact on Renewal Rate and Pricing PowerNegative Impact on Renewal Rate and Pricing Power

Case Study: InstillCase Study: Instill

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Key Success Factor #4: Focus on Key Success Factor #4: Focus on Delivering Value Not TechnologyDelivering Value Not Technology

Benefits:Benefits:– Higher Likelihood of Product Success Since That’s Higher Likelihood of Product Success Since That’s

Often All Customer Cares AboutOften All Customer Cares About– More Intuitive SolutionMore Intuitive Solution

Costs:Costs:– Poor Usage and Customer SatisfactionPoor Usage and Customer Satisfaction


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Key Success Factor #5: Focus on “Lowest Key Success Factor #5: Focus on “Lowest Cost Denominator” User, Then Power UserCost Denominator” User, Then Power User

Benefits: Benefits: – Broader Market Penetration and AppealBroader Market Penetration and Appeal– Superior Financial PerformanceSuperior Financial Performance– Usually Satisfies 80% of Needs With 20% of EffortUsually Satisfies 80% of Needs With 20% of Effort

Cost of Not Doing This:Cost of Not Doing This:– Developing product that misses broader marketDeveloping product that misses broader market– Poor financial performancePoor financial performance


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Key Success Factor #6: Don’t Get Defensive -Key Success Factor #6: Don’t Get Defensive -Seek Actionable Learnings!Seek Actionable Learnings!

Benefits: Benefits: – Opportunity for Significant Product and Financial Opportunity for Significant Product and Financial

ImprovementImprovement– Negative Vocal Leaders Can Become Best AdvocatesNegative Vocal Leaders Can Become Best Advocates

Cost of Not Doing This:Cost of Not Doing This:– Lost Opportunity to Improve ProductLost Opportunity to Improve Product– Vocal Leader Getting More Negative Resulting in Lost Vocal Leader Getting More Negative Resulting in Lost

Customers and Negative PressCustomers and Negative Press


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Key Success Factor #7: Be Customer Key Success Factor #7: Be Customer Focused Not Customer CompelledFocused Not Customer Compelled Benefits:Benefits:

– Understand Customer Needs and Priorities so can Understand Customer Needs and Priorities so can Optimize Solution for Maximum Customer and Optimize Solution for Maximum Customer and Company Benefit.Company Benefit.

– Financial and Customer Satisfaction Improves.Financial and Customer Satisfaction Improves. Cost of Not Doing This:Cost of Not Doing This:

– Sacrificing your company’s needs for customer’s Sacrificing your company’s needs for customer’s desires.desires.

– Inferior solution and financial performance. Inferior solution and financial performance. Replacing your team’s expertise in applying Replacing your team’s expertise in applying technology to solve problems with that of someone technology to solve problems with that of someone less skilled (customer).less skilled (customer).

Case Study: Southwest Air, IntuitCase Study: Southwest Air, Intuit

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Successful Products Satisfy the Successful Products Satisfy the Value Proposition TriangleValue Proposition Triangle

Company Company ObjectivesObjectives

Customer Customer ObjectivesObjectives

Delivery Team Delivery Team ObjectivesObjectives

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Key Success Factor #8: Include Your Key Success Factor #8: Include Your Competitor’s CustomersCompetitor’s Customers

Benefit:Benefit:– Understand Your Perceived Weaknesses Relative to Understand Your Perceived Weaknesses Relative to

Competition and How to OvercomeCompetition and How to Overcome– Understand Your Competitor’s Weaknesses and How Understand Your Competitor’s Weaknesses and How

to Position or Build Product to Exploit Themto Position or Build Product to Exploit Them

Cost of Not Doing This:Cost of Not Doing This:– Miss Valueable PerspectiveMiss Valueable Perspective– Susceptibility to Competitor ProductSusceptibility to Competitor Product


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Additional Research TechniquesAdditional Research Techniques

If Possible, Avoid Bringing Sales, Client Services If Possible, Avoid Bringing Sales, Client Services or Anyone Who Might Want to Cover or Anyone Who Might Want to Cover Weaknesses (you want the dirt!)Weaknesses (you want the dirt!)

Disarm Participant by flagging the discussion as Disarm Participant by flagging the discussion as being research, to get them to open upbeing research, to get them to open up

Define Questions in Advance that Meet Your Define Questions in Advance that Meet Your ObjectivesObjectives

Ask them to prioritize, rate and quantify where Ask them to prioritize, rate and quantify where possible and explain answerspossible and explain answers

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Unique Application #1: Using Customer Unique Application #1: Using Customer Research to Improve Product SalesResearch to Improve Product Sales

Case Study: IntuitCase Study: Intuit

Documents

Customer-Focused Product Management