How much should you invest in “Customer understanding” for new products and services?
With any new product or service, one of the most important things is to make sure you have a customer base that sees value in what you’re offering and will change their behavior to start using and adopting your product or service over what they’re doing today. And what they’re doing today doesn’t necessarily mean using a competing solution. A simple example could be a weather app. You’re competing with... Watching the weather channel? Listening to the radio? Looking out the window? Not knowing the weather? — And what are the real needs here? To know if you need a coat or not? If you’re going to need to wash your car later? If you need sun screen? These are all competing solutions, barriers to overcome to get someone to learn about, download, sign up, and consistently use your product or service over what they’re using today.
So how can you know, or at least uncover more unknowns, so that you’ll have a better chance at launching something that actually solves real customer challenges, and one that has a large enough addressable market to become a viable product or service? Funny enough many teams don’t really believe you can know, or even be more well informed before launching something. Well.. You can!
When consulting with different teams I always suggest looking at the investment they’re imagining is needed to launch. If your weather app (to keep with the theme) takes $20k to launch, well I’m not recommending to spend twice that to learn if it will be successful or not. On the other hand, maybe you’re planning on getting $5m of investment to launch, or your large organization is looking to launch something innovative that is meant to propel their business forward. You might want to spend a proportional amount in building some data around customer understanding so that you and your teams can make informed decisions, reduce risk, and generally be more successful.
What is that ratio of discovery-to-investment? I don’t think it’s always the same, there are variables around: how much you know today, is this an extension to something you already have in the market, etc… but if I asked how much would you be interested in spending to protect that $5m investment that could make or break your company? 10%? 20%? What’s the alternative? A launch with no customers and a large "lessons learned"? So spending that $500k to $1m to ensure greater success of the $5m investment sounds like a deal.
With that, here are some ways to invent in uncovering those unknowns:
Go straight into design and development. Wait, didn’t I just say not to do this? We generally don’t recommend this, but if you have the ability to launch your MVP with little or no investment due to: you already have the systems in place, the solution is extremely simple to produce — or you have an unlimited amount of funding and success is less important in the near term — in these cases you can “pivot” as you launch and learn to help find your audience and the right set of features and functionally.
Pros: Less up-front work, faster to launch.
Cons: High chance of failure due to not involving users in the process, potential to head in the wrong direction and never find your audience. General high risk of failure.
User Experience Design + Validation: Using subject matter experts and other stakeholders, create a design prototype of key features and flows, and use this “prototype” to felicitate conservations with potential customers and validation testing to determine a mix of value and usability. This method, like the previous can only get you so far. It usually won’t redirect if your way off-course, and it's really more about making the best version of your idea vs. determining if your idea is the right one.
Pro: Lowest costs while still interacting with users. Design work will can be used in development.
Cons: Not as good at determining value, or other opportunities, more focused on usability of product.
KANO Study / Value Testing: Using a method for determining value, we’ll show potential users representative screens and designs and ask intentional questions to gauge value. This helps prioritize what people want out of your product or service. We’ve used this a number of times at projekt202 with great success. Again, more for prioritizing features and functionally from predisposed ideas vs. determining if the idea is generally the right one.
Pros: Helps with feature prioritization, gets early feedback on designs, helps organizations develop MVPs.
Cons: This is not true “in context” research, will still need to build out more detailed designs.
Experience Strategy: This is a way to get a full picture of your users and uncover the most unknowns. What they’re doing today, what additional systems are they using, and what are the most important pain points and opportunities. This will include: in-person observations, journey maps, personas, etc… This can be used with current users or potential users, and be focused in on one product or service, an entire multi-channel experience, or even has the ability to generate entire unexplored areas to serve new or current customers.
Pros: Best way to define a full product strategy, including: market size, user needs, prioritization, building user empathy, etc…
Cons: Due to the in-person nature of qualitative customer understanding, and general thoroughness, this is the longest program to run.
When running Experience Strategy programs I’ve never been underwhelmed of the data that’s brought back, and how it sets a north start for teams. Groups I’ve worked with are usually surprised, and it really opens up not only their eyes, but a path towards really innovating and creating that great customer experience we’re all trying to deliver.
I find that every book, article, and post about product development talks about: “Customers Matter”, “Focus on your customers”, “Improve your customer experience”, “Find the jobs to be done" — but they don’t really talk about the investment, time, and teams needed to do that work. They do talk about the value of design and improved CX, but skim on how to get there.
So which path should you choose to uncover your unknowns? As mentioned above the overall investment is usually the main driver. If you’re working on a multi-year program or something core to your business or mission, chances are you’ll want to mitigate the risk of potential failure and the overall cost — to do this, you need a crisp, clear picture of your users and how they’ll use (or not use) your product or service. If this is a shorter, lower cost program to get to launch or MVP — then you can take more risks, and you can go ahead and just get something out there to see if it will stick.
Without sounding like a broken record, there really is no substitute for meaningful interactions with the people that will be potentially using the product and service you’re looking to build to help shape and guide that product in the right direction. As User Experience Designers we need to remind product teams that unknowns can be known with a little time and effort — and it’s worth the investment.