Introduction
Identify and adapt to your customers’ evolving needs.
The most successful companies excel at fulfilling customer desires, but in today’s rapidly changing world, these desires are always shifting. That’s where this book steps in. You’ll learn a fresh approach to product development that will help you keep pace with your customers’ changing expectations.
You’ll dive into strategies for identifying opportunities and learn to distinguish between what your business produces and the outcomes your customers seek. Covering everything from brainstorming and market research to team collaboration, this guide will help you design standout products that give you a competitive edge.
In these key ideas, you’ll discover:
– why solo brainstorming is essential,
– the single most important question to ask your customer, and
– how to effectively map your opportunity space.
Key idea 1
Prioritizing outcomes instead of outputs can lead to developing the right products for your customers.
But what exactly is the difference between an output and an outcome? Understanding this distinction could be crucial for your business.
Let’s begin by defining an output. An output is a tangible item, like a product or a specific feature within a product. If you ask your product team about their outputs, they’ll likely point to the products on your business’s shelves or the unique features they’ve designed for these products.
Now, let’s consider what an outcome is. Unlike an output, an outcome isn’t a tangible item; it’s a shift or change—perhaps an improvement in your business’s bottom line, an alteration in customer behavior, or an increase in customer satisfaction. Outcomes reflect the impact that your company’s products have on customers or the business itself.
With this distinction between outputs and outcomes in mind, let’s pose another question: Should your company be focusing on outputs or outcomes?
The answer is always to focus on outcomes. Prioritizing outcomes means placing your customer at the center of your business. Your product team begins by identifying the desired outcome for customers, then considers which products to create or adjust to bring that outcome to life. This approach is the optimal way forward.
In contrast, when focusing on outputs, the product team starts by designing a product concept and only later considers what customer needs it might address. This is not the ideal approach.
Let’s explore how this difference plays out in practice.
Product consultant Teresa Torres worked with a custom dog-food company’s product team, encouraging them to start by identifying the outcome they wanted for their customers. They decided to focus on enhancing customer awareness of the health benefits of their custom dog food. The team believed that if more customers understood these benefits, they would be more likely to continue purchasing the food each month. With this goal in mind, the team tested different approaches to communicate the value of their product more effectively. They then tracked whether these adjustments influenced customer subscription rates. By concentrating on outcomes instead of outputs, they ensured that customer needs remained central to their efforts.
Key idea 2
Select the right outcome and allocate sufficient time to achieve it.
When your product team shifts its focus from outputs to outcomes, it can significantly enhance your business’s performance. However, success depends on avoiding common pitfalls. Let’s examine some frequent mistakes product teams encounter along the way.
First, many teams fall into the trap of trying to pursue too many outcomes simultaneously. While the desire to achieve multiple outcomes quickly is understandable—especially under pressure to deliver results and with varying priorities from management—this approach can be counterproductive. Why? Because your team may create some impact across all these outcomes but will fail to make significant progress on any single one. As a result, overall business performance is likely to stagnate rather than improve. Therefore, it’s advisable to select just a few key outcomes to focus on.
Second, avoid the mistake of switching from one outcome to another every few months. In many companies, teams often find themselves in crisis mode, with new emergencies popping up every couple of weeks. Management frequently urges teams to abandon their current priorities to tackle the latest issue. However, this constant firefighting prevents product teams from making any real progress on their outcomes. Patience is essential for effective continuous discovery.
It’s improbable that your team will achieve significant progress on any specific outcome within the first three months of working on it. Typically, noticeable results begin to appear around the six- to nine-month mark. Therefore, if you’re constantly shifting your focus on outcomes every few months, your team’s efforts won’t have the opportunity to impact the business. Additionally, the steep learning curve experienced during the initial months of discovery will go to waste. Your team will gain valuable insights about an outcome but won’t have sufficient time to implement that knowledge before being rushed onto the next outcome.
Finally, avoid the misconception that you’re concentrating on outcomes when, in fact, you’re still prioritizing outputs. This error frequently occurs when teams misunderstand the distinction between the two concepts.
For example, the author collaborated with a student recruitment team at a university that claimed to be outcome-focused. When she inquired about the specific outcomes they were targeting, they stated their goal was to increase the number of student reviews of the university’s courses on its website. Can you spot the issue? Online reviews are merely an output; they don’t necessarily signify a change for the target audience. Instead of concentrating on the quantity of online reviews, the team should have aimed to boost the number of website views that included a review. Focusing on page views would have prioritized outcomes over outputs. After all, a page view reflects an action taken by the customer, and modifying what that view entails would directly affect the customer experience. To ensure your team maintains its emphasis on outcomes rather than outputs, continually ask them one straightforward question: What impact will this change create?
Key idea 3
The most effective product teams meticulously chart their opportunities.
If you’re involved in developing new products, you may have heard that your role is to solve your customers’ problems. However, the truth is that you’re not just in the business of problem-solving; you’re in the business of seizing opportunities. So, let’s begin exploring the countless possibilities for creating products that your customers will truly appreciate.
Why should product teams concentrate on opportunities instead of simply addressing problems? Picture yourself in the ice cream business, tasked with creating a product that customers will genuinely want. In this scenario, you aren’t really solving a problem for your customers; they could always opt for a nutritious bowl of spinach. Instead, you’re tapping into their desires. Your delectable ice cream presents an opportunity to enrich your customers’ lives by offering them something they’ll truly enjoy. With this in mind, consider all your customers’ needs, wants, and challenges as avenues for your business—opportunities to enhance your customers’ experiences in meaningful ways.
The first step for your product team should be to determine the specific outcome they want to prioritize. After identifying this outcome, their next task is to explore the opportunities available to achieve it. Here’s a real-world example:
The author collaborated with a product team that was tasked with enhancing a particular aspect of customer experience. Customers who wanted to purchase products from the company were required to complete and submit a lengthy application form beforehand. Unfortunately, many potential buyers dropped out of this process, leading to a decrease in sales. Therefore, the product team’s objective was to boost the number of completed and submitted application forms.
To reach this outcome, the product team started examining the opportunity space related to it. They considered what opportunities could create a positive change in the application process. What could enhance the customer experience? What strategies would encourage customers to complete the process and ultimately purchase the company’s products?
The product team began by individually mapping out the opportunity space. Each of the three team members held different roles, which gave them distinct insights into the potential issues within the application process. After they had shared their individual findings, they discovered that each member had approached the outcome from a unique angle. These varied perspectives were eventually combined to generate innovative ideas for achieving the desired outcome.
When your product team begins mapping the opportunity space related to a desired outcome, it’s crucial to incorporate a diverse array of ideas. Limiting the focus to a narrow scope of shared knowledge within the team will result in a limited set of solutions.
After identifying the various opportunities within your field, you can begin testing them. This is where market research becomes essential, involving customer interviews and focus groups. You’ll engage with customers to assess how these opportunities could function in practice. Up next, we will explore ways to maximize your market research efforts and ensure you are posing the right questions to customers.
Key idea 4
Effective market research hinges on asking the right questions.
What do your customers genuinely seek from your products? While it may seem logical to simply ask them, proceed with caution. In the realm of continuous discovery, customers may not always provide dependable insights.
This is because customers frequently lack awareness of what they truly want until it’s presented to them. A well-known example is Henry Ford, who famously remarked that if he had asked his customers, they would have requested faster horses. This insightful statement highlights the need for product designers to exercise caution during market research, as customers may not have a clear idea of the best solutions for their own needs or desires.
Additionally, another challenge you may face in market research is that people often struggle to accurately comprehend their own behaviors. Here’s an example to illustrate this.
Product consultant Teresa Torres was researching the preferences of corporate recruiters regarding the types of candidates they wanted to hire. The recruiters made it clear that they preferred candidates who were already employed (passive candidates) over those who were unemployed and actively seeking jobs (active candidates). They believed that passive candidates were generally of higher quality than their active counterparts. Based on this information, Teresa developed a recruitment product aimed at providing a pool of passive candidates. However, to her surprise, the recruiters didn’t actually desire this product. In reality, they continued to hire active candidates for their vacancies. When asked about this discrepancy, they explained that they faced pressure to fill positions quickly, and active candidates were typically available to start work much sooner than passive ones.
Why did the corporate recruiters express a desire for one type of candidate while actually pursuing another? The answer lies in basic human psychology and the disparity between our ideal selves and our real selves. Ideally, the recruiters would always choose the best candidate for the job, even if it took a bit more time. However, in reality, they faced deadlines and targets, meaning they needed to hire the most readily available person instead of the best fit. Often, when discussing our preferences, we tend to focus on our ideal selves rather than our actual circumstances. For product managers seeking customer input, this can be problematic; if not approached carefully, it may lead to developing the wrong product.
Fortunately, there’s a solution to prevent this issue, and it involves asking your customers the right questions. Rather than directly inquiring, “What do you want from a product like this?” consider asking them to recall their last experience purchasing a similar product and the motivations behind that choice. By prompting them to reflect on a real-life experience, you encourage them to base their responses on practical realities rather than ideal scenarios.
Key idea 5
Product teams must generate a wealth of ideas, both from their customers and their own brainstorming.
When you begin conducting customer interviews, you might face an unforeseen issue: your interviewees may not provide extensive responses. They could give you brief answers, leaving you feeling like you haven’t received the detailed insights you were hoping for. Let’s examine this challenge and its opposite scenario: how to handle situations where interviewees have too much to say.
Let’s begin by examining why the customers you interview might provide short responses. This tendency relates to social norms. In typical everyday conversations, there’s an unspoken expectation that both parties will share the speaking time equally. As a result, when an interviewer poses a question that is only one or two sentences long, the interviewee may instinctively feel they should reply with similarly brief answers.
How can you address this issue? The most effective approach is to clearly inform the interviewee at the start of the interview that you want them to talk more than you do, and that you’re eager to hear all their thoughts on the topic.
Now, let’s examine the opposite scenario: how to handle it when your interviewee shares more information than you can effectively utilize.
During market research, you and your product team may end up identifying a large number of opportunities. This is particularly true when dealing with digital consumer products, as the possibilities for enhancing these products are virtually limitless.
With this in mind, the key question is: How can you determine which opportunities to pursue and develop? For example, if you’ve been interviewing customers of a streaming service like Netflix, they may have shared a comprehensive list of their wants and challenges regarding streaming TV shows and movies online. Now, you and your team need to decide which opportunity to prioritize. Should you address the issue of customers running out of episodes of their favorite shows, or should you focus on their interest in identifying the actors appearing on their screens?
The most effective approach to determine which opportunity to prioritize is to evaluate the potential impact of each opportunity on your outcome goals. For instance, if your primary objective is to boost the number of subscribers to your streaming service, you should investigate which opportunity would most significantly influence your customers’ willingness to register for your service.
After selecting the opportunity you want to pursue, the next step is to determine how you will create a meaningful impact. For example, if you choose to address the issue of customers running out of episodes of their favorite TV shows, how can your product team alleviate this problem? There are numerous strategies to achieve this objective, and the initial phase involves brainstorming all possible solutions. This is the exploration stage of discovery.
While it might appear that your team only needs a single strong idea to effectively address a specific pain point, the reality is that generating a wide range of ideas is the best approach for finding an optimal solution. During the brainstorming phase, the focus should be on quantity rather than quality; it’s about producing as many ideas as possible. The ability to generate numerous solutions for a particular problem is referred to as fluency. A team with high fluency can produce a diverse array of ideas. Research indicates that idea fluency is closely linked to the quality and originality of those ideas. In essence, teams that generate the most ideas are also the ones that develop the most innovative and effective solutions.
To generate the most innovative and promising ideas, it’s beneficial for your product team to start brainstorming individually. Research shows that when we collaborate in a group, we often hold back our suggestions due to self-censorship, as we instinctively want to avoid expressing anything that might be deemed inappropriate. Ironically, it’s these unconventional and somewhat quirky ideas that can lead to groundbreaking solutions that distinguish your products from the competition. Therefore, encourage your team to break away and develop their potential strategies independently for a time, before reconvening to share their insights with one another.
If the continuous discovery process seems demanding, that’s because it truly is. Enhancing your customers’ lives by refining the products you provide is no small task. However, the benefits for both your business and the people you serve will ultimately make the effort worthwhile.
Final Overview
Your customers’ needs, challenges, and desires are continually evolving, which means the products you provide must also adapt. While it may seem straightforward to just ask your customers what they want and proceed accordingly, they might not have a clear understanding of their own needs. This is where a thoughtful discovery process becomes essential. It’s the responsibility of your product team to thoroughly identify opportunities to better serve your customers and make informed decisions about which opportunities to pursue.
