In the product business, the focus is often on company internal things. Time is used to solve complex technical issues to create products. People with technical backgrounds always talk about how we can plan, design, and develop our products. Sometimes we concentrate on thinking about what would be fun to develop or whether there are technologies that look good on our CVs. Technology is exciting and important, but we need more.
Remember: It is all about the customer!
But who pays our salaries – the customer does!
To be successful, we must understand why our customer buys our product.
This understanding is fundamental to people responsible for the products – typically product managers. Luckily, modern product management has systematic methods and tools to improve this understanding to ensure the success of your products.
Let’s approach the topic with a hypothetical story that could have happened to you regardless of what your industry is!
What exactly happens when a customer buys?
Now that business travel is possible again, we can travel to customer meetings. Do you remember how it feels to embark on an early morning flight towards new adventures?
In the morning, the alarm rings 2 hours earlier than usual. The time runs fast after you wake up. You don’t have time to make coffee. You are in a bit of a hurry, you order a taxi, and start to wonder if it will arrive in time. You snooze in the comfortable back seat of the taxi. Soon you arrive at the airport. You have already checked in online, but you must still clear the security check on site. You feel relieved that you are at the airport in time.
The moment you step inside the terminal, the aroma of freshly roasted coffee hits your senses. Being a heavy coffee drinker, the desire to get a cup or seven starts to grow irresistibly.
You join the queue and buy a big cup of black coffee (yes, coffee will be served on the flight, but you can't be sure. Actually, you remember that during your last flight, only half a cup of weak coffee was served in a small cardboard cup).
And thus the cafe operator closed the deal, and a handful of euros changed hands!
What just happened? What was needed to close a deal?
The following ingredients are required for the purchase transaction:
1) Customer need: in this example story, an entrenched habit or maybe even coffee addiction.
2) The offering: the product/solution to be sold. In this case, freshly brewed coffee.
3) Encounter: the customer's need and the offering must connect in time and location, i.e., in the airport cafeteria.
4) A trigger for action (one or more): the trigger in this example was the smell of fresh aromatic coffee wafting around. (We don't know if that aroma is in any way related to the coffee being sold)
For your product to be sold, the above factors must be present. Or, maybe you have a genuine killer product that people line up to buy just because you developed it.
Let’s now look at the three factors you can influence as a product manager.
Your product or service solves a customer's problem or need. The airport café has the equipment and raw materials to help you quickly get a cup of hot coffee. Coffee shop chain management has designed the customer experience to meet the needs of the most important customer segments. The service is the same no matter who serves you in the morning shift.
Your products and services will succeed if they solve a customer’s problem or satisfy their needs. In other words, the product must create value for the customer. A successful product makes the customer's life easier in some way.
Successful products are easy to use. For example, if you need an excessive training program or additional services to ‘’redeem’’ the value of a product, success may elude you.
Ease of use may also depend on the context. If there is a rush to the exit gate, the cardboard mug beats the porcelain mug, as you can throw it to a recycling bin after use. If your SaaS service is used on the road in addition to the office environment, it is undoubtedly sensible to supplement it with a mobile application.
The coffee shop should be where there is people flow. The best location is where coffee-thirsty people move about – away from their coffee machines. For example, at the airport, where people often go unusually early in the morning or sometimes feel exhausted.
A large number of customers in a favorable position without an alternative or competing solution is a winning combination.
There are many sales models, and the physical marketplace is often not the most important.
The buyer's journey starts online long before meeting a salesperson. Many products and services are purchased online, including expensive business-to-business products and services. Instead of a physical encounter, the buyer sees the advertisements and content marketing in different channels before making contact.
When there is no physical encounter, customer understanding is essential. The benefits and value of your product and service must be crystal clear and easy to understand. The customer is only interested in their problems and needs.
When the need, the offering, and the encounter are in place, one last touch is still needed. The customer may be inclined to postpone the purchase decision. In our example story, you might as well have decided to have your coffee on the plane.
What if you broke your entrenched practice and bought an energy drink from an airport store? Maybe you didn’t have a strong need for coffee today. What if you started a coffee strike that day?
That’s when you smelled the aroma of fresh coffee and immediately decided to buy a cup of coffee.
The trigger will get more customers to take an extra step towards your sales goal!
I list some ideas about how to push your customer to buy your product or order a service.
- Free trial to test the value of the product. Examples could be a free trial of a SaaS service or a product tasting at the local grocery store.
- Eliminating customer risk with, for example, a money-back guarantee or an extended warranty.
- Discounted price.
A trigger works best when it is designed to motivate the customer to act quickly. The idea is to bring the sometimes dormant need to the top of the customer's mind and give a rational reason to act quickly.
So, how do you make your own product business thrive?
Good product management helps need, supply, encounter, and trigger meet!
Product management provides systematic ways to make a business thrive.
The market opportunity helps find the best ideas for new products. The need and business potential are explored efficiently by systematic market opportunity methods.
Product planning helps develop value-creating and easy-to-use products and services. Product design means focusing on the things that are important to the user of the product and ensuring that the product's value is easy to redeem.
Product marketing helps your customer to buy your product. Product marketing is the raw material for the actual marketing. Through product marketing, value is communicated to buyers to remove barriers to buying.
Product strategy defines how the offering is developed to achieve long-term goals (vision).
Lifecycle management helps maximize the value of a product beyond its lifecycle. Every product needs an owner who proactively manages the product business according to the goals of each life cycle stage.
Eficode can help you adopt state-of-the-art product management methods, upgrade your product management practices, and train your product managers.
Published: June 2, 2022