Our session for June was about balancing the customer need and stakeholder demands. The session was run by Mat Vine who has a wealth of experience to draw on for this topic. Mat organised his presentation into the top 6 factors to look out for to keep the customer need in focus as stakeholder demands creep into the product design process.
A perennial business challenge is the balance between delivering customer value vs business success. Developing a new product is complex and as you begin to get into the details, sometimes you get too far away from the original customer need you were planning to solve! To keep from “diluting the proposition” you need to champion the need through the entire process.
6 Factors to Help Balance Customer Need & Stakeholder Demand
1. Pick your business outcome
The outcome can be a range of things but make sure it is what people actually strive for and not what your KPI is. For example, it is quite common for profit share to be the KPI at a company, yet people will be drawn to a different measure such as growing market share. Examples of business outcomes you could use:
- Market Share
- Sales volume
- Revenue per sale
2. Be very clear on your customer need
[pullquote]You can never be too passionate on the customer need in the business[/pullquote]
An example Mat covered here was Adidas sponsorship of the London Olypmics. Adidas set up Adi-zones around London that had free use of sporting equipment. The intention was to help get young people, who might not otherwise have an opportunity, active and involved in sport. It worked out well for Adidas as they ended up with a 2% growth in market share, and £100M increase in apparel sales.
3. Choose your time horizon but never ignore the long term
One of the stories shared here was about the strategy of HR companies in the US going aggressively after market share. To gain customers they dramatically undercut the price of the software which meant in the short term they were not making profit at all. This approach eventually led to being able to sell the company off for a significant value due to the customer numbers they had to offer to whomever acquired them. The question in the back of the audiences mind however, is how much work the new company will have to do to be able to move those customers to a profitable state.
4. There are many levers to work with – choose wisely
There are many levers you can use to achieve balance in customer value and business outcome. If you don’t have enough customer value but doing ok with profit, then you are in a great position to add value/ features consistent with your CVP. If you are not delivering enough profit then it’s much more difficult because you need to remove features and value… you can replace with other features that cost less but have high perceived value, or remove features that aren’t highly valued by customers
5. Know your stakeholder and embrace stakeholder management
The image Mat used in his presentation did cause the audience to laugh. A reflection of the fact that we know this is such a critical part of a product managers job, but every now and then it isn’t always the favourite part. Anyway, the advice offered by Mat was to work towards you stakeholders being:
70% convinced, 100% committed
One of our audience asked Mat if he used this statement in front of people, and he said he did. He found that calling out clearly where people were at with their belief in an idea, could help with uncovering what was holding people back.
The other piece of advice was to start early with stakeholder management, the earlier they on the path with you the better. At this point, Mat wondered if perhaps he should have had time on his list. Time can give you many advantages but one key on is to allow you to work through all stakeholder concerns.
6. Decide what’s important with your Customer Value Proposition (CVP) – and champion it
Some good discussion occurred around this point, with some thoughts shared on how to help make sure the core vision isn’t lost and does get communicated and cascaded to everyone. The audience had very mixed experiences with how hard or easy this is to do, and at times astonishment that it even needs doing. This led us nicely into further conversations at the bar.
A fantastic night, newcomers, old faces and time to chat with each other afterwards as well. Join us for our next event on the 24th of July or coffee on June 26th.
Thanks Liz. This is a great resource for people who didn’t attend on the night. I appreciated being able to read all about it.