Customer Centric Product Life Cycle Management

How do you explain when a successful MVP (Minimum Viable Product) and a proven product-market fit result into an unsuccessful business?

The answer to this question lies in understanding and applying a customer centric approach to managing product life cycle. The following diagram represents a simple yet profound way to manage product through 4-critical phases – Acquire customers, Optimize customer experience, Retain customers and Cultivate customers.

Absence of customer centricity, mentioned above, is likely to result into a failed product despite a successful MVP and a great product-market fit.

Here is a double click on the core thought: it’s important to understand as to how do you decide whether to focus your engineering investment in support of customer acquisition strategy and/ or in optimizing customer experience?  Customer acquisition is often about adding a lot of new features to acquire new customers either in the core markets or adjacent markets. Whereas optimizing customer experience is about making sure that the customer is able to derive full value from their investment in the product. In other words, expected outcomes are delivered to customers, and they see a business value created by those outcomes. This can be measured by Net Promoter Score and referenceability of the customer base.

Optimizing customer experience in not just about the user experience as in UI, it is about gaining a greater understanding of the ‘consumption model’. How customers use the product, what are the associated systems that the product has to interoperate with to deliver the value, and what are the inhibitors (aka frictions) in the user adoption – are some of the key questions which must be answered and fully understood not only by the product managers but also by everyone touching customers, directly or indirectly, namely, sales, SE, services, support and the engineering.

Post successful MVP and product-market fit validation, every product leader finds himself/ herself at a decision fork – Should I invest engineering resources in support of customer acquisition or in optimizing customer experience? 

This is also the time when executive management of the company needs to clearly assess as to where the product truly is from a value creation standpoint.  Temptation to acquire more customers without investing in optimizing customer experience can prove pretty expensive over time.

An easy answer to the question about where to invest is to do both but then there are only a fewer resources available to do both. One extreme yet very common bias that I have found, which is also an easy trap to fall into, is to go into customer acquisition binge and not worry about optimizing customer experience until each customer deployment becomes a real pain. This is not only unfair to the early adopters who believed in the vision of the product, it results into an endless support costs and PR debacle.

These are hard choices to make for each and every company after a successful release of MVP. Lack of investment in optimizing customer experience can trigger a spate of customer escalations, which in turn can negatively impact the morale of the employees. Talented and hardworking engineering, product and customer support teams may slip into thinking that they are not winning despite burning long hours. This could ignite a negative spiral.

Product leaders and the executive management teams have to make the right choice. Here are some thoughts around how to go about making the right choice:

·         Identify key customer outcomes and focus on maximizing value creation around those outcomes

Maintain a laser focus on value created by key set of outcomes that allowed you to win your customers. Continue to raise the value for the customers around these outcomes. This will require a lot more investment of time and resources to understand how customers are consuming the product so you can optimize their experience. 

In other words, resist the temptation to add new features for customer acquisition when you have not even optimized customer experience around initial set of outcomes that you delivered.  It can create a false sense of achievement if you get many customers in the beginning as none of them will see a sustained value coming from their investment.

It is prudent to take a step back, and focus more on delivering the expected value which led to a successful acquisition of the customers to start with. Raise the bar enough to be ahead of the competition and to claim a market leadership position in what you aim to be best at in creating customer value.

·         Gain a better understanding of the consumption model.

Ensure that sales, product and engineering teams have a greater understanding of how the product is being used by the customers.  Understanding roles of various actors, outcomes that matter to them, end-to-end use case, the workflow that the product is a part of and the velocity of the usage (aka adoption) are critical to determining the state of adoption and, therefore, the need to optimize the customer experience for a greater adoption.

Also, this will allow your sales team to gain a better insight into the critical outcomes that your product must enable to improve stickiness. In the process you can cultivate customer by delivering even greater value.

·         Establish a clear balance between acquisition and adoption requirements.

Often improving the plumbing of the core product is not seen as the exciting thing but it has the most far reaching impact on the adoption of the product and customer referenceability over time.  Technical debts that one takes early on have always proven to be very expensive. 

Find the right balance. Consider applying dedicated resources to fix the plumbing issues to optimize customer experience with the product, and a set of dedicated resources to work on new features for customer acquisition. This requires that there is a roadmap for optimizing customer experience alongside enabling customer acquisition to plan for a balanced release cycle by delivering a core set per Sprint to enable both.

·         Do not copy competitor’s customer acquisition strategy.

This can be a death spiral when product leaders simply start copying competition.  While it’s crucial to learn from the competition, it’s even more important to look at your own strategy to acquire customers and delight them so they stay with you.  Here are the key probing questions to ask – Are you enabling outcomes that matter most to the customers and that value created by you is far greater than the competition? What can you do to raise the bar and delight the customers around key outcomes you are focused on? What outcomes are you enabling that competition cannot enable today? Are you adding more user friction than the competition? If so, what is your strategy to minimize that?  These are just a sample set of questions, which probably are pretty obvious.  It’s unfortunate that most product leaders and executive management teams simply gloss over the obvious and try to copy competition.

It is ideal to leverage strategy canvas (Refer: Blue Ocean Strategy – Authors: W. Chan Kim · Renée Mauborgne, and please see my blog from Sep 3-2013) to assess what outcomes matter most to the customers to develop your winning product strategy.  Products don’t simply become great by just copying!

·         Executive support.

Customer centric product life cycle management puts much greater burden on the executive management team so they can help and lead in managing customer and field organization’s expectations. They also need to ensure that they are not leading the product and engineering teams down the path which will result into incurring expensive technical debts on an ongoing basis.  There has to be a plan to pay that debt sooner rather than later, and Executive Management must support that.

A lack of executive support and poor understanding of the need to balance investment in customer acquisition and in optimizing customer experience can cost companies their fortune.  Temptation to acquire new customers often takes critical resources away from fixing the plumbing which becomes super expensive with each release and each new customer who migrates over to a new release. It also leads to engineering burn out as they spend long and non-productive hours in fixing all the problems they knew but they didn’t get the time or resources to fix. Among other things, this can also result into an exodus of top talent as no one wants to be wasting his/ her time fixing known issues!

At the end of the day, in order to have a sustainable growth and to have delighted customer experience, you need find the right balance between acquiring customers and optimizing customer experience!