42 – is not just the answer to the ultimate question of life, rather, it is the average number of people that a digital customer will tell about a good customer experience.
Imagine the compound effect of this. Without spending any marketing budget, if 10 customers share the experience, it would translate to nearly 450 potential buyers of your product.
Question is, how do we ensure a good customer experience?
There is an art and science to creating products with good customer experience.
Let me walk you through a step-by-step process that is tried, tested and proven to help you learn the nuances of building a product that customers not just like but love!
Step1: Know your customer
Who they are, what they do, what drives them, what motivates them and what challenges they face.
Imagine if Mark Zuckerberg released Facebook to everyone in one shot; it would not have had the success it is today. Instead, he started it as a social platform for students at Harvard. Since it worked so well, he rolled it out to other Ivy League colleges and over the next couple of years released it to the rest of the world. Mark speaks about it in detail on the podcast Masters of Scale.
Starting with a specific set of customers and expanding them to a larger set would be your path to success.
For example, a startup wants to build a shopping cart app that buzzes when you buy anything over your budget.
The founder Annie initially said that the “customer could be anyone” but with the right questions, I was able to help her narrow it down to a customer persona.
It is important that you know the answer to this because this is the foundation on which your startup customer base is built.
Here is a look at Annie’s ideal customer – Jill.
“Jill is a 42 year old insurance agent, she has 3 kids and is always on a tight budget. Her husband is a car mechanic and their combined annual income is $76,000.She is often angry with herself for buying another shampoo or soap that she did not need, while grocery shopping. She wants to save enough to take the kids to Disneyland this fall. She always “coupon” shops.”
A detailed profile of Jill
Note that the above description is very specific.
You know her goals and ambitions. You are familiar with her challenges.
If you don’t know who your customer is and their goals or challenges, start with an imaginary profile.
Once you speak to a few, you can narrow down it down further.
If Jill is indeed your customer, maybe she is willing to try your product for a few bucks.
Let us pause and reflect on this.
Your customer just went from “anyone” to a specific person who is ready to pay real money for your product.
Step2: Address the problem you are solving
But, Why would Jill pay you money for the budget saving grocery shopping cart app?
For a couple of reasons:
First, your app is going to address her goal of taking her kids to Disney. Obviously her kids mean the world to her and anything to make them happy makes her happy.
Once you think in terms of a customer’s story it becomes less about the product features and more about why anyone would buy your product.
Don’t get me wrong. I am not undermining the complexity of writing code.
I understand the debate between native app versus hybrid app and java or python.
But all that is secondary if your customer does not feel a need to use your product.
The success of your product adoption is directly proportional to the pain of the customer problem you are trying to solve.
Step3: Under your customer journey
Often I hear startup founders say, “I conducted a survey”.
Or “I got feedback from my network”.
“A lot of people find this idea interesting”
The question is “Ask them to pay 10 dollars for the product and notice their reaction”
Yes, talking to customers is nerve-racking. It means getting you out of your comfort zone.
So is starting a startup.
I ask the startups I work with to ask for a discount at Starbucks. Not because you cannot afford the coffee but it will teach you to push yourself out of your comfort zone.
(Sidenote: I usually ask for discounts at stores like Aldos and Nordstrom. The reaction is not what I expect.)
Hence talking to customers is important. It helps you with the following:
1.Identify your correct target customer
2.Their stories paint a picture of the problem you are solving
3.Establish rapport between you and the early adopters
4.Find your first paid customer
5.Get feedback on your product mockups
Are these reasons not incentive enough to make you want to talk to your customers?
Step4: Convert stories to features
You have just completed multiple customer interviews and listened to a lot of customer stories. The ones that deal with the problem you are solving will be the most relevant.
How do you connect these stories to your product?
There is a proven methodology to go about it.
Going back to the example of shopping cart saving app, here is how the interview can be translated to a feature.
Jennifer, 39 yrs, mother of 2 kids (ages 6 and 9)
Jennifer is frustrated that each trip to the grocery store costs her anywhere between 200-300$. She goes to the grocery once a week. Analyzing her expenditure using Mint.com, Jennifer is amazed that most of that money is spent on products that she did not need – one more hair conditioner, face wash to be added to the 3 she already owned, slivered almonds that she meant to use for baking that she never got around to, 4 different vegetable oils and the list goes on. She is frustrated that she might never get to that dream house or take her kids to Disney.
Now let us break down Jennifer’s story.
Her long-term goal: To save money for down payment of her house
Her immediate goal: Take her kids to Disney World
Her challenge: She needs to control her spending on unwanted items.
The questions to ask:
How can your product help with her saving goal?
How can the product provide a means to curb her spending habits?
How can you help her fulfill her dreams for her children?
Your product is going to help her get to her goal. She is asked about her grocery list. As she scans the products in the grocery store, the app buzzes if she picks something not in her list. She might have a flash of a house with a picket fence on her screen every time the buzzer goes off.
At the end of this exercise we have translated her story to actual product features.
Step5: Build a Minimal Core Product
Most people call this the MVP (Minimal Viable Product). One of things that is often wrong with the MVP approach is building some features that you think are important and releasing it. This can be some of the technology components that are easy to build. It can also be what you call the beta launch and conjure a few features together.
This defeats the purpose of seeing if customers are willing to use it and most importantly, are they willing to pay money for it?
Turning this approach on it’s head might give you better results.
Can you narrow down on the core customer problem you are solving?
In the case of shopping cart saving app, would the user be able to upload her shopping list? Would she be able to scan the price/total items she bought?
If you are an AirBnB, then this means connecting someone who wants a room with a property ready for renting.
If you are a photo sharing app, ensuring that folks are able to upload photos and share.
Whether they integrate with their Twitter, Instagram or Facebook is secondary. It can wait.
If the core of the product is not used, then there is no point building the bells and whistles.
The key to building products that customers want and buy over and over again is talking to potential customers.
Understanding their challenges, what drives them and what makes them happy is important to building something they will use.
What is stopping you from building an awesome product?
Is it time, money, effort or just don’t know who your ideal customer is?
Let me know in the comments.
By 2020 every business will either be a digital predator or a digital prey. It is 2017 and most organizations are undergoing some form of digital transformation. The question is how successful are these projects? Especially when you are dealing with legacy systems, outdated business models and a culture resistant to change.
While it is easy to gain efficiencies from one-off projects on digital, how can you utilize it for growth and profitability?
According to MIT and Accenture, Digital maturity equals 29% more profitability, 9% more growth and 9% higher market valuations.
Digital transformation touches many aspects of your business – technology, processes, skills, operations etc. But the crux of your success depends on changing the fundamental way you do business. This is due to heightened expectations of customers due to digital businesses we are all familiar with like AirBnB, Uber, Netflix, Amazon etc.
The issue then is not about what projects to invest in but how to have an overall impact on your business. We recommend adopting a strategy that addresses common challenges most digital transformation projects face.
1. Change Although change can start anywhere in an organization, the drivers for a digital transformation project should be the C-suite. A top down approach will help with the change in business models, organization culture and most importantly investment in the right opportunities. The % of CEOs who champion digital has increased to 68% in 2017 from 33% in 2007! By starting at the top, a vision is formulated taking into account the impact across the organization.
According to McKinsey "To make a digital transformation happen, you need complete alignment—from the board through the executive team through the whole organization. Without that “air cover” from the board and from shareholders who understand the change that you’re taking the organization through, it is very, very hard to do it successfully.”
Once the leadership team is clear with the vision, the message can be clearly and openly articulated across the organization. A sense of urgency has to be conveyed to the mid-management, since they hold the resigns of execution.
Less push and more passion is the secret to the organization’s adoption of digital transformation.
2. Business Strategy / Business Models You would be surprised to know that Kodak’s downfall was not lack of latest technology; it died due to lack of appropriate business model. They purchased a photo sharing site called Ofoto in 2001 but instead of utilizing it to share photos and memories, they tried to get more people to print digital images.
Bolting digital on top of what you currently have is easier than seeking new and alternate strategies for your business. This is daunting if you don’t know where to start. Looking at competition, digital trends and assessing where you are on the Social, mobile, analytics and cloud spectrum would be the beginning of this long journey. “Ten years ago, innovation was based on features and functions,” says William Ruh, chief digital officer at GE. “ Now it's about your business model and transforming your industry"
The focus of digital transformation can fall under three categories 1. Enhancing the core of your current business 2. Finding new and adjacent business models and 3. Introducing disruptive products. Depending on your appetite for risk, any or all of these aspects can be used to transform your business. The key is in striking the right balance between reinventing but not “throwing all out” approach.
3.Prioritization:Since digital transformation is a vast area requiring additional skills and resources, it would be important to prioritize what areas of the business you want to tackle first - e.g., Do you want to increase customer engagement on social media? Or would you like to launch a new product using machine learning? Are you thinking of utilizing predictive analytics to increase revenue?
Listening to your current customers - on social media, on your app store, your customer service department as well other channels - will give you an idea of some of the quick wins. For example, when a flight is canceled, Delta Air Lines provides re-routing information on customers’ mobile app.
By focusing on the outcomes rather than the technologies, you can be assured of a successful transformation.
The question then is what about other projects in flight? Figuring out if there is any impact to those programs and folding them into the digital transformation project will make sure there is no duplication of efforts.
First, getting quick wins out of the door will boost the confidence and momentum of the digital transformation project. Secondly, launching a new business initiative can bring in additional revenue. Thirdly, tightening the entire end-to-end cycle from sales to operations would keep the ball rolling on accepting digital as a way of life for years to come.
4.Key metrics You can't manage what you can't measure. Digital initiatives need a new set of metrics to keep track of your success. You would now be measuring your customer engagement and sentiment, your network in the eco-systems, adoption rates in addition to revenue and growth. Additional metrics are customer centric like Net Promoter Score, customer lifetime value and customer satisfaction index. An example of networks in your eco-system is the number of Uber drivers or the number of property owners for Airbnb.
Too often metrics can be a nightmare as they might reside across complex cross-channel interactions. Clearly stating the KPIs at the onset of the project and monitoring it along the way will derive maximum value from the digital transformation initiatives.
An advantage of adopting digital is that you can utilize these metrics to boost customer engagement and revenue growth further. For e.g., the customer data can be used to drive new marketing and sales campaigns on channels that you have maximum engagement. You can also utilize it to drive strategic direction like improving your online and mobile presence.
Digital transformation is more than changing your strategy, technology or processes. It is about embracing change culturally and rethinking the way you do business. The successful organizations have managed to overcome the barriers of mapping the digital customer needs to growth opportunities in their business.
The truth is that most organizations are still undergoing this journey and learning as they go along. The ones who manage to overcome the above challenges are the ones moving the needle in the right direction.
This is a guest post from our partner KISSPatent.
If your company is looking for ways to gain industry credibility and increase profits, consider how patents can make your company stable. Patents are proven to be of great benefit to small companies, large firms, and individual entrepreneurs. Patents are linked with stronger performing companies and higher levels of employee satisfaction. Both factors contribute to a more stable company.
Build your growth from patented ideas.
Consider two Asian companies that are attracting investors: Xiaomi and Huawei. These two companies have seen phenomenal growth. They have also relied upon patent protection. This type of protection as a company grows and expands into international trade and development is vital. A company whose value is in intellectual property and products, resulting from innovative ideas, must be strongly defended through patents and licensing. This protection creates the prospect of stability by being able to rely upon a market that demands the products that the companies produce.
A company that can predict what a consumer market will demand can create manufacturing and product plans with confidence.
JOIN OUR PATENT COMMUNITY TO LEARN MORE ABOUT HOW YOUR BUSINESS CAN BENEFIT FROM PATENTS!
Lower investment risk with patents
The U.S. Patent and Trademark Office has clearly linked intellectual property with a strong U.S. economy. It is in a company’s interest to protect their most valued property--intellectual property-- with patents and product trademarks. Inventions that are shored up with such protections will be more attractive to investors by lowering risk. If a company relies on investment dollars for research and development, it is vital to patent their innovation.
Gain credibility and appeal with patents
One of the strongest qualifiers for credibility is a company that has patented technologies. By patenting its technology, a business can stand out among its competitors as being the sole producer of an in-demand product. There is “peace of mind” for investors, as well as consumers, when doing business with an institution that has invented, developed, or created something. A patent speaks of capability, ingenuity and brilliance.
By patenting, it shows that a company sees great value in their efforts. Patenting and licensing is an effective strategy companies can engage in to shape their business into a model that will attract future partners and customers.
DOWNLOAD OUR FREE EBOOK: PATENTS PROTECT INGENUITY HERE
Your employees will thank you for your patents
The loss of talent can create instability within a company that relies heavily upon intellectual innovation. Not only does a company have to undergo the process of recruiting new, qualified talent to replace its loss, but there is also the threat that lost talent will find employment with a competitor. Patents are crucial to increase employee satisfaction, which in turn, results in lower turnover rates. The U.S. Patent and Trademark Office research indicates that the use of patents creates greater advancement opportunities, reduces conflicts and disputes, and fosters a spirit of teamwork that results in employees who are more likely to remain long-term with a company.
A patent is also a means for an employer to recognize the intellectual contribution of individuals or project development teams. It is a way to reward the contribution of employees, encouraging more creativity and innovation. This is how inspiration is driven to discover new ways of creating products or re-inventing processes. The brightest minds are matched with the resources of a company so that their potential can come to fruition.
Patent Benefits Abound
In addition to creating stability for companies, patents offer a number of other benefits:
· Invention theft protection
· Higher sale prices can be demanded from consumers, thus improving profit margins
· Reduction of competition
Patents Are Easy To Obtain
An innovative company doesn’t necessarily have to hire a team of lawyers to patent their ideas and products. Through patent DIY websites, every single creative individual or business, no matter how large or small, can get a patent. Use such a platform and grow your business, protect your ideas and keep your employees thriving in a creative environment where they are rewarded for their ingenuity.
CONTACT US AT KISSPATENT IF YOUR IDEA NEEDS PATENT PROTECTION!
It is a given that adopting disruptive and emerging technologies is a must for any enterprise to survive, not only to maintain your shareholder value but also to keep yourself from going out of business.
History is strewn with the dead bodies of failed organizations that refused to introduce innovative products. We are all too familiar with the stories of Blackberry, Kodak, Sears and more recently, JCPenny, which is a reminder of how innovation is the only lifeline for enterprises. It is important to note that there are many new technologies that are useful for operational efficiency. I am not talking about those. It is not about incremental change in your business model.I am talking about adopting disruptive and emerging technologies that will put you way ahead of your competition and capture new markets.
Take the example of Nike, from self-lacing HyperAdapt 1.0 to Apple Watch Nike+ that aids your workout regimen, Nike holds the maximum patents in the design space. “But it’s always a balancing act. There is this magnetic pull to focus more on the short term, the immediate, the quarter-to-quarter. And then there’s a sense of, f— that, we are going to go out here and really create the future. And we need to do both. I have to live that tension.”says Mark Parker, the CEO of Nike.
The question is does the adoption of the emerging technologies for new products follow the same processes and procedures of regular product design and launch? According to Harvard Business School Professor and author of “The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change)”, Clayton Christensen,
“Disruptive technologies bring to a market a very different value proposition than had been available previously. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value.”
That is the reason that you cannot use the same tactics of building new products while adopting disruptive technologies.
How would you know what the new customers want? How can you rapidly ship a product and test it? What is the revenue potential of the new product without writing a ton of code?
The answers for these questions lie in changing the fundamental way you design, build, test and ship a new software product. You need a process that is proven, tried and tested to produce faster results.
I think combining the best practices of Customer development (from lean startup), Google Venture Sprints and Agile engineering, would give you the best returns and results on your innovation investment.
Let us take a look at what these best practices look like and how you can easily use them to produce results in less than 90 days.
Customer Development: Once you have established that it takes a new set of customers to use your newest and disruptive products, the next step is to get out of the building and talk to them.Speaking to potential customers gives you an idea about the core of your new products as well as their willingness to pay for it. The output of these conversations becomes the input for the next step.
GV Sprint process: Google ventures sprint process is excellent for intrapreneurial activities since it takes only five days to go from concept to mock-ups and customer feedback.Essentially it is a do-it-yourself framework for figuring out the crucial elements of a new product launch – strategy, innovation, design etc. and at the end of five days presenting a prototype to customers for feedback. It requires forty hours of dedication from core team members, a few hours from key decision makers and a lot of structured discussions.
“On Monday, you’ll map out the problem and pick an important place to focus. On Tuesday, you’ll sketch competing solutions on paper. On Wednesday, you’ll make difficult decisions and turn your ideas into a testable hypothesis. On Thursday, you’ll hammer out a realistic prototype. And on Friday, you’ll test it with real live humans.” From the book “Sprint – How to solve big problems and test new ideas in just five days”
Agile Engineering: Agile is a methodology that allows for software to be built as per the ever-evolving requirements. It is a collaborative and transparent process where the emphasis is more over writing working software instead of focusing on documentation. The emphasis is more on open communication and collaboration that would ensure accelerated delivery of smaller chunks of working products. Since you have the feedback from customers, you track these in the form of “user-stories” that are helpful to actually build the product.
Conclusion: In conclusion, there is no doubt that innovation by adopting emerging technologies is crucial for companies to succeed long term and avoid obsolescence. The key to successful launch of innovative products is adopting newer techniques of customer validation, testing prototypes and building software that scales. This is possible by combining the best practices of customer developer with GV Sprint process augmented by Agile engineering practices.
You are in the year 2020 (not far off actually!) and your refrigerator ensures that you have a fresh supply of milk when you run out of it.
And you thought that IoT is just hype in the world of technology?
If you fear this unknown technology, here are some success stories that are inspirational to start thinking about using it in your industry.
1. ALEX AND ANI’s connected AppMost of you might own an Alex and Ani bracelet. What you did not know is that the Alex and Ani is not only awesome at jewelry but also in harnessing the power of IoT to increase sales. Utilizing iBeacon (location-sensing technology of Apple) they attract nearby users into their jewelry locations. Their new app tracks customer purchases and makes smart recommendations to them in store. It is also ensures increased revenue, since this technology tracks where shoppers are walking in a store and determines the best place to showcase certain products.
2. Healthsense’s eNeighbor
A senior care health service provider’s eNeighbor utilizes sensors integrated with remote monitoring capabilities. They can sense when seniors have wandered or had a fall or even forgotten to take medication. Additionally, the system includes an emergency call pendant, allowing patients to call for help if needed. This has been a boon to the senior health care market.
3. First Responder Apex Program
In this pilot program by Dept. of Homeland Security, sensors from smart devices like smart shirt, smartwatch, vehicles, cameras conveyed crucial situational awareness information to first responders (fire, law enforcement and emergency medical assistance). This would assist in expedited response at a disaster site.
4. Disney world Magicband
You have either heard of or used Disney’s Magicband. Guests use Magicband to access all amenities in the park, whether to check-in to their hotel or reserve rides or buy food. The Magicband is embedded with sensors that use RFID to track the actions of guests. This helps Disney to optimize their services according to the demand.
5. Schindler elevators’ smart systems
We have all ridden Schindler elevators. Used by a billion people in 100 countries, this 141 year old business is always ahead in innovation. Using IoT, their real-time maintenance system connects sensor technology with mobile applications, creating a "digital tool case" for the company's more than 20,000 field workers. This allows their service engineers to correct the issue before the customers can notice the problem.
6. King’s Hawaiian FactoryTalk
Manufacturing has always used sensors in their equipment. With the advent of IoT, these sensors are now connected to the Internet. King’s Hawaiian were able to double their food production in their connected facility in Georgia compared to a similar unconnected facility in Hawaii.
The machines were connected to a software platform called FactoryTalk, which allows managers to view real-time information, providing a production-wide overview of plant operations. The result was faster time to market, workforce efficiency, and smarter cost expenditures.
7. City of Dubuque’s Water Management System
A lot of cities are vying to become a smart city but only very few have implemented a tangible IoT solution. The City of Dubuque’s DBQ IQ Watermanagement system is an excellent example of the social use of IoT. Utilizing Neptune Technology’s radio frequency meter interface unit, the residents of the city were able to view their water consumption and leaks. This resulted in a 6.6% reduction in water usage and a 11-fold increase in the amount of reported leaks.
8. Airbus Factory of the Future
You can only imagine the number of parts that go into manufacturing an airplane. Aerospace industry has tons of automation in their assembly process but also has an abundance of manual processes. Hence, Airbus introduced smart tools that use visual algorithms to monitor complex functions like precision drilling as well as automated testing. This helps Airbus to deliver their airplanes faster to customers. With a nine-year backlog of orders this would be greatly appreciated,
“If I can get [the airplane] one day earlier to the customer, I would be very happy. I would receive my check one day earlier and the airline would be able to put the airplane into service one day earlier,”says Hentz, the Director of Innovation at Airbus.
9. Remy Martin’s Connected Bottle
A fun and successful example of IoT is Remy Martin’s (the French cognac producer) introduction of the “Connected Bottle”. By introducing a solution that detects bottle opening, they managed to reduce counterfeit alcohol in China. In addition, they have also had increase in their Club customers. These high-end customers are providedan app that includes loyalty membership and an interactive platform.
10. Port of Cartegena, Colombia
One of the busiest ports of Colombia engaged Cisco-IBM partnership to create aninterconnected hub of data. By installing thousands of IoT devices on cranes, vehicles, and shipping containers, data is sent for predictive analysis using IBM’s Watson platform. The port utilizes this solution to get ahead of equipment degradation, predicting maintenance and keeping machines running efficiently avoiding costly equipment failures.
11. Airport’s BlipTrack
Cincinnati’s regional airport (CVG) installed BlipTrack , a technology that utilizes wireless signal tracking that collects locations of passengers based on their smart devices. This is helpful in optimizing traffic flows and reduced wait times at check-ins and security. CVG has noticed a reduced security line wait time by about 33% after implementing this solution.
In conclusion, if you have been thinking of IoT, NOW is the time to act. To get a fundamental overview on this topic, check out our session next Wednesday, June 15th.