Having a clear product direction – and understanding the value you provide to clients through your products is the cornerstone of a company’s success.
However, this is not always enough to guarantee success but there are a number of fool-proof ways to make sure to you’re going in the right direction.
But first, here’s a tale of how not to approach product development:
John is the Product Director for New-Retail-Direct Ltd (NRD), a small fashion retail company of 500 staff. The company is successful, but they have challenges around customer engagement, due to the fact that the vast majority of customers use the “guest” checkout journey. John created a new strategy to improve customer engagement by adding a new channel to their Business – an App – which provides additional features that are not available on the web. Internally they have completed App designs that John signed off, followed by the board and the senior team.
John has pitched a new feature called MyNRD, which allows customers to add items they would like to buy in the future, like a wish list. The key to MyNRD is that customers need to sign in to add items to this space and this will lead to NRD creating an account for them. John is aware that the new App will cannibalise sales from the web traffic, but he believes the new MyNRD feature will close the gap on accounts and the additional value is worth it.
They set aside £2m in App development budget and hire a team from a well-known software delivery company, who estimate the design and development as a 1-year project and suggest it is phased for the customer to gain immediate value from the App. NRD, in belief that their approach is correct, request a big bang launch, so they can provide marketing across TV, YouTube and digital marketing platforms.
The App is built perfectly by the software company, on time and on budget.
On the 1st July the project goes live with a large amount of marketing spend. Initially there are a high number of downloads, but customers are still using guest checkout in the App. In a final attempt, John forces a log in at the start of the App journey which reduces sales conversions from 15% of total sale, to 1%. The company now has the maintenance costs of both Web and App, but with a cost-per-acquisition of five times of what the same customer would have cost on the web.
After 3 months in the market, the MyNRD feature is removed as it was unused and the App was a native version of the web site. Apple and Android updates are released and the App deprecated (due to a lack of maintenance). The company moves back to a web strategy only, still with very little understanding of their customers.