This series is written with the beginner in mind.  The content is explanatory and foundational, designed to give someone new to product leadership the practical tools necessary to build a product in a timely and efficient manner.

Building Customer-Focused Products: How to Prioritize Actions Based on Research

One of the most challenging things to accomplish in any business is how to decide which opportunities to pursue. Your team has a lot of good ideas, and any one of them could be the product, or marketing campaign, that makes your company take off.  It’s really tempting to try more of them than we can afford, either in time or money.

On the other hand, how many times have we sat in “strategic planning” or “brainstorming” sessions, listening to the same old ideas being discussed over and over?  Joe is convinced that subscribers are dying for Offer X, and Jane believes Bundle Y is what will drive revenue next year.  Joe says, “Every customer I talked to last week agreed that Offer X is a great idea!”  Jane replies, “Well, Offer X is really expensive to build.  We could offer Bundle Y tomorrow!”  Who’s right, and how do you stop having these unproductive conversations?

How Do You Begin?

This is another area of product development where market research is your friend.  And it’s easy to gather enough information to objectively prioritize all the great ideas your team comes up with.  So, how do you start?

1. Quantify Your Budget.  Can you reallocate funds from marketing existing products to launch Offer X?  Will you have development resources available to develop Subscription Bundle Y?  If not, do you think you can get funding from other sources if the numbers look good?  If the answer to these questions is “no,” stop now.  Don’t spend your scarce time on an exercise that has no value. If you feel you “must” launch new products, then you must be prepared to find the money and resources to make them happen.  Be transparent – put a number on the table so your team knows what they’re working with.
2. Define Direction.  Looking to get more subscribers to your existing publication, or to offer your market more products in addition to your current subscription?
3. Communicate the Goals – and the Restrictions. Rather than stifling creativity, giving your team this direction will focus their idea-generating in a productive direction. If you getting ready to pack a suitcase, it helps to know if you’re traveling to Peru or Pittsburgh.
4. Keep a Log.  Keep a single spreadsheet or list of all the product ideas that come up.  Keep track of the date each idea was last discussed, and why it was given the go-ahead/tabled/turned down.  Whenever one of these ideas comes up again, review the information you recorded and ask, “has anything changed to make this idea more appealing now that it was six months ago?”  If not, make a note and move on.  Spending time going over the same ground due to stubbornness or lack of recordkeeping wastes everyone’s time and increases rather than reduces frustration with the process.

The Readiness™ Model 

A few years ago, my product management team brought 232 ideas to our annual brainstorming session.  I hadn’t given them enough direction, and clearly, they had many good ideas!  To whittle down the list I created a simple model to quickly, easily and objectively identify the ideas that would be best for our business, and best for our subscribers.

What is The Readiness Model (TRM)?

TRM is a set of customizable questions that can be answered in a quantifiable way on a scale of 1-5.  Each business selects questions that are most pertinent to it, and performs research to find the answers given whatever tools, time and budget are available.

What does TRM measure?

How Ready Am I?

How ready are we to meet this market need?  These measurements focus on ranking our ability to fulfill the idea – to bring it to market. Questions in this section include:

• How much would it cost to launch?
• How long would it take to build?
• How comfortable is Sales with selling it?

How Ready Are They?

How ready is the market to purchase your product? This can cover everything from market health to how aware the market is of your brand and your product. Questions in this section include:

• Are we known by this market as someone who sells this product?
• How much does the market need this product?
• Does the market have money to spend?

How Big is the Opportunity?

Using the data derived from your segmentation and sizing exercise and using credible market research sources to find this information, make sure you document the market opportunity for your product or service.

“How big is the market for this?” is the most dangerous question a product manager can hear, but one of the most critical to have an answer for.  While market sizing goes in and out of favor, nearly all project funding sources, from our own CFO to our Board of Directors, will ask for a market size and assumptions about how much of that total market you can sell to.

Market Sizing begins with a statement of the market, some simple math, and a little logic.   It begins with a market hypotheses: “We believe there is a market for an “apartment care” subscription box for female apartment dwellers.” The next question is: “How big is that market?”

What can you learn from the above:

• Analysis can be done with a combination of actual data and estimates as long as each source is documented.

• It’s more effective to create an estimate using some assumptions than to have no estimate. The components of an estimate can be debated and adjusted; an assertion such as “the market is huge!” cannot.

• Market sizing is not rocket science.

What Else Should I Know About the Market?

Market Sizing is as straightforward as was just demonstrated.  It’s a series of increasingly smaller sets of prospects combined with assumptions about average order value.  But there are other aspects of the market that bring a basic market sizing to life.  They include:

• Market Trend.  If you’ve got an opportunity to enter a growing market or a shrinking market, it’s always better to start with the market that’s on the upswing.

• Market Spending Power.  Does the market have money to spend?  The answer may be less quantifiable than other market sizing stats, but giving the question some thought is worthwhile.

• Market Regulations and Expectations.  Scientific and medical journals are traditionally created from highly-specific research, by experts in the field, and articles reviewed by others with the same lofty qualifications.  While these editorial procedures are largely self-imposed (versus required by law); they are critical to uphold the validity of the material.  What standards, regulation or just expectations are there in your market, and can you effectively address them?

Readiness Model Examples

EXAMPLE #1: Below is an example of the scoring in a Readiness Model, where the goal is to choose to enter one of the markets shown.  The Total Score (third in from right) shows quite clearly that the Financial Services and Insurance markets are the highest-opportunity markets of the options shown.

EXAMPLE #2: Below is a graphical representation with slightly different data.  Here, the Learning Center market would be a better opportunity to attack, even though it’s not the largest in terms of the number of prospects.  Why?  Because that market is readier for us, and we are readier to serve it, than any other market.

Final Thoughts on Prioritizing

Leverage the sources we’ve discussed so far to get quantifiable answers to the questions of market trends and internal quantifications such as the number of authors, man hours to build a new product, etc.  Get your finance, IT and customer service teams involved if you have them.

Don’t have the resources or time to spend? Even going through this exercise without the benefit of hard data will give you a clearer, more objective view of the benefits of doing one project over another.

And remember – using numbers and market research are the beginning of the discussion of how to prioritize your new-product opportunities, not the end!  The exercise doesn’t replace rational discussion, it just informs it.