Why is Product Experience Important?
1.1 The Product Experience Imperative
The customer hasn’t always been the driving force behind company decisions. Before digital transformation began and the age of the customer emerged, it was a volume game. Companies operated with a product-centric mindset. “How much can we sell and how quickly can we sell it?” was the question fueling businesses of all shapes and sizes. Consumers had fewer choices, so businesses had the power.
With the shift to a digital model, now the customer gets all the power. It’s easier than ever to create digital experiences. Apple’s App Store has over 2 million available apps—and they’re the second-largest app store. (Mind you, we didn’t say good digital experiences). If you offer a digital product, you have way more competitors than before and that means that a customer has the power to grow with you and shrink with you. The power to stay with you or leave. The power to tell their friends about you or not. You need them more than they need you.
1.2 New Market = New Product Expectations
Once upon a time, the goal for businesses was simply to sell as much product as possible. Now, it’s become much more complicated. We’ve identified three significant changes in market dynamics that have contributed to the evolution of our product expectations.
- Subscription Models
Subscription models have changed the metrics we use to determine success. It’s not just about revenue anymore, now we measure customer acquisition, adoption, retention, expansion, and advocacy. Product teams are responsible for playing their part in attributing to these metrics.
- Fierce Competition
Competition is getting greater and more specialized. There’s a lower barrier to entry, but our B2C experiences have given consumers of today high expectations from the products they use. Fierce competition in the cloud demands that products deliver value with superior experiences.
- Access to Data
Gut-feel decisions don’t carry as much weight anymore in our connected SaaS world. We had way less customer data to go on before. You were blind because you had no other choice—your product was sold through partners or installed on customer servers. Today’s market requires you to pressure-test ideas before you make big bets. If you’re not making decisions driven by deep insights, you’re falling behind.
1.3 Product Teams Need to Adapt...or Face the Consequences
“Over the next three to five years, we see the product-management role continuing to evolve toward a deeper focus on data (without losing empathy for users) and a greater influence on non-product decisions”
- McKinsey & Company”
These new product expectations have fundamentally changed the product role. The power shift to consumers has put the onus of delivering value on the vendor. Before, if you bought a piece of hardware, a car, or a movie, it was up to you whether you used the hardware, drove the car, or watched the movie. Now it’s up to your entire company to lead users and customers to value.
In order to stay competitive, product teams face ever-increasing pressure to deliver winning products and exceptional experiences. When you’re offering a digital experience, so much of the interaction between your customers and your company is happening within the product. As a product leader, you’re expected to drive product usage and feature adoption, but lack control over the channels through which users can be engaged. Meanwhile, executives expect to see the correlation between product investments and business results, but the data is spread across the company. In order to deliver exceptional experiences, product teams must master these three skills:
- Make data-driven product decisions by leveraging analytics to make informed, compelling roadmap decisions.
- Accelerate onboarding and adoption with the use of in-product engagements that guide each user to have the optimal experience.
- Demonstrate the impact of product investments by correlating new feature adoption with retention, trial conversion, and expansion.
A study by Pragmatic Institute
found that 52% of users said a bad product experience made them less likely to engage with a company. These bad product experiences have a bigger impact in the Age of the Customer because once a user is unhappy, they will find another solution out there to replace yours—no matter how irreplaceable you think your product is.