Why research ROI matters to product managers

Every smart innovator knows that the most successful products solve real pain points. That’s why customer feedback is a critical component of the product innovation cycle. But product managers face a few critical challenges when integrating customer insight into the product development process.

For one, in many companies, customer feedback fails to keep pace with the speed of business. And much of the feedback product teams get tends to be anecdotal, sometimes coming only from a small group of vocal customers who may not reflect majority. This forces product managers to use market research to validate decisions after they’ve been made-or not rely on data or insight at all.

The tough reality is customer insight is mostly unavailable throughout most of the product innovation cycle. Many product managers use data on trends, markets and customer preference that is either stale or incomplete. This combination leads to assumptions, hunches and invalid business cases. Consequently, capital and resources are wasted by investing in the wrong products or features. Once a product is launched, in-market issues are diagnosed too late to prevent sales from being negatively impacted.

The challenge facing product managers presents an opportunity for market researchers to collaborate with product teams and provide customer insight when it’s most needed. In the process, research teams can demonstrate a return on investment (ROI) for their work to the brand.

Market research is critical in product management

Before diving in into research ROI, it’s important to clarify the value of customer insight in the innovation cycle.

In product management, people like to talk about process. Product people are obsessed with roadmaps, methodologies, acronyms and productivity tools, notes Jeff Morris Jr., director of product  at Tinder, but customers don’t really care about these things.

“Customers don’t actually care about how we build our products, or our process,” he argues. “Customers only care about how our products feel in their hands, and nothing else.”

Process is important to product management, but it shouldn’t steal the focus. It should support product innovation but not get in the way of creating value for customers.

To be fair, product managers know they need customer insight. The problem is often of speed and availability of research. According to Mind the Product, 49% of product managers find that the number one challenge they have is conducting proper market research to validate whether the market truly needs what they’re building. Product managers, for the most part, don’t know if they’re building the right products because of this inability to access timely research.

Mind the Product’s advice: look for ways of asking the market directly for feedback that can be done immediately.

Customer insight can reinvigorate growth

In addition to putting the focus on customer needs, market research can also revive product lines that are going stale.

Take Gatorade, for example. When product manager Sarah Robb O’Hagan took over Gatorade, the product was starting to slide, so she decided to reconnect the brand with its core customer: the serious athlete. She discovered these consumers did much more than just hydrate during events. In fact, athletes also loaded up on carbs before and drank protein shakes afterward to recover. Armed with this insight, Gatorade saw an opportunity to expand beyond its niche, introducing complementary products to help athletes. This bold strategy immediately energized sales for Gatorade.

As this example shows, getting insight on customer behavior can provide product managers the inspiration necessary to revive an existing product and create new ones the market is actually looking for.

Customer feedback can inform all product decisions, both big and small

Even small decisions can have a big impact on your product, and sometimes your customers will see something you won’t. That’s why Keurig Canada engages with thousands of customers to get feedback on every aspect of its products, from the initial idea-what accessories it should make, for example-all the way up to packaging and distribution.

Consumer insights analyst Eileen Chen said Keurig Canada has maintained its leadership in the increasingly competitive single-serve coffee maker market by leveraging its relationship with customers. The company uses an insight community to involve customers in the product management process and deliver successful products to the market. “The real benefit of an insight community, especially for a CPG company, is with our innovation across the whole pipeline,” Chen explained in a recent webinar.

She said the insight community enables Keurig Canada to be iterative. Sometimes, the company does as many as four rounds of feedback for a single project. This approach has also meant response rates are higher since customers feel more involved. Most of all, the insight is quite current-exactly what product teams are looking for.

For product team, the future is now

In the end, learning from your customers helps reduce the risk of a failed product launch. It helps stakeholders make data-driven, customer-validated decisions at every stage of the innovation cycle. Customer engagement keeps the focus on the customer pain points that the product needs to address, rather than the process.

Leveraging customer intelligence in your product development cycle is well worth the investment. A Forrester study commissioned by Vision Critical found that companies using our customer intelligence platform to include customer feedback in the innovation cycle have seen substantial ROI: they’ve reduced product testing time by 75% and saved as much as $5 million by avoiding failed launches. Companies that use our relationship-based approach to gathering customer intelligence could also see four to six times faster speed to result for research activities, according to the study.

Vision Critical versus Qualtrics - reviews

In the study, Forrester said:

Interviewees noted instances where they changed product concepts and approaches after negative results toward the initial proposals from their insight communities. One interviewed company used Vision Critical as a critical component of a product relaunch – the revamp of their member desktop experience. One market research manager estimated that faster feedback from their insight community saved two months of work on a one-year project.

As these examples show, incorporating research into the product development process delivers substantial ROI. But in order to do so, research needs to be used in every step of the innovation process and it has to keep up with the speed of doing business today.

Leave a Reply

Your email address will not be published. Required fields are marked *