Product Strategy for the New Normal

No doubt COVID-19 has affected everyone. The In-Person Economy is eroding, and people’s expectations will change. If you don’t adapt to the new normal you’ll be left behind by companies who do. What do you need to change your product strategy to adjust to changing customer preferences and demands? Is your company prepared to meet the New Normal of customer expectations?

Customers will want:
- Everything to be easier to use
- More services delivered online
- More products delivered to their door
- Higher quality experiences from apps and websites

This presentation covers:
- How to reshape your Value Proposition for the New Normal
- How a better understanding of your customer’s needs informs your product/service strategy
- Using Human-Centered Business Design to find new ways of creating and capturing value

Transcript

1. Product Strategy for the New Normal April 10, 2020 X
2. 2 1. What’s changed in the last 60 days (a lot). 2. How people make decisions. 3. A brief look at Value Propositions. 4. Revisit your Customer Journeys 5. Finding your Adjacent Possible. 6. A few things you can (and should) do. What We’ll Cover
3. 3 Seller Driven Economy Buyer Driven Economy 2000 2010 2020 1990 1980 1970 1960 1950 .com bubble burst Great Recession
4. 4 Seller Driven Economy Buyer Driven Economy 2000 2010 2020 1990 1980 1970 1960 1950 In-Person Economy .com bubble burst Great Recession COVID-19
5. 5 1. Economic a. Many people lost some or all of their income. b. Cut back on discretionary spending. c. Focus on preservation (or survival) instead of growth. 2. Psychological a. Forced into a “Scarcity Mindset”. (there isn’t enough to go around) b. It takes 7 weeks to form a new habit or behavior. c. Traumatic events make these changes harder to overcome. Changes in Consumer Behavior
6. 6 1. Typical Recession Consumer Behavior, with an added twist. a. Will be more price-sensitive for discretionary purchases. b. Will expect more value from purchases they do make. c. Leading to more online research before making purchasing decisions. — and because of Social Distancing — d. More likely to shop online for things previously bought in person. e. Will do more online research before going in store. f. More likely to make purchase decisions without ever seeing the product or talking to a salesperson. What does the future hold?
7. 7 • Consumers are indifferent at any point on the diagonal “demand line”, where perceived value and cost are equal. • Product A is preferred because it is seen as a better value for the cost. • Product C is at a disadvantage because its perceived value is below its perceived cost. Perceived Value Perceived Cost Product A Product B Product C Demand Source: How the recession has changed US consumer behavior - McKinsey - Dec 2009
8. 8 Perceived Value Perceived Cost Product A Product B Product C • In a downturn, the perceived cost increases, while the perceived value does not. • Products and services struggle to recover unless they are more effective at communicating value. Downturn Effect Demand Source: How the recession has changed US consumer behavior - McKinsey - Dec 2009
9. 9 Perceived Value is greater than Perceived Cost = YES! Exchange Theory Perceived Cost is greater than Perceived Value = NO! Both Value and Cost can be measured in: time, money, pleasure, effort, power, status, love, etc. If {
10. LIZARD BRAIN 10 YES NO HIGH-FUNCTIONING BRAIN LAND OF REJECTION INPUT FEAR? DESIRE? CONSCIOUS DECISION MAKING Basic Human Psychology
11. 11 1. Is not your “elevator pitch”. 2. Is a promise your marketing makes to the customer, which is (hopefully) delivered by your product. 3. Is how your customer determines your product’s perceived value. 4. Is the foundation for your product positioning and marketing. Your Value Proposition
12. 12 TAM CAC LTV Targeting Market Segments • Largest Total Addressable Market (TAM) • Lowest Customer Acquisition Cost (CAC) • Highest Lifetime Value (LTV) • Shortest Sales Cycle Sales Cycle Also see: https://neilpatel.com/blog/customer-acquisition-cost/
14. YOUR PRODUCT 14 CUSTOMER ROLE TASK PROBLEM PAIN TASK PROBLEM PROBLEM PROBLEM PAIN PAIN PAIN PAIN PAIN PAIN PAIN PAIN PAIN RELIEVER PAIN RELIEVER GAIN CREATOR GAIN CREATOR PAIN RELIEVER PAIN RELIEVER VALUE PROP
15. 15 CUSTOMER ROLE TASK PROBLEM PAIN TASK PROBLEM PROBLEM PROBLEM PAIN PAIN PAIN PAIN PAIN PAIN PAIN PAIN Use MindMapping software to write down: • the role your customer is performing • the tasks they need to accomplish • the problems they have performing those tasks • the pain they feel because of those problems Some tools to try: • Miro - www.miro.com • MindNode - www.mindnode.com
16. 16 1. What are all the steps your customers need to complete to get from the initial idea to the finished task? 2. How can you provide more value to them at each step? 3. Are there any opportunities to streamline or simplify the journey for the user — or to reduce your costs? Revisit Your Customer Journeys
17. 17 I Want a Taco! Open App Choose Tacos Add to Cart Complete Order TACOS!
18. 18 I Want a Taco! Unlock Phone Open App Choose Location Delivery Address Browse Taco List Choose Tacos Choose Toppings Add to Cart View Cart Payment Method Modify Cart Complete Order Success Message TACOS! • Have more steps than you initially think. • Identify more opportunities to create & capture value. • Help streamline processes and find areas to improve. • Help align your products & services with your Value Proposition. User Journeys can:
20. 20 1. Some businesses need to change. a. Revenue is down. b. Layoffs of key staff. c. Your target markets have shifted. 2. How to reformulate. a. Look at your People, Process, Product, and Platform. b. Market Weaknesses. c. Internal Strengths. Finding Your Adjacent Possible
21. 21 Who is on your team? What is your mission? PEOPLE PROCESS PRODUCT PLATFORM Internal Strengths Adjacent Possible Digital Strategy Worksheet ninelabs.com Market Weakness How will you make decisions? What will you create? How will others build on it? • Mission • People • Process • Product • Platform and… • Market Weakness • Internal Strengths then… How might we…?
22. 22 1. Consider how recent events change the way your customers make purchasing decisions. 2. Think about the roles your customers play, the tasks they need to perform, the problems they encounter, and the pains they experience. 3. Use a Mind Map to write down their tasks, problems, and pains - and think of specific ways you can provide pain relievers. Things you can do now…
23. 23 4. Discuss your Value Propositions with your team to make sure everyone has the same idea of who your customers are and how you provide value to them. 5. Make sure you’re targeting the right market segment with a review of your TAM, CAC, LTV, and Sales Cycles. 6. Host a session with your team to brainstorm ideas for your Adjacent Possible. Things you can do now…
24. 24 1. My business is different… 2. How long does this take? 3. What if I get stuck… 4. I don’t have time… Questions? A copy of this presentation and the worksheets will be emailed to you.
25. 25 J Cornelius Founder & President Nine Labs www.ninelabs.com jc@ninelabs.com Thank You. A copy of this presentation and the worksheets I mention will be emailed to you.