My product management toolkit (28): testing price sensitivity

Normally when I talk to other product managers about product pricing, I get slightly frightened looks in return. “Does that mean I need to set the price!?” or “am I now responsible for the commercial side of things too!?” are just some of the questions I’ve had thrown at me in the past.

“No” is the answer. I strongly believe that as product managers we run the risk of being all things to all people — see my previous post about “Product Janitors” — and I therefore believe that product people shouldn’t set prices. However, I do believe it’s critical for product people to think about pricing right from the beginning:

  • Do people want the product?
  • Why do they want it?
  • How much are they willing pay for it?

Answers to these questions will not only affect what product is built and how it’s built, but also how it will be launched and positioned within the market. I’ve made the mistake before of not getting involved in pricing at all or too late. As a result, I felt that I was playing catchup to fully understand the product’s value proposition and customers’ appetite for it.

Fortunately, there are two tools I’ve come across which I’ve found very helpful in terms of my comprehending the value a product is looking to achieve — both from a business and customer perspective: the Van Westendorp Pricing Sensitivity Meter and the Conjoint Analysis respectively.

The Van Westendorp Pricing Sensitivity Meter has helped me to learn about the kinds of pricing-relating customers to ask (target) customers:

  • At what price would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
  • At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good? (Too cheap)
  • At what price would you consider the product starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
  • At what price would you consider the product to be a bargain — a great buy for the money? (Cheap/Good Value)

The aforementioned Van Westendorp questions are a good example of a so-called “direct pricing technique”, where the pricing research is underpinned by the assumption that people have a basic understanding of what a product is worth. In essence, this line of questioning comes down to asking “how much would you pay for this (product or service)?” Whilst this isn’t necessarily the best question to ask in a customer interview, it’s a nice and direct way to learn about how customers feel about pricing.

Example customer responses to the Van Westdorp questions — Taken from: http://www.5circles.com/van-westendorp-pricing-the-price-sensitivity-meter/

The insights from applying these direct questions will help in better understanding price points. The Van Westendorp method identifies four different price definitions:

Point of marginal cheapness (‘PMC’) — At the point of marginal cheapness, more sales volume would be lost than gained due to customers perceiving the product as a bargain and doubting its quality.

Point of marginal expensiveness (‘PME’) — This is a price point above which the product is deemed too expensive for the perceived value customers get from it.

Optimum price point (‘OPP’) — The price point at which the number of potential customers who view the product as either too expensive or too cheap is at a minimum. At this point, the number of persons who would possibly consider purchasing the product is at a maximum.

Indifference price point (‘IPP’) —Point at which the same percentage of customers feel that the product is getting too expensive as those who feel it is at a bargain price. This is the point at which most customers are indifferent to the price of a product.

Range of acceptable pricing (‘RAI’) — This range sits between the aforementioned points of marginal cheapness and marginal expensiveness. In other words, consumers are considered likely to pay a price within this range.

Van Westendorp price sensitivity meter (example) — Taken from: https://www.qualtrics.com/uk/market-research/pricing-research/

In addition to the Van Westendorp Price Sensitivity Meter, I’ve also used Conjoint Analysis to understand more about pricing. Unlike the Van Westendorp approach, the conjoint analysis is an indirect pricing technique which means that price is combined with other attributes such as size or brand. Consumers’ price sensitivity is then derived from the results of the analysis.

Sample conjoint analysis question — Taken from: https://www.questionpro.com/survey-templates/conjoint-analysis-retirement-housing/
Sample conjoint analysis question — Taken from: https://www.questionpro.com/survey-templates/conjoint-analysis-retirement-housing/

When designing a conjoint analysis study, the first step is take a product and break it down into its individual parts. For example, we could take a car and create combinations of its different parts to learn about combinations that customers prefer. For example:

Which of these cars would you prefer?

Option: 1

Brand: Volvo

Seats: 5

Price: £65,000

Option: 2

Brand: SsangYyong

Seats: 5

Price: £20,000

Option: 3

Brand: Toyota

Seats: 7

Price: £45,000

This is an overly simplified and totally fictitious example, but hopefully gives you a better idea of how a conjoint analysis takes into account multiple factors and will give you insight into how much consumers are willing to pay for a certain combination of features.

Main learning point: I personally don’t expect product managers to set prices for their products or design price research. However, I do think we as product managers benefits from a better understanding of the pricing model for our products and a better understanding of what constitutes ‘value for money’ for our customers. The Van Westendorp Price Sensitivity Meter and the Conjoint Analysis are just two ways of testing price sensitivity, but are in my view to good places to get started if you wish to get a better handle on pricing.

Related links for further learning:

  1. Van Westendorp pricing (the Price Sensitivity Meter) – 5 Circles Research
  2. Conjoint analysis – Wikipedia
  3. Why You Should (Almost) Never Use the van Westendorp Pricing Model
  4. Van Westendorp’s Price Sensitivity Meter – Wikipedia
  5. Pricing research: A new take on the Van Westendorp model | Articles | Quirks.com
  6. Easy Guide: How To Run a Van Westendorp Pricing Analysis – Dimitry Apollonsky
  7. Van Westendorp Price Sensitivity Meter
  8. Conjoint Analysis – introduction and principles

 

App review: Warby Parker

I recently listened to a podcast which was all about Warby Parker and its makings. After listening to the podcast, I was keen to have a closer look at Warby Parker’s website:

My quick summary of Warby Parker before using it – Warby Parker is disrupting the way in which consumers discover and buy glasses. I expect a product which removes the need for physical opticians.

How does Warby Parker explain itself in the first minute? – Accessing https://www.warbyparker.com/ on desktop, I see a nice horizontal layout, dominated by two hero images. There are two main calls to action. Firstly, “Try frames at home – for free”, which then offers me to either “get started” or “browse frames”. Secondly, “Shop online” which lets me shop for eyeglasses and sunglasses.

Getting started, what’s the process like? – After clicking on “Get started”, I can choose between styles for men and women.

Having selected “Men’s styles”, I’m pleased that there’s an option for me to skip the “What’s your fit?” screen as I’m unsure about the width of my face 🙂

Selecting a shape of frames feels somewhat easier, but it’s good that I can select all three shapes if I wish. Instead, I go for “rectangular”.

The same applies for the next screen, where I can pick colours and I select “Neutral” and “Black” simply because I find it easier to visualise what the frames will look like in these colours.

I decide the skip the step involving different materials to choose from. The icons on this screen do help but I personally would have benefited from seeing some real samples of materials such as acetate and titanium, just to get a better idea.

It’s good that I’m then being asked about my last eye exam. Wondering if and when I’ll be asked for the results from my last eye test in order to determine the strength of the glasses I need.

The next holding screen is useful since up to this point I hadn’t been sure about how Warby Parker’s service works. The explanations are clear and simple, encouraging me to click on the “Cool! Show me my results.” call to action at the bottom of the screen. I now understand that I can upload my prescription at checkout, but I wonder if I need to go to an eye doctor or an optician first in order to get a recent (and more reliable) prescription …

I’m then presented with 15 frames to choose from. From these 15 frames, Warby Parker lets me pick 5 frames to try on at home. I like how I can view the frames in the different colours that I selected as part of step 4 (see above). If I don’t like the frames suggested to me, I can always click “Browse all Home Try-on frames” or “Retake the quiz”.

I like the look of the “Chamberlain” so I select this pair of frames and click on “Try at home for free”.

As soon as I’ve clicked on the “Try at home for free” button a small tile appears which confirms that I’ve added 1 out of 5 frames which I can try at home. I can either decide to find another frame or view my cart.

When I click on “Find another frame” I expected to be taken back to my previous quiz results. Instead, I can now see a larger number of frames, but there’s the option to go back to my original quiz results and matches with my results have been highlighted.

I really like how the signup / login stage has been positioned right at the very end of my journey – i.e. at the checkout stage -and that I can just continue as a new customer.

My Warby Parker experience sadly ends when I realise that Warby Parker doesn’t ship frames to the United Kingdom. No matter how I hard I try, I can only enter a US address and zip code 😦

 

Did Warby Parker deliver on my expectations? – Yes and no. I felt Warby Parker’s site was great with respect to discovery and customisation, but I do think there’s opportunity to include some explanatory bits about Warby Parker’s  process.

 

Related links for further learning:

  1. https://www.stitcher.com/podcast/national-public-radio/how-i-built-this/e/48640659
  2. https://www.recode.net/2018/3/14/17115230/warby-parker-75-million-funding-t-rowe-price-ipo
  3. https://www.fastcompany.com/3041334/warby-parker-sees-the-future-of-retail

My product management toolkit (27): checklists

If you’d know me personally, you’d know that I love a good list. Making lists helps me to outline my thoughts, see connections and help prioritise. Three years ago, I wrote about “The Checklist Manifesto” by Atuwal Gawande, which is a great book about the importance of checklists and the ingredients of good checklist (see Fig. 1 below).

 

Fig. 1 – Key learnings from “The Checklist Manifesto” – Taken from: https://marcabraham.com/2015/07/01/book-review-the-checklist-manifesto/, 1 July 2015:

  1. Why checklists? – As individuals, the volume and complexity of the know-how that we carry around in our heads or (personal) systems is increasingly becoming unmanageable. Gawande points out that it’s becoming very hard for individuals to deliver the benefits of their know-how correctly. We therefore need a strategy for overcoming (human) failure. One the one hand this strategy needs to build on people’s experience and take advantage of their knowledge. On the other hand, however, this strategy needs to take into account human inadequacies. Checklists act as a very useful as part of this strategy.
  2. What makes a good checklist? – Gawande stresses that the checklist can’t be lengthy. A rule of thumb that some people use is to have between 5 to 9 items on a checklist in order to keep things manageable. The book contain some good real-life examples of how people go about starting their checklists. For example, looking at lessons learned from previous projects or the errors known to occur at any point.
  3. How to use a checklist – I believe that the key thing to bear in mind when using checklists is that they aren’t supposed to tell you what to do. As the book explains, a checklist isn’t a magic formula. Instead, having a checklist helps you at every step of the way, making sure you’ve got all the crucial info or data required at each step. Also, a checklist is a critical communication tool, as it outlines who you need to talk to (and why, what about) at each step of the way. Gawande also highlights the value of the ‘discipline’ that comes with having a checklist, the routine that’s involved in having a checklist. I’d add to this that a checklist can be a great way of identifying and mitigating risk upfront.

 

I’ve since read Leander Kahney’s biography of Jonny Ive, Apple’s design honcho. The book contains a quote about Apple’s New Product Process (‘ANPP’):

“In the world according to Steve Jobs, the ANPP would rapidly evolve into a well-defined process for bringing new products to market by laying out in extreme detail every stage of product development.

Embodied in a program that runs on the company’s internal network, the ANPP resembled a giant checklist. It detailed exactly what everyone was to do at every stage for every product, with instructions for every department ranging from hardware to software, and on to operations, finance, marketing, even the support teams that troubleshoot and repair the product after it goes to market.”

I perked up when I read how the ANPP resembles “a giant checklist”, detailing what needs to happen at each stage of the product development process. Apple’s process entails all stages, from concept to market launch. The ANPP is understandably very secretive, but I believe that we don’t need to know the ins and outs of Apple’s product development process to look at the use of checklists when developing and managing products:

Checklists aren’t the same as Gantt Charts! – It’s easy to confuse a short checklist with a Gantt Chart. Over the years, I’ve observed how people can derive a lot of certainty from creating and viewing detailed Gantt Charts or roadmaps (see my previous thoughts on this topic here). In my view, a super detailed checklist defeats the object. Instead, I encourage you to have short checklists that highlight both basic and critical steps to go through when developing / launching / managing products.

Checklists are evolving – Checklists are evolving in a sense that they’re likely to be different per product / team / project / etc. I find, for example, that each time I work with a new team of people or on new product, the checklist reflects the specific steps that need be checked, tailored to the team’s way of working or the specific product at hand.

Checklists are a collective effort – I’m currently onboarding a new UX designer into my team, and he’s keen for us to look at the ‘design checklist’ together, as he’s got some suggestions on how to make it work better. This might mean that the existing design checklist (see Fig. 2 below), underpinned by my preferred dual track approach, might be binned or adapted accordingly. Both are fine, as I expects checklists to be formed by those people who are responsible for checking the different list items. I’ve seen people treat their individually developed checklists as a decree … which others had to following blindly. My simple reaction to that kind of approach: no, no, no, no.

 

Fig. 2 – Sample ”design checklist”:

Democratise the sign-off process (1) – Often, quality assurance people come up and drive the best checklists. However, the risk I’ve observed, is that these QAs or the product managers become the single sign-off point for the checklist in question. I go into companies and look at their SCRUM and Kanban boards which have cards stating “Pet sign-off” or “Jackie sign-off”. I recently spoke to product managers at a company where the CEO wanted to sign off each feature.

Democratise the sign-off process (2) -Whilst nothing seems wrong with this approach at the face of it, there are two reasons why I feel uncomfortable with this ‘single sign-off’ approach. Firstly, to me, a hallmark of a truly self-organising and empowered team is that everyone feels empowered to ‘sign off’ on the end result (and its individual components). Secondly, I’m also worried about what happens if the designated sign-off person isn’t available. What happens if Pete and Christina are off ill or in never ending meetings? What if the CEO isn’t available for sign-off? Does the feature or product not get released to market? In short, I’m worried about creating another bottleneck or ‘single point of failure’ or forfeiting speed to market.

Don’t forget the basic steps – How often have you’ve been in a situation where you’ve just launched a new product or feature and realised that you forgot to test the styling of the images, content and calls to action? Sense checking things like these sounds like a basic step, but it’s one that’s easily forgotten in the excitement (and haste) to launch. Having basic steps like ‘check content’ included in your ‘pre-launch checklist’ will make sure that things don’t get overlooked (see Fig. 3 below).

 

Fig. 3 – Sample ”hygiene checklist”:

 

Include critical steps, lessons learned – I’ve found checklist to be a good way to incorporate key lessons learned on a continuous basis. The risks with post-mortem sessions or retrospectives is that lessons learned don’t get action and tend to be forgotten. Including a learning into a checklist is a simple but effective of way of ensuring that a learning sticks. For example, “training the customer support team” (on a new product, user flow or feature) was a critical step that I used to forget consistently. By including this item in a ‘go-to-market checklist’ helped me and my team in making sure this step wouldn’t be forgotten about anymore.

Put your checklist on a wall – Finally, I’d recommend making your checklist as visible and shareable as possible. You can stick your checklist on an office wall or, if the team aren’t all working in the same space, in collaboration software products like Confluence and Trello (see Fig. 4 – 5 below).

 

Fig. 4 – Put your checklist on a wall – Taken from: https://www.superestudio.co.uk/wall-checklist

 

 

Fig. 5 – Add your checklist in Trello – Taken from: https://www.addictivetips.com/internet-tips/trello-an-online-pinboard-for-task-organization-collaboration/

 

 

Main learning point: As long as you don’t confuse them with highly detailed project plans or roadmaps, checklists can be a valuable tool in making sure you and your team don’t overlook key steps when developing products!

 

Related links for further learning:

  1. https://www.interaction-design.org/literature/article/apple-s-product-development-process-inside-the-world-s-greatest-design-organization
  2. https://qz.com/183861/any-company-can-copy-the-keystone-of-apples-design-process/
  3. http://www.theequitykicker.com/2014/03/06/apples-new-product-process-long-checklist/
  4. https://www.quora.com/What-is-Apple-s-product-development-process
  5. https://blog.toggl.com/gantt-chart/
  6. http://datainsightsideas.com/post/18502350035
  7. https://en.wikipedia.org/wiki/Single_point_of_failure

Lessons learned from Uri Levine, Co-Founder of Waze

Last Friday, I attended a talk by Uri Levine, Co-Founder of Waze, a community-based traffic and navigation app that was sold to Google for $1.1 billion. In a two-hour session, Uri shared some of his key learnings from the Waze startup journey; from starting from scratch to a successful exit. I felt that his talk was packed with valuable insights, and I’ve selected some key ones to share:

Focus on the problem – I loved how Uri concentrated on the problem that you’re looking to solve. He talked about problem solving being a key driver for him and the different startups that he’s (been) involved in. For example, Waze originated from Uri’s frustration with traffic jams … Uri then talked us through the “Adjusted Startup Curve” to illustrate the typical journey of a startup, starting with a problem to solve (see Fig. 1).

Fig. 1 – Knife Capital’s “Adjusted Startup Curve” – Taken from: http://ventureburn.com/2013/07/the-startup-curve-south-africa-wiggles-of-realism/

Don’t be afraid to fail – I always find it incredibly refreshing when other people speak openly about failures and not being afraid to fail. As Uri rightly pointed out, the fear to fail (and therefore not trying) is a failure in itself (see Fig. 2). He was also keen to stress that creating and managing a startup is never a linear, upward journey. By contrast, you effectively go from failure to failure, but you might win in the end – if you’re lucky that is (see Fig. 3).

Fig. 2 – Michael Jordan quote about failure – Taken from: http://www.quotezine.com/michael-jordan-quotes/

Fig. 3 – “Journey of Failures” by Douglas Karr – Taken from: https://twitter.com/douglaskarr/status/333027896241299457/photo/1

Passion for change – Uri’s points about entrepreneurs and their passion for change really resonated with me. I’m not an entrepreneur, but I feel that I’ve got some innate restlessness which is usually fed by change, learning and trying new things. It was interesting hearing Uri talk about how this passion usually doesn’t sit with well with fear of failure or loss. “Move fast and break things” was one of Uri’s mantras in this regard.

Honest validation of your ideas – As an entrepreneur, Uri explained, you need to fall in love with your idea. However, he also highlighted the importance of being able to critically assess your own idea. He suggested asking yourself “who will be out of business if I succeed?” If you don’t know the answer to this question, Uri explained, your idea probably isn’t big enough.

Iterate based on user feedback – Uri reminded me of the mighty David Cancel as David is also very focused on solving customer problems and listening to customer feedback (see Fig. 4). Like David, Uri didn’t get overly zealous about Agile or lean development methods. Instead, Uri talked about constantly iterating a product or service based on customer feedback.

Fig. 4 – David Cancel at Mind the Product conference, London 2016 – Taken from: http://www.mindtheproduct.com/2016/12/importance-listening-customers-david-cancel/

Main learning point: I found Uri Levine’s talk hugely inspiring; he was honest about the challenges involved in creating or working at a startup whilst at the same encouraging us to solve problems and try things.

Related links for further learning:

  1. http://www.tellseries.com/events/uri-levine/
  2. http://uk.businessinsider.com/how-waze-co-founder-spends-his-money-2015-8
  3. https://www.ft.com/content/49857280-8eaf-11e5-8be4-3506bf20cc2b
  4. https://www.crunchbase.com/person/uri-levine#/entity
  5. https://www.theguardian.com/media-network/2015/may/28/waze-uri-levine-tips-startup-google

My product management toolkit (17): Assess market viability

Whether you’re a product manager or are in a commercial or strategic role, I’m sure you’ll have to assess market viability at some point in your career. For that reason, I wrote previously about assessing markets, suggesting tools that you can use to decide on whether to enter a market or not.

A few weeks ago, I listened to a podcast interview in which Christophe Gillet, VP of Product Management at Vimeo, gave some great pointers on how to best assess market viability. Christophe shared his thoughts on things to explore when considering market viability. I’ve added my sample questions related to some of the points that Christophe made:

  1. Is there a market? – This should be the first validation in my opinion; is there a demand for my product or service? Which market void will our product help to fill and why? What are the characteristics of my target market?
  2. Is there viability within that market?  Once you’ve established that there’s a potential market for your product, this doesn’t automatically mean that the market is viable. For example, regulatory constraints can make it hard to launch or properly establish your product in a market.
  3. Total addressable market – The total addressable market – or total available market – is all about revenue opportunity available for a particular product or service (see Fig. 1 below). A way to work out the total addressable market is to first define total market space and then look at percentage of the market which has already been served.
  4. Problem to solve – Similar to some of the questions to ask as part of point 1. above, it’s important to validate early and often whether there’s an actual problem that your product or service is solving.
  5. Understand prior failures (by competitors) – I’ve found that looking at previous competitor attempts can be an easy thing to overlook. However, understanding who already tried to conquer your market of choice and whether they’ve been successful can help you avoid some pitfalls that others encountered before you.
  6. Talk to individual users  I feel this is almost a given if you’re looking to validate whether there’s a market and a problem to solve (see points 1. and 4. above). Make sure that you sense check your market and problem assumptions with your target customers.
  7. Strong mission statement and objectives of what you’re looking to achieve  In my experience, having a clear mission statement helps to articulate and communicate what it is that you’re looking to achieve and why. These mission statements are typically quite aspirational but should offer a good insight into your aspirations for a particular market (see the example of outdoor clothing company Patagonia in Fig. 2 below).
  8. Business goals  Having clear, measurable objectives in place to achieve in relation to a new market that you’re considering is absolutely critical. In my view, there’s nothing worse than looking at new markets without a clear definition of what market success looks like and why.
  9. How to get people to use your product – I really liked how Christophe spoke about the need to think about a promotion and an adoption strategy. Too often, I encounter a ‘build it and they will come’ kind of mentality which I believe can be deadly if you’re looking to enter new markets. Having a clear go-to-market strategy is almost just as important as developing a great product or service. What’s the point of an awesome product that no one knows about or doesn’t know where to get!?

Main learning point: Listening to the interview with Christophe Gillet reinforced for me the importance of being able to assess market viability. Being able to ask and explore some critical questions when considering new markets will help avoid failed launches or at least gain a shared understanding of what market success will look like.

 

Fig. 1 – Total available market – Taken from: https://en.wikipedia.org/wiki/Total_addressable_market

1000px-tam-sam-market

Fig. 2 – Patagonia’s mission statement – Taken from: http://www.patagonia.com/company-info.html

screen-shot-2017-01-20-at-07-21-29

Related links for further learning:

  1. http://www.thisisproductmanagement.com/episodes/assessing-market-viability
  2. http://www.mindtheproduct.com/2013/05/poem-framework/
  3. http://smallbusiness.chron.com/determine-market-viability-product-service-40757.html
  4. https://en.wikipedia.org/wiki/Total_addressable_market
  5. https://blog.hubspot.com/marketing/inspiring-company-mission-statements

My product management toolkit (11): assessing the market

As a product person it’s extremely important to keep a finger on the market pulse at all times. It can be very easy to get locked into a tunnel vision where you’re so focused on developing your product that you lose sight of market needs or what your competition are doing.

Let’s be clear: this doesn’t mean that your product or company has to become ‘me too’, blindly following what the competition is doing. Equally, it doesn’t mean that you shouldn’t develop a feature if another company has already done it. Understanding your competitive landscape and your positioning in it urges you to constantly reflect on positioning, user needs, customer segments and differentiators.

Tool 11 – Assessing the market

As with anything, there are a number of ways to look at the market your company or product operates in. I’m personally not wedded to a single technique; whatever approach or visualisation gives you the best picture of your market and the players – competitors or customers – in it. As part of my toolkit, there are a number of simple techniques I often use to paint this picture: the KANO model, the Business Model Canvas and the Value Proposition.

KANO – Distinguishing between “Basic needs” and “Delighters”

Kano_model_showing_transition_over_time

Taken from: https://en.wikipedia.org/wiki/Kano_model

I find the KANO model a great way to look at the market through the lens of a customer. Which needs are considered to be “basic needs” and why? What are the “delighters” that will give your product an edge? It’s fairly easy to learn from your (target) customers about where they perceive your product or features to sit and learn how this positioning compares to your competitors.

Business Model Canvas

the-business-model-canvas-shadow-hero

Taken from: http://www.businessmodelgeneration.com/canvas/bmc

Alex Osterwalder’s Business Model Canvas lets you look at your product more holistically, taking into account important factors such as revenue streams and customer segments. I’ve often used the Business Model Canvas as a starting point for a group exercise where we filled in the canvas together or where I provided the group with ‘my canvas’ and asked them to critique.

Value Proposition Canvas

value-proposition-canvas-explained-5-638

Taken from: http://www.slideshare.net/juliusparrisius/value-proposition-canvas-explained

I see Alex Osterwalder’s Value Proposition Canvas as a great extension of the Business Model Canvas, the empathy map and the jobs-to-be-done framework. It’s a really useful tool for delving into the (assumed) problems that you’re looking to solve through your product or service, understanding the value you’re creating for your customers.

Related links for further learning:

  1. http://www.kanomodel.com/
  2. http://www.mindtheproduct.com/2015/09/video-building-winning-product-strategy-kano-model-jared-spool/
  3. http://www.businessmodelgeneration.com/canvas/bmc
  4. https://strategyzer.com/books/value-proposition-design
  5. http://businessmodelalchemist.com/blog/2012/08/achieve-product-market-fit-with-our-brand-new-value-proposition-designer.html

 

My product management toolkit (10): Jobs-To-Be-Done

How does one combat what I call “featuritis”? This innate need among most of us to come up with new features or projects all the time without taking a step back to figure out the customer problem worth solving. I recently came across a company where they’d created so many features and products that they’d lost track of what constituted a “product” in the first place.

In both cases the “jobs-to-be-done” framework can help massively in systematically capturing user needs and translating these into opportunities and solutions. The whole point behind the jobs-to-be-done framework is putting customer needs at the fore, throughout the product lifecycle (see a great visualisation of this principle below).

Tool 10 – Jobs-To-Be Done

Tony Ulwick

Taken from: Tony Ulwick at Business of Software Conference 2014 – http://www.slideshare.net/marklittlewood/turn-jobs-to-be-done-theory-into-practice

Why and when is it important to use the “jobs-to-be-done” framework?

Before you delve into creating features or solving problems, I strongly recommend looking into the “customer jobs” you’re looking to solve in the first place:

  • What job is the customer looking to get done and why?
  • How is the customer currently getting this job done?
  • What jobs are customers not doing and why?

Strategic thinker Tony Ulwick identifies three validating questions to help map the steps customers take to accomplish a specific outcome:

  • Defining the execution step: what are the most central tasks that must be accomplished in getting the job done?
  • Defining pre-execution steps: what must happen before the core execution step to ensure the job is successfully carried out?
  • Defining post-execution steps: what must happen after the core execution step to ensure the job is successfully carried out?

Answering these validating questions will give you the necessary context to apply the actual jobs-to-be-done-framework.

The jobs-to-be-done framework outlines the eight steps that all jobs have in common:

  • Step 1 – Define: Customers determine their goals and plan their resources.
  • Step 2 – Locate: Customers gather items and information needed to do the job.
  • Step 3 – Prepare: Set up the environment for the customer to do their job.
  • Step 4 – Confirm: Verify that customers are ready to perform the job.
  • Step 5 – Execute: Customers carry out the job without any problems or delays.
  • Step 6 – Monitor: Assess whether the job is being successfully executed.
  • Step 7 – Modify: Make alterations to improve execution.
  • Step 8 – Conclude: Finish the job or prepare to repeat it.

One of the things I really like about the jobs-to-be-done framework is the focus on user outcomes, the “so what” element of the typical ‘job statement’:

JobStory2

Standard format of a job statement – Taken from: https://blog.intercom.io/using-job-stories-design-features-ui-ux/

What are the benefits of the jobs-to-be-done framework? – Where do I start!? The main thing for me is that it helps me to unlock the value for the customer. Bob Moesta, who has done a lot of work around the jobs-to-be-done framework, talks about the “mechanisms of value” in this respect. What are the things that caused someone to buy a product or a service? What are people doing or not doing (and why)? I’ve listed some additional benefits in Figure 2 below.

Main learning point: There are two key reason why I like using the jobs-to-be-done framework. Firstly, because of its focus on value for the user. Secondly, because of its emphasis on outcomes. In my experience, thinking about jobs and outcomes really helps to focus the mind!

 

Fig. 1 – Fictitious examples of 8 steps of the jobs-to-be-done framework

Example of “Define” (Step 1) – I need to find a quick way to understand my monthly mobile phone bill and how to spend less on mobile phone bills. Perhaps looking at the top line items on my bill can help in figuring this out.

How can a company help customers in this example? – Create a real-time version online of a customer’s mobile phone where they can quickly and easily scan their mobile phone bill breakdown.

Example of “Locate” (Step 2) – I need a quick view of how much I’ve spent this month on text messages and international calls.

How can a company help customers in this example? – Colour code those cost ‘components’ of the mobile phone bill where the customer is (at the risk) of exceeding what’s covered in her contractual package with the mobile provider.

Example of “Prepare” (Step 3) – When I am looking at my billing information I need to know about the specific phone numbers I’ve rung or texted.

How can a company help customers in this example? – By stripping out all ‘non monetary info’ from the bill (i.e. removing all data related to phone numbers).

Example of “Confirm” (Step 4) – I would like to get a reminder to look at my mobile phone usage before an invoice is sent out by the mobile phone provider.

How can a company help customers in this example? – Send customers a push notification 7 days before the monthly invoice is sent out to remind the customer to check usage and make any package changes, including a link to the real-time data.

Example of “Execute” (Step 5) – The billing information that I am looking at needs to be as up to date as possible, it’s no good to me if the data is more than a day out.

How can a company help customers in this example? – Ensure that there are no lags in the data provided, maintaining optimal performance.

Example of “Monitor” (Step 6) – I expect the mobile phone provider to keep tabs on whether I’m checking my billing information, so that I when I contact them to enquire about charges they can see exactly which information I’ve accessed.

How can a company help customers in this example? – Putting analytics in place – both for desktop and mobile – to monitor data usage on an ongoing basis.

Example of “Modify” (Step 7) – Personalise the way in which billing is presented to users, based on their previous viewing behaviours or enquiries.

How can a company help customers in this example? – By personalising the data presented to the customer, the mobile phone provider will save the customer from having to wade through lots of data or having to customise data themselves.

Example of “Conclude” (Step 8) – I’ve seen my real-time billing info and will now log out.

How can a company help customers in this example? – Provide the customer with appropriate calls to action once they’ve viewed their billing information, for example contacting customer service.

Fig. 2 – Benefits of using the jobs-to-be-done framework:

  1. Helps to understand value for the customer
  2. Identify the progress users are (or aren’t) making towards their desired job outcomes – see visual below
  3. Focuses people on outcomes and needs instead of solutions
  4. Takes into account user context
  5. Helps to to concentrate user research on what users actually do instead of what they say they do
  6. Enables you to distinguish between the ‘main job to be done’ and ‘related jobs to be done’ – see visual below – and to prioritise accordingly

progress-making-forces-diagram

Progress Making Forces diagram – Taken from: http://www.startupdaily.net/2016/01/designing-the-right-product-for-the-right-people-at-the-right-time/

Jobs main - related

Main jobs to be done vs related jobs to be done – Taken from: https://medium.com/@zbigniewgecis/8-things-to-use-in-jobs-to-be-done-framework-for-product-development-4ae7c6f3c30b#.251fsjcoz

Related links for further learning:

  1. https://blog.intercom.io/jobs-to-be-done-doubter-believer/
  2. http://www.christenseninstitute.org/key-concepts/jobs-to-be-done/
  3. https://strategyn.com/customer-centered-innovation-map/
  4. http://pt.slideshare.net/marklittlewood/jobs-to-be-doneswitch-workshop
  5. http://pt.slideshare.net/marklittlewood/turn-jobs-to-be-done-theory-into-practice
  6. https://jtbd.info/uncovering-the-jobs-that-customers-hire-products-and-services-to-do-834269006f50#.ay0pc5hfl
  7. https://blog.intercom.io/podcast-bob-moesta-on-jobs-to-be-done/
  8. https://medium.com/@zbigniewgecis/8-things-to-use-in-jobs-to-be-done-framework-for-product-development-4ae7c6f3c30b#.251fsjcoz
  9. https://blog.intercom.io/using-job-stories-design-features-ui-ux/
  10. https://strategyn.com/jobs-to-be-done/jobs-to-be-done-examples/
  11. https://en.wikipedia.org/wiki/Quality_function_deployment
  12. http://podbay.fm/show/499859427/e/1330043644
  13. https://medium.com/@gavinlum/the-progress-making-forces-diagram-6f1a9fd951e6#.puwx6id2t