How to make the business case for product innovation
Businesses are operating in a world where nothing stands still – market dynamics, user habits and user preferences are constantly changing. In order to maintain competitive advantage and survive, it‘s essential that businesses keep the development and introduction of new, redesigned or substantially improved digital products – front of mind.
We talked to Mila Gencheva, Product Manager at Xoomworks Technology on what it takes to present a winning business case for digital product innovation.
A user-centric approach is critical when it comes to successful product innovation or product-led decision making. At the same time, it’s vital to understand the competitive landscape. It's rare for a company to define a niche that no one has dipped into yet, so you need to know how your USPs and competitive advantages stack up against the rest. This will also help ascertain if the potential reward of product innovation is worth the effort.
The first phase of a product innovation project involves gathering all the information and data needed to support the business case, otherwise known as the discovery phase. You need a good understanding of discovery techniques and best practices, which is why product designers and managers will generally work with a researcher experienced in product discovery to plan and implement this phase.
Product innovation starts with knowing your customer
Understanding your user and being able to test ideas and concepts quickly is crucial when it comes to successful product innovation. It’s important to think beyond the stand-alone product and understand where your product sits within the user’s end-to-end journey. This will not only help understand you what the user values about your product; it will also enable you to identify any gaps and other needs that could create additional value to the user.
If you use the product yourself, be careful not to fall into the trap of thinking you represent the “typical” user; you only represent a single viewpoint. When it comes to product innovation, the idiom “one size fits all” couldn’t be further from the truth. It’s important to get in front of as many users or potential users as possible as they will use your product in different ways and perceive different value in it. What’s key is to quickly identify the most common use cases and address those first before starting to iterate further.
Any hypothesis needs to be backed up by data. So, if you think a product is going to work, then you need to be able to quantify this. A/B testing with real users works well when a product is live. Survey- based testing works to some extent but can be biased as people tend to respond to surveys with pre-conceived ideas in mind. Take a multiple-choice question, for example – if the answers weren’t in front of you, your response to the question may be entirely different. Third-party data can also be used to test a hypothesis, and there are a lot of platforms out there that can provide valuable insights.
Building a winning business case
Once you understand the value of your product to the user, you can start building your business case. The discovery phase is the vital first step because any business case built without user needs in mind will plummet to the ground.
The business case needs to demonstrate the value of your product and how it can be positioned in the market. It also needs to highlight any potential risks of cannibalisation, any dependencies and any potential shifts in the market that may impact the viability of your product - not to mention the routine spreadsheets and statistics covering pricing, volume and cost projections.
A huge amount of information, data and statistics go into building a business case, so it’s important not to overwhelm decision-makers with data overload. When presenting a business case, it’s crucial to know your audience and adjust your pitch accordingly. When you’re talking to senior management, for example, it’s more about painting the bigger picture than diving into the detail.
Good product managers will know their product and the details of the business case inside out. This will enable them to present an executive summary that’s informative but not overwhelming. If you’re running the project for a client, it's good to address their needs and priorities as well as the end-user needs.
Ultimately, it’s about sharing what’s important to your audience and having the detail and statistics available to back you up if needed. Successful product innovation requires solid cross-functional and stakeholder relationships. It requires the need to be agile, to move quickly and reprioritize because nothing stands still.
Find out more about how Xoomworks Technology is helping to drive competitive advantage by building and innovating user-centric digital products.