Product Development Strategy: A Complete Guide to Create Better Products

Posted on Mar 15, 2023Mar 15, 2023 by Emily Louise Spencer

When creating a product, you can’t just spitball it. You need to take the time to create something that customers will actually want, and that is a better option than what they currently purchase. A product development strategy will assist you in finding your ideal product-market fit, and winning over customers from competing brands by providing a superior option.

What is a product development strategy?

You might have heard of the terms “new product development” or “new product development process” – while these are definitely important when creating a new product, they aren’t precisely what we’re talking about today.

A product development strategy is the direction that a new product release takes, from its market position to its overall demographic targeting process.

It’s a catch-all term that includes everything that takes place between having an idea for a product and actually putting it on the market.

The key takeaway here is that while new product development has to do with the actual act of creating a product, the product development strategy covers this and the steps needed to turn it into a viable, marketable product.

TCGen, which specializes in product development, has created a brilliant checklist that summarizes what a product development strategy is useful for, so take a look below.

So you might be thinking, if I’ve already implemented the new product development process, why do I need a product development strategy? After all, couldn’t I just take the end result and apply the same principles?

Well, you could. However, no business exists in a vacuum.

The fact of the matter is that some products aren’t just made for the sake of making good products that make money. They have another purpose. To gain a competitive advantage within the market, keep the company relevant, and claim a foothold that wouldn’t be available later.

It’s no coincidence that a new Xbox launches around the same time a new PlayStation does. Both companies can’t afford to concede market share to each other (Unless you’re Nintendo, and then you can do whatever you want).

Alternatively, businesses can patent & sell products simply so the competition can’t. Both Xbox and PlayStation have a long history of exclusive games, many of which were made by 3rd party companies.

The lesson here?

In the world of business, it isn’t enough to have a good product. You can still be undercut, out-advertised, and out-sold by another product if you don’t play it right.

That is to say, if you don’t have a good product development strategy.

What benefits can a product development strategy bring?

Okay, this sounds great in theory, but how do I apply it to my products? Fair question.

We touched briefly on why a product development strategy is important in the last section, but now it’s time to talk about tangible benefits.

So, what are some benefits of having a product development strategy?

Keeping an eye on the big picture from the start

When you have a product development strategy, you know exactly what it is you’re trying to achieve.

That might sound like common sense but bear with me here.

Let’s say you’re making a line of clothing, and your big-picture aim is to introduce hypo-allergenic fabrics that you can market to customers with sensitive skin.

Now, if you simply tell your design team that you want a certain set of clothing, e.g., pants, shirts, etc., from pure cotton, all they know is the letter of the instructions, not the spirit.

Nevertheless, they get on with it and have a working set of prototypes produced.

So the day comes for them to produce their designs, and lo-and-behold, they’ve used a dye that renders the line completely unusable by people with sensitive skin.

So what now? Well, they’ve got to go back to the drawing board with more precise instructions.

When you have an overarching aim, you need to keep all of your teams informed so they can create products that fit the spirit of your aims, not just the letter.

A product development strategy does exactly this, aiming to focus on the product’s placement and market position every step of the way.

Aligning cross-functional teams

When you run a business that creates products, it’s expected that you’ll have more than one team working on different steps of the process.

Those involved in product creation aren’t necessarily the ones who will be manufacturing it, and vice-versa. Thus, when creating a new product with a specific aim, you need to be keeping everyone on the same page if you want things to run smoothly.

Easier said than done.

Sometimes there are factors that one team is aware of, but the other is not, making the entire process grind to a halt when a plan is produced that simply doesn’t work under current limitations.

For simplicity’s sake, let’s take the example of the clothing manufacturer above again.

Your design team has managed to avoid the issue with dyes and has created a sensible prototype. And so, they decide to pass it on to the manufacturing team to produce.

However, you run into yet another roadblock.

You see, the supplier of the dye that you’ve selected has had some bad press, and the dye itself isn’t considered that reliable by those who find hypoallergenic clothes a necessity.

Now, anyone on the marketing team could have told you this. It’s their job to know the ins and outs of the current market, and they could have saved you from having to loop back again if only you’d communicated.

Product development strategies include communication aspects like these, using the big-picture focus to bring in new information when it’s needed.

Kellogg’s championed their traditional cereals such as Cornflakes, Froot Loops, and Frosties for decades, but with times changing and consumer preferences shifting, they’ve widened their reach by acquiring more diverse options to keep their customers happy.

Feedback & guidance loops

Both of the above are examples of a business that’s missing feedback & guidance loops.

Feedback & guidance loops are lines of communication in which advice is passed on from further down the chain back to the product design team. By keeping themselves in the loop, delays and design errors can be avoided, and the process runs more smoothly overall.

Of course, these loops aren’t limited to being relevant to the design team.

All teams involved can benefit from them to some extent, even if the most obvious examples involve product design.

The big-picture approach requires, well, keeping the big picture in mind at all times.

And if factors change in one area, it’s going to have a knock-on effect that might alter your overall approach.

Efficiency

Lastly, let’s talk about efficiency.

The ultimate goal of business is to bring in revenue & make profits.

Now, this obviously means that you need a decent amount of sales, but there’s another side to it too. Costs.

You can have the most incredible products ever created, but if the costs of design are too high, then you’ll spend years in the red before ever being profitable.

That’s not to say that you can’t plan to be in the red, but it needs to be done carefully. Plenty of businesses thought that they were in the clear, only to be blindsided by the COVID-19 crisis in 2020.

What I’m trying to say is that the future is uncertain, and you need to be able to bounce back. Sinking into the red with a lengthy, inefficient product development process is precisely the opposite of that.

See, a lot of the time, your manufacturing costs can’t really be altered without affecting the quality of your products.

Your costs of sale, packaging, delivery, advertisement, and the like are often relatively static, especially if you use a third-party platform like Amazon or Etsy to sell.

So, when those two types of cost are static, and you need to lower your numbers, what do you do?

You improve your product development strategy, improve your efficiency, and decrease the amount of time & money it takes to develop a new product.

Every factor we’ve talked about thus far has been leading up to the ultimate goal of product development strategies; to make the process smoother and less costly to go through.

The 3 types of product development strategy

Rewinding back, let’s look at what a product development strategy is again before jumping right into the types you can have.

Product development strategies are all about aiming for sales. They’re all about trying to create & develop your new products in such a way that they’ll not only be great, but marketable.

You can have the greatest volcano-proof diving suit ever made, for example, but if no one will buy it, then from a business perspective, it’s a dud.

With that in mind, the types of product development strategies you can have are largely dependent on your marketing tactics.

Let’s take a look at the three most common types.

PDS type 1: Premium

When I think of premium, my mind jumps to brands like Louis Vuitton and Porsche.

What do these brands all have in common? Well, they’re high-end brands that market their products as luxuries, as things to aim to achieve.

They’re brands that enjoy high brand equity, with their products making people go “wow.”

These brands aim to be right at the top of the market, selling small numbers of products but at high prices. That way, they make a lot of profit per unit and increase their revenue overall.

There are downsides, though.

For one, costs are higher than average. This is expected, as you use “limited-edition” or “high-quality” materials in your products to make them more desirable.

Often, these materials are entirely superfluous to the nominal function of the product, such as diamond-encrusted handbags, but you could say that their purpose is to show off.

Remember, these are luxury products. Most drivers wouldn’t need a car that goes 250 mph and wouldn’t think about it when deciding to buy one. They’d just think about what can get them from A to B.

Someone looking for a luxury car, on the other hand, probably has the time and money spare to take it to a race track or onto a highway where such speeds are allowed, thus making such a feature relevant.

Further, luxury brands are very difficult to establish.

Unless you’re entering an entirely new market where almost all products were created recently, akin to Apple when establishing themselves in the PC industry, there are probably going to be big-name brands there already that won’t like you muscling in on their territory.

Keep in mind that often these brands have a long and proud history.

Many European and Asian brands date back centuries and take their longevity as a badge of honor. It’s taken as a standard of quality that they’ve been able to operate for so long and still stay in business.

The Genda Shigyō company that provides traditional Japanese gift wrapping has been running since 771! Just imagine trying to go up against that kind of established name!

There’s also the factor of a diminished customer base. It’s a fact that most Americans can’t afford luxury goods.

Fewer potential customers mean that every sale matters. Every sale lost matters even more. It’s vital to keep your quality high and your customers satisfied if you want to keep operating with this type of strategy.

PDS type 2: Budget

Entirely on the other end of the scale, we have the budget strategies.

These types of strategies follow the idiom “quantity over quality” to the extreme. In essence, by making very small amounts of profit on each sale but making lots of sales, you increase your profits.

And a low-cost product is far more likely to be bought by those who make choices on the basis of price alone, meaning a bigger reach for it.

Budget products are often thought of as low-quality, but this isn’t always the case. In this type of product development strategy especially, you keep your profit margins low to keep prices down rather than using cheap materials.

Remember, being a budget option does not mean you are cheap. It means you’re comparatively cheap when you consider the market as a whole.

A great example of this dichotomy is the smartphone industry. The cheapest new model will still set you back at least $50-100, not exactly budget.

Of course, if you do use cheap materials, you can lower your prices further and present yourself as a truly budget option, but that’s at the extreme end of the scale. The vast majority of products are not created to be cheap alternatives since consumers expect some measure of quality.

A phone that can barely load WhatsApp would probably sell poorly, after all.

There are some cons to this strategy.

You can quickly stray from low profit to no profit if your circumstances change. The difficulty with positioning yourself in this area comes with constantly having to monitor your operating costs, as even the tiniest increase will be a blow to your profits.

There’s also the factor of coming across as too cheap.

Generally, consumers are suspicious of products that are cheaper than others, even if reviews say that quality is consistent. It’s expected that certain types of products cost certain amounts, and any strategy that prices under this can be dismissed as being tacky.

Overall, this type of product development strategy is tricky to do but can perform wonderfully.

PDS type 3: Competitive

We’ve talked about the two extreme strategy types, but those are what they say on the tin, extremes. The vast majority of product development strategies fall somewhere in between, even if they do lean one way or the other.

Right in the middle of budget & luxury goods, you have competitive goods. These are products that have moderate profit margins and aim to sell a moderate amount of units.

How do you define moderate? A moderate price is determined by the average prices of that particular market as a whole. In other words, you price your product so it might be considered by the average consumer, keeping the quality consistent with what they’d expect for that price.

Let’s look at an example to make it clearer what this means.

When you think of high-end coffee, you might think of imported Jamaica Blue Mountain. On the other hand, if you want a low-budget option, you might settle for Dunkin’ Donuts’ own brand.

In the middle of these options sits Starbucks. Not too pricey and not low-quality. A good, reliable coffee shop that serves millions daily.

Starbucks occupies the competitive slot in this case, with their coffee being of a good enough quality to be called pleasant while keeping their prices low enough that they’re not a luxury brand.

Starbucks exemplifies the reason why most products are planned out to follow this route. You have the possibility of reaching almost all consumers, whether as a cheaper alternative to their luxury goods or as an upgrade from their usual once-in-a-while.

Your pricing strategy means that you make a decent amount of profit on each sale and aren’t that vulnerable to fluctuations in material costs or consumer tastes changing.

So what’s the catch? Why would anyone choose a different strategy than this, you might be asking?

Well, that’s precisely the reason. If everyone is aiming for this place in the market, then you’re simply one of a dozen.

Think of the last time you bought lightbulbs. Did you choose a specific brand, or did you just grab the first pack you saw on the shelf with a decent enough rating? Probably the latter.

When the market is saturated, you’re going to have a hard time establishing yourself as anything more than a face in the crowd. The reasons that brands want to choose this strategy are, paradoxically, the reasons that they can’t.

Not every coffee drinker goes to Starbucks, just as not everyone buys the same brand of shower gel. People buy what they’re used to, and unless you’re entering a market with something new and exciting, you’re simply going to fade away into the background.

Internal and external product development strategies – what’s the difference?

Now that we’ve talked about the different types of product development strategies, it’s time to take a brief note of… different types of product development strategies. ????

Hold on, this isn’t just a rehash of what we just spoke about, but something different entirely.

When you’re creating a new product, there are two different ways you can go about it. First off, you can utilize resources that you already possess, or you can look for possibilities that exist outside of these.

That’s what we call an internal vs. an external product development strategy.

Internal product development strategies

Internal product development typically refers to creating new products out of existing ones. That might be a personalized variant, a new and improved version of your product, or simply taking the ideas that exist within a product and applying them in new ways.

If you’re a smaller business or a start-up, you may find it hard to employ internal product development strategies since it’s possible you’ll lack the necessary resources. Look to the next section for how you might go about strategizing.

A common way for software companies to develop using internal product development is by acquiring smaller companies that produce complementary software, then combining them into a single package. This way, they can utilize their existing resources, which is far cheaper than creating new ones, and sell again as a new product.

Internal product development has several advantages, notably that you’ll already be established and can use the marketing from previous products to your advantage.

When Apple releases a new iPhone variant, for example, it’s always with the caption “the new iPhone” or “the upgraded iPhone” to allow consumers to subconsciously associate them with the success of previous versions.

Overall internal product development strategies are cheaper, easier to implement, and run far more smoothly on average since you probably know what you’re doing in this area.

On the flip side, there’s only so much you can do with an internal strategy since you’re limited by what you already possess. If you want to really innovate, you need to create an external product development strategy.

External product development strategies

External product development strategies are about creating something new. Something that your organization has never delved into before. This can be entering a new market, expanding into another country, etc.

External product development is a double-edged sword, however.

There are great rewards to be had with creating truly new, innovative products. Technological progress comes from external development, with giants like Thomas Edison & Nikola Tesla daring to be creative and develop something new.

However, this also comes at increased costs. After all, acquiring new assets takes funds, time, and effort, none of which are free.

When you create a new product using an external strategy, you could end up revolutionizing the future of electricity by patenting multiple electronic devices like Edison.

On the other hand, you could run out of money trying to build Wardenclyffe Tower like Tesla. The tower stood as a monument to human progress. However, it came at an extreme cost that couldn’t be recouped.

After all, it’s not enough in the world of business to simply innovate, you need to do it in a way that makes money and keeps your investors happy.

4 stages to creating a product development strategy

If you’ve read this far, you probably want to know how to go about creating a product development strategy.

To create one, you just need to follow the steps below. That’s it.

Go. ????

Stage #1: Defining your vision

First, you need to define your vision. This harkens back to our earlier discussion on the types of product development strategies you can use.

There are two questions that you can ask yourself when deciding what type of strategy is best.

Do you want to be a budget option, a luxury option, or a middle-of-the-road?
Do you intend to create something entirely new or to derive from existing assets?

To answer these, you need to have an idea of what you want to develop already in mind. Without this starting point, the entire plan falls apart.

Luckily, you can start with even the most ridiculous ideas. At this point, you’re not putting any material costs into the process, just time.

If you think your idea is too ridiculous, remember that someone once put their hand up in a board meeting and suggested a movie featuring “a tornado made of water with sharks in it.”

And it got sequels too!

Once you have your idea, you can start applying the potential options to it and seeing if they work.

Sometimes, you simply won’t be able to think of a place to market an idea, and that’s okay! Just file it away and move on to the next one until you find a concept you’re certain can fit one of these options.

Stage #2: Developing a strategic plan

Once you have your concept, it’s time to lay out a plan for how to create it.

The process of product creation can be as straightforward as designing a 3D file to send to a machine or as complex as mapping out a piece of software. Either way, it’s important to plan how you’re going to create it.

The strategic plan isn’t a step-by-step for how to produce your product. That comes later. Essentially, this is the process by which you link vision and reality, taking your concept and applying the first touch of real-world principles until you have a rough guide for how to begin.

The key idea here is to touch upon the real-world factors you’d need to consider, laying them out for future reference. It’s all about large strategic steps that might seem vague but are definitely necessary.

Remember, strategic plans aren’t the final word. They’re rough guides for how you want to go about your operations, with the actual details up in the air until they’re finalized. After all, you can’t predict how supply chains might look two years from now, so why finalize it right away?

Stage #3: Building a roadmap

Remember how we mentioned the step-by-step guide? This is it.

A product roadmap takes the broad steps of the strategy and breaks them down into recognizable, realizable steps. These are often built up over time and can be highly technical.

A roadmap is essentially a guide for how you will be bringing your product concept into being. It connects budgeting, assets, decisions that you need to make, and more.

When creating a roadmap, it greatly helps to keep things modular.

You might be thinking, what? Haven’t we just been talking about how important it is to keep everything running together?

So, when I say modular planning, I mean keeping every aspect of your roadmap separate yet connected.

Essentially, for each step of the journey, you need to keep it self-contained in such a way that it doesn’t depend on the previous steps having particular outcomes.

Let’s say you want to use a plastic-type material in your product, whatever that might be. You’ll need a machine that can utilize that plastic. You’re favoring polyurethane and have a machine in mind that can use it.

So what do you put down in your roadmap? Get polyurethane. Then, get a working polyurethane machine. No, no, no, you don’t do that. ????

When placing the polyurethane machine into your roadmap, you’ve essentially condemned yourself to alter your roadmap if your plan of using polyurethane falls through.

What does this mean? Remember how I talked about efficiency and lines of communication? The team looking into obtaining machines for you isn’t necessarily going to be the same one testing the materials. If you’ve placed a polyurethane machine into your roadmap, you’re going to have them running around looking for a machine that is no longer practical for you.

That’s time, effort, and money wasted.

Long story short? Make your planning modular in the early stages, so you don’t run into these issues.

Stage #4: Parallel innovation processes

The process of utilizing a product development strategy can be a tough one. How are you supposed to tie a long-term strategy into your daily operations?

Well, there’s an answer to that, and it lies in parallel innovation processes.

The trick to doing both at once is tying them together. Sure, you can try and run your daily operations independently, but that’s just asking to be led astray.

The key lies in having two systems in place:

A system for planning and budgeting in the long-term, often yearly.
A system for the short-term to explore possibilities and select emerging concepts, often monthly.

So how do you tie them in? The outputs from your long-term process become your inputs for the short-term.

In other words, you use the data you’ve gathered from your long-term vision projections as the starting points for your short-term.

You might think to yourself, what’s the benefit of doing this? Well, short-term planning without long-term management can be misguided, and the most crucial aspect of all is the budget aspect.

Every year there might be millions of product concepts thought up. However, you can only continue onto the creation process if you have the budget and assets to do so.

You can’t have your cake and eat it too. ????

The parallel innovation process keeps you on track to create only those products you’re capable of creating. Whether it’s due to budget restraints, technological limits, or simply a lack of resources, keeping your overall goal tied to the present circumstances will ensure you stay grounded.

That’s not to say that you can’t pick up ideas later on when circumstances change. Avatar had to wait almost a decade for special effects technology to catch up to James Cameron’s vision. In the meantime, Cameron devoted his attention to other projects.

The takeaway? Stick to what you can feasibly do.

Conclusion

So there you have it! You should now have everything that you need to create a workable, useful, and reliable product development strategy.

What’s next?

Once your product is out there in people’s hands, they’re going to have things to say. It’s imperative you’ll learn how to collect this data, analyze it, and use it to create better products. Check out our customer feedback analysis article to understand what needs to be done.

Product Performance Analysis: Putting Your Data Into Action

Posted on Nov 14, 2022Dec 16, 2022 by A. Levy

The world changes over time. That’s a fact whether we like it or not. When looking into your numbers, you might notice factors that seem to change for no real reason but time. Understanding why these changes occur and why your products perform how they do is the heart of product performance analysis and the key to your business’ growth.

What makes a great product? Is it audience reception? Hitting a certain number of units sold? Making a certain amount of profit?

The answer depends on the industry, business, and specific strategic goals. A profitable product can be considered a failure, while a break-even one is a resounding success.

In order to determine your product’s performance and analyze it with your business plans in mind, you need a method that yields information on the individual product level. In other words, you need to employ product performance analysis.

What is product performance analysis?

Product performance analysis is all about measuring how well your product is doing with respect to the goals that you set out to achieve. It’s a process conducted by higher management, as they’re the ones with the information necessary to make such evaluations.

Unlike other analysis methods, product performance analysis is highly individualized, targeting a specific product at a time. It’s extremely rare for a business to launch multiple products with the same goals in mind, after all.

This means that every time you launch a new product, you’ll need to perform product performance analysis from scratch. But worry not! Once you’ve got the hang of it, the process of data gathering and analysis is actually quite simple, and similar methods can be used each time.

After all, it’s not how the data is being gathered that changes but what data you need.

The advantages of analyzing product performance

Before we get into the nitty gritty of how product performance analysis works, let’s talk about some benefits.

What we’ve laid out below will give you a general idea of what product performance analysis can do for you. Granted, this isn’t a complete list of the benefits it provides. That would stretch the word count into the high thousands as we’d need to get into really specific, niche situations.

Let’s see what you have to gain.

Increased knowledge of customer-product interaction

Knowing how your customers interact with your products is vital when you’re in the product development stages of your project.

When designing a product, the first thing you should think about is what exactly that product will be used for. Then come the following questions:

What will it do?
Who will use it?
Why does it beat out the competition?

Information from customer-product interactions will help you answer these questions in a data-driven way, by giving you insight into the minds of your customers. It’ll tell you what they want from your product, how you can improve it, and where you’re hitting the mark.

Performing customer-product interaction is especially important in software fields, where the ever-changing nature of the market means that you must keep a close eye on what your customers want from you.

Adobe has certainly taken this to heart, with their Acrobat 2020 version featuring several unique features that are clearly based on customer interaction data.

For example, the software giant added a color customization capability in the Fill & Sign tool, allowing you to choose specific colors for your signature.

On top of that, the 2020 version includes:

Improved accessibility features.
Support for the use of tablet pens when using the software.
Increased control of signature panels.
Touchbar support for MacBooks.

Many of these improvements are most likely born out of going over user data, telling Adobe that:

Users with accessibility needs were using their software.
Users were using tablet pens and other similar devices while using their software.
Users were signing documents with their software.
A high proportion of users were using MacBooks.

While the software industry benefits significantly from customer-product interaction, especially due to its measurable nature and ease of data gathering, it’s not the only one.

Other sectors can enjoy the fruits of such analysis by gathering user feedback via surveys or other organic manners like customer reviews. With the right analytic tools, you can discover a trove of data that will help you improve your products.

Reduced customer churn

It’s also been well-documented that acquiring new customers is significantly more costly than retaining your current ones.

That’s why many businesses must invest in churn-reducing strategies. These include:

Lightning-fast customer support.
Behavior-based predictive analytics.
Personalized and focused promotions.

Another way is to give your customers what they want and need. By tapping into the information you’ve acquired from your product performance analysis, you may be able to adjust certain aspects of your product to keep your customers happy.

Twitter, for instance, is rolling out an Edit function to select users, something that users of the platform have been asking for for years.

Improving your products is an excellent place to start, but it goes deeper than that. You need to make products that are not only useful but ones that understand your customers’ needs.

Recognizing user engagement drivers

It’s all well and good knowing what your customers like about your product, what they use, and what they don’t, but understanding the drivers of these is another matter entirely.

This is especially true for offline, physical products, where the link between what a product is nominally intended for and what it is actually used for can be radically different without any indication.

I’m sure you’ve probably seen one of these, whether it’s what you made when you were in school or simply in passing.

It’s certainly recognizable as a spider decoration, but what isn’t always known is that the legs are made from pipe cleaners. These days, it’s very rare to come across one being used for cleaning pipes, actually.

Looking from the perspective of a product performance analysis, making arts and crafts with these would have been totally unexpected. Yet, it’s the main user engagement driver for pipe cleaners these days. It just goes to show, what you think a product will do isn’t always what it will end up doing.

A better understanding of your customer base

When attempting to create products, one of the first questions that are asked is often “who are we making this for.”

Tying in with user engagement, different demographics of consumers tend to have different habits, different ways of doing things, and different features that they want out of a product.

It’s true that everyone is an individual, and that no two people will want exactly the same thing. However, you can still make generalizations.

It’s not stereotyping to say that people over 70 will want large text options in media, after all that demographic tends to have worse eyesight than those younger than them. If you’re targeting over 70s, you should therefore include these options.

However, it isn’t always clear who is using your products. Looking at the case of the pipe cleaner spiders, the customer base for pipe cleaners is radically different from what was expected at the time of launch.

Manual laborers vs. schoolchildren is quite a big difference, after all.

Product performance analysis can give you information on your customer base, who they are, where they’re based, what they do, etc. Information is power after all, and you can make your products more specialized and therefore more relevant if you know exactly who is buying them.

Of course, it’s entirely possible to end up with several different demographics buying your products. In fact, that’s likely the norm in a lot of markets.

What happens then? You can continue adding features that appeal to all demographics to make a product that’s a good average, or you can specialize.

One company that’s been on the ball with specialization in recent years is Wizards of the Coast. Their Magic: the Gathering cards are purchased by two main types of consumers:

Those who want to play the game because they find it interesting.
Those who want to collect the cards because they find them aesthetically appealing.

Starting in 2019, Wizards began making special cards with alternate artworks, designed to appeal to the second cohort of customers. You can see below the differences between these cards and the regular releases, with one being practical and easy to read, and the other more focused on appearance.

These alternate editions of cards proved a huge success. As a distinct entity, they didn’t appear in regular product editions and so appealed to the second cohort without any backlash from the first.

How do you perform Product Performance Analysis?

Below we’ve laid out a list of steps for you to follow in order to create your analyses. With these templates in hand, you’ll be able to make adjustments that would fit the specific needs of your businesses and be on your way to a successful analysis.

#1 Set your goals

In an ideal world, all you’ll have to do is push the “analyze my product’s performance” button. In reality, setting your goals means deciding how to analyze your product. In other words, the first step is to determine what you want to achieve with your product.

What would you consider a success? A product that’s a failure in one regard might be successful elsewhere. Some products are launched solely to make money, others have different aims.

This question will dictate the metrics you’ll be using. Is it units sold? A certain profit margin? Beating out a competitor?

Then, you’d need to set up the timespan you’ll be looking at. Remember, some products take time to reach their full potential.

Let’s take a look at some examples to get a better feel of how it works.

Promotional items

I’m sure you’ve seen those small gift bags given away at events and conventions. You might’ve handed some yourself.

As you may know, the purpose of these items isn’t to make a profit (not directly anyway), but to give event attendees a physical reminder of your presence there and warm them up towards your brand.

To measure success, you may use “items given” as a metric. Perhaps a better one would be expecting an increase in traffic on your website in the days following the event.

Raising awareness

Some products or campaigns can be created solely to bring attention to your brand.

A good example of a campaign made to raise awareness is PlayStation’s Play and Plant initiative. For every player that reaches a certain section of the video game Horizon: Forbidden West, the corporation will plant a tree in their name.

Players won’t buy the game to plant trees, but this initiative generates positive headlines for PlayStation and raises awareness of both the game and the brand.

Measuring the success of similar awareness efforts isn’t easy.

Awareness is the first stage in the marketing funnel, and it may take a while for potential leads to convert into paying clients. Your best bet to assess this is by monitoring traffic, leads, and conversions over time, trying to find an uplift in these metrics.

Boost sales of another product

Whenever you look to purchase a new phone charging cable, it’s super cheap. In fact, you’ll probably wonder how on earth any profit is made from them.

That’s because they’re not in fact designed to make a profit, but to support the use of the mobile phones that particular business sells too.

With different types of phones come different connectors. If you purchase an iPhone right now, for example, you’ll need a different charging cable than you would if you purchased an Android.

Put yourself in a buyer’s shoes for a second.

If a particular brand of phone needs a charging cable that is expensive or difficult to find, you’re likely to look elsewhere for a complete set.

You might even decide to buy a different model of phone when your charging cable breaks, rather than simply replace the cable if it’s costly or tedious to do.

Thus, phone charging cables can be seen not as profit makers, but as support to the phones that a maker sells. Their success would be measured not in profits, but in customer retention rates.

Ultimately, it’s up to you to decide, and with any luck, you’ll be able to pick sensible options that align with your business goals.

#2 Define the relevant data

Once you know what you’re looking for, the next step is determining which data is relevant.

If you’re looking at product features, you’ll look to detect statistics and other product data sources.

If profit margins are your game, look to financial figures.

This step follows from the first, but the metrics that you use aren’t always obvious. If in doubt, think back to your overall business goals as an organization. Aligning these with your data collection will greatly assist in choosing metrics.

#3 Pick your methods of data collection

Once you’ve decided what metrics you want to track, the next step is to decide what methods you’re going to use to collect the data.

Once again, this step is heavily dependent on the previous. The data you want to collect will determine the method of collection, with only a few different options available.

Are you looking for quick, easy-to-collate product ratings? Look to STAR reviews and similar.

Do you want detailed information on your product’s capabilities and how they meet your customers’ needs? You’ll need to search for more detailed review data.

Data collection can be done both in retrospect and in real time. Real-time data is usually considered more up-to-date as customer opinions can shift over time, but it is also far more difficult to collect.

Some ways of obtaining real-time data include sending out regular surveys, conducting incentivized review programs, and using software to obtain new information from the internet.

#4 Collect & analyze customer data

Once the first three steps have been decided, it’s time to put your data collection plan into action.

The time scale of your plan will vary depending on your particular plan, but in general data collection should go fairly quickly.

When the data is collected, you should make sure to format it correctly. It’s no good having all the data in the world if your analysis software can’t read it.

This is especially true when pulling data from multiple sources that might have different internal means of formatting.

What analysis tools you use, and what software you use, will again be determined by your needs. In the next section we’ve laid out a few different ways of performing analysis that can be useful in different contexts, and with any luck, you’ll be able to determine which one is right for you.

#5 Put the information you’ve obtained into action.

Finally, you need to act on the information you’ve found. There’s no use in doing all this analysis if you’re not going to do anything about the situation, after all.

When acting on your information, it’s important to keep in mind that this is all retrospective. Information quickly goes out of date, especially in the case of volatile markets such as fashion or software.

Ultimately, what you do will be heavily dependent on your situation, the information you’ve found, and the market you’re in. There isn’t really a right or wrong way of acting, however, we can give general advice on scenarios that might pop up.

Are you seeing that customers aren’t happy with a change? Rolling it back will be the way to go.
Are your products seen as outdated? You’ll need to look at your designs again.
Do you see a drop in sales? There will be a reason for that, you need to look further.
Are your competitors’ products seen as more desirable? Take a look at them and see what they’re offering that you’re not.

Analyzing your data

Product performance analysis has several functions, with the one you pick being the one most relevant to your goals. Below you’ll find some of the more common ones, how they function, and why they’re important.

Bear in mind that many analysts use multiple categories in order to get a more rounded view. However, the more types of analysis you use the more likely it is that you could get mixed signals from your data, so be careful!

Funnel analysis

Funnel analysis is all about diagnosing your sales funnel, a term used for customer journey analysis that starts with marketing, goes through to sales, then ends with purchasing.

It’s about the actions the customer takes, rather than the actions of your business.

Sales funnel analysis will look at the process’s separate parts, from the first interactions your customers have with you, to the end of the line when the purchase is made.

Trend analysis

Trend analysis in this case means tracking customer behavior. Opinions and beliefs change over time, and the behavior that these create will change accordingly.

Trend analysis uses both current and historic data to determine where the market is headed. It’s not always obvious when a change is beginning, so you need to be careful. What looks like a small rise in a figure could actually be the beginning of a drop, or vice-versa.

In short, only trust your data if it’s showing these trends over a long period of time.

It’s extremely useful to split customers into their demographics when performing trend analysis, as different demographics tend to have different behaviors overall. This is especially great for age groups since younger consumers tend to prefer a more tech-heavy experience than older ones.

Cohort analysis

This one is trickier to define. A cohort is similar in some ways to a demographic, that being that they are all customers who experience common things. That being said, it’s not quite the same as the event can also be factors like the month or time of day when the purchase occurred.

Cohort analysis is extremely useful as it tells you facts about your products over time.

Are you seeing an increased number of complaints about product defects in one month, but not the one before it? It’s likely that your manufacturing tools have developed a fault.

Did reviews drop after a competitor launched their product? Customers are probably comparing your product to your competitors and finding that they fall short.

What’s difficult with this type of analysis is determining which cohort a customer will fall into. This is much easier in ecommerce, where everything takes place online, but can be done with proper data tracking for offline purchases too.

Customer journey analysis

While this might at first glance seem to be the same as sales funnel analysis, you need to remember that a customer’s journey doesn’t always stop at the point of purchase.

Customers are a valuable advertising tool, with it being well known that a friend referring a product makes it far more likely that someone will purchase from you than if they have no information.

Customer journey analysis tracks a customer’s behavior in the following stages:

Awareness.
Acquisition.
Adoption.
Assimilation.
Advocacy.

In each stage, the customer becomes more and more likely to do some of your marketing for you. Analyzing these steps will allow you to see what makes a loyal customer, and how you might improve the process.

You can read more about customer journey analysis here.

A/B tests

A/B tests are a means of checking if you’ve made the right decisions. They involve two metrics, one that you have control over, and one that you measure the outcome of.

Take, for instance, the color of the packaging you use for your product. This can be your controlled metric.

By changing the packaging from purple to orange, you can then measure the overall impact that this has on the other variable. This way you can optimize the things you can control about your product.

A/B tests are often used in the product testing stage with test audiences, as this is much less costly than rolling out the changes across an existing product.

That being said, test audiences do miss things. Limited-time releases can serve the same purpose as tests, with the changes potentially being made permanent or into an offshoot if they prove popular.

Coca-Cola Raspberry, for example, was first sold on a trial basis in New Zealand back in 2005. It was discontinued as planned at the end of the year, but has since been brought back and expanded to four continents.

What metrics you should use for product performance analysis?

When the word metrics is used, what it means is anything, absolutely anything, that can be measured and recorded about a product over time. This can be something as inconsequential as the volume levels of production machines, or as important as sales figures.

When we’re talking useful metrics, it refers to anything that can be used as a measure of a product’s success.

We’ve laid out a few of the more important ones below, but be aware that it isn’t a be-all, end-all list. Any factor you think is important can be taken into account – it’s up to you to determine what is, and isn’t relevant.

Business-oriented metrics

These metrics mostly look at things from the perspective of your business and it’s relevant processes.

Revenue per product

Let’s start with the big one. Revenue.

The amount of profit you’re making is extremely important, as the end goal of most businesses is to make money and stay afloat.

The amount of revenue you make per product sold determines your profit margin. It will also tell you if it’s worth expanding into new territories where shipping costs will be higher, and whether or not the product would be worth keeping at all.

It all depends on the strategy you’re using. Some products rely on a high volume of sales with a low-profit margin, others the inverse. Keep your strategy in mind when analyzing this metric.

Cost to acquire new customers

It’s often said that it’s easier to keep existing customers than it is to attract new ones. While true, more customers is always better.

The cost of acquiring a new customer will give you information on how you should proceed with your marketing plans. Is your product one that will easily attract new faces? If so, you should keep it at the front and center of future marketing efforts.

On the other hand, if your product isn’t very attractive to new customers and will likely cost a lot to obtain, you’re better off focusing on keeping your existing customer base.

Customer lifetime value (CLV)

Customer lifetime value refers to the amount that a single customer is worth to your business over the entire span of your relationship with them. This can be anywhere from a single purchase to a loyal, lifetime subscriber.

CLV is a useful metric as it will tell you about customer behavior. It ties in with the customer retention rate metric that we’ll talk about further down, but is a more numerical indication with other functions.

How far should you go when attempting to retain customers? At what point should you be fine seeing them go? CLV helps you determine at what point it’s still profitable to try and keep a customer.

Customer-oriented metrics

These metrics are all about your customer base, and how they interact with your product.

Revenue per customer

How much is a particular customer spending with you? Can you expect and rely on a high volume of purchases from a small group of people, or should you aim to market to a wider audience?

Revenue per customer ties into the customer’s lifetime value, but is aimed at short-term analysis in the immediate future, rather than the long term.

Customer sentiment toward products

How do customers feel about your products? Remember, emotion is a huge driver in choice when purchasing a product. Customers are willing to pay up to 140% more with a brand they’ve had positive experiences with in the past.

It’s the main reason we’ve created Sentimate, the world’s first AI-powered product insight engine.

With Sentimate you will have access to the combined might of all publicly available reviews on a product, using sentiment analysis to detect customer sentiment in highly contextualized situations.

Customer retention rate

The proportion of customers who can be considered loyal is another great source of information.

How many of your customers stay with you after purchase? Can you expect repeat purchases, or should you aim your marketing more toward one-time customers?

Your customer retention rate will be highly contextual, depending on factors such as industry, sales model, and target demographics. By factoring that in, you can learn a lot more about your products.

For instance, USA Pan offers a lifetime guarantee on some of its products. That’s a literal lifetime, meaning that at any point between purchasing from them and your death, they’ll replace your products for you if they break.

Obviously, a low customer retention rate for these products isn’t a problem. In fact, even if it were zero then they wouldn’t see a problem with it.

If you sell a product with a limited lifespan, on the other hand, you’d be concerned if your retention rate was low. Context is key to this metric!

eCommerce-only metrics

We’ve split this section off from the main body since it’s so specific to analyzing the way ecommerce functions.

eCommerce has a huge advantage in product performance analysis, since by it’s nature, information is communicated back to the hosts. I’m sure you’ve seen a little pop-up when an app crashes, asking to send a report.

The advantage is even greater in the case of self-hosted websites, in which the software that runs it is hosted on your own internal servers and therefore can be analyzed in the most minute of details. You don’t need permission to analyze your own files or to gather data on how your own servers are running, after all.

These e-commerce-specific metrics are heavily indicative of how well your assets will function, and of how they’re being received by users. While analyzing them might not be that straightforward, a means of gathering these metrics should be built into them in order to make data collection simpler.

Task times

How long does it take your customers to perform certain tasks? Is it around what you’d expect or does it take longer?

See, the thing about navigating websites or apps is that once you know what to do you’re completely fine. Developers will naturally know what software does and how to perform tasks, as they know it inside and out.

Your users, on the other hand, aren’t so lucky. If a task takes them significantly longer to perform than you think it should, they’re probably having problems.

Whether that’s with finding the correct links, the interface layout, etc., is up to you to find out, but a task time will tell you that there is a problem in the first place.

Task exits

On the flip side, there are task exits. Is there a particular task or feature that a high proportion of users exit from? If so, you’ve probably identified a pain point that needs to be fixed.

Any place where many users stop using your website or app is an absolutely huge problem. It’s something that’s big enough to stop them from interacting with you altogether because of how much it frustrates them, which is the exact opposite of a good customer experience.

Errors logged

Errors are pretty self-explanatory, and they’re expected in self-hosted websites and apps more than template ones. It’s also a fact that nobody can release a piece of software without them, so you need to keep an eye on where they are logged if you’re using someone else’s software as a template.

The places where the most errors are logged can indicate where users are having trouble with your media, but it can also indicate the number of users using that feature. This will help greatly when prioritizing which to begin patching.

A major bug that only affects a few users might be considered less important than a minor one that affects everyone. It’s up to you to decide, but error logging information can help you there.

Users unsubscribed

I’m sure you’ve all seen the little boxes that pop up when you unsubscribe from a service or mailing list. The ones that ask you “why did you unsubscribe” and potentially “here’s an incentive to not do that.”

The amount of users unsubscribing from your mailing lists or from notifications are useful, as it can indicate when problems began occurring and assist you with tracking them down. However, if you’re given the reason that users unsubscribe it will assist you far, far more.

(De)activation of features

Ah, features. The shining light and also the bane of software’s existence.

When dealing with modular apps, users can activate and deactivate certain features as they please. With this information, you can determine what features users like and dislike, as well as how certain cohorts use your app.

Naturally, this will give you insight into what future features you might want to add, what current features you should accelerate the development of, and what you might want to drop.

Session durations

Session durations are another fine source of information. The amount of time customers spend on your website or app can give you insight into how your customers interact with it.

Are they mostly spending five minutes here and there? It’s likely that you’re being used to find specific items that they trust you for.

Are sessions longer? It’s likely that users are either exploring your features or simply that they use you regularly as a reliable seller. You can cross-reference with your sales statistics to check this.

Unique user rates

The number of users that are connected to you at any one time is useful information. The amount of unique users is much more interesting.

Your software will log every individual account’s interactions with it, thus allowing you to track the number of unique users at any point in time. This will let you see interesting pieces of information such as:

The average lifetime a customer will interact with you.
Whether or not new users are joining at the same rates.

This tells you how users are interacting with you.

Are they connected with you for short periods of time and be done with it? It’s likely that you’re being used to find the odd item that they can’t find elsewhere.

Are you seeing consistent use by the same users over time? You’re likely a lynchpin of their daily routines.

What happens if my data conflicts?

You’re never going to get the complete picture from a single piece of data. That’s generally why we try to analyze several in order to get a more rounded view of things.

Unfortunately, when you have multiple pieces of data that you’re tracking, some of them will inevitably conflict. If that happens, don’t panic! There is usually a solution, though it might not be immediately obvious.

Check your methodology

The first thing you should do when you’re seeing conflicting data is re-check your methods. If there’s a flaw in one of them, that might explain why you’re getting mixed signals.

If you find no flaws, you must conclude that the data is sound. But how can that be? How can two completely opposite things be true at the same time?

Well, you’ve got to consider that no two pieces of data are collected the same way. There’s always going to be a bias depending on the method. There might be a factor at play here that accounts for the discrepancies.

Online surveys are more likely to be completed by younger customers, for instance. If one piece of information was gathered online, and the other offline, they may be coming from different cohorts.

Examine your cohorts

The solution there is simply to split your data to account for the differences between them.

Next, if you find no distinct difference between the cohorts that gave you the data, look to when or where in the customer journey the data was collected. Let’s take a look at customer sentiment, which tells you how customers feel about your product.

Are you dealing with after-purchase? At the point of purchase?

Customers are much less likely to post a review as time goes on after the purchase. Thus, any review that’s posted a long time after purchase is likely to be heavily weighted. It’s also an unfortunate fact that the longer the wait the more likely that review is to be negative.

Thus, data that says customers are both pleased with your product and have a burning hatred of it, can both be correct.

Consider randomness

If this step reveals no differences, the only thing to do is simply chalk it up to the uniqueness of the data.

Each piece of data you’ll ever collect is unique. While there may be overall trends it’s entirely possible to end up with completely contradicting pieces of information by sheer chance.

The key here is to remember that no analysis will ever account for everything that a customer thinks. There’s always the chance that you had a boom in the popularity of a certain feature one month, then had it drop away the next, for example.

In the case of directly conflicting data, remember that it will have been pulled from different individual customers, with thoughts and feelings of their own. Customers aren’t cogs in a machine, their thoughts aren’t predictable and sometimes you just have to shrug your shoulders and re-do your analysis.

Wrapping up

Conducting product performance analysis is key to understand what your customers are after, allowing you to cater to their needs.

It’s not a one-and-done thing, though.

You’ll need to constantly assess the viability of your products in the ever-changing marketplace. The good news is that it gets much easier once you’ve got the hang of it and have the tools for the job.

Remember that product performance analysis is usually done after the product has launched. To better prepare yourself for these stressful and joyous occasions, it’s best to have a solid go-to-market strategy. Check out our complete guide for more.

How To Improve Your Product

Posted on Jun 27, 2022 by Emily Louise Spencer

How To Improve Your Product

Product improvement is a data-driven process that should not be taken lightly. With the digital revolution well underway and companies seeming to come up with new product modifications on a regular basis, you need to keep on top of features and design preferences if you want to stay competitive.

That being said, there’s such a thing as overdoing it or missing the point. A good example of this is the recent release of Windows 11, which brought many new features, but prevented users from moving the taskbar. This led to a whole host of complaints and caused Microsoft to have to revert the change in late 2021.

Microsoft’s main mistake was to think about features, not usability. It doesn’t matter how brilliant or innovative your designs are if they’re laid out in a way that the users don’t like. People don’t like large amounts of change, and product improvement is no exception to that rule.

What should you do when envisioning new features and upgrades? Think about your customer base and what they use your products for. If you’re dealing with the general population, your products need to be easy to use and understand, at least on the surface level. If you’re looking at a more specialized or niche target audience, you might get away with a less straightforward product that has more available features.

With all this in mind, let’s dive into what happens when you improve your product, and how to go about doing it.

How to get started on improving your product

When you’re starting out, the task of product improvement can seem like a daunting one. Fortunately, there are a few categories of product modifications that you might find yourself looking into, and there are some general rules for each that can be followed in order to get the most out of your alterations.

Exploring new opportunities and avenues
If you want to expand, you’ve got to grow. One of the best ways to do this is by tapping into markets that you haven’t explored before. This kind of product improvement can come in two ways, adding new features to attract new customers, or expanding existing ones so that they reach a wider audience.

New opportunities (the “O” in a SWOT analysis) can be assessed by looking into usage cases of your product that you might have underestimated in the past. That is why completing a thorough SWOT analysis is key when starting to look into product improvement. Let’s say you discover that a consumer-base that does not belong to your go-to audience has been using your product—you would definitely want to tap into it.

It’s also possible to expand into new markets by creating new products specialized for them, but since that isn’t classed as product improvement we won’t talk about it here.

Addressing customer concerns

As evidenced by the Windows 11 example above, upgrades to features aren’t always what your customers want. You need to keep their needs and desires in mind when you implement changes, especially with more specialized products.

This is where listening to the Voice of the Customer comes into play. Only if you monitor your customers’ opinions in online reviews and social media you’ll be able to know their concerns and address them in your product updates.

Changes that address customer concerns are by their nature reactive rather than proactive, happening after you’ve received feedback on your product modifications. For this reason it can be helpful to keep receiving consumer feedback in the testing stages, rather than coming up with a finished design and hoping it goes down well. The term “beta testing” covers this idea, and while it’s mostly synonymous with the software industry it has applications elsewhere too.

Keeping up with the times
All products, but technology especially, can become stale and behind the times. Upgrading your products to match current expectations will keep your customer base interested, as well as have the potential to produce new features.

Or course this doesn’t just apply to technology. Environmental impact and ease of disposal or replacement is a great customer concern in current times, and older, less green products are being rejected over time by more and more of the population.

Keeping up with the times is about knowing what’s expected by consumers, which is distinct from what’s desired. If something is taken as an absolute necessity and you fail to provide it, you’re in for a bad time and bad publicity.

Depending on which of these categories your planned improvements fall into, you can adjust your approach to best suit it.

What can be improved in a product

Once you’ve figured out how you want to improve your product, you need to examine it and figure out what can be improved. You need to keep things practical after all, and whether it’s technological limits or manufacturing constraints there will always be something limiting your ability to improve your product to the “ideal” level.

Cost is another crucial factor in product improvements, as improving revenue and profits are almost always the ultimate aim of any business. There is no clear line that can be drawn at what would be considered worth the cost or not, it’s up to you to decide.

As success of new features won’t be visible in advance some organizations have adopted what’s called the “minimum viable product” approach, creating the most basic form of a product or feature for release in order to get feedback before committing their full budget to any one idea.

You should also prioritize features based on customer use, as these ones will see the most return on investment. Customer feedback will tell you which features are the most used, which are problem points and could do with some tweaks, etc.

What works and what doesn’t

You’re never going to be able to do everything exactly right. There’s always going to be things that have been missed in the ideas stage, unforeseen factors that cause complications and so on. That’s okay, everyone is only human and some mistakes are bound to crop up somewhere along the line. There are several key indicators that your modifications will prove successful, and some that indicate the opposite.

Signs of a great product modification plan:

You’re solving a problem or adding something that consumers desire.
Your plan is customer-centric.
You’ve made your plan flexible enough to get around obstacles.
You’ve defined your manufacturing limits and budget properly.
You’ve factored the product life cycle into your plan.

The last item is especially important when it comes to product improvement as you need to assess how long this product will last on the market before a new one is required, and thus define what the limit of your improvements will be. Those products with relatively short life cycles such as mobile phones or software will receive far less in terms of upgrades with each iteration than products such as car models which require far more in order to be perceived by consumers as worth buying.

Aside from the opposite of the above, there are a few signs that your product plan needs rethinking:

The modifications that you’re making would make your product too similar to another.
There are hidden costs that you didn’t account for.
The work is taking longer than expected.

None of these by themselves are reasons to drop your plans, merely signs that you need to re-assess them. The last point is especially important, as no matter how good your product is, people aren’t willing to wait forever and will lose interest over time. That being said, you shouldn’t rush the work either or you may end up with faulty products that fail to live up to expectations.

If you’re unsure on any of these points, you need to test, test, test! Alpha versions of products can be checked by your in-house team, with beta versions being made available to a small range of volunteer consumers in return for detailed feedback. Your plan should never be static, since new data means new information and new insights into what your customers want and how you might provide this.

How to analyze product data

Data is complicated, and you’re not going to be able to fully analyze it without software since the sheer volume would overwhelm any human who attempts it. Below you’ll find some of the commonly used analysis tools and a brief description of what they do:

Text mining
Text mining is the process of reading through unsorted text and extracting information that might be useful to you. Generally any software that collects information from raw text will also transform it into an easy to read form, simplifying it by factoring in synonyms and other linguistic quirks.
Sentiment analysis
Sentiment analysis is similar to text mining, except instead of simply pulling words out it looks at the meaning behind the words, or the sentiment that the text is meant to convey. This type of analysis is particularly useful for analyzing internet reviews or other short-form pieces of text that may contain slang or metaphors that simple text mining wouldn’t be able to pick up on
Customer sentiment
Customer sentiment is a general measure of how customers feel about interactions with you. It’s gathered in a similar way to sentiment analysis, but goes a step further to sum up all the interactions or feedback you receive into a sliding scale of positive to negative. While simplistic, it’s a great way of checking how your products are doing in the early stages of testing or release.

Sentimate offers customer sentiment on all products within its database, so if you need to find out what is and isn’t being received well, you can simply sign up and access our huge database of product insights.

How to implement your changes

When it comes to making product improvements, you can’t simply put them in and call it a day. If you don’t advertise your new products or features then consumers won’t be aware of them, and if consumers aren’t aware of them they won’t buy them. Marketing is key here, and you need to keep on your toes and keep your marketing department informed of the changes you’re implementing and what you intend to improve on in the future.

Key to this, especially if you’re looking at a long process that might take several revisions, is a vision of what you want to produce in the end and how it will be seen by your customer base. If your vision is aligned with that of customer desires, you’ll be able to use marketing to drum up a buzz and get people excited about it. A consumer base who want to buy your products before they’ve even hit the shelves is a valuable asset indeed.

What examples of product improvements can we see today?

There are all sorts of product modifications going on on a daily basis, some successful and some not. Let’s take a moment to look at some of the more successful examples that you might be able to learn from.

Koumeican Flat Extension Cords
Extension cords are a familiar sight to anyone who’s ever worked around any electronics. They do, unfortunately come with a bit of a drawback. Most extension cords simply use regular circular wires, which can lead to you tripping over them and issues pushing anything on wheels past without ripping the cord from its socket.

Koumeican came up with a brilliant solution to this – a cord that can even go underneath the carpet if necessary, and is flat so as to not be a trip hazard if simply placed on the floor. They looked at an issue that customers were having and solved it in a simple manner, a definite upgrade.

The iPhone
This one is a bit old, but you can’t deny it was innovative. While touchscreen phones, portable music players and devices with mobile internet access had existed before, the original 2007 iPhone was the first to place them all within one device, saving space in consumers pockets and simplifying their device needs.

What the iPhone did was completely transform the way phone technology was used, as well as expanding Apple’s market reach beyond computers and portable music players to reach a whole new range of consumers. Everywhere you look today you’ll see smartphones and similar devices with multifunctional capacities like tablets and smart watches, all offshoots of the original iPhone’s vision.

Using Sentimate to improve your product

Sentimate offers a wide range of features that can be used to gleam insight into your products. There’s a lot of information you can gather from customer feedback, though it usually comes at great effort. Fortunately, we’ve done it all for you and can give you all the insight you need at the touch of a button.

SWOT Analysis
Strengths, Weaknesses, Opportunities and Threats, together called SWOT, are some of the most valuable pieces of information. Sentimate’s analysis is derived from consumer sentiment in order to divide your product’s aspects into one of the four categories.
Not every facet of your product needs changing, in fact it’s best to leave the Strengths of your product alone. Opportunities indicate you’re on the right track, whereas Threats mean that you’re barking up the wrong tree when it comes to what your customer base wants. As for Weaknesses, nobody likes those but they do exist and you need to take those into account when deciding how to alter your product next.

Competitive Landscape
With just one click you can compare your products with those of your rivals and see where you lie in the realm of both customer sentiment and review volume.
You’ll be surprised at the amount of information you can extract from these two figures alone, with high-sentiment low-review count stats being an indicator that your product needs more promotion, whereas the inverse tells you that you need to upgrade the product itself a bit. There’s only one idea place to be on this chart and that’s slap bang in the top right corner, and by analyzing where you stand you can see what you might do to reach that goal.

Comparison Tool
A side-by-side comparison of two products is the best way to assess where you stand in relation to the market leaders (or your closest rival), and Sentimate’s Comparison Tool does just that.
The data we’ve gathered allows you to view different products and see where they stand, but more importantly why they stand there. When combined with the aforementioned Competitive Landscape tool you’ve got an incredible amount of detail into your products’ standing and how you might improve it.
From the advantages and disadvantages that consumers see in each product to key metric comparisons that tell you how customers feel, you’ll be sure to know more than you set out to by the time you’re done.

Hot Or Not
Trends can come and go in the blink of an eye, especially in some of the more volatile industries such as fashion or beauty. By using our Hot Or Not tool you can track customer sentiment at the present moment, see what’s rising in popularity within each category and see what’s dropping out of favor.
By keeping track of rising stars and falling rocks, you’ll be able to tweak your products according to shifting consumer opinions in real-time, even make predictions based on the projected landscape to bring out the next hit product yourself.

How to Use Consumer Insights in Your Favor: The Definitive Guide (2022)

Posted on Oct 13, 2021Nov 4, 2022 by Simone Somekh

Consumer insights are your customers’ truth – how they experience your product or service, how they felt about it, what they want, need, and desire.

Understanding your consumers’ needs and wants is essential to ensuring your brand’s future. Scanning, collecting, and analyzing customer feedback empowers businesses to learn from their customers – so they can innovate and improve customer experiences and generate positive sentiment.

This blog post is your definitive guide to consumer insights.

We will explain what are customer insights, their importance, how you can use them in your favor, and what impact the spread of COVID-19 has had on customer feedback analysis.

Another note we would like to add, Revuze Explorer is one of the most advanced consumer insights tools out there. Our true strength is turning consumer insights into actionable action items for companies, all done in minutes instead of days & weeks.

Last update: November 2021.

What are Consumer Insights?

Consumer Insights are analyzed data businesses use to better understand customer wants, needs, attitude, and sentiment. Useful Consumer Insights are new, relevant and inspiring, and provide extensive knowledge of consumer desires, needs, and motivations. These insights help improve a brand’s interaction with customers, which creates better customer experience and improves revenue.

So, how do you find consumer insights? Well, data.

Consumer insights are a result of data interpretation and analysis. They are aggregated from data collected with different tools, like trend analysis, customer satisfaction surveys, focus groups, Social Listening, and more.

Why are consumer insights important?

First and foremost, consumer insights give the tools to make better business decisions. Improving customer experience, focusing marketing campaigns, and optimizing brand innovation will help drive brand growth and revenue.

In addition, customer insight analysis helps identify consumer and market trends, pain points and attitudes. This information highlights consumer sentiment and experience on different parts of the consumer journey, data that helps brands build and maintain customer loyalty.

How can consumer insights improve advertising?

I’m glad you asked.

Advertising and marketing your product can be hard. It is hard to know how successful your campaigns are or how your latest ad resonated with your target audience.

The job can be even harder when we talk about e-commerce. Online consumers come from all walks of life, from different generations, with varied interests, and unique needs. For example, Baby boomers, Gen X, Millennials, and Gen Z are all very different and come with their own particular wants and needs. So, what may work for one audience won’t necessarily work for all.

This is where consumer insights come into use.

Consumer insights allow businesses to get a better and deeper look into their customers’ purchase decisions and behaviors. Insights enable brands to identify the best marketing campaigns and strategies that will resonate most powerfully with the targeted audience.

Using consumer insights allows you to make a smooth and data driven shift from product-focused marketing to consumer-centric marketing. For instance, what if you could focus your ad campaign on a customer-desired feature? Quality consumer insights enable you to do just that.

Taking an example from our latest Headphones Market Report, after analyzing customer feedback we have identified noise cancellation as the latest trend in the wireless headphones industry. Just look at the noise cancellation topic volume chart below –

Using this data to create a more focused, optimized, customer-centric advertising strategy will allow you to achieve your marketing objectives more effectively and efficiently, saving you valuable time and money.

How to use consumer insights in your favor?

Now that you know what are consumer insights and why they are so important. It’s time to understand how to use them in your favor.

We already covered the positive impact consumer insights can have on your marketing efforts. Here are some other aspects of your business can profit from consumer insight analysis –

Consumer loyalty –

Consumer or Brand loyalty is a strong positive consumer sentiment, meaning people will choose a particular brand over all the others. Businesses with a strong and well-founded brand loyalty will enjoy returning customers that’ll make repeat purchases.

Quality consumer insight analysis provides information about which brand aspect is the customer’s favorite and why. Optimizing customer experience (or even the product itself) based on that data will make people feel heard, cultivating customers’ emotional connection and loyalty.

Customer service –

Identifying customer pain points using insight analysis helps brands stay ahead of the game. Knowing what is bothering your customers will help you improve your customer service – you can plan your response, prevent issues from recurring, and even train and educate your staff to better handle customer complaints and inquiries.

Optimizing your customer service will not only create and cultivate customer loyalty, it will attract new clientele through positive word-of-mouth, and might even improve brand equity.

Consumer Insights In the COVID-19 Era

As the novel coronavirus (COVID-19) spreads across the world, consumers and businesses are forced to dramatically rethink their commercial behaviors. This means customer feedback and its analysis must change as well.

People are afraid and worried not only for their health, but for their jobs and saving too. These financial concerns have resulted in major emotional and economical shifts, ones that have to be taken into account when collecting and analyzing consumer insights.

Maybe the most important thing you can do is listen. The constantly changing global reality calls for flexibility and open mindedness. For example, you might want to abandon the normal barrage of survey questions. Asking fewer, more open-ended questions will help you get more extensive, detailed answers from your clients, so you won’t miss vital insights.

Another much needed aspect these days is adaptability. Quick thinking and short response times are essential for brands to survive such tumultuous times. building up your brand’s capacity to make short-term changes largely depends on quality information. Consumer insights allow you to test changes and prioritize future ones. Knowing what your customers are feeling and thinking will help you adapt to the coronavirus crisis.

Getting started with consumer insights

Establish your goals – Make sure you know what you want to learn from your data.
Identify resources – It’s important to be clear on how you will get the data – who’s going to collect and analyze it, what’s your collection method, what audience are you targeting?
Create a plan – In order to make sure all your efforts won’t go to waste, planning is key. So, think about what departments, processes, and strategies will use and benefit data the most.

We know collecting and analyzing customer feedback can be quite a challenge. Find out how Revuze’s AI powered CX analysis can help you get quality consumer insights that’ll push you to the next level!