What is the first thing that comes to your mind when you start working on your amazing idea? Is it excitement? Or is it a success? Maybe both. But along with this moment of excitement, there is always a moment of fear. Fear of failure. What if my product fails? What about the losses with the product failure?
Business is harsh. More than 90% of the businesses don’t see the 3rd year of existence. This is an existent problem that is a harsh reality. The economic success of a business makes it float in the market. It depends on the ability to determine the needs and wishes of the customers and to transform those needs into quality products within the desired schedule and with acceptable costs for the customers.
But why does this happen? Is it because of the bad product idea or incorrect way of developing the product or ignorance of customers? Let’s discuss some of the causes that lead the business to failure.
Numerous factors cause the failure of the product. Let‘s take a look at some of them:
A product that satisfies the market, solves the needs of the customer, and makes money out of it. What if your product doesn’t solve the problems of customers? You can not assume that people will buy your product or service because you thought so. Thorough market research is a must for a startup because there is no point in building a product that nobody wants.
A lack of investment capital is often the mark of startup failure. One of the reasons can be that they have built a product that’s not needed by the market or they lack skills in managing the operational cash when in need of further operations. Understanding the burn rate of your business is an important skill to avoid the situation.
A product that is easy to use and helps, in the long run, is a user-friendly product. The product should be well presented and easily accessible to the common features. Its functions should be clear to the customers and the usage error should not affect the product functionality. If the product is not appealing to the customers, it will lead the business toward failure.
A business model explains how the company operates, makes money, and how proposes to achieve its goal. It’s a detailed plan that assists the viability of the product or the company. The absence of a business model may lead to dissatisfaction among customers or high-value customers. To ensure high margins from the product, a business model is needed to check if the product is the best solution available in the market.
Customer needs are the center of every product or service. To run a successful business, it’s required to know about your customers’ needs either directly or by other means. By solving the customers’ problems through your product will make your product gain more attention and thereby make your business successful.
The inability to market your product is a common failure. It’s equally important to plan marketing strategies along with the product’s quality and design. Some startups don’t favor the idea of promoting the product instead of focusing on the product or service. To be a successful startup, it is needed to identify the target customers, get their attention, and convert them into paying customers.
Many startup founders believe that adding more features to their products will make them successful. But, in reality, more features may confuse your customers and make your product less usable and thereby decreasing the feasibility. Focussing on the key features of your product and limiting the bandwidth of confusion with complex features, helps in gaining more attention towards your product.
The timing of the product launch is one of the major factors that determine the future of the startup. If your idea comes too early, the consumers may not be ready for your product (eg. google glasses), or when your idea comes too late, you would be facing the market that is formerly captured by your competitors at a large scale( eg. google attempts into social media).
Businesses face several difficulties while providing products and services to customers as they work tirelessly for their satisfaction. A product can not be successful just by adding features to it but by identifying the customers’ problems and designing the product that solves those problems. Pointing out the customers’ problems and solving them is crucial in building long-term relationships with clients and increasing customer retention.
To best serve your customers, it’s necessary to identify the target customers and the market for the product. Not everyone who buys your products or services fits the same profile, but as an organization, having a customer base proves to be beneficial. Not only does it help you streamline your product offerings, but it also allows you to give those customers the best possible experience.
Business owners do everything they can to meet the needs of their customers. Companies introduce new products and services that they believe are an improvement over what they offered before. But consumer reaction to new products or services, including new marketing campaigns, can be a big turnover. Experimentation on a small scale for customer problems allows the company to predict the outcome on a larger scale.
Ideation is an important step in the design-thinking process, which is a user-focused method of solving problems. Sessions or workshops are created as a structured process in which a facilitator guides them to come up with ideas for the customer problem they want to solve. People often use ideation techniques to create a list of as many solutions as possible, which they can then narrow to the most viable options. One of the best ideation techniques is brainstorming that leverages the interaction between a group of people to create solutions by building on one another’s ideas.
A data-driven idea of testing and experimentation puts you in control of your marketing expenses. It allows you to prove the marketing actions, optimize strategies to improve performance, and make smart business decisions. The different techniques that can help to find the best solution for the market by testing the hypothesis are A/B testing, multivariate testing, before and after testing, and time-based on/off testing.
The best way to find the solution to customers’ problems is by conducting experiments. Performing experiments on products, minding the features and services, is not an easy task but is a necessity. Uncertainty in the factors during the development may create an impact on the future performance or services which thereby affects on quality and reliability of the product. This highlights the importance of experiments. Consider the following components while performing experiments on the product.
A hypothesis is a statement that asks to explain why something has happened or what might happen to it if something has changed. The real value of hypothesis testing in business is that it allows professionals to test their theories and assumptions before putting them into action. This essentially allows an organization to verify its analysis if it is correct before committing resources to implement a broader strategy. Hypotheses are often written as if-then statements; for example, “If this happens, then this will happen.”
The hypothesis has been created. Moving forward with the experiment, let’s test the hypothesis. A few steps are mentioned that can be considered while testing the hypothesis.
The steps taken in experimenting with the hypothesis depend upon the type of product or service and its features for the target customers. These are the key steps in understanding the product thoroughly and turning it into a long-term success.
The success criteria of an experiment depend on how the customers respond to your product. Did fewer customers visit your website or buy your product? Was the product impactful toward the customers’ needs? If the responses to your product have a greater percentage for a particular period, then the product can be considered to be launched.
Now, among the mentioned three components of an experiment, the hypothesis is considered to be the main component of product development. Let’s scratch it a little more to get a better understanding of it.
A hypothesis test examines two or more affirmations about a parameter or a feature to determine which one is better for our product. Did you conduct experiments in your science class? It’s almost the same as conducting a hypothetical experiment in a science class. Make an observation, form questions on the information that you have obtained, and work on the solutions in different ways. Let’s take a look at some ways to test the hypothesis.
A/B testing also referred to as split testing is a random experimentation process where two versions of parameters or features are shown to different segments of users (website visitors or customers) at the same time. The conversion is then measured for each segment and compared to look for a significant uplift in one segment so that the other can be ruled out. This is done to determine which one leaves a maximum impact and drives business metrics.
Example: Landing pages are important not only for conversions but also for sales. The content that reaches the customers through your website should be optimized for maximum potential. The elements (to be tested) that have the potential to influence the behavior of the target customers are:
Multivariate testing is a method in which more than one variant and more than one variable are tested. It aims to determine which combination of variables performs the best out of all the combinations. A multivariate analysis is done to eliminate the need to run sequential A/B tests for the same goal in a shorter period.
Example: If a page contains a catchy header with different colors, CTA options, and some images and videos, a multivariate test is performed with the different combinations of these elements, and the result is analyzed for the combination which has the maximum conversion rate. This helps to determine the interaction between the changes of the elements in different combinations.
Sometimes it’s not possible to split the users into two or multiple variants as there might be effects on the chain of products. For example, if there is a hypothesis that involves whether the price hike for a product is better or not, the shops can not be divided into various segments as this takes into account the demand and supply chain of the entire place. In such cases, a test will have to compare effects before the change and after the change to conclude and make a decision on the hypothesis.
In time-based on/off testing, the changes are introduced to all the users for a particular period and terminated for an equal period, and repeated the same for a longer duration for a conclusion.
Example: Take the same example of a price hike in a product. Whenever the price of the product changes, the response of the customer towards the product changes. However, testing of the new prices can be done on alternate days or weekdays, or on weekends to see if the hike in price has a positive or negative response from the customers.
Businesses across all industries collect data from multiple sources to help improve operations, increase sales, reduce costs, and uncover product development opportunities. The data collected for the product should be tested before providing it to the customers.
A few techniques are used to test the hypothesis:
Surveys are done to better understand their target market. They allow businesses to efficiently collect feedback, opinions, and responses from customers and use that information to enhance different areas in the development of the product. Survey responses can approve or encourage discussions on strategic business decisions and provide unbiased data to guide decision-making. Feedback gathered from surveys depicts what customers think about your brand and products, as well as provides a baseline for comparison over time.
Effective landing pages are void of all distractions and help visitors focus on the particular product or service being offered. Using both professional and personal touches, this single page can convey all of the information about a product or service that the potential customer needs. High-converting landing pages make you come up with a short, to-the-point synopsis that highlights the most important aspects of your product or service. Landing pages are effective in particular customer needs:
During the process of product development, the question always arises- “what features do our customers have or what do they want?” or “What’s the next feature that will be most valuable for our customers?” These questions are hard to answer but can be dealt with by extracting the analytics obtained by the product itself, from customers, or by running tests. But how will you deduce that these features are worth spending time and resources on? A dummy feature is a technique that can be used to determine whether the features obtained are worth the product. The dummy features are added to the product to examine the response the feature gets from the customers.
There can be different ways to test the hypothesis depending on the type of product for the experiment.
Experimentation has become an essential part of product development in agile teams. There may be a time that you would need to take a step back in the meantime and remodel your product or services and wait for the perfect opportunity to relaunch and succeed in the market. The economic success of the organizations depends, predominantly, on the ability to determine the needs and wishes of the consumers. To transform such needs into products of quality or services in the desired schedule and with acceptable costs for the consumers requires frequent experimentation.
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