Practical Approaches to Customer Centricity in Product Development

TL;DR: Products often tend to be technology-driven, without actually solving a real problem of real users we see companies and products fail every day because money was invested in the wrong idea. In contrast, a truly customer-centric approach ensures you enter the right market with the right product, thus increasing user experience, loyalty, and profitability ‒ a win-win situation. One format for user-centered innovation projects are Design Sprints, which allow for a first validation of a product idea within a week.

Max: Today, I have the pleasure to introduce Daniel Thulfaut, Head of IP InnovationLab and longtime friend, as the second guest author on my blog.

With 15 years of experience in design, product management, software development, process optimization and strategy consulting, Daniel’s passion lies in innovation projects, agile organizational development and workshop facilitation. His love for pragmatism and his dislike for non-value adding things shows in all his projects and workshops.

A cheetah sprinting.
Photo by Cara Fuller on Unsplash

At the digital brand studio Interactive Pioneers we have been developing digital products for clients for over 20 years. With our innovation lab, we support established companies and start-ups in the development of innovative products using methodologies such as Google Design Sprints.   

In more than 20 years we have learned that no matter how good the team is, no matter how good the business plan is and no matter how solid the financing is, the most important thing for the success or failure of the product is a consistent customer focus.   

Often a product is simply developed because one has the knowledge or the technology, but then we desperately search for the right problem to that solution. The success of well-known companies like Apple, lies exactly in the opposite approach.  

The Embrace Infant Warmer

A nice example of customer centricity is the development of the “Embrace Infant Warmer”. Students in the fields of electronics, computer science, mechanical engineering and business administration were asked to develop a more cost-effective version of an incubator for newborns. The starting point for this project was that in third world countries: clinics did not have enough money to buy these incubators and therefore many newborns could not be treated and died.  

So materials were compared and other potential savings were discovered. Industrial partners were consulted and the new product took shape. One of the students wanted to talk to local clinics and traveled to Nepal. He had expected a lot, but certainly not this: The majority of the incubators in the hospital were empty. There were enough incubators and a cheaper product would not have made a difference. But what was the reason for the high infant mortality?   

He asked the doctors and unfortunately there was a simple, sad explanation: the majority of the children were born dozens of miles away from the hospital. No matter how cheap or well designed an incubator would be, the struggle for survival takes place at home alone with the family, far away from the hospital.   

Based on these findings, the team was able to turn the project around completely. Instead they developed an inexpensive, easy-to-use sleeping bag that could be heated with hot water, to keep the baby warm on the long journey to the hospital. First prototypes were extremely well received by the population in Nepal and achieved first results. Nevertheless, many children arrived at the hospital hypothermic and no longer treatable even with this product. 

Again, the students had to talk to the mothers and get even closer to the customer. Was the product not good enough? The problem this time was cultural: there was a temperature scale on the product with the indication to maintain thirty-seven degrees. In Nepal, however, people were sure that Westerners would always use a little too much medicine, so thirty degrees was probably more realistic.   

In the next product iteration, the scale was replaced by a simple traffic light. If the light was green, the temperature was correct. And suddenly the project team could observe how the mortality of newborns due to hypothermia dropped drastically.   

In the end, it is irrelevant whether the investors or the management team consider an idea to be good. The user is the single point of truth. The user is the only source of information to know which product to develop. And these answers cannot be found in your own office.   

Benefits of user centricity

When entering the market, a customer-centric approach ensures that you enter the right market with the right product. But this approach also plays an important role beyond that and separates “the wheat from the chaff” in competition.   

Recent studies show that in successful companies customer centricity is the number 1 priority, even before the product and the pricing strategy. Software as a service providers in particular often achieve a doubling of sales within thirty-six months when consistently focusing on the user. But why is this focus directly reflected in sales?  

The most direct effect is the higher price the customers are willing to pay. Eighty-six percent of all buyers are willing to pay higher prices for a good customer experience ‒ up to 15% more. But thinking longer-term, customer focus also means customer loyalty. And a loyal user buys 5 times more frequently, tests new offers 7 times more frequently and recommends new products 4 times more frequently than other customers. So it’s no wonder that customer-centric companies are on average around 60% more profitable than comparable companies.   

But how does customer-centric product development work?   

In recent years, frameworks and methodologies such as Design Thinking, Design Sprints and Product Discovery have been developed. But the basic idea behind all these methods is always the same.   

We do not go straight forward from the starting point of the project to the solution finding process, but back in the process to the user and to the actual understanding of the problem. We try to understand the causes behind the symptoms. Based on these insights, we then develop possible ideas and validate them in the smallest possible prototypes with the actual target group. The two core aspects are thereby the focus on the actual user problem and the test of all ideas with small, pragmatic prototypes with real users.  

Sometimes, however, the first aspect in particular is very difficult ‒ accessing the target group. Or one is part of the target group oneself and therefore understands the problem, but has no valid data about the willingness to buy and size of the market. In this case, you can focus on the validation of prototypes. This is then called “hypothesis-driven product development”.   

Sprinting towards customer satisfaction

A concrete format for such innovation projects are Design Sprints ‒ and also one of the core methodologies of the IP Innovation Lab. Here, the entire process from problem analysis to ideation and testing is compressed into a single week. And at the end of the week, the team has proven or disproved the hypothesis and gathered valuable information about the market. In this one week, therefore, often more value is created and more knowledge is brought to light than in 6 months of real product development ‒ at a fraction of the cost.   

But what exactly is a prototype? The first version of a software developed without a focus on quality? No, in fact most prototypes do not require a single line of code to be produced. A prototype is merely a facade of the real product. Comparable to the city scenery in a Wild West movie. Everything looks real. But when I enter a house, I am not standing in the hallway, but in the desert behind the backdrop wall. In the same way, our prototype only has to look real enough to create real feedback. This could be a small campaign with Facebook Ads or Google Ads, where only the click data is measured. This can be a dummy landing page of the product to be tested. 

In the case of software, it will usually be a clickable, interactive prototype. These are real looking screenshots which are linked to each other via hotspots and animations. But hardware products and services can also be prototyped and tested using techniques such as 3D printing and the use of actors. The hard part is not to invest more effort than necessary, but to have a prototype that looks as real as possible and is tailored to the specific questions that the test is supposed to answer.   

In addition, there are also the so-called low-fidelity prototypes. The best known type of these is paper prototyping. Here the user journey to be tested, is tested with mostly hand-painted screens. If the user clicks a button with his finger, the moderator exchanges the current sheet of paper with the selected screen. Here you don’t get a real validation of the success of a product. But it is a very fast method to uncover major issues in the user experience before further testing with high-fidelity prototypes.   

Five tests are often enough

Besides tests that mainly rely on quantitative data (like Facebook Ad Pretotyping) most prototypes can be validated with just five users. This may seem like a really small sample size ‒ but it is usually enough. At early stages where you test rough prototypes you are looking for the big patterns and obvious flaws. You want to find 80 percent of your concept flaws with a less than 20% investment. Those are the patterns that typically emerge after about five test sessions. At later stages you want to try A/B testing and quantitative testing with a much bigger sample size. But those tests are for details and usability decisions for validated products. One thing to keep in mind though: If your product has a heterogeneous audience you want to test five times with each distinct persona. 

Is this bullet proof? No. No test really is. But it is good enough. And that is the whole mantra behind fast paced prototype-based innovation. 

No validated work

Unfortunately, we see companies and products fail every day because money was invested in the wrong idea. The more we deal with an idea, the more we have already invested in it and the more we know about a topic, the more prone we are to not question and understand the actual problem.   

Just like we encourage our customers to validate and sharpen their project idea before implementation, we can recommend a simple philosophy to all startups and development teams: No line of code without validation with real users. Take every good idea, bring it to life in a prototype and then go out of the office to the user and get real feedback. In most cases, the idea is not nearly as good or important as originally thought. So you can pragmatically uncover the real treasures and invest development work exactly where it creates the most customer value.   

So that you don’t develop cheaper incubators for a hospital full of empty incubators.

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