Amazon recently redesigned its Echo Dot speaker to provide improved sound quality. How did it do it?
Amazon used customer data to improve its Echo Dot speaker by continuously collecting customer feedback on what features they wanted in the device. With this data, Amazon was able to create new features and updates that customers wanted, such as higher sound quality, improved voice recognition, and more intuitive voice commands. Amazon also used customer data to improve its Alexa virtual assistant, which is integrated into the Echo Dot speaker, by making it more accurate and responsive.
According to a survey conducted by Productplan in 2020, 73% of companies reported using product insights to inform their product strategy.
Since we do not have any magic power to enter customers’ minds and know how they use our products, we need to find the most authentic and systematic solution to unlock the mysteries of customers’ emotions.
For example, a new line of healthy snack bars brands used product insights to inform the product strategy through market research and customer feedback. They learned that consumers were looking for snack options high in protein, low in sugar, and with minimal ingredients. Using this information, they developed a line of snack bars made with only a few natural ingredients, such as nuts, seeds, and dried fruit, and were high in protein and low in sugar. That was a huge success and helped them sustain and succeed in the market!
Businesses aiming to enhance their product strategy should consider product insights. With this, companies can better understand what their target market wants and needs by gathering and analyzing data on customer behavior and preferences.
What is Product Strategy, and How Can It Help Your Brand?
Product strategy refers to the long-term planning and execution of a company's product development and management efforts. It involves setting goals, determining the target market, identifying potential competitors, and developing a plan to bring the product to market.
Product strategy helps to identify the target market
This involves understanding the needs and wants of the target market and identifying any potential gaps in the market that the product could fill. This may include conducting focus groups, surveying potential customers, and analyzing market trends to determine the likely demand for the product.
Product strategy is a straightforward way to product positioning
This determines how the product will be positioned in the market concerning competitors. This highlights unique features or benefits of the product or targets a specific niche within the market.
Product strategy helps to establish a robust pricing strategy
Product strategy covers developing a pricing strategy that will be both competitive and profitable. This helps to analyze the costs of producing the product and the potential demand for the product to determine the optimal price point.
Product strategy identifies the best ways to launch and promote the products
Product strategy also involves developing a go-to-market strategy that outlines the plan for launching and promoting the product. This allows identifying distribution channels, developing marketing campaigns, and creating a sales strategy.
Altogether, product strategy is a crucial element in the success of any product. It requires careful planning and execution to ensure that the product meets the target market's needs and is positioned effectively in the market. Companies can increase their chances of success and achieve long-term growth by effectively executing a product strategy.
What is Product Insight?
"Product insight is the key to understanding customer needs and creating a seamless and fulfilling customer experience. Without a deep understanding of the products and services we offer, it's impossible to create a personalized and relevant customer journey." - Shep Hyken, customer experience expert and author.
Product insight is the in-depth knowledge of a product's attributes, advantages, and capabilities and how people use and view it.
This knowledge can be applied to sales, marketing, and product development initiatives to help pinpoint growth opportunities. Product insight can be gathered through various means, including market research, consumer feedback, and data analysis.
What Are the Challenges to Collect Product Insights?
There are mainly 5 challenges leaders face in collecting product insights:
- Limited access to customers: It can be difficult to collect product insights if you don't have direct access to your target audience or customer base. This can be especially challenging for new businesses or companies that don't have an established customer base yet.
- Lack of feedback: If customers aren't providing feedback on your products, it can be difficult to gather insights into what they like or dislike about them. This can be due to a lack of engagement from your customers or a lack of opportunities for them to provide feedback.
- Inaccurate or biased data: If the data you are collecting is not representative of your entire customer base, it can be difficult to draw accurate conclusions about your products. This can be due to self-selection bias, where only certain types of customers are providing feedback, or due to inaccurate data collection methods.
- Difficulty analyzing data: Even if you can collect a large amount of data, it can be challenging to analyze it effectively and get actionable insights. This can be due to the complexity of the data, a lack of resources or expertise, or simply not knowing what to look for.
- Competition: In some cases, collecting product insights can be difficult due to competition from other companies. This can include companies that are trying to replicate your products or steal your customer base or companies that are simply trying to gather similar data to what you are collecting.
Types of Product Insights That Help to Build Better Product Strategy
There are mainly 2 types of product insights that help to establish an excellent product strategy - quantitative and qualitative product insights.
Quantitative product insights
Quantitative insights are data-driven insights based on numbers and statistical analysis. These insights are focused on measuring and understanding the performance of a product or feature in terms of specific metrics, such as revenue, customer satisfaction, or usage frequency.
Qualitative product insights
Qualitative product insights, on the other hand, are insights based on subjective experiences and observations. These insights revolve around understanding users' emotional and psychological responses to a product or feature, as well as their motivations, needs, and behaviors. Qualitative insights are often gathered through user interviews, focus groups, and surveys.
Quantitative product insights focus on the "what" and "how much" of product performance. In contrast, qualitative product insights focus on the "why" and "how" of user experiences and behaviors.
Information You Will get from Product Insights to Enrich Product Strategy
There are mainly 5 types of information you can gain from product insights.
- Customer needs and preferences
Understanding what customers want and need from a product, product managers and developers can inform product strategy by guiding the development and design of the product to meet these needs and preferences. - Market trends and competition
Knowing what other products and services are available and how they perform can help inform product strategy by understanding areas where the product can differentiate itself or meet unfulfilled needs. - User behavior and usage patterns
Understanding how customers use the product and their pain points can enrich product strategy. - Product performance and quality
Analyzing data on the performance and reliability of the product will be useful to build a strong product strategy. - Customer feedback and reviews
Gathering feedback and reviews from customers can provide valuable customer insights into the strengths and weaknesses of the product and inform product strategy.
5 Key Elements of Top Product Strategies
1. Customer led
By putting the customer at the center of their product strategy, companies can better understand what their target market is looking for and create products that genuinely meet their needs. This can help to increase customer satisfaction and loyalty, leading to long-term success for the company.
2. Clear sense of purpose
A clear sense of purpose helps to focus the team's efforts and provide a clear direction for the product. It also helps to differentiate the product from competitors and can be used to connect with and resonate with the target audience. A clear sense of purpose is essential for creating a successful product that meets the needs and expectations of the intended users.
3. Collaborates with different voices
Collaboration is a key element of top product strategies because it brings together different voices and perspectives to create a more holistic and well-rounded product. This can include input from various departments, such as marketing, engineering, design, and customer support. By considering the diverse needs and insights of these different groups, companies can create products that are more responsive to customer needs and more likely to succeed in the market.
4. Flexible and make space for changes
This means that a product and its corresponding strategy should be able to adapt to new market trends, customer needs, and other external factors that may affect its success. By being flexible and open to change, a product and its strategy can remain relevant and effective in a rapidly changing business environment. This can help to ensure the long-term success of the product and the company.
5. Measurable benchmarks
Measurable benchmarks provide a clear and quantifiable way to track progress and assess the success of a product. By setting specific benchmarks, such as target sales figures or customer satisfaction ratings, companies can measure their progress and make informed decisions about adjusting their strategy to meet their goals. Measurable benchmarks also allow companies to compare their performance to that of their competitors, helping them to identify areas of strength and weakness and make strategic decisions about how to improve their products and services.
Importance of Data-driven Product Strategy
Data-driven product strategy is crucial to modern product development because it allows companies to make informed decisions based on real-time data and analytics.
In today's fast-paced, competitive business environment, companies need to be agile and responsive to change to stay relevant and achieve success. By leveraging data-driven insights, companies can quickly pivot their product strategy to meet evolving customer demands and market trends.
Data-driven product strategy also helps companies make more accurate predictions about product performance and market demand. This allows them to make more informed decisions about product development, pricing, marketing, and sales strategies, which can ultimately lead to increased revenue and profitability.
Overall, a data-driven product strategy is essential for companies looking to stay ahead of the curve and remain competitive in today's digital age. By leveraging data and analytics to strengthen their product development and marketing decisions, companies can create more targeted, practical products that meet the needs and preferences of their target audience.
Real-Life Examples of Brands Using Products Insights to Build Product Strategy
Combining product and consumer insights with product strategy can help a company make robust decisions about developing and selling its product. By understanding the needs and behaviors of its target market, a company can tailor their product strategy to meet those needs better and effectively reach its target audience.
For example, a company may gather data on how their product is being used by customers and find that the majority of users are using it for a specific purpose. They can then use this insight to inform their product strategy by focusing on marketing and developing features that cater to this particular use case.
This can help the company better meet the needs of its target market and differentiate its product from competitors.
Check a few examples of brands successfully using product insights to strengthen their product strategy.
- Nike used product insights to develop their "Nike+" line of shoes, which includes a chip in the sole that tracks your running stats and syncs them with a mobile app. This resulted from Nike's research into the needs and preferences of their target market (runners), who were looking for ways to track and improve their performance.
- Apple used customer feedback and insights to improve the design and functionality of their popular AirPods wireless headphones. This resulted in the release of the AirPods Pro, which quickly became a best-seller due to its improved features and functionality.
- Amazon used product insights to develop its "AmazonBasics" line of products, which includes a wide range of household and office essentials such as batteries, cables, and office supplies. This resulted from Amazon's analysis of customer purchasing data, which revealed a high demand for these types of products and an opportunity to offer a more affordable, private-label alternative.
How Can a Brand Build a Customer-centric Product Strategy using Product Insights?
Here are steps you can take to effectively use product insights to inform your product strategy:
Step 1: Identify key sources of product insights
The main sources include customer feedback, surveys, market research reports, sales data, and competitive analysis. Make sure to gather insights from a diverse set of sources to get a well-rounded understanding of your product and market.
This information can inform product strategy and help companies decide how to best position and market their products. By analyzing data from various sources, such as feedback, sales data, and market trends, businesses can gain a deeper understanding of what drives customer demand and how to target their marketing efforts and curate marketing strategy effectively.
Step 2: Analyze and prioritize insights
Once you have gathered a significant amount of data, it's time to sift through it and identify the most valuable and relevant product and customer insights. Look for patterns and trends, and consider which insights align with your overall product vision and goals.
This allows businesses to gather and analyze data on their products and their performance in the market, providing a deep understanding of how they are being used and perceived by customers continuously. This information can then be used to identify areas of improvement and potential new product opportunities and reinforce decisions on product development and marketing efforts.
Step 3: Use insights to inform the product roadmap
Your product roadmap is a high-level plan that outlines the development and release of new features and updates over time.
Use your product and customer insights to inform the roadmap, prioritizing the most impactful and requested features and updates. Product Insights is a great tool that helps companies inform their product roadmap and strategy.
By gathering and analyzing data on customer behavior, usage patterns, and market trends, product teams can gain valuable insights into what features and improvements will be most impactful for their customers.
Step 4: Incorporate insights into product development
As you work on new features and updates, make sure to keep product insights top of mind. Use them to guide your decisions about design, functionality, and marketing efforts.
This will help companies improve their products and meet the needs of their customers.
By incorporating insights into product development, businesses can ensure that they are creating products that are relevant, useful, and successful in the market.
Step 5: Continuously gather and analyze product insights
Product and consumer insights are a living, breathing resource – they are not a one-time thing. Make sure to continuously gather and analyze new insights to inform your product strategy and keep your product evolving and meeting your customers' needs.
It helps enrich the overall product strategy and ensures that the company is making the right and solid decisions about the direction and development of its products.
By following these steps and regularly incorporating product insights into your product strategy, you can make more informed, data-driven decisions and create a product that truly resonates with your target audience.
Set your Product Strategy with Product Insights
Product insights are great sources for establishing product strategy. By gathering and analyzing data on customer behavior, preferences, and feedback, companies can make informed decisions about how to design and market their products. And companies can better meet the needs and desires of their target audience, ultimately leading to increased customer satisfaction and business success. Therefore, it is essential for businesses to regularly gather and analyze product insights to strengthen their product strategy and get a competitive edge in the market.
When charting a course through an uncertain world, product analytics solutions like Clootrack are important. They can assist you in sorting through the noise and choosing what to pay attention to and what to ignore. You may establish how to price your products and services, uncover and market competitive differentiators, structure teams, and assess results by evaluating and activating data.
Analytics should always have a seat at the table, whether teams are identifying their unique forms of leverage, managing trade-offs, or modeling outcomes.
Read more 7 Exciting Ways Product Insights Help To Build a Robust Product Strategy