NUS-ISS Learning Day 2017 - Customer Intimacy Through Data-Driven Product Management

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CUSTOMER INTIMACY THROUGH DATA-DRIVEN PRODUCT MANAGEMENTSOME INSIGHTS….

August 2017 / Richard Tan & Lee Boon Kee

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The Customer Perspective

© 2016 National University of Singapore. All Rights Reserved 2

Source: content26.com

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The Heart or the Brain?

© 2016 National University of Singapore. All Rights Reserved

Source:Adapted from Bryan Eisenberg, Analytics ROI Marketing

Superior Perceived

Value

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Changing Customer Expectations

New Trends…


1 - Drive Customer Intimacy

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Importance of Segmentation


2- IPad Newspaper

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Impact of Omni-channels…


Source: Forbes

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Pervasive Technology


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Invasion of Technology…


Into our City… Into our Homes…

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Resulting Outcome…


Source: CSC

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$1,000,000,000 Bet


Magic Bands

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The Product Manager’s Perspective


(1) Is there is Gap in the Market?

(2) Is there is Market in the Gap?

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Customer Intimacy…

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Data

Information

Knowledge

Insights

Leveraged Data & Analytics…


Benchmark RecommendPredict

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Product Life Cycle


Development Scaling Sustainability ExitIdeation

Design Thinking

Financial Outlook

Customer Experience

Product R&D

Minimum Viable Product

Pretotyping

A/B Testing

Product Launch

Go-To-Market

Alpha / Beta

Iterative Product Development

Sales

Product Maintenance

Product Road-mapping

Pricing Models

Market Requirements

Long Tail

Growth Hacking

BCG Growth-Share Matrix

Product Support

Financial Retrospective

Product Obsolescence

Product Extension

Business Case

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Product Life Cycle



Design Thinking

Financial Outlook

Customer Experience

Product R&D

Minimum Viable Product

Pretotyping

A/B Testing

Product Launch

Go-To-Market

Alpha / Beta

Iterative Product Development

Sales

Product Maintenance

Product Road-mapping

Pricing Models

Market Requirements

Long Tail

Growth Hacking

BCG Growth-Share Matrix

Product Support

Financial Retrospective

Product Obsolescence

Product Extension

Business Case

Right Data

Right Person

Right Time

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Product / Market Fit

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Product / Market

Fit

Voice of the

Customer

Customer Decision Journey

Customer Lifetime

Value



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Voice of the Customer (VOC)


• Every VOC touch point will generate or result in a form of VOC data.

• Multi sources• Internal & External insights• Focus on:

- customer needs- expectations and- product improvement

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Explicit Implicit

1) Direct discussion or interviews

1) Social listening -sentiment analysis; opinion mining

2) Surveys, focus groups 2) Chat-bots

3) Customer specifications, observations

3) Machine Learning

4) Warranty data, field reports, complaint logs

4) Augmented Intelligence

5) Customer service – both pre and post-sales

5) Cybernetics

3 - A day in the Life of a digital Customer

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Source: Google

The Infinity versus Loyalty Loop

Google’s View…Customer Decision Journey (CDJ)


4 – Winning with ZMOT

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Source: Adapted from WikipediaTimeline

Status Quo Active LookingWindow of Opportunity Status Quo

CDJ & Digital Touch Points


Digital Touch Points

Data Generation

Data Generation

Data Generation

Data Generation

Data Generation

Churn

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Customer Decision Journey (CDJ)


McKinsey’s View…

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Customer Lifetime Value (CLV)


Acquire Retain Chu

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Product / Market

Fit

Voice of the

Customer


Customer Lifetime

Value



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Data is King

"Opinions are important yet often prove meaningless. Have facts supported by charts and numbers or simply confess ignorance."

─ Robert S. McNamara, US Secretary of Defense, 1968


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Product Life Cycle



Is there a gap in the market?

Is there a market in the

gap?How can I grow the market?


ScalingProblem / Solution Fit

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Product Iteration

Minimum Viable Product (MVP)


Build

Measure

LearnIDEA

Product/Market Fit

What are the product metrics we should use?

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Product Metrics


How do customers find you?

Do your customers have a great first experience?

Do your customers come back for more?

Do your customers tell others?

How do you make money?

Value Metrics for MVP

AARRR Framework

Growth Metrics for Scaling

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Recursive Process

1. Define your objectives at each stage

2. Set up the right metrics

3. Set up goals to meet your objectives

4. Conduct experiments one at a time


Objectives Metrics Goals Experiments

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Product / Market

Fit

Voice of the Customer


Customer Lifetime

Value



• Market Research• Market Intelligence

• Customer Journey Planning

• User Experience Design

• Customer Segmentation

• Customer Lifecycle

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VOICE OF THE CUSTOMER (VOC)


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Voice of the Customer

• Definition:• "Voice Of the Customer" is a process for eliciting

needs from customers.• Spend time with current and future customers to

determine past, present and future market problems

• Benefits:• A way to accumulate market information• Either confirms your actions or help decide how to

adjust your direction


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User Research

• Experiences of customers who use your product

• Articulated and unarticulated needs

• Explicit:• Examples: Surveys, customer feedback, etc.

• Implicit:• Examples: Opinion and sentiment mining, etc.


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Explicit: Kano Analysis


SatisfyingBasic Needs

Satisfying Performance Needs

Satisfying Excitement Needs

Get Into Market Sustain and Compete

Excel andBecome World Class

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Implicit: Machine Learning


Create self-learning models using your own data

Caution!

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VOC Limitations

• Assumptions• Customers know what they want• Can express their needs clearly• Willing to pay

• Innovation• Latent needs in your market through new product

development


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Desired Outcomes


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CUSTOMER DECISION JOURNEY (CDJ)


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Customer Lifecycle


Source: Salesforce Canada

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A Restaurant Example


Entering restaurant

Walking pass the

restaurant

Getting a seat

Ordering from a menu

Enjoying the food

Paying the bill

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Rethinking Customer Experience


DisruptiveIncremental

Small improvements

to existing products and

service

New products or services that solve problems

in new and different way

Example: Amazon Dash

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User Experience Design


Source: https://www.pinterest.com/pin/525795325223973083/

MVP

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CUSTOMER LIFETIME VALUE (CLV)


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Customer Lifetime Value (CLV)


RFM Analysis

Recency:How recent was the last purchase?

Frequency:How many purchases have been made?

Monetary Value:What is the value of the purchase?

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Customer SegmentationRecency Frequency Monetary

High HR HF HM

Medium MR MF MM

Low LR LF LM


Segment RFM Description Marketing Action

Best Customers LHH Customers who transacted recently, most frequently and spend the most.

Onboard them for a loyalty program, retain them.

Big Spenders XXH Customers with high spends Opportunity to upsell and cross-sell.

Loyal Customers LHX Customers who transacted recently, and with high frequency. Referral program. Gather feedback.

Churning Customer HHH High value customer, but most likely about to churn.

Reactivation campaign aimed to drive repeat purchase

Low value Lost Customers HLL Hasn’t transacted in a long time, with low number of transactions and spend little. Re-engagement campaign

New Customer LLX Recently acquired customers Personalized communication aimed to cross-sell.

Source: Blog by Shafique Gajdhar on April 18, 2017

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Customer Lifecycle


Source: Lifecycle marketing guide by Metisa

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Descriptive vs Predictive CLV


Descriptive CLV Predictive CLV

Likely to remain inactive in future, even though more past purchases

Active and more likely to make more purchases

TimePurchases

Source : Webcast presentation by Jean-René Gauthier on February 28 2017

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Maximizing CLV


Source: Technical article by Naveed Asem November 23, 2013

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Data-Driven Product Roadmap

1. Roadmap Flexibility• Keep flexibility in roadmap to accommodate changes

2. Product Evolution• Evolve product and customer segments in parallel over

time

3. Feature Pruning• Remove underperforming features from the product

4. Product/Market Fit• Use product/market fit strategy to accelerate product

feedback and iterate


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Summary

Deliver breakthrough customer experiences• Iterate your product to ensure product / market fit

using VOC, CDJ, and CLV.• Proactively shape customer behaviour at each

touchpoint by analyzing data for actionable insights.• Scale your product to maximize revenue, increase

repeat purchase and reduce customer churn.


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Product Community of Practice (PCoP)


• ISS will launch the inaugural Product Community of Practice (PCoP) in the 4th

quarter of 2017• Objectives of the PCoP:

- To gather like-minded professionals and industry thought leaders who share a common passion for product management

- Crowd source wisdom to facilitate an understanding and insights to better manage challenges in the product management domain

- Facilitate networking and exchange of ideas

• Format of PCoP will vary and will include:- Talks and sharing- Panel Discussions

• Please indicate your interest by providing us with your contact details

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THANK YOU [email protected]

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Education

NUS-ISS Learning Day 2017 - Customer Intimacy Through Data-Driven Product Management