In this short series I am addressing the question of should all companies invest in product management? Can product perfection drive marketing leading positions. In part one of this series I explored what I call the Product Motivational Hierarchy.
One set of signals that will inform you of route to achieving a “Favorite” product in your market is frequency of use and perceived competing value. I call this the Market Frequency Value Matrix which can be used to analyse your product and the market.
Frequency of use is easy to understand, but what is perceived competing value? For the purpose of Market Frequency Value Matrix it is the value or benefit the consumer believes they get from the using your product compared to other products in the market place. Consider it the consumer perceived value of your USPs when compared to the competition. This can be revealing, specially when in some product segments, all the products ironically claim the same USP (not Unique is it).
For example lets consider the insurance comparison aggregator market. In this sector consumers save time by only having to input their personal information once to get the cheapest insurance quote. Users get the value of saving money and reassurance they have conveniently shopped around from the wide market. Statistics suggest a high volume of consumers of insurance comparison websites get quotes from multiple comparison websites. The product does deliver a high value, it save money and time, however the products have the same perceived value when compared to the rest of the market. In such an example they would be low usage (annually) and low perceived competing value.
It would take revolutionary innovation (disruption) of the feature set to catapult the product of insurance aggregator to a market leading position. Insight into user pain and learning exactly how users consume the product might inspire a suitably impactful innovation. However probability and investment required for revolutions suggests this should not be the core focus of product management. Referring to the Market Frequency Value Matrix product management needs to focus on optimisation and product marketing to create a differentiation with consumers. Optimising the sales conversion through the customer journey is the core product priority.
There are other strategies product management can explore when products are in the tricky bottom left corner. Product extension can be a powerful tool, this is where the product aims to solve a related user problem (which may have little or no revenue, or even a cost). The extension must be either highly regularly used and, or has high perceived competing value.
Focusing on increasing perceived competing value may extend in surprising ways. In the UK the market leading insurance aggregator is CompareTheMarket.com. They have a highly successful marketing campaign which has ran for many years. Through TV advertising they developed lovable fictional characters. The key to the overwhelming success was to create a free product, a soft cuddly toy, of the characters and limiting the toy to be available only when you purchase insurance. In a market place full of low frequency and low perceived competing value they now have a higher value than their competition - because their customers get an exclusive toy. Their marketing has made this toy desirable and focused on the characters more than the insurance comparison.
When products are in the low usage, low perceived competing value box I have heard people suggest product management is not required. Clearly this is incorrect, it is critical to focus on optimisation and improve features sets as the market develops.