As a result, they begin commissioning new apps, web services and sites. The results are often not what were expected: low traction, high churn or no clear return on investment.
This is, in part, do to the fact that it is not enough to simply make a digital product. The most successful digital products have a whole business wrapped around them, sustaining it.
The successful digital product business has three characteristics:
- It is strategy-led
- It is results-driven
- It is continually evolving
It is important that companies think through the implications of building and releasing digital products. If they do not implement these characteristics, the likelihood of the product failing increases over time.
Strategy led digital products
In order for a digital product to succeed, it has to have a clear vision of what it is and a strategy for achieving that vision. The vision and strategy are the framework within which the product can develop.
Everything that Google does ultimately is about organising information, making it accessible and useful. There is lots of room in that vision to explore how this is possible, but at the end of the day Google products are different from others because Google’s are built to deliver this vision.
With a vision and strategy in place, even if it is still a hypothesis at this point, the product has already got a shape and direction. This is extremely important during the design and development process as all sorts of possibilities and opportunities will emerge. Successful digital product businesses look at these opportunities against their strategy and vision and make decisions as to whether or not to pursue them.
One client of mine saw an opportunity to sell more of their books through a platform that was focused on providing critical information to their customers. While they could have found a way to make it work, it took the focus away from vision and caused confusion, both with the users and with the product team. In the end, they realised that they would not get the benefit of their investment in the platform if they tried to make it be everything for everyone.
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Results-driven
The strategy is only the first step for a digital product business. There needs to be a clear way to measure how well the product is delivering against the strategy. There also needs to be a way to identify what is and is not working so the product can be improved.
For this, there need to be quantifiable targets that are constantly monitored, analysed and the results feed back into the development process.
Successful product companies are constantly testing, changing and adapting their products. This means that the product development team needs to be releasing updates on frequent schedule.
Unlike traditional web sites where there may be a refresh of the site every quarter or year, digital products are going live with updates daily or weekly. While these may be minor changes, they are the result of the testing and analysis the product team are constantly doing.
If, for example, we have a metric on how long a user stays on the site, the team need to be constantly investigating the data. Are we reaching our targets? Where are the drop off? What can we do on those pages to prevent users leaving, such as making the shopping cart more visible?
Continually evolving strategy and products
The most successful digital product companies have understood that they do not know anything. As a result, they are agile in the fullest sense of the word. They take calculated risks, accept that some will fail and then adapt themselves to the results.
One of my clients in healthcare started out with the aim to build a digital library of knowledge for their medical clients, but once they began engaging with the customers and the wider business, it was quickly clear that the market was looking for an entirely different type of product. They went back and rethought their strategy and refocused on building a diagnostic tool for non-specialists who needed assurance in treating their patients.
Even if it was a much more costly and difficult path, they understood that the payoffs of switching course would be greater, then trying to sell a product that no one wanted.
In order to be able to evolve and adapt, the digital business needs to open constant interaction amongst its strategy, user experience, financial and technology teams.
Senior executives need to become data-savvy, demanding quantitative proof and not be afraid to engage with product teams. The product teams need to work within the context of the larger business strategy, drawing customer insight and feedback from wherever it is and feed that back into the product road map.
Above all, everyone needs to be empowered to test things out sensibly, fail and learn.
That is how successful digital product companies operate and that’s how you can too.
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If you want to get a true return on your investment, you need to make your business a digital product business, not just turn out digital products.
We have the know-how, the process and the experience to get you there.
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