How product development often goes wrong
What if 80% of your developments are not used? Ferdinand Goetzen, co-founder and CEO of Reveall helps you sell the right product to the right customer. He and his team are currently developing a platform that helps B2B-tech companies develop the products customers want. The key to building a strong growth business is knowing who your best customers are, and finding more. How do you do this? Ferdinand guides you from problem to solution.
How product development often goes wrong today? According to Ferdinand, tech companies struggle with three common problems:
- The traditional division into departments causes problems.
- The frequently used personas don't work.
- Most products are developed without customer insights.
Ferdinand provides a number of solutions. These solutions will help you make the right choices to build the best products for the best customers. In this article, we explain the idea behind these solutions.
1. The traditional division into departments causes problems
“Many companies have high barriers between different departments. The sales department, for example, is rarely involved in product development. And product developers rarely get feedback from customers or are given the wrong information. The people developing the products often have little to no contact with customers. They receive their instructions top-down. Customer feedback has to cover a long journey in this process: from sales person to manager, then to the CEO, who passes it on to the product manager, who, in turn, tells the team what to do. Because this communication is not structured and often crosses procedures, the risk of incorrect instructions is extremely high.”
The solution lies in breaking down the barriers, and centralising and organising data. What is needed is intense collaboration, multidisciplinary teams, open communication between sales and product development, product managers who talk to customers, etc. “Everyone should talk to customers at least once a week. This is possible by attending a product demo or making a simple phone call. It teaches you to understand what customers want to achieve and why they use your product.”
2. The frequently used personas don't work
Customers are often divided into customer groups. Each group is symbolised by a buyer's persona. Companies subsequently align their marketing and product development to these target groups. “B2b SaaS companies sometimes have two to three personas. However, this classification obscures the internal diversity of these groups behind a supposedly clear profile. On the other hand, the information that can reveal this diversity is hidden in Slack sessions, in emails, communications about deals that went wrong, etc.”
According to Ferdinand, the solution lies in bringing together all customer communications and segmenting them based on similarities in the user stories. “Look for the flow through these stories. And only then zoom in on the technical assessment. Share these user stories with everyone. The more people understand your customers, the better.”
Instead of the buyer's personas, the ideal customer(s) emerge(s). “These best customers may be completely different, but still walk a similar customer journey or use a similar service or platform. Focus on these best customers. Get to know their motives and needs. Map their customer journeys and then look for more of these customers.”
Customer Centricity, a book by Peter Fader teaches you the distinction between good best customers.
3. Most products are developed without customer insight
In his consulting activity, Ferdinand noticed a long time ago that most decisions are made without any customer insights whatsoever. Developments are often based on the CEO's gut feeling, under pressure from stakeholders and at the request of one major customer. They then determine which developments are doing well. “Based on the idea that building something is better than building nothing, a huge amount of resources are wasted,” Ferdinand knows. “In the past, 80% of our developments sometimes remained unused, even though they had been developed at the request of customers or the sales department. Many tech companies recognise this. And many tech companies only realise this when testing the development or long after the release.”
The solution lies in implementing procedures as an alternative to the gut feeling. Ferdinand puts forward customer data as a major priority. “If confidence in how you make decisions today is low, you need to do more research, find more data to support ideas. If a customer asks you for a certain feature, you can, for example, list 15 reasons why you won't build it. Customers will have to be very adamant to ignore these reasons and demand the feature.”
As part of the procedure, Ferdinand and his sales team also put the lost deals in Hubspot. “This has impact,” he concludes. “We automatically collect the feedback of the reasons that the deal is lost in Reveall, our research repository tool. This allows us to prioritise at a later time which features or improvements are most important in Reveall. These lost deals tell sales not to build any features that won't get sold. And they inform product development about what does or doesn't sell.”