Continuous Improvement: Optimizing Digital Product Value for Customer Success
- Product Led Growth /
- Product Strategy /
Bringing a digital product to life isn’t enough. It needs to be nurtured and refined on a consistent and ongoing basis. Continuous improvement is about unlocking the full potential of a digital product for it to be realized. When executed adeptly, your product can evolve incrementally to maximize the value delivered to your customers, and as a result, propel your business forward. For some product teams, optimization is the easy part. For others, it may prove to be the most challenging aspect to fulfill. Ongoing product improvement has its own set of skills, tools, challenges, and opportunities.
In this article, I’ll unpack continuous improvement; what it is, and what it is not. I’ll also share some of my firsthand knowledge about these integral principles to achieving success.
What is Continuous Improvement?
Continuous improvement is an iterative methodology aimed at optimizing the product experience to promote ongoing improvement, where minor changes add up to significant breakthroughs. Continuous improvement focuses on empowering cross-functional teams to achieve shared goals and move towards realizing a larger strategic vision. This process is frequently referred to as Kaizen (a Japanese word for “change for the better”) in manufacturing circles. The concept follows five fundamental principles.
- Create customer value: Know your customer, their needs, wants, and desires. Make a commitment to meet those requirements.
- Empower teams: Align your teams around a shared purpose and set of goals. Provide everyone with the system and necessary tools to reach those goals. Encourage everyone to take ownership of their work, and give them the authority and resources to identify and implement improvements in their own work processes.
- Target zero waste: Focus on reducing waste in all areas, from the organizational, team, and individual contributor levels. Standardize processes to ensure consistency and reliability. Automate where possible, remove the mundane and unleash people’s potential.
- Follow the action: Value is created where things actually happen – start there! Every outcome starts somewhere. Focus on the earliest moments (behavioral and functional) that are necessary to enable the intended outcome. This requires a proactive stance, rather than a reactive one.
- Be transparent: Focus on visible and tangible improvements. Use real data to drive decision-making and measure impact.
These principles help create a culture of continuous improvement with the goal to maximize customer success, increase product quality, and deliver enhanced business outcomes through an ongoing iterative process of improvement. It’s a proven method of identifying opportunities, facilitating experimentation, catalyzing product refinement, effectuating incremental innovation, and achieving a fortified market fit.
Product Discovery vs. Continuous Improvement
To help further understand continuous improvement it’s helpful to highlight where there is often confusion. Marty Cagan in his Silicon Valley Product Group article Product Discovery vs. Product Optimization sums this up beautifully.
“Product Discovery, it’s intended for identifying significant new functionality. This is common both when we’re starting a new product, but also when we’re considering significant changes to an existing product, such as a usability redesign, or enhancing the product to meet the needs of a new class of user.
But often the work we do is not about discovering new products or capabilities, but rather our task is to optimize the user experience and/or business results of an existing product. This Product Optimization uses different tools and techniques than Product Discovery, and the scope is generally narrower, but don’t let that fool you as the results can be impressive.”
It is important to recognize that product discovery facilitates the process of understanding your audience’s problems and exploring the best way to solve them to address market demand. Product optimization focuses on refining and improving on the value of that product. Continuous improvement encompasses the interactive process foundationally in product optimization.
Three Product Optimization Areas to Focus On That Continuously Drive Results
At Emerge, we have found that there are three areas that consistently deliver results as our product teams work to improve our clients’ products and support their business goals. Here are the three types of loops we encounter the most when collaborating on digital products with our clients.
A customer feedback loop (or a voice of the customer program) is a continuous process in which you actively seek feedback from your customers, analyze the feedback, and use the insights gained to improve the experience. The goal of feedback loops is to gain ongoing valuable insights into your customers’ perceptions, needs, preferences, and pain points. This allows you to make data-driven decisions to align priorities and resources, with objectives and key results.
Example: Your product isn’t performing to customer expectations.
Challenge: You receive complaints across multiple support channels regarding a product usability issue or blocker to utilizing a core feature that was not detected during production or pre-release quality assurance testing.
Feedback loop: Acknowledge the customer’s pain, thank the customer for their feedback, and notify them of what actions are being taken to resolve the issue. Take action and follow up with a solution.
Possible solutions might include:
• Offer a discount or refund for their trouble.
• Creating a customer self-service solution to address specific issues and use cases.
• Invite the customer to help solve the issue and enhance the product offering.
• Notifying the product team of the issue and creating solutions.
It’s important to note that there are negative and positive feedback loops. Where negative feedback loops provide insight and opportunities for service recovery, a positive feedback loop is focused on strengthening the customer experience and value you deliver. Each type of loop facilitates the process of gathering feedback (insight), analyzing and prioritizing, and assessing and taking action. Ultimately, you are positioned for the follow-up and follow-through to close the loop.
As a concept of product design to deliver memorable and useful products, a value loop describes the cycle of how and in which ways your product creates, delivers, and amplifies value both psychologically and functionally. The goal of a value loop is to maximize the impact that you deliver to customers, creating a sustainable competitive advantage, and driving long-term growth.
Example: Your product delivers more value based on the number of people that use it to collaborate together, ultimately increasing work efficiency.
Opportunity: You know the value of your product is amplified for every additional team member that participates. It drives habitual behavior and triggers increased retention.
Value loop: Team members’ motivation to collaborate, the ability to easily participate and collaborate, the prompt to take action, and the reinforcement of benefits.
A few possible value drivers might include:
- Moving people from being unaware to aware
- Shifting confusion to clarity, focus, or certainly
- Tackling inconvenience through simplification and reducing the level of effort required
- Solving for inefficiency via innovation of process or automation, improving time to completion of a task
- Enabling new capabilities and levels of competence
Value loops can be leveraged to provide an incremental benefit that progressively moves users forward or amplifies the recurring value provided by your product. Products are created by people for people. All enabled user behaviors should be intentional. Doing something new or unfamiliar, delivering on expectations of something familiar, increasing the use or duration of an activity, or ceasing the action completely should all be intended outcomes. When value is delivered, it provides the foundation to enable growth opportunities.
A growth loop is a strategy to achieve sustainable growth by continuously acquiring new customers and retaining existing ones. A growth loop involves customer acquisition, activation, retention, and expansion. The goal is to align the value delivered at each stage, unlocking new value opportunities for customers.
Example: Your users adopt a core feature of your product. Their expertise has progressed to unlock additional benefits of other supporting functionality.
Strategy: You bundle features and product capabilities based on recurring use cases that will result in predictable behavior and value delivery.
Growth loop: Users provide input into the system, the product provides value in response to the users’ actions, and as a result, an output is produced. The value of the output can then be directly reinvested into the next input. It creates a flywheel effect that improves user acquisition and retention.
Growth opportunities might include:
- Freemium offering
- Subscription (product as a service)
- Upsell based on increased consumption or participation
- Cross-sell new capabilities and benefits
- Community (a.k.a network effect whereby the increasing numbers of people thereby increasing the value of the product or large platform)
- Resource recovery
There are several ways to implement growth loops that provide an exceptional user experience by understanding where physiological value and functional value are created for users, and how it evolves over time. Growth loop success is based on providing continuous value and reinforcement across every stage of the customer journey.
Bringing Focus to Continuous Improvement
The process of Product Optimization involves carrying out controlled experiments with users. This is followed by a swift assessment of the results and the subsequent selection of the most viable options. This cycle is repeated until the ideas for improvements are exhausted, or the point of diminishing returns has been reached.
Common examples of continuous improvement that drive business results include:
- Strengthening market position relative to their competitors
- Lowering customer acquisition cost
- Increasing product or service adoption and time to value
- Lowering the cost of ownership
- Reducing attrition rate/churn rate
- Increasing customer lifetime value
Consider the value loop concept we defined previously. In many cases, there are a few essential flows and outcomes that influence the success of your product and where value is created. These primary flows and outcomes provide a systematic approach to clarifying the areas that require focus and the areas that will drive business results.
Here are a few steps to help you get started:
Step One: List each flow that the product must support across the user journey to acquire, serve, and retain customers/users. It can be helpful to think of flows as single or multi-step tasks, or as ‘jobs to be done’ in order to enable customers/users. The goal is to pivot your thinking from features to users’ needs. How do they support the customer/user experience? How do they inform customer/user behavior?
Step Two: List the intended user outcomes for each flow. Starting with a user-centric approach to outcomes helps maintain the focus on users’ needs. From there, you will be able to align those needs with your own goals for the product. This will provide a powerful baseline to challenge, clarify, and validate assumptions that will drive product success. Are you delivering key outcomes today? What would it take to deliver them? What obstacles are in your way?
Step Three: Focus on business outcomes. Identify the outcomes that, when met, will determine product viability. Are user and business outcomes in alignment? If realized, do outcomes help move the user forward? For example, through fulfilling the user outcome, are you able to collect the information necessary for the business to deliver greater value down the line?
Steps such as these allow you to examine and understand the broad scope of the product, and the intended outcomes that will determine success. You’ll have the tools to correlate the relationships between outcomes, illustrating the required value exchange to propel your business forward.
Your Product is More than the Sum of its Parts
“Great things are done by a series of small things brought together.”Vincent Van Gogh
As product leaders, it is our responsibility to ensure that we have the requisite expertise, demonstrated experience, and appropriate tools for both Product Discovery and Product Optimization. These are distinct yet interdependent areas of focus that require different techniques, working models, and communication across an organization. If you don’t have the data, start there. If you do have the analytics, identify the key moments and user flows that determine your customer’s success. It’s possible that the very goals you want to achieve are in the smallest details of your product that prove to matter most to your customers. This is at the heart of continuous improvement, serving people in the most impactful way.
Colleen Murphy, Copy Editor