It’s no secret that we’re in a period of financial turbulence. A cost of living crisis - being exacerbated by the constantly rising cost of energy - is hitting people’s finances hard. As their fixed living costs ramp up, the amount of discretionary income they have to play with diminishes, and that means they’re being much more discerning about where they spend their money.
This will put increasing pressure on businesses (many of whom are already facing energy and cost difficulties of their own) as customer spending contracts. Businesses with digital products and apps therefore face a major challenge in demonstrating their value to customers, and try to grow (or at least maintain) customer spend in the months and years to come.
Each approach is perfectly valid in terms of bringing new products and applications to market, but there are upsides and downsides to each one. Which one is right for you depends on many factors, such as the size of your business, budget, timescale, level of skills and expertise, and much more.
Quick fixes don’t solve the problem
It’s natural to think that a crisis that emerges as quickly as this one requires a similarly quick solution. From a product development perspective, that often means adding more features or launching new marketing campaigns. But not only are these short-term approaches often ineffective, but they can actually do more harm than good.
Adding more and more features, or pushing ever greater volumes of content, can overwhelm your users to the point where they feel your product is too complicated and not focused enough. Taken to extremes, customers can end up feeling stupid because they can’t use the product, and therefore feel so negatively that they stop using or paying for it.
Marketing campaigns like trials or discount periods, meanwhile, act as a ‘leaky bucket’ of sorts. It can bring customers in, but they can end up going out just as quickly as they feel the product doesn’t deliver enough value at full price.
Both of these approaches can be destructive to long-term value.
Developing a genuine ‘wow’ factor
Just like the personal finances of the public, now is the time for businesses to batten down the hatches and shore up the core customer base.
This means forgetting about new customers for a while, and even forgetting about what your competitors are doing, and concentrating on the customers you already have. After all, it’s already well known that selling products to existing products requires a much lower marketing spend than selling to new customers. So now more than ever, it makes much more sense to target the relatively low-hanging fruit, and keep those subscriptions, renewals and regular purchases coming in.
From a product development perspective, that means exploring ways to introduce new features or refine existing ones, but with a ruthless approach that leaves no room for compromise. You should work out which features provide the most value while retaining a user experience that stands out in the marketplace. This requires intensive research, clear prioritization of which features are truly important, and the ability to resist internal pressure to add new features solely for sales, marketing or internal political reasons. Netflix is an excellent example of how a product can be redefined and repositioned to great effect. In 2008, they spotted a slump in the cable TV market in the United States, as consumers tightened their belts due to the global financial crisis. They then took advantage of emerging broadband connectivity and cloud computing to become a streaming service, giving millions of customers on-demand TV, free of advertising, at a price they could afford.
Ultimately, you want to get to a point where the set of features in your product is so focused, innovative and high-quality that customers are happy to use it time after time. So happy, in fact, that they can’t help but tell other people about it and do some of the marketing legwork for you.
Starting the process today
If you haven’t already started the process of redefining your product, then there really is no time to lose.
Consumer spending is already dropping off, and if you wait for official figures to point to the slowdown in the economy, you’ll find that it’s too late for you to react before your competitors do. Those who make a well-timed, focused investment into product development often do very well out of economic downturns, to the point where they can often grab market share from their rivals.
Getting an objective view on how to approach this can be difficult, which is where our Product Discovery offering can be so valuable. This flexible process allows any client to discover products or innovate on existing ones, so that they can drive maximum value. VavaCars, Jaguar Land Rover and Cellpoint are just some of the clients we’ve worked with to create new high-growth products which have reached markets in months rather than years.
At a time when getting rapid product development right is more important than ever, get in touch with us today to see how we can help you.