Why we should be paying more attention to optimising our existing products and services.
Having recently finished two projects focussed on optimising existing products and services, we’ve been reflecting on why less than 5% of the briefs we receive are about growing, improving or fixing existing products or services (versus the other 95% about developing something brand new).
If you’re tasked with growth targets, whether they be growing income, attracting new customers or delivering greater impact - Mckinsey’s 3 Horizons of Innovation is a simple structure to think about where to focus your efforts.
Looking at the 3 Horizon’s, the question we ask ourselves is; where can we deliver the greatest returns for the least effort or investment? And there's a strong need to be made for putting more focus on Horizon 1 versus putting all your eggs in Horizon 2 or 3. For example:
Seeing results faster - it’s much quicker to get a new version of an existing product to market than the time it takes to launch something brand new. So you'll see results hit the bottom line much faster.
Better ROI - with an existing team, infrastructure, and routes to market it’s much cheaper to tweak an existing product than trying to build everything from the ground up. And in our experience, the income or impact potential of optimising an existing product is often equal to, or in some cases greater than what you’ get from creating something new.
Captive audience - you’ve got existing customers to design and co-create with, making it cheaper and easier to identify and find ways to improve your products.
So if you’re thinking about how you might generate results by optimising your existing products and services, we wanted to share 4 lessons we’ve learnt working with the likes of WWF and British Red Cross to optimise some of their most successful products.
#1 Don’t wait until a product is on the decline
It’s easy to forget about the need to improve existing products when they’re thriving. But you don’t need to wait until a product is on the decline before you start thinking about how you can fix it.
There’s a huge amount of potential within the ‘growth’ stage for example. Optimization shouldn’t just be about fixing things that are broken. It could be taking something that’s working really well, such as the customer experience, and supercharging it to make it even better to generate more word of mouth, or to help you retain existing customers for longer.
#2 Data is King. But it will only get you so far.
The data will pinpoint where things are working well and less well. Is it for example the marketing is working really well, but you’re struggling to convert interest into customers? Or you’re really good at getting new customers on board, but you lose them as quickly as you found them?
The key is to have a laser focus on what needs to change, and to not change too many things at once. The data will point you in the right direction, but it won’t tell you why things aren’t working. Why are we losing customers so fast? Why does our marketing work but we still can’t get a high enough conversion rate? There’s only one way to answer these questions, and that’s to test and co-create solutions with your customers.
#3 Listen to your customers (but not too much)
What you’ll often find when co-creating new ideas with customers is that they’ll add lots of bells and whistles to it. They're likely to ask for high levels of personalisation and customisation in the customer experience which will no doubt lead to something that people really want, but that’s entirely unfeasible to deliver!
This is when our challenge as Designers comes in. How do you distil those requirements down into some simple Design Principles (such as personalisation) and then find ways to provide that in a simple and cost effective way? For your changes to work, they need to be equally desirable (to the customer), feasible (for you to deliver) and viable (in terms of hitting your targets).
#4 Simple is best
Sometimes the smallest tweak can make the biggest difference. In 1872 Aaron Montgomery Ward of Chicago produced a catalogue designed for direct order via mail. It transformed the middle-class way of life in the late 19th and early 20th Centuries (very much Horizon 3!).
But as the mail order business quickly grew into the equivalent of a $20billion industry, it wasn’t Motgomery Ward who became the market leader. Instead, Richard Warren Sears of the now famous Sears brand, had a small but genius tweak to their existing offer which helped them become the most successful mail order brand in America.
Sears realised that by releasing a new vision of his catalogue with slightly smaller pages than Montgomery Ward’s, this would mean a tidy minded person would always stack the two catalogues with the Sears one on top. Ensuring it was always hiding away the competition underneath. Brilliantly simple, easy (and cheap) to deliver, but highly effective.
We’ve found this in our work. Something we would never have imagined before the project started, but stumbled upon by working closely with the target customers, resulted in such a small and simple change that had such a big impact.
If you’d like to hear more about what we’ve learnt doing this with others, or you’ve got some specific questions you need answers to then we’d love to hear from you. Email me at ryan@goodinnovation.co.uk and we can get something booked in.