Part of growing a business means you’ve got a new product development strategy to keep your customers happy. Whether you’re an e-commerce company, service providers or SaaS company, this strategy applies to you.
You can differentiate your strategy by focusing on process improvement to get more and higher quality products through your workflow.
I’ve designed physical products for my previous Amazon business, consulting services and software to scale my consulting business. I didn’t do them perfectly and that’s the point. There’s no advice or article that can prepare you so the best education is through iterations.
Products – like software – are processes.
Processes are fickle creatures. They have a limited useful life just like machinery, equipment and every other asset you use to run your business. When the market gets more competitive or consumer tastes and trends change, your processes become obsolete.
If you don’t refine your current products, you lose customers. If you don’t develop new products, you never get into new customer segments or target markets. Consequently not lessening the outside risks and threats to your company.
This is why we build a business process improvement engine to customer data and turn it into moneymaking products.
WHAT IS THE PRODUCT DEVELOPMENT PROCESS
Product development is a straightforward tactic for business building. You’re finding ideas that you can turn into profitable products. This means your product development process starts with “find ideas” and ends with “swimming in cash” or some version of that.
DESIGN A NEW PRODUCT DEVELOPMENT PROCESS
If you’ve never designed a product before, check out sources for lean product development or agile product development. this will help you design a process.
Agile comes from Lean so you won’t hurt my feelings either way.
I stay away from traditional waterfall management or any process that pulls me away from the customer because I want to make money as fast as possible.
But this isn’t about me so stop asking already!
IMPROVE YOUR CURRENT PRODUCT IDEA PROCESS
If you’ve already got a few products or services under your belt, then you want to start developing, profitable products faster.The first step is to find out which step in your process takes the longest.
This is what we call the pacemaker, bottleneck or choke point. What it means is that this is the weakest link in your process because it:
- takes the longest (lead time)
- has the worst outcomes or results (low quality)
If we hit this step, we’ll get the biggest return on investment of our time and money. Since my physical was a private label specific to selling on Amazon FBA it’s a different process map.
We’ll focus on how you can build software to productize your service. After all, the best products are problems you’re already playing around. Below is a process map a service provided to our e-commerce clients:
WHY DO WE DEVELOP NEW PRODUCTS
Just like finding new customers, there should be a rhythm to this. Your annual strategy should include various growth initiatives. If you don’t develop new products:
- revenue doesn’t grow year over year
- continue to lose customers to competitors more than the average churn rate
- products have a limited lifecycle – they die off
Nothing lasts forever unless you improve it. This isn’t to say you can’t have one product and be successful. The point is that you have to be continuously improving whether it’s your current product or developing new ones.
Ideally, you’re doing both but let’s do one thing at a time.
HOW DO YOU FIND NEW PRODUCT IDEAS
There are a lot of articles out there talking about how to find new product ideas including one that said. In fact, a popular search term is “new and exciting” and thank God for that because your boring ass wasn’t going to come up with anything on its own.
But your boring ass CAN come up with new ideas! In fact, all you have to do is talk. to. your. customers.
GROWING COMPANY WITH CUSTOMERS
Your customers are a veritable buffet of product ideas. When you’re solving a problem you have to go straight to the source. In this case, our source is our customers because they’ve been living with the problem far longer than anyone else.
Sourcing new products ideas is like any other sourcing process, you need a way to separate the wheat from the chaff.
Just like we do to find great employees or customers with the highest lifetime value we have to:
- Create an ideal product idea profile
- Create a rigorous screening process
- Build a manual alpha or model
LEAN STARTUP WITH NO CUSTOMERS
No customers, no cash = no problem. Every business started out here. It’s a journey and we’ve all gone through it and we’re better for it.
Saving you cash is critical so you’re in a better place to be creative than large corporations with even larger budgets. You can’t be tempted to use money to solve your problems because you don’t have any! And that was the good news…
I read a quote once that said the only difference between creating and copying is the amount of work you do. Instead of copying, you need to benchmark.
Part of your lean canvas business plan and strategic plan is understanding who your competitors are. Who are their customers? Where do they find them?
- Work backwards in their process get to those customers too.
- Use your own ideal customer profile to filter out the ones you don’t need to talk to.
- Start analyzing your voice of the customer data to understand how their needs aren’t
- Repeat the steps above to build a profitable product development process.
WHEN SHOULD WE SOURCE NEW PRODUCT IDEAS
Are you doing anything now? Great, do it now!
Kanban is a Japanese term used in Lean Six Sigma process improvement that means shopping cart. You can refer to it as a buffer, queue, backlog or work in process (WIP) but it means a stack of “things” just waiting to run through your process.
In order to visually manage your product development, you’ll have a kanban board showing how many ideas you have in the backlog. The most popular kanban board is Trello and I think it’s the most friendly for a non-Lean Six Sigma person.
The important part is to understand how many ideas or too little and when you should get sourcing new ones. If you test 5 ideas per day and you’ve got 15 ideas in your product idea list, you need to start sourcing by the end of 3 days.
The same calculation applies to your current product’s lifecycle. No Products, like a business, have a lifecycle and can die off or evolve. Your product journey map, model or lifecycle graph should detail where each product is in this lifecycle.
I highly recommend using a kanban board or dashboard so you can see if you’re heavy in one phase vs another.
In the process example above, I put leads time (cycle time + waiting) on each step so you can see how long items wait in list before it’s processed. You need a new product idea in your pipe every 29 days.
WHAT YOU CAN DO TODAY
I hate articles that touch on things and still leave you feeling like you have no idea how to do it. I didn’t dig deeply enough into how you weed through customer data, how to build kanbans or how to find the product development bottleneck.
I’ve put all of these topics into my blogging kanban but they aren’t on the schedule for this year so let me know if I need to move them up. After all, you didn’t expect me to improve my blogging process without getting your feedback.
Unless you’ve got a process map updated this year, grab a sample of products that represent 51% of what normally flows through the process. Don’t grab the exceptions or map without data.
Your map should be a piece of art not the finger painting on your mom’s fridge. Your an artist so make sure you’re proud of the work you sign your name to.
At 26, she was asked to create a new department to grow their Fortune 300 company using Lean Six Sigma continuous improvement.
While working with consultants and experts, she saw a common thread among their challenges and failures.
With this insight, she created a custom process to create a high-performance company.
As the only CPA and business architect in the US, she helps others use creativity instead of cash to efficiently build their businesses.