|Volume 1 · Issue 1|
A Product Manager's Playbook
Leadership in Product, Platform and Information Management
Market Research or Market Opportunity?
Background: Robert is a product manager in a large financial services organization and finds the most challenging part of his job to be assessing and quantifying the market opportunity for new products. His firm has subscriptions to a number of outside research services, yet the market data they provide is not very helpful when it comes to assessing where investments should be made and what products customers will embrace.Question: How can I get the facts I need to evaluate the opportunity for something new and be confident that management will sign off on my recommendations? When I gather feedback from clients, it tends to focus on enhancements to the services they are currently buying from my organization.
Dear Robert: Everybody want to do a better job of assessing market opportunity and your question goes to the heart of identifying where the next great opportunity for your product line might be. In other words, "where should we invest, how much, and what should be the expected return?" We couldn't agree with you more that understanding where the opportunity for a new product or capability will be, is not buried in secondary research. Market research reports go after aggregate trends that have little to do with how your particular financial institution is positioned, the details of your products and services, and how your customer base is segmented.
But where do I start? How do I know what questions to ask and what data will give me the answers I'm looking for?
Define the landscape: It may seem obvious that the foundation for assessing market opportunity is defining the market correctly. Yet many people simply accept generic definitions such as an industry type, a size of company, or a market segment where your competitors are offering services (regulatory compliance, cash management services, direct deposit accounts, as examples). Wrong on all counts. Your challenge as a product manager is to determine what market segmentation is meaningful for your product as delivered by your company and then to validate what you are thinking. To get there you need to gather data internally from your front-facing client service and sales people, and externally from your prospects and clients to assess the potential. Then, you can establish a market entry or growth strategy to support your case.
Create a hypothesis: The best starting point for market understanding is to put a stake in the ground by making a hypothesis that you will set out to prove or disprove through your research. Your hypothesis might be based on your knowledge of the industry, a commonly held perception in your organization about what customers are seeking, or on an outside analyst's prediction about where the growth will be. A clear hypothesis will get you to the truth and will tell you what data is important to gather.
Ask the right questions: Here's the hard part about getting useful answers from the customers and prospects that help you make decisions. Objective, discussion-based research with the right people, internally and externally, will help validate your assumptions about the opportunity. We're not talking about a check-the-box survey or even about focus groups, but rather a structured set of questions that will guide a conversation, allowing you to dig deep and get a detailed understanding of the issues. Ten, in-depth discussions - where you listen, they talk - are worth more than 100 online surveys. Gathering the data is time-consuming and you may wish to tap an outside party to help, however, never outsource the opportunity to learn. As product manager and domain expert, you should be structuring the discussion, piloting the interviews, and guiding the analysis.
Question: So, I have my hypothesis and I'm asking the questions. What if the data I'm gathering isn't telling me anything?
Look for patterns: Once you have gathered the data with your own people internally, and your customer and prospect base externally, look at it in the context of the industry ecosystem to see what patterns emerge. Keep an open mind and you should start to see themes emerge, usually around problems that drive needs. If patterns aren't evident after the initial conversations, you will have to go back and adjust your hypothesis. Iterate over and over until you are able to get to the truth and have a hypothesis that is supported by the data.
Watch your language: You may be surprised at how the same words mean different things across functions and even geographies within the same organization. An important success factor to your market assessment will be making sure that the opportunity is framed in terms that everyone in your organization understands and agrees on. Don't assume that everyone is on the same page. Be explicit about every term you use so that all the players are in the same game going forward. Getting sign-off for your recommendations will rely on an internal lobbying effort (communications plan) that starts with defining the language.
This is very helpful, but there never seems to be time to gather enough data. How much data is the right amount for making an assessment that is meaningful?
Make your case: You're right. The dilemma when it comes to .defining the next great opportunity always centers on knowing how much data is enough? Our contention is that the in-depth primary research you have done with your customers and prospects, structured in meaningful groupings, and mapped against market segments, company size and geographies will reveal the pockets of growth and change that represent market opportunity. Therefore, the answer to how much data you need is really "as much as it takes to convince both yourself and someone else that the opportunity is real and worthy of investment." Let's not kid ourselves, market opportunity analysis is not a prediction of the future. However, if you have done the hard work, people may disagree with your conclusion but they cannot argue with the facts you present. As domain expert for your product line, you may not be a prophet but you can be confident in your ability to frame the opportunity and obstacles for the new product or service that you are proposing.
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