What is a product?
Many people have tried to define what a product is. Most of the time the debate centers on whether it includes service as well as a tangible object, what it means on the internet or if it needs to have a defined customer experience. As Gartner says, it is hard to come up with a pithy, all-inclusive sentence that defines all there is around a product and all the different variations of what it encompasses. Gartner defines some common characteristics that can be used to determine what a product is:
- It can serve an external or internal customer (user)
- Is clearly defined by its business capability
- Delivers capability that customers value
- Can be a repeatable service
- Can be a platform (one- or multi-sided)
- Can be bought, sold, subscribed or funded
- Has competition and a product lifecycle
But, a product can be made up of one or more other products. If you take the example of buying a new computer – you might end up with a bundle of products. This might include a screen, tower, keyboard and mouse that is wrapped up as a single offer. Each item here represents a distinct value proposition, but can also be a bundled value proposition.
Thinking in digital terms
When considering building websites, apps and other interfaces to a business, the definition of products become more challenging. Silicon Valley Product Group (SVPG) suggest that, firstly, most products aren’t even physical – they’re software. Secondly, most of the time the software isn’t even installed on a computer but rather it’s running on some remote server, or even more abstract, it’s running “in the cloud.” For instance, Google has a product called Search. It fits most of the definition from Gartner. It clearly provides value to users. But Search is related to other products (like AdWords) that really does the job of generating (a lot!) of money. Both AdWords and Search are products (with clear and related value propositions). Both products are managed independently. But they are most valuable to Google when considered interdependently.
Customer experience is included
SVPG define the product for internet companies as:
Product = Holistic User Experience = Functionality + Design + Monetization + Content
- Functionality is referring to product’s capabilities.
- Design is referring to the resulting blend of interaction design, the visual design and, for physical devices, the industrial design.
- Monetization refers to the revenue strategy; it might be some of the various forms of advertising, subscriptions, or transactions.
- Content may be original, user generated, or aggregated.
With two clear pointers when considering how you might organize to design and develop products.
- You can’t separate form and function; you must look at the product holistically.
- The person responsible for the product (or a specific area of a website or app) must balance the functionality, design and content with the monetization strategy.
In terms of looking at a product holistically, this might include how to find, buy and fulfil the product and, after, how it might then be used and supported. Ultimately, it needs to consider how the product (and associated customer experience) brings to life the company brand or influences impacts the brand, purpose and vision.
Getting to the ‘right sized’ products
The trick for an Enterprise is to get the right ‘level’ of product defined using some criteria.
A product shouldn’t be so big that there are too few of them. But they shouldn’t be so small that there are thousands of them. With the size and complexity of an Enterprise, there should be a few end-to-end customer experiences that represent something that a customer would recognize as a product or service that the enterprise sells or a significant customer journey. However, underneath that, there will likely be a couple of hundred ‘products’ that follow some design principles that balance the need for building reusable capabilities that support multiple customer journeys, are flexible to change and are continually improving by making the most of any technology advancements.
Here is an example for how a retailer might pinpoint a product:
- They might be a specific Customer Journey (e.g. grocery shopping – a journey from the point where a customer identifies they need something, to the point where they can find an item right to the moment where they can purchase it, or even the moment it reaches the customer’s house) or
- They might be a specific Business Capability (e.g. manage a customer payment) or implement a specific manifestation of a Business Capability (e.g. Apple Pay or taking cash)
- They might be a specific subpart of a website, app or process step (e.g. checkout or basket)
Architecture is important
There is clearly a potential dependency and relationship between the types of products described in the example above. Those “smaller products” can be part of one (or more) overarching products and value propositions. Which is why architecture is important.
Getting to an architecture for how different products are defined and fit together can be a challenge for an Enterprise. This can include how products are named – one resource, albeit a Government one, that is helpful to think through how to give products, services and capabilities good names can be found here. The architecture should help people understand the key building blocks for the major parts of an organization’s value propositions and how they hang together to support the overall business model. Product Leadership and Management is required for each of these and the people working on them will need to work together to bring about overarching value propositions to market.
Product leaders are technologists too
Much of the debate in terms of what a product is within Enterprise companies actually relates directly to who might provide product leadership or who might be the product managers. As companies rely more and more on technology, and business models are supported online or within apps, there is a need for a greater understanding of technology as part of the product leadership and management processes. The traditional challenge of aligning business and IT is getting in the way of creating great products. The division needs removing between departments. People leading products need to be accountable for the desirability of the product, the viability of the business model, and the feasibility of what can be supported by the company. It’s a balancing act of bringing together multiple stakeholder groups within an Enterprise.
What this means for product management
Marty Neumeier has written extensively on how business is changing and the impact it has on brand. He describes it as: A brand is a person’s gut feeling about a product, service or company. This means product management absolutely needs to consider how to communicate a company’s product to the market, and how a customer or user consumes it. It must include both the tangible and intangible, how all the elements come together, and the impression left in the mind of a customer.
There are many frameworks to help define Value Propositions (such as this one here) that help point to the things that need managing – a couple of items that need managing regardless of Value Proposition framework are:
- The User(s) – a deep understanding of what users need, want and value.
- The Solution – the process, technology, services and experience that is needed to serve the users needs. What makes your solution unique?
- The Competition – how well do your current and future solutions compete in the marketplace. How does your product compare, complement and compete?
- The Benefits – what does a customer get from your solution?
- The Business Model – how does your solution generate value and fit in the wider company
- The KPIs – how does your solution affect and improve the KPIs of the business and the customer
- The Message – is your product aligned with the Enterprise brand values? How does your product influence the marketing and messaging of the Enterprise?
So, when you think of the products within your Enterprise, consider if you are able to identify how your product ties to the Enterprise values and brand promise? Examine how it fits into one (or more) user journeys and how they’re being managed? Can you construct a value proposition for them?
Any question mark is probably worth a deeper exploration. Those will help you ensure that you deliver value to the user, which in turn, will create value for your Enterprise.
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