If there was a perfect world for us product managers to live in, what would it look like? Sure there would be white unicorns everywhere but what would our jobs be like? I’d guess that we’d know our customers much better than we know them today. In a perfect world, starting with the product development definition, product managers would be able to target their customers with the perfectly customized offer at exactly the right time across the right set of channels. Does this perfect world exist?
Just Exactly What Is A “Next Best Offer”?
Product managers have always wanted to be able to read their customer’s mind. Here in the 21st Century it’s starting to look like we just might be able to do this. The arrival of analytics is providing product managers with mountains of data about their customer’s preferences and how they go about the process of shopping. However studies show that most of us are not making good use of all of this data.
Back in the old days, if they indeed ever existed, your customers would form a healthy relationship with your product’s sales team. They would have discussions about what the customer was trying to accomplish with their business and your skilled and knowledgeable sales team could guide the customer to the product or configuration that would best meet their needs.
Sadly, this situation rarely exists these days. Instead, your customers have too little time to develop these types of relationships and you have too many and too complex products for your sales teams to have a good understanding of all of them.
What all of this means is that all too often, your customers are going to find themselves on their own when they are trying to find a way to solve the problem that they are facing. This is where product managers need to step in and start to offer Next Best Offers (NBO). Do this right and you’ll have something that you can add to your product manager resume.
A Next Best Offer is based on all of that demographic and psychographic information that you are probably already collecting on your customers. You use this to create a highly customized offer that will steer your customers to the right configuration of your product. This is what we call a Next Best Offer.
In the brave new world that product managers are living in, we may be tempted to go after a bunch of goals using all of the new consumer analytics data that we now have. However, a Next Best Offer program offers us the best value in terms of both potential ROI and enhanced competitiveness.
How Can Product Managers Define Our Objectives?
If we are going to get the most out of our NBO efforts, we’re going to have to start in the right place. The experts agree that before we do anything else, we first have to create clear objectives for our NBO program.
If you want to have any hope of coming up with clear objectives for an NBO program, then you are going to have to be able to answer the simple question “What do you want to achieve?” The good news is that there is no one right answer to this question.
Depending on what your company’s current goals are, you may have to choose between many different answers to this question. You may be trying to increase the revenues that your product brings in. You may trying to boost the loyalty of the customers that you already have. You may want to get more money from the customers that you already have. Perhaps you simply want more new customers.
No matter which objective best meets your needs, you need to choose one that you can use when you are trying to figure out how to use your customer data in order to make the perfect offer to your customers. However, there is one more thing that you need to understand.
As with all things in marketing, the objective that you select that you’ll be using to achieve product success with is not set in concrete. This means that there is a good chance that your market conditions will change on you at some point in time. When this happens, you need to make sure that you’ve remained flexible enough to modify what your objective is.
What Does All Of This Mean For You?
In a perfect world, a part of every product manager job description would state we were to instinctively know what kind of solution our customers were searching for in order to solve their problems. We don’t live in a perfect world so we need to collect as much data about our customers as we can and then use analytics to determine how we can best serve them.
However, all too often we don’t do a good job of accomplishing this. What we would like to be able to do is to present our customers with the correct Next Best Offer which we defined as being the right offer at the right time across the right channels. However, this won’t be possible for us to do if we haven’t taken the time to choose the correct objectives.
Having a great deal of customer data is a great feeling. However, all of that data is not going to do us any good unless we are able to find a way to transform it into actionable customer knowledge. Creating Next Best Offers is the best way to go about doing this.
Question For You: Do you think that you should limit yourself to just one objective for your NBO program?
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What We’ll Be Talking About Next Time
Just in case you’ve been living with your head underneath a rock, the world appears to have gone “big data” crazy lately. Your customers, your company, and probably your competition have all started to talk about the problem of big data and just exactly what can be done about it. Somehow you are going to have to find a way to work “big data” into your product development definition. No matter what type of product you manage, it sure seems like you need to understand what this problem is – and how it can be solved.