What would the perfect buying experience with your product be for your customer? I’d be willing that it would go something like this. They’d contact you and explain their problem to you. You’d listen, and then based on what you already knew or could deduce about them you’d end up recommending the perfect product that would solve their problem. While you were at it, you might also suggest some other products that would solve problems that they didn’t even know that they had. Too bad this perfect world does not exist…
What’s Wrong With The Way That Your Customer Buys Today
When your customer goes shopping for a product like yours today, the experience is often not ideal no matter what you included in your product development definition. First, they often feel as though they are alone in performing their shopping – there is no sales professional who is going to help them to make their decision (sales people just try to get them to buy). Additionally, in a world with so many different product options, customers feel as though they have to do all of the work to determine which product / configuration is the right one for them. Clearly this is not something that you’re going to want to put on your product manager resume.
The good news is that things are changing. Product managers are starting to be able to take advantage of data gathering techniques and analytics in order to create the ability to make the offer of the right product at the right price to their customer at the right time. This technique is called making a “next best offer”. In order to do it, product managers need to follow a simple 4-step process.
NBO Step 1: Define Objectives
It may sound silly, but before you can put together the right offer for the right customer you first have to decide what your objectives as a product manager are. There are a number to choose from: increased revenues, more customer loyalty, new customers or more market share? In addition to making sure that you know what your objective is, you are also going to have to remain flexible. When you start to get feedback from your customers, you’ll need to be open to changing your objectives to better match what your customers want from you.
NBO Step 2: Gather Data
Once again, gathering data seems like it is easy to do; however, it turns out that you are going to want very specific types of data. This is going to include collecting data about your customers, your product offerings, and the circumstances under which your customers will be making their purchases.
Customer data will include such items as age, gender, income, etc. The customer data that you are going to want to collect now includes additional data items. This new information goes by the acronym SoLoMo: social, location, and mobile.
Your product offerings need to be known and understood in terms of how your customers are going to be viewing them. You need to understand this so that you know how to make the best offer to your customers. Creating a good classification system for your products is the right way to start.
Finally, you need to understand the circumstances under which your customer may purchase your product. Which channel will they be using? Will face-to-face contact be required? Additional factors such as the weather and the time of day may also have to be factored in.
NBO Step 3: Analyze And Execute
Now that you have your data, it’s time to analyze it and then start to use it to create custom offers for your customers. The simplest way to do this is to use a customer’s history of past purchases in order to make recommendations about what additional products they might like to make. Taking this to the next level, you can use statistical analysis and predictive modeling to gage a customer’s likelihood of responding to an offer that you present them with.
NBO Step 4: Learn and Evolve
One of the most important things to realize about making next best offers to your customers is that it is an inexact science. This means that each time that you are making an offer, you will be constantly improving both the offer and how you make it. Learn to view each offer that you make to a customer as a test and then take the time to observe the results of the test and adjust how you make your next offer based on those results.
What All Of This Means For You
Our customers are constantly being bombarded with sales and advertising messages about both our products and competing products. In order to help them to make their buying decision, the product manager job description now tells us that we must learn how to offer our customers a next best offer (NBO) .
In order to create an NBO for our customers, product managers have to follow a 4-step process. First, the objectives of making the offer have to be decided on – this will be important in determining how successful the program is. Next, data about your potential customers has to be gathered. At this point, the data has to be analyzed and matched to your customers in order to be able to make the correct offer. Finally, every offer needs to be viewed as being at test and the results of each test need to be studied and changes to the system made.
In order to prevent your product from falling further behind in the market, you are going to have to get good at this NBO stuff. Get started now and make sure that you study the results of every offer that you make. Once you master this technique it’s going to be your competition that is struggling to keep up with you!
Question For You: Do you think that there is anything that you can do to make sure that your customers don’t feel that you know too much about them when you are making presenting them with an NBO?
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What We’ll Be Talking About Next Time
The results of the first ever The Accidental Product Manager “where do you need the most help with product management” survey are now in! First off, let me take just a moment and thank everyone who took the time to (1) read my really long email, and (2) hit the “reply” button and sent me the number of the area of product management that you would most like to have help with. The answers were both exactly what I was expecting and a bit of a surprise at the same time – let me explain.