What “What’s In Your Wallet?” Means To Product Managers

by drjim on January 30, 2012

Who would have guessed that Vikings could sell credit cards?

Who would have guessed that Vikings could sell credit cards?

I’m sure that any product manager living in the U.S. has encountered one of the Capital One ads for their credit cards at some point in time over the last year or so. What might get lost in the blizzard of Capital One ads and promotions that seem to always be around us, is that the product managers at Capital One are very good at what they do. Perhaps we can learn something from them…

It’s All About Analytics

There are a lot of companies out there that are selling credit cards to consumers. Why has Capital One succeeded where so many other firms have failed? I’ve got one word for you: analytics.

The product managers at Capital One have always taken a scientific approach to marketing. What this means is that they have taken the time and energy needed to create ways to analyze and segment their customers in a way that allows them to create new product offerings and then work with their account manager and business development manager coworkers to offer them in a way that they’ll appeal to their customers. It sure seems like analytics should really be part of a product manager job description these days.

The product managers at Capital One realized that they had a commodity product on their hands – credit cards. They looked around for ways to make their product offering different from everyone else’s. What they discovered was a set of different ways to create industry leading products. These included offering teaser rates on their credit cards and zero-balance transfers. These offerings are commonplace now, but they were started by Capital One.

What The Capital One Product Managers Did Differently

So just what did the Capital One product managers do differently that allowed Capital One to become such a big success? It turns out that analytics was just part of the story. Other credit card companies were also using analytics at the same time.

What the Capital One product managers did differently was to use their analytical data differently — they applied strategic management to their data. The other credit card companies were using their data almost exclusively to create predictive models that they would then use to drive the marketing campaigns for their cards. Capital One product managers turned this on its head by creating a culture of testing based on analytics.

This meant that they were using the data that they had collected to test different types of offers. It also gave them opportunities to test, test, test different product combinations. This was in marked contrast to all of their competitors who were forced to put all of their eggs into just a few very large scale marketing campaigns and hope for the best.

What All Of This Means For You

In the past 20 years, the product managers at Capital One have grown their credit card product line from nothing to being one of the biggest credit card issuers with more than 40 million customers.

The way that the Capital One product managers were able to get their products to stand out in an already crowded field was to find ways to harness the power of analytics better than any of their competitors. Like all of their competitors, they collected a lot of information on their customers. What the Capital One product managers did better than their peers was to use this information to build products that were even more successful. This is exactly what the rest of us would like to be able to put on our product manager resume.

All of the other credit card companies had access to the same types of data. What the Capital One product managers did better was to use this data to perform a great deal of market testing. This allowed them to introduce more products and to tailor those products to better meet their customer’s needs. We can all learn that asking our customers “What’s In Your Wallet” just might be the best way to become a better product manager.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that getting trained on how to use analytics to process customer data is something that every product manager should learn?

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What We’ll Be Talking About Next Time

Here’s a classic product management question for you: how well do you know your customers? I mean, do you know then REALLY well? We all like to say that we know what our customers are looking for, but do we? The product managers over at the online gaming company Zynga (you know, the one that went from nothing to $600M in revenue overnight) can say that they do know their customers very well. They’ve got the analytics to prove it.

{ 5 comments… read them below or add one }

Peeyush Sharma January 30, 2012 at 6:00 am

I think there is no fixed method to analyze customer data. Its about how strategically sound you are to approach and evaluate customer data. I believe that every product manager should learn how to convert a market research into an operational task.

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Magali Janvier January 31, 2012 at 11:57 am

Great post. I totally agree with your point of view. Product Managers need to be better at “harnessing the power of analytics”. The thing is that many times, the focus is on defining analytics that will serve to lead internal decisions.
Mag, Planbox Product Manager

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Dr. Jim Anderson January 31, 2012 at 2:47 pm

Magali: great point. I think that we are at the early stages of trying to figure out what product managers should do with the analytics tool that they are being handed.

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Serge Doubinski February 23, 2012 at 2:22 pm

I don’t really see how any PM can afford NOT to be trained, officially or otherwise, in how to apply analytics to the customer data they are working with.

This exercise is somewhat easier for those of us dealing with pure web products; with more defined metrics that are simply pulled out of your Google Analytics/Omniture/etc account. So I really respect PMs who deal with situations where they have to get creative about defining conversions and performance indicators in their space.

That said no matter what product you own, Magali is totally right, it’s the definition that maters most. After all you are looking for actionable insight rather than an ocean of data points which don’t help you move the needle.

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Dr. Jim Anderson February 26, 2012 at 9:00 am

Serge: You bring up a great point — we’re all looking for data that will show us what the correct next step is. There’s not shortage of data, it’s that knowledge thing that can be so hard to find. The one thing that I think a lot of product managers don’t yet understand is that analytics is an ever-changing area. You can’t “fix it and forget it”, instead you always have to be looking for a better way to use your data…

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