Nowadays, almost every company describes itself as customer-oriented. But is that really true? In this article you will learn what the focus on customer value actually means and why this focus has become a decisive factor for success.
Feature vs. Customer Value Orientation: 2 Types of Product Development
Feature-driven product development works like this: A product planner designs what he believes to be the perfect product with numerous features that he or the management consider indispensable. The developers then develop this product until it is ready and launched on the market in all its complexity. The disadvantages of this approach are obvious:
Only after a long development period the product is shown to the customers for the first time – and they often have a different opinion as to whether they need all those fancy features or whether a less complex and correspondingly cheaper product would have solved their problems much better. The company risks unnecessary effort and costs and does not generate revenue at the same time in this case. But how can this risk be minimized?
Why Product Development for and with Customers Is Much More Successful
In case of a product development initiative that is oriented towards customer value right from the start, unnecessary costs can be avoided. The reason for this is that every additional product feature is going to be evaluated before its implementation: Which problem of the customers does it solve? And is this advantage more important than advantages of other features that are to be developed?
Companies that develop products in this way increase the likelihood that customers will actually pay for them: Depending on the context, they can earn money from the very first product release and continuously improve quality based on initial customer feedback. In times in which markets continue to change from seller to buyer markets, this customer focus is crucial for success. As a customer, wouldn’t you rather buy the products from a company that addresses your needs and solves your problems?
The reason why customers can make such decisions nowadays is the growing transparency through price and product comparison opportunities on the Internet, for example. With just a few clicks, you can compare products and select those that offer the most benefits. Companies that are unable to offer such products will lag behind their competitors.
In product development, it is therefore important to first define the customer value or benefit for each individual feature. But how can this be done and what tools can be used?
Agile Teams Use Tools For Regular Customer Value Checks
In agile product development, frameworks such as Scrum offer various tools with which teams can keep their focus on customer benefits at all times. One of these tools are user stories in which the Product Owner describes who benefits from the respective new feature, what the user does with it and why it helps him/her. A typical format of a user story looks like this:
„As <user> I want <goal>, so that <reason>.”
Conclusion: Formulating requirements with the help of this user story template has several advantages:
By taking a first-person perspective, one automatically identifies with the customer, making it much easier for both the product owner and the development team to focus on customer benefits.
The formulated reason can be used to check whether a feature actually solves an existing problem, thus giving the customer an advantage and creating customer value.
Requirements that are all formulated in the same way are much easier to compare. This helps to estimate effort and customer value and leads to reasonable prioritization in the product backlog, which in turn is helpful during sprint planning.