Not meeting your product KPIs? Prioritize customer understanding
19 May 2024
Customer understanding and the cold hold maths of product development are often viewed as at odds with one another. This couldn’t be further from the truth.
While the goals that your product team are chasing may sound like cold, hard metrics—conversion rate, click-through rate—they’re actually measuring the value that you give to living, breathing humans. If you’re a product professional, this is something that you surely know.
But how sure are you that your product development process maximizes customer understanding for the sake of KPIs?
Let’s discuss.
What exactly is customer understanding?
I get it—the term feels fluffy. Customer understanding, empathy, and all of those related terms conjure up an image of a bunch of product managers singing kumbaya around a campfire while c-suite is nearby wondering why you aren’t generating any revenue. However, this couldn’t be further from the truth.
Customer understanding is the very concrete notion of using every single information source available to you in order to parse out what will give enough value to your customers in order to hit those coveted KPIs. 
Simply put, if you want your customers to convert to paying users, you have to understand them. 
Depending on your organization, your user research team, designers, marketing team, sales team, data analysts—all have information that you want. When you piece it all together, you’re able to put together a nuanced understanding of your customer that can inform your product roadmap and impact your key metrics.
Again, you don’t disagree.  So why aren’t you doing it?
What’s the biggest reason that your team doesn’t do enough to understand the customer?
I’ll say it plainly: you’re under the pressure of time, and you’re comfortable with your assumptions because you’re a smart person. 
The easiest things to push aside when someone is breathing down your neck about a deadline are the things that feel amorphous or less concrete—like customer understanding.
You can’t skip design, and you can’t skip writing code. But you can definitely save time by writing a paragraph about your assumptions on part of the customer in your PRD and calling it a day.
I’m here to convince you that this comes at the expense of achieving your goals. 
The cost of sidelining customer understanding
Time is money, and product iterations are time. When you’re guessing and making assumptions in your bias-ridden mind, you’re likely making a lot of product iterations that don’t translate to KPI gains. In many ways, failures are a hazard of the job—no amount of customer understanding will guarantee that every initiative is a slam dunk.  
But you can decrease your failures, and thereby save time and money, by making customer insights a part of your product development process.
While we never ask users what to build, the intimate understanding of our customers’ pain points, behaviors, and motivations allow us to make better calls about what our product teams should pursue. The hard part isn’t accepting this notion, but putting it into practice. 
What are the sources of customer data and insights at your org?
There are a lot of ways to get into the mindset of your customer for the sake of making good product decisions and before you create a plan for utilizing them, it’s important to know who they are. Here’s an overview.
User research
I may be biased as a user research lead, but the product teams with user researchers on hand are some of the luckiest people in the universe.
If you have a team dedicated to understanding your users, you can work with them in order to design both long-term and short-term studies that increase your customer understanding. 
Most marketing teams are doing two very important things: one, user acquisition and two, competitive research. Your marketing team can tell you things like which ad messaging works best with your target audience, which in turn tells you what your customers value. 
They can also clue you in as to what your competitors are doing and what exactly is driving their growth. These aren’t the complete picture when it comes to customer understanding, but they’re data points that can give you a much more nuanced picture of who you’re building for.
If your product has a sales team, there is unlikely to be anyone else at your organization who understands the mindset of your user quite as well. What are the major concerns and struggles that your users have? What are the blockers to purchasing your product? Your sales team can clue you in.
Customer support 
When things go awry for your users, your support team is there to help. For that reason, they have important perspectives about problem areas that are ripe for impactful iterations. 
Data analysts
It’s likely that you’re already utilizing your data team to do things like maintain dashboards and to help you make data-informed decisions when it comes to all forms of experimentation, like A/B tests.
But if that’s all you’re doing, you’re underutilizing your data team. So much of customer understanding is wrapped up in long-term, detailed analysis of user behavior. Do you have questions about how your customers behave? Of course you do. Start the conversation with your analysts. 
Depending on your company, this may not be an exhaustive list. Have a conversation with your colleagues about who else may also have valuable insights to contribute when it comes to customer understanding.
After you’ve assessed the landscape, it’s time to put your money where your mouth is—read on.
How do you integrate customer understanding in your process purposefully rather than performatively?
Before you schedule a few “syncs” or “share a few docs” so that you can check the box of customer understanding, let’s align on what it means to actually integrate the nuanced comprehension of your customer in your product development process.
As a user researcher, I’m often asked to comment on documents like PRDs, or to add user research insights that validate whatever a product manager is selling to the product team.
Here is how this reads to me: “Hey Cori! I’ve already decided what I want to do, but if you more or less agree with me, give me some good talking points so that I can convince everyone else.”
This is not a customer-centered product development process. This is a performance. This is an acknowledgement that yes, product iterations should be informed by knowledge of the target audience, but a refusal to do it in the right order. This is a recipe for assumption-based product development that almost undoubtedly leads to more failures than necessary.
So how do you integrate customer understanding in a meaningful way? Here are a few strategies. 
Accept the right order: insights before the product solution
This is a simple mindset shift that lays the foundation for a customer-informed, pro-KPI product roadmap. First, you seek to understand your customer and second, you brainstorm and execute product iterations.
If you rely on your assumptions and only integrate soundbytes about your customers after the fact, you’re performing customer understanding rather than utilizing it.
Codify customer understanding: make it official throughout your process
In all likelihood, your team has a process for how product iterations are born, all the way from brainstorming and ideation through to execution and finally, analysis. Here are some simple ways to make sure that you’re utilizing internal customer knowledge to make good product decisions:
  • Add people with customer knowledge to your brainstorming meetings. Think twice before ideation sessions are limited to product managers and designers. Take a moment to think: does anyone on the sales team have relevant insights here? What about marketing? And so on.
  • Create a section for customer data in your PRD template. Make it mandatory to establish the problem and/or user need that you’re addressing and make sure that the people with the relevant knowledge are genuinely consulted rather than asked performatively to comment. 
  • Don’t neglect the why when interpreting the results of an experiment or an initiative. If you ran an A/B test and your new variant either won or lost when it comes to your key metrics, you probably have enough information to make a call about next steps. But even when you’re wallowing in your disappointment and/or basking in the glow of a successful initiative, true customer understanding demands that we understand why the data looks like it does. This may mean running a usability test to understand why drop-off occurred, or asking your Sales team to speak with some customers about the value that they’re finding, or not finding, in a new feature. Once you understand the why behind your results, you’re poised to make better iterations in the future.
Get good at synthesis
As a product professional who’s newly obsessed with real and true customer understanding, you’re going to have a lot of insights from a lot of different sources. Sometimes these insights will initially look like puzzle pieces that don’t fit. Don’t panic: that means that you’re on the cusp of understanding your target audience in a more nuanced way.
My overall recommendation here is to give your insights, regardless of source, a home. We use Dovetail to tag insights that we get about customers regardless of the source—interviews by the research team, common complaints from our customer success team, quantitative results from experiments. 
Over time, we build a knowledge base where we can look at all of our customer insights in the context of the other and help make product decisions that honor the validity of all of the different methods by which we learn about our customers.
In all likelihood, you’re sitting on a wealth of information about your customers that could make or break Q1 and beyond as far as KPIs are concerned. Make a commitment to yourself and to your team: stop performing customer understanding, and start practicing it. 

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