But uncertain market conditions can throw us off our game, causing us to question our standard approach. A weak economy might cause us to deprioritize innovation projects, or put a pause on making large-scale improvements to the customer experience. In these instances, we start to minimize the value of our efforts and send the message that our work can just as easily be put on hold. But at what cost?
Peter Drucker famously said, “business has two basic functions: marketing and innovation.”
While marketing budgets may tighten in a soft economy, brands with the foresight to hold onto, or even increase their spend tend to end up growing their share of mind in a given category while their competitors stumble.
According to Forbes, during the 1990-91 recession, Pizza Hut and Taco Bell capitalized on McDonald’s decision to cut its advertising spend. As a result, Pizza Hut grew sales by 61%, Taco Bell by 40%, while McDonald’s saw a decline of 28%.
But what about that second part – innovation?
Does it make sense to pull back on inventing our future when we’re uncertain about today and tomorrow? Sure, large scale endeavors may need deeper diligence, but we believe the day to day improvements need to carry on in order to – like the marketing example above – capitalize on market conditions.
For product owners evaluating what efforts to prioritize, let us make a few suggestions:
1 – Understand the changing nature of your customer
It’s always smart to look outwards, particularly in times of change. The pressures on your business are also impacting your customers, and the goal here is to adapt your product offering to meet their changing needs.
Heading into uncertain times is exactly when to invest in customer research, to gauge needs, expectations, and how buying decisions have changed over the last year. These insights should drive changes to communication, channels, pricing, and how you move a prospect through the buyer journey. Adapt quickly and be positioned to address these changing customer needs.
Staying current with customer sentiment is really the difference between a values-led communication approach and messaging that falls flat. Consider running qualitative research now to understand how needs and expectations have changed, and how your offering may need to follow suit.
2 – Revisit and reprioritize the product roadmap
For many of us, the product roadmap we set 12 months ago is almost surely different from what’s needed today. By its very nature, a product roadmap should be flexible to change course, but a shaky economy is generally not something we plan for too far in advance.
Beyond understanding your customer’s needs, your roadmap may need to adapt to organizational changes – perhaps to your team structure, or maybe there’s new pressure to meet new and unfamiliar KPIs. When we lose visibility for the road ahead, there’s no better time to revisit the roadmap and make sure we’re heading in the right direction.
A product roadmap is a living, breathing resource that needs to be groomed and revised regularly, particularly when changing market conditions are ahead. Consider evaluating the backlog and adjust your near term priorities. Don’t hold back the critical work, but focus on efforts that clearly lead to creating value.
3 – Consider new offerings that meet emerging needs
According to the Global Digital Outlook Study (March 2023) from Forrester Research and the Society of Digital Agencies, “Launching New Products and Services” was the top ranked priority for strategic investment in 2023, as ranked by over 400 marketers surveyed.
Clarity can sometimes come from charting a whole new path forward. For some product owners that can mean shifting focus to a new venture that creates additive value to the business.
Perhaps a customer insight created the spark for a new product. Or maybe an item on the roadmap is worth spinning out into a discreet service. However you arrive at it, defining the vision and building the value case for a new digital product or service can energize the organization, and of course, create new revenue opportunities that didn't exist before.
With the average time to bring a new digital product to market as ~2 years from idea to launch, a market slowdown can be an ideal time to refocus resources in this direction. Consider how to thoughtfully expand the product portfolio in a logical way by exploring ways to serve unmet customer needs or to reach a new customer segment.
As they say, the only constant is change, and as a product owner, this sentiment should ring true. But only those organizations that look at uncertain times as a challenge to be met rather than an obstacle to suppress, may uncover new opportunities for growth.
If you’re interested in understanding how user research can illuminate opportunities for new products and services, or you’re seeking a fresh perspective on how to better prioritize the roadmap for the year ahead, reach out to us. We’d love to hear from you.