Profitable growth correlation: technologies and business practices to enable this scenario
The significant positive effect of customer satisfaction on an organization’s profitability is evident from many great business examples and related success stories.
In addition to that, this is supported by many scientific studies elaborating evidence that customer satisfaction has a significant and positive impact on internal financial performance indicators such as sales, operating income, net income, and retained profit. Satisfied customers are the foundation of any successful business as customer satisfaction leads to higher retention and recurrent purchase, brand loyalty, and positive word of mouth that has growing importance in the age of social networks.
To summarize, achieving customer satisfaction triggers a positive chain of effects leading to higher retention and profitable growth.
How to achieve and keep high customer satisfaction and experience?
The correct answer can be only one: by keeping permanent alignment with customer needs! But to accomplish that, you need to implement agile product management practices for managing your critical products and support your key business functions (e.g., CRM) by products developed and maintained by using agile product and platform management principles. One of the most widely used methodologies for implementing agile product management is the AIPMM methodology that defines product development and management in 7 phases, from conceiving the idea for to product to the product retiring.
Product lifecycle stages
According to the methodology, every product, whether a good or a service, will pass through seven phases of the product life cycle that include: conceive, plan, develop, qualify, launch, deliver, and retire phase.
Everything starts with conceiving ideas that will be the baseline for future products and services. For this, you need as detailed market examination as possible to explore market needs and trends in the areas of your interest. After that, it is essential to develop an open-minded SWOT analysis of your specific strengths and weaknesses and opportunities and threats within the defined context.
Product managers should not overestimate opportunities and related product features that they like – customers will decide the most valuable features for them and have the final word if the product will succeed.
Suppose the results of the conceiving phase show reasonable chances that the organization can develop a successful product based on the recognized market opportunities. In that case, the endeavor goes to the next phase of detailed planning.
In this phase, all aspects of the go-to-market (GTM) strategy are defined. The product manager and his team define customer segments, value-proposition for each of them, pricing strategy for the segments, the optimal distribution channel mix, buyer, and user personas, etc.
Based on the collected information, the team creates the product strategy, business case document, detailed market needs specification, and product description. The phase is closed by creating the initial product development roadmap.
After the two initial “strategic” phases, the next two phases are focused on the first product version development (usually MVP) and qualifying if the product is on the right track considering the product strategy and the defined business case. Providers usually qualify their new products in cooperation with early adopters that help them collect relevant information about necessary changes and improvements that need to be performed to get the functional product. After reaching the required level of product quality, the product is ready for the Launch phase when the product is announced widely to the market according to the defined GTM strategy.
After launching, product manager involvement is not decreasing. On the contrary, the Deliver phase is crucial for the long profitable life of the product since it is essential to keep the product in top condition and continuously align with rapidly changing customers’ needs. To achieve this, the product management teams need to gather insights into how the product can be optimized by setting up channels or methods to collect customer feedback. Many voice-of-customer market research methods could be used to include ethnography studies, interviewing prospects and customers, working with lead users, focus groups, etc. Based on the insights collected from the market on a regular basis, the agile product development process is organized to upgrade the product iteratively, keeping it permanently competitive for the market and aligned to customer needs. This is the phase when the organization harvests the profit from the investment. Therefore it is vital to prolong the phase as much as possible by an agile approach to product management.
Even products with effective agile product management will one day approach the phase when it is crucial to retire them to save the overall business performance from products that could drain valuable resources and potentially damage future growth. Of course, this phase must be planned much in advance to avoid negative consequences and maximize customer retention by creating excitement around the new (successor) product and by onboarding customers to the new product. The whole organization must be informed, trained, and motivated to support the process proactively.
In the digital age, organizations are under increasingly demanding pressure regarding product portfolio and business model management. As one survey (1440 companies from 11 industries and 12 countries) conducted by Accenture shows, around 54% of the companies expect that new businesses will generate more than half of their revenues in three years period. As well, 51% believe the same about their profits. Such a serious business transformation is possible only if the existing core is transformed to be able to invest in a new source of revenue and profit, as well as if the organization is able to scale new business initiatives quickly and efficiently, for both organizations need mastery in agile product and platform management.
Be continually aligned to the customer needs with Asseco Live3.0 CRM solution
Asseco experts and the LIVE 3.0 family of the solution may provide continuous alignment to the customer needs in business areas that strongly influence your overall performance: providing customer care services, improving sales support capabilities, and enabling your employees. By comprehensive market research and analysis of customer needs, we capture inspiring insights to permanently enhance features of our solutions by using practices, principles, and the framework of agile digital platform management. In that way, we ensure that our partners are always on the safe boat that navigates in the direction of rapidly changing customer needs.
For more information on how Asseco and the LIVE product family can support the implementation of your profitable growth strategies, please contact us at [email protected].