The one-stop product management guide

Everything you need to know about managing products through each phase of the product lifecycle.

Product Management GuideThis guide provides a framework to build, grow and manage digital products.

It is structured around the product lifecycle; providing an overview of the activities that take place during each phase, plus links through to more detailed explanations and resources.

At the end of the guide is a section that looks at the different skills and techniques required to develop and manage products.

Whilst primarily written for product managers in larger organisations, the guide should also appeal to anyone who wants to understand what product management is and how it will benefit their business.

As with all methodologies and frameworks, please do not treat this as a list of prescriptive steps. Instead consider it as your toolbox to take what you need and adapt for your own purposes.

Finally, whilst I have placed activities into different phases for the purposes of structure, it is important to note that many activities will run both concurrently and iteratively throughout the lifespan of the product.

Note: The guide was originally published on Digital Friday and transferred here when the Digital Friday newsletter was closed down.


Please use the links below to jump to the specific sections of the guide:


Ideation phase

Product Lifecycle Ideation Phase

New products are created for all sorts of reasons.

Sometimes it’s the result of a group of friends trying to solve a problem (resulting in a startup), it could be a business wanting to satisfy a gap in the market, or it could be a not-for-profit / government organisation responding to social / political needs.

Whatever the catalyst, the Ideation phase should be highly exploratory and creative.

At this point, nobody will be sure what the solution is or how it will reach the market, so the process of transforming the initial idea into a more solid proposition begins.

For the group of friends creating a startup, this could be as simple as sketching ideas out on the back of a napkin; but for bigger organisations the process will be more formal.

Starting with ‘why’

We all have a natural tendency to solutionise problems, which means we focus on what the eventual product will look like without thinking about ‘why’ the product needs to be developed in the first place.

By delaying your thoughts on the solution and dedicating time to be certain of the ‘why’, you’ll create a much better product.

To help reinforce this point, I’d advise watching Simon Sinek’s Ted Talk on starting with ‘why’.

During the talk, Simon explains why successful product companies like Apple are able to differentiate themselves from the competition by focusing on the ‘why’, rather than the ‘what’ and ‘how’.

The product vision

Starting with ‘why’ helps you to define a clear vision of who the customer is and the problem you will help to solve.

Capturing this in a vision statement as early as possible and maintaining high-visibility of the statement throughout the lifecycle, ensures your product team remains focused on the over-riding goal.

Essentially the product vision is the ‘guiding star’ to keep navigating towards, especially when the pressure is on.

Useful vision statement resources:

Building a business case

Whilst the group of friends can get away with planning their business on the back of a beermat, larger organisations have processes in place to justify investments in new products, with a common vehicle for doing this being a business case.

The culture of your organisation will determine how much work is involved in producing a business case. Some will require an inch-thick document, whilst others will use a more simplistic approach, such as the Lean Canvas.

As the product manager you may be responsible for producing the business case or it might be owned by others and you will only be asked to input to certain parts.

As business cases are a significant subject in their own right and there is a wealth of information already written, I will only highlight a couple of important principles:

Ensure the business case focuses on user needs

The case should incorporate all business drivers for making an investment, but this can lead to certain drivers like reducing costs or legislative compliance clouding the focus away from end user benefits.

Therefore it is important to build the case around the original product vision and the customer problem you are trying to solve. Here is some further reading on building a business case around customer needs.

Build the business case in iterative stages

I’ve seen many business cases use complex modelling techniques to estimate the full lifecycle cost of investment. At this early stage the models can only be based on very broad assumptions and nobody really knows what the product will look like or how well it will be received.

The problem is that the cost estimates quickly become adopted as gospel truth, as well as forcing early solutionising, which places a major constraint on future development of the product strategy.

A better alternative is to break the development of the business case down into different stages, allowing for smaller investments to be made and better data to be collected on customer needs and investment costs as the stages progress.

The following product development stages provide natural timeframes to align the business case iterations to:

  • Discovery
  • Alpha
  • Beta
  • Live

Useful resources for business cases:

The product strategy

The product strategy is the route map for achieving your vision and by initiating the strategy during Ideation, you will set the agenda for the remaining phases.

The strategy will remain as a constant artefact throughout the product lifecycle, however there should be many iterations along the way to reflect new learning.

The following three sections form a core part of every product strategy:

  • The product vision (using the vision statement)
  • Goals
  • Initiatives

These areas are explained in more detail in this resource: Introduction to product strategy guide.

Useful resources for product strategy:

Thinking about metrics

Data-driven product management moves the basis of decisions from personal opinions to actual evidence of what the market needs, so having a metrics framework in place enables you to make informed decisions – rather than rely on guesswork.

Here are some examples of metrics to use:

  • Tracking progress towards goals – Your product strategy should specify goals that will take place within agreed timelines and tracking with metrics gives you a more accurate view of progress.
  • Identifying issues that require further investigation – Regularly reviewing metrics will highlight anomalies, which when investigated in more detail help to identify ways to improve your product.
  • Measure the performance of alternative features or approaches – Experimenting with different sign-up pages or user onboarding approaches helps you to identify the most effective.
  • Guide continuous improvement activities – Knowing which parts of your product are under-performing enables you to prioritise them in your backlog for improvement.

Setting up a metrics framework

With so many possibilities it is easy to find yourself swamped with data, so it is important to define a shortlist of metrics that are highly relevant to your product.

A really good starting point is the AARRR Framework (also known as Pirate Metrics for Startups).

Originally created by venture capital investor Dave McClure to be used by startups, the framework can be just as effectively adapted for larger organisations, both in the profit and non-profit sectors.

Here is a detailed explanation of the AARRR Framework.

Metrics to be avoided are the so-called ‘vanity metrics’. You see these a lot with websites boasting about the number of hits they receive each month. So yes having a 100,000 hits per month might sound impressive, but the figure gives no indication of what actions those hits resulted in.

  • Did the visitor sign-up for an email newsletter?
  • Did they demonstrate any level of engagement with the site?
  • Where the hits actually real (real people as opposed to machine-generated bots designed to appear as human visitors)?

The Ideation phase is a good time to put an initial framework in place and get into the habit of using it to guide product decisions. The initial framework can then be iterated and improved as you progress.

Useful resources for metrics:

Creating a product roadmap

The roadmap sits below the product strategy and acts as a more detailed artefact to inform the priority of work during Development and later phases. It can be used to guide both your product team and as a tool to communicate with other stakeholders in the business.

Roadmaps are produced in a variety of formats and organisations will have their own preferences on the information contained in them.

Useful resources for roadmaps:


Discovery is the first of three product development stages that organisations can use to bring new products to market. The other stages being:

  • Alpha
  • Beta

The aim of the Discovery stage is to understand the customer problem and gain insight into potential solutions, so activities will include:

  • Defining your target users and creating personas.
  • Understanding and prioritising user needs.
  • Understanding how well the market is currently served and impacted by broader political, economic, social, legislative and technological trends.
  • Assessing how well equipped your organisation is to meet user needs.
  • Undertaking technical spikes (investigations) to inform the solution design.
  • Defining initial success metrics.
  • Understanding and mapping all of the stakeholders affected by the product.
  • Scoping and planning for the Alpha stage.

This would also be the period of time where the initial product vision, the strategy and potentially an updated version of the business case will be produced.

Larger organisations tend to timebox Discovery to a set number of weeks to keep control of costs.

At the end of the Discovery stage, there should be a business decision made based on the findings, with one of three outcomes:

  • Do not proceed any further.
  • Undertake another period of Discovery to gain more information.
  • Proceed to the Development phase.

Please note: It is not always necessary to run a formal Discovery stage or for that matter any of the other stages. Smaller, more agile organisations may well dive in and begin releasing initial versions of their product straightaway in order to understand their customer needs. The approach you take will always need to be scaled and adapted to your own needs.

Useful resources for Discovery:


Development phase

Product Lifecycle Development Phase

The end of Discovery will signal the end of Ideation and progression onto the next phase – Development.

Whilst the Ideation phase was all about understanding the customer problem, the focus now moves to finding and building the right solution.

The Development phase  can also be broken down into two stages – Alpha and Beta; each having slightly different goals.


Having diagnosed the customer problem during Discovery, your team should be bristling with ideas and the aim of the Alpha stage is to prototype, test and whittle the ideas down to a refined solution that will form your core product for development in the Beta stage.

Just like the Discovery stage, Alpha should also be timeboxed (usually for six to eight weeks) and the time used carefully to prototype against prioritised user needs and gain feedback from your target audience.

Common activities to expect during Alpha include:

  • Refining your target user personas.
  • Adding and refining user needs.
  • Prioritising user needs and crafting fully-fledged user stories complete with acceptance criteria for the highest priority needs.
  • Updating your understanding of the external customer environment based on new learning.
  • Mapping out core customer journeys, covering the periods:
    • Before the customer uses your product
    • Whilst the customer uses your product
    • After the customer uses your product
  • Designing how the customer will interface with and experience your product.
  • User testing with your target audience and iterating designs based on the feedback.
  • Prototyping and exploring technical concerns.
  • Refining success metrics.
  • Scoping and planning for the Beta stage and planning the longer-term product roadmap.

By the end of Alpha, there should be a much better view of user needs and the technical complexities involved, along with a clear view of the core product solution to proceed with.

The findings will again prompt a business decision on whether to stop all development, extend Alpha for more information or proceed to the Beta stage of Development.

Useful resources for Alpha:


Assuming the decision has been made to proceed with Beta Development, it is a good time to review the product strategy and other artefacts to ensure they reflect the latest learning.

Things will really start to take off during Beta.  Your team will begin to grow and there will more interest from other departments and stakeholders, so it is important to be able to clearly communicate the vision and strategy.

As the overall process is iterative, many of the Alpha activities will continue in Beta, but the difference will be the focus of the team moving from experimental prototyping to coding against the user stories and quality assuring them with the agreed acceptance criteria.

Using Agile or Lean methodologies (more details in the Product management skills section), the team should be getting into a smooth rhythm of pulling prioritised user stories from the backlog and taking them through short, iterative cycles of:

  • Design
  • Development
  • Test
  • Release

This allows the product to gradually build up to a level where you where you will be happy to launch it to your customers.

The approaches for making the product available to your customers are discussed in the Minimum Viable Product and Introduction sections below.

Useful resources for Beta:

Minimum Viable Product (MVP)

One of the biggest problems with old-style ‘Waterfall’ development approach is the lack of customer interaction with the product until everything is built and tested, resulting in customer needs not been met.

To avoid the situation where an expensive product is developed – but not required, it is best to validate demand at the beginning with a basic version that customers can use.

If there is insufficient demand then work can stop or change direction, before a significant investment is made.

In his book The Lean Startup Eric Ries refers to the basic version as the MVP or Minimum Viable Product and the principle is to get an MVP out to your target audience as early as possible, so that you can begin collecting real-life customer data.

Startup organisations are prone to releasing MVPs to a restricted audience right at the start of the Ideation / Development phases.  This is because funding is tight and they need to know that they are on the right track as soon as possible.

For corporate businesses, there is a greater level of reputational risk involved in releasing a product that is not fully fit-for-purpose, along with more stakeholder hoops to navigate.

For these reasons, corporate businesses are prone to leaving MVP releases to later in the Development or early Introduction phases.

All of this quite nicely links us to the next phase in the lifecycle – Introduction.

Useful resources for MVP:


Introduction phase

Product Lifecycle Introduction Phase

There are different ways of introducing new products into the market, ranging from the low-key beta releases that Google opts for through to the media-hyped big-bang launches of Apple.

Your own product launch will be part of your product strategy and you will need to work closely with other stakeholders across the business to agree and prepare the approach.

Useful resources for product launches:

Once the product is publically available, it is effectively in the Introduction phase and the focus will be on moving into position for growth, which involves:

  • Finding Product-market fit
  • Transitioning to Growth

Product-market fit

Finding Product-market fit is critical to achieving growth. Marc Andreessen is credited as being the first person to use the term, which he explains as:

“Product-market fit means being in a good market with a product that can satisfy that market.”

Sounds simple enough, but getting to Product-market fit is more difficult than it would appear. This is why it is important to release an MVP nice and early, then hone in on Product-market fit by continuously iterating and testing.

Finance and resource availability will place a natural constraint on the length of time you spend trying to reach Product-market fit and if good progress is not being made, a decision will be required about pivoting the product in a different direction or withdrawing the product from the market completely.

It is worth noting that reaching Product-market fit is not a single event that will happen overnight.  For this reason, it is worth developing a set of test metrics or indicators that will show a positive transition over a period of time.

Useful resources for Product-market fit:

Transition to growth

When you are confident you have reached Product-market fit, the business needs to start scaling up resources ready for the Growth phase.

In the startup world, growth will be financed by a new round of funding by venture capital investors, whilst in the corporate world, senior managers will approve additional budget to pay for extra resources or to buy-in external supplier assistance.

In addition to changes to the team, everything else about the product (goals, metrics, channels, operational processes, marketing, etc) will experience change and whilst exciting, the change can have quite an emotional impact on the original product team.

Useful resources for Transition to growth:


Growth phase

Product Lifecycle Growth Phase

Growth is a make or break phase for your product.

With sufficient traction and the right conditions, your product can build a substantial user base and become a self-perpetuating growth engine – where new users refer the product to their friends and colleagues, who in turn do the same with their connections.

The period of time your product will grow for depends on a number of factors and it is important to develop a growth strategy, which could include the following activities:

  • Product and feature enhancement / development
  • Marketing / growth hacking
  • Strategic alliances
  • Acquisitions of competitors / related businesses

However, before any major investment is made in new customer acquisition, it is vital to ensure existing users will remain engaged with your product.

Useful resources for growth strategy:

User retention

Trying to grow a product with a poor user retention is like carrying water in a leaky bucket. Whilst you can still move the water from A to B, you’ll lose a lot on the way and end up expending more effort than you would using a non-leaky bucket.

The same principle applies to products that cannot retain the interest of their users. You can still try to grow the user base with customer acquisition activities, but it will require a lot more money and effort to do so, plus the business will have limited sustainability in the long-term.

User retention can be improved with small product enhancements, but it may also be the symptom of a bigger underlying problem. Either way it needs to be given a lot of attention before significant resources are committed to other growth activities.

Useful resources for improving user retention:

Creating a growth engine

Products that do a specific task very well and have habitual features will benefit from word-of-mouth recommendations. As the number of users grow, the number of recommendations also grow.

This self-perpetuating model is known as a growth engine and is how companies like Google and Facebook became so big without needing to advertise.

The diagram below is taken from an article by 500 Startups and shows the growth engine for a mobile app.

Growth Engine

At the start there is Awareness, where you might employ both traditional and contemporary marketing activities to let people know the app exists and how it can help them.

Next up is Download, where a proportion of the audience will commit effort and potentially money to download the app onto their phones.

Activation is where the user commits further effort to go through the steps of creating their account, adding friends, sending their first message, posting their first status update or whatever key tasks the app enables.

Note: Making the Activation process as simple as possible is crucial for getting the user to incorporate the app into their day-to-day and maintaining high retention rates.

Once the user is established and has confidence in the quality of the app, they will be prepared to Share it with friends, family and colleagues.

The viral aspect moves into top-gear as a critical mass is achieved. This means so many people are using the app, that people who are not using it will find themselves at a disadvantage – effectively forcing them to download it and become a user.

Marketing and product management

Marketing communications plays a critical role in driving awareness and ensuring the brand is prevalent amongst your target audience.

However I’m always skeptical about treating marketing as a separate function from product or for marketing being something you do just to get new customers.

In reality product teams should be thinking about marketing right from the beginning – even before they have started to identify user needs.

This ensures the product strategy takes into account things like product positioning, branding, price, quality control and customer service – enabling the entire proposition to be in a strong position to power growth.

Marketing during growth

During the Growth phase, there are a number of marketing activities that can be used to kickstart the growth engine.

Here is a brief summary of the types of activities available:

  • Outbound marketing
  • Inbound marketing
  • Growth hacking
  • Relationship and influencer marketing

Naturally the most effective marketers are those who can combine elements from each group to create campaigns and build the brand.

Outbound marketing

Outbound consists of the traditional ‘push’ marketing activities, such as:

  • Banner advertising
  • In-app advertising
  • Television advertising
  • Radio advertising
  • Newspaper / magazine advertising
  • Out-of-home advertising

This type of marketing is useful for driving general awareness and brand recognition, but is limited in terms of direct response actions.

Useful resources for outbound marketing:

Inbound marketing

Inbound marketing effectively ‘pulls’ in customers who are looking for something to help them solve a problem or enhance their lives.

If you can create and position your product as the resource that helps people achieve a particular goal, then they will be drawn to it when they are proactively searching for help.

Common subsets of inbound marketing include:

  • Content marketing
  • Search engine optimisation
  • Social media marketing

Useful resources for inbound marketing:

Growth hacking

Growth hacking originated in the startup world, where scarce resources resulted in product teams thinking up ingenious technical hacks to grow their customer base.

A great growth hacking case study involves AirBnB, who in their early days hacked a technical solution to automatically post the AirBnB listings onto Craigslist (a popular US-based classified ads site).

The result for AirBnB was immediate access to the established Craigslist audience; helping the startup build awareness, gain new users and provide better value to their existing customers.

In a way growth hacking is a modern-day version of guerrilla marketing, although the term has become very diluted nowadays.

Useful resources for growth hacking:

Relationship and influencer marketing

I’ve lumped these two together, but essentially they concern the development of customer and influencer relationships using social channels and email marketing.

Useful resources for relationship and influencer marketing:

Tracking growth with the AARRR Framework (Pirate Metrics)

I previously referred to the AARRR Framework as the ideal basis for a metrics framework to track progress and here we’ll take a more detailed look at how it can be used.

AARRR covers the key steps in the customer journey and the growth engine:

  • Acquisition
  • Activation
  • Retention
  • Referral
  • Revenue

Whilst originally designed for SaaS (software as a service) startups, the framework is easy to adapt for corporate and not-for-profit organisations.

In the example below, the framework has been set up to track via the channels used to acquire new users (search engines, social media, email marketing, etc):

AARRR Framework

Whilst the percentage figures and est. value are arbitrary, the example would show which Acquisition activities are most effective at bringing in customers and by overlaying data on your marketing spend, you can figure out which activities are the most cost effective.

In addition to customer acquisition, the framework enables you to spot potential problem areas, so for example, the Acquisition and Activation rates may be satisfactory, but the Retention rate is poor.

This should raise alarm bells and allows you to focus product resources on understanding the retention problem.

Useful resources for the AARRR Framework:

Cohort analysis

As you strive for product growth, you and your team will be making on-going improvements and modifications based on customer feedback and other sources of data.

The collective impact of all these improvements must ultimately be positive, but the challenge is knowing whether your product is actually improving over time, as users who signed up in the first month of your product launch will be having a different experience to users who signed up in the sixth month – preventing you from making a fair comparison.

To overcome this problem a technique called cohort analysis is used in the startup world to ensure positive trends and again this can easily be adapted for use in the corporate world.

Useful resources for cohort analysis:


Maturity phase

Product Lifecycle Maturity Phase

Once growth begins to slow down, the product will start transitioning into the Maturity phase.

However mature products can still be very effective cash cow revenue earners and the Maturity phase can easily last for years. Just look at Microsoft’s suite of Office applications as a great example of products that have spent years providing healthy revenues.

Adapting the product strategy for Maturity

Once a product has reached Maturity, the strategy should focus on prolonging the phase for as long as possible.

This might involve:

  • Releasing new features.
  • Re-designing / re-launching / re-branding the product.
  • Acquiring competitors.
  • Finding new distribution channels or purchasing models.
  • Finding new uses.
  • Cutting operational costs.

You could argue that the iPhone operates in a mature market and the key strategies used by Apple to maintain interest are developing new features and launching updated versions of the phone.

This approach will likely keep the iPhone at the top-end of the market for years to come.

Useful resources for managing product maturity:


Decline phase

Product Lifecycle Decline Phase

Eventually all products reach the end of their lifecycle and enter the Decline phase, but whilst sales might be flagging, there are often good reasons for maintaining the product.

A useful exercise at this point is to undertake a Cost-Benefits Analysis, which will help you decide whether to maintain or decommission the product.

Things to consider are:

  • The current costs of maintaining your product (new developments, bug fixes, customer support, marketing, etc).
  • The costs of decommissioning the product.
  • The opportunity costs of maintaining and decommissioning.
  • Any reputational, technical and operational risks involved in maintaining and decommissioning.

Other reasons for maintaining your product in service will include:

  • You are not yet ready to release your replacement product to the market.
  • Your customers need help switching from the current to the replacement product and you cannot decommission it until that transition is complete.
  • Your existing product may find a new lease of life as a free promotional app or as part of an overall package of apps for new customers.

Useful resources for managing products in decline:


Product management skills and techniques

Product Management SkillsThe product lifecycle provides context and an overall framework, but within this there are many specialist skills and techniques required to bring new products to market and deliver them successfully to customers.

This final section takes a more detailed look at those skills and techniques, providing signposts to more detailed resources.

If you are new to product management and want an overview of the role, a good starting point is A day in a life of a product manager.

Strategic analysis

Product managers need to be able to look at the big picture, as well as the details. Areas of strategic analysis include:

Understanding user needs

Getting to the heart of user needs is fundamental to building a successful product, so it is vital for product managers to be able to collect and analyse user needs effectively.

Identifying the user and creating personas:

Capturing user needs:

Using the Jobs-to-be-done framework:

Thinking about Micro-moments (I want to…):

Reviewing analytics and other sources of data:

Mapping customer journeys:

Managing the backlog and prioritisation

The product backlog is the place for sorting user needs into a prioritised order ready for design and development.

Product design

Product managers need to understand design processes and ensure outputs are aligning with product strategy and user needs. In smaller teams, product managers may be required to take on design tasks themselves or work closely with outsourcing partners.

A good starting point is 4 design skills every product manager should have.

Understanding the hierarchy of design:

  • The right design at the right time explains the following design hierarchy:

    • Product design – Designing the product to solve a problem or satisfy a desire
    • Interaction design – Designing the user interface and user experience to be easy to understand and use
    • Visual design – Make the product visually appealing

Mapping user flows:

Designing information architecture:

UI (user interface):

UX (user experience):


User testing:

A/B testing:

Interface writing and micro-copy:

Product development

The ability to work closely with technical teams and understand development processes is essential.  Whilst being able to code is a nice-to-have, being able to converse in technical terms will save a lot of time and help you validate the technical decisions being made.

Useful reading:

Agile development:

Lean development:

Release planning:

Launching and growth

Growing a product involves the right combination of continuous improvement and product marketing to gain and retain new customers. It also relies on product managers being able to work with colleagues in other departments or even other organisations to meet customer needs.

Product launches:

User acquisition:

Landing page optimisation:

Conversion techniques:

Customer onboarding:

Customer experience:


Product managers are often placed into ‘unofficial leadership’ positions; having the responsibility to get things done, but without the line management authority. To meet this challenge, you need to be able to work as an influencer and bring people in your team and other stakeholders along towards a shared product vision.

Useful reading:

Stakeholder management

Internal and external stakeholders will always play a part in your product, especially in corporate environments; so it is important to know how to classify individuals and stakeholder groups, so you can develop appropriate communication and management strategies.

Useful reading:

Customer Discovery – How to discover exactly what your customers need

Customer Discovery ProcessTo build really great products and services for your customers, it’s vital to get into the nitty-gritty of what they really need.  Not what they say or think they need, but what will actually solve their problems and enhance their lives.

Customer Discovery is the concept of getting customers involved in the development of new products and services right from the beginning – something that can massively alter the way businesses perceive their customers and raise the chances of long-term success.

Whilst Customer Discovery processes will vary from organisation to organisation, they should include the following steps:

Step one – Start with market segmentation

Identifying your target market segment gives you a focal point to begin the discovery process and avoids information overload.  Often markets will break down into layers of sub-segments and drilling down to a very specific sub-segment or niche further helps to focus resources.

A good starting point in established organisations will be the corporate strategy documents that should detail the target segments.  In addition to this, discussions with key stakeholders from around the business should merit further insights into the preferred segments.

Once you have identified your target segment, it is useful to create customer personas which will help make the connection with customers more tangible and also make it easier for your team to emphasise with the end user.

Step two – Collect and compile customer data

The next step is to establish what data you currently collect and hold on your target segment.

This could be internally gathered data gained from analytics packages and customer services feedback or it could be secondary data purchased from external sources, such as market research agencies.

By mapping out your existing data sources, you can assess their usefulness and credibility, enabling you to identify gaps in your knowledge base that need to be filled with new research; ideally by directly observing and talking to your target audience through focus groups, one-to-one customer conversations and visiting your customers in their homes or places of work.

Step three – Analyse the data

Analysis of the data should reveal patterns and trends that will lead you to identify potential customer problems.  Further analysis and research should then help you gauge which problems or opportunities are going to have greatest impact amongst your target audience.

Customer problem statements are a good way to illustrate the issue, enabling greater empathy and providing a tangible challenge for your team to take on.

You’ll need to be selective with the number of statements you produce, so it is important to prioritise those that will have the most impact.

Remember that everything from here on in becomes part of an iterative process and the initial set of statements will evolve, grow and re-prioritise as you discover more information.

Step four – Formulate a hypothesis

Scientists use hypotheses to formulate ideas about why things are the way they are, so that they can develop experiments to see if their understanding is correct.  It is an iterative learning process and one that is making a big impact in the business world.

In the context of customer discovery, the aim is to formulate ideas that will solve customer problems and identify ways to test the predicted outcomes.

Each hypothesis can be summarised in a similar statement to the following:

We believe the customer has a need to do X, and that we can satisfy this need by offering them Y. We will test this by doing Z and are expecting the following outcomes…

In addition to the statement, there will be supporting documentation for each hypothesis and for big experiments some sort of budget / risk sign-off.

As with the problem statements, you’ll need to prioritise what becomes a hypothesis and be aware that each one will evolve as new information and learning is gained.

Step five – Experiment and validate

The number of experiments you can run at any one time will be limited by factors such as their size and your own resource limits, so again it is important to prioritise the hypotheses that you will be testing.

Taking the highest-priority hypothesis from your list, you will need to design an experiment that will test whether doing Z will result in the outcomes that you predicted.

Experiments will vary significantly in terms of size and methodology – ranging from simple A/B tests through to focus group reviews of mock-ups and right the way through to fully-fledged prototypes that are launched to a limited audience.

Once you have run the experiment, you will need to analyse the data to validate the customer need and depending on the results you and your team see, decide whether to refine, alter, expand or simply reject the hypothesis completely.

Remember positive and negative results are all useful

Try not to be despondent if your experiments do not provide the results you were expecting, as negative results still provide very useful feedback and help you decide on a slightly different methodology or confirm that the expected customer problem is not really a concern (providing you have conducted the test in a robust way).

With consistent testing, you’ll soon begin to see more positive results appear and find yourself on the path towards better customer experiences.

A five step process for developing a digital customer experience strategy

Many organisations talk up the importance of customer experience, but lack a well-formed CX strategy – let alone an aligned strategy for digital experiences. This makes it difficult for their leaders to determine how they can provide a better service to customers or prioritise resources.

In this article, we look at the five steps that will enable you to develop a digital customer experience strategy that supports your corporate objectives, aligns with your brand values and meets your customer’s needs.

Digital experience strategy development process

Step one – Understand the business objectives

The organisation’s mission and corporate objectives should guide the development of all underlying business strategies, including digital experience.  In short any experience developed for customers must contribute to the achievement of the organisation’s objectives and fulfil the brand values aspired to.

Branding is particularly important in this context, as the digital experience customers receive will directly impact their opinion of the brand, so it is very important to be consistent.

The best starting point is to review corporate strategy documents and operational plans.  These will provide an initial view, but bear in mind documents often only tell half the story, so it is important to schedule meetings with key stakeholders to get the real insights.

Step two – Develop a deep understanding of the target customers and their goals

Business objectives don’t always align with customer goals and to build engaging digital experiences for your customers, you’ll need to balance their needs against those of the organisation.

This means really getting to know your customer and immersing yourself in their world to understand their goals, motivations and behaviours.

Some useful tools and techniques to consider for this task include customer personas, one-to-one interviews, surveys, customer journey mapping, jobs-to-be-done and/or user stories.

Step three – Map out and assess your digital assets

Now it is time to move into audit mode and understand all the different digital touchpoints that your customers might come into contact with when engaging with your organisation.

Bear in mind that behind every great customer touchpoint there is a whole host of backoffice support; so it is also a good idea to map out all the backoffice teams, tools and systems that make your touchpoints happen.

Examples of digital touchpoints include:

  • Websites
  • Apps
  • Social media pages
  • Search presence
  • Podcasts
  • Point-of-sale and kiosks (e.g. ATMs, customer self-service points)
  • Digital billboards and signage
  • Gadgets and devices developed by your business to deliver your product (e.g. Amazon Firestick)

The backoffice assets supporting them can include:

  • Customer databases
  • Digital teams / key staff members
  • Tools (analytics, email mailing lists, behavioural insights)
  • Core systems and processes

As you build up your map of digital assets you can begin assessing how effective they are in meeting customer needs, so that this information can feed into strategy formulation step.

Step four – Map out the competitive landscape

Understanding the competitive landscape is another important step and it will enable you to compare how well your organisation’s digital experience compares to your competitors and provide a source of inspiration for new experience innovations.

This benchmarking exercise can range from a high-level review through to a much more detailed assessment and there are many tools to help you carry out a competitor benchmarking exercise.

Step five – Formulate your digital experience strategy

Steps 1 to 4 all focus on gathering sufficient information and insight to enable you to establish your current position in the market and understand the general direction of where you need to get to.

The final step is different in that it focuses on defining the specific destination and the details on how you will get there.

Essentially there are three questions to answer:

  • What outcomes do we want to achieve? – Remembering that all business activities should jointly link through to the corporate objectives, brand aspirations and customer goals; you will need to define the outcomes of the digital experience strategy.  Examples could include higher customer conversions, improved retention rates or more referrals.
  • How will we achieve the outcomes? – Knowing a very specific outcome enables you to put together a roadmap of highly targeted activities to achieve it. Examples of these activities could include improvements to high priority touchpoints or improvements to a core product to overcome previously discovered issues.
  • How will we measure success? – The final aspect is determining how to measure the impact of the digital experience strategy so that you know you are on the right track. One approach would be to define KPIs (Key Performance Indicators) or OKRs (Objectives and Key Results) to provide a tangible measure.

Implementing and optimising your digital experience strategy

Strategy development is just the starting point and the real test begins with the execution.  To succeed you’ll need to refine and optimise the strategy based on a continuous cycle of Build > Measure > Learn.  This enables you to pivot based on new findings and information gained from the delivery experience, making your organisation much more competitive.

What is DX?

In a world of simple price comparison and customer reviews, a place of choice where the next competitor is just a click away, organisations are increasingly looking at positive customer experiences to differentiate themselves from their rivals.

This practice of customer experience management is referred to as CX and takes into account all the processes, connections, touchpoints and interactions that make up the experience people have whilst interacting with a brand or organisation.

The more straightforward and positive the experience, the more likely customers are to complete their transactions, enabling those businesses to compete and grow.

DX (also referred to as Digital CX or DCX) is a subset of CX and focuses exclusively on the digital elements of the experience.

As the sketch below illustrates, there are a broad range of elements that contribute to the digital experience and the goal is to manage these to provide positive outcomes for the customer.

Elements of DX

To help quantify a ‘positive digital experience’, it is useful to use the following criteria:

A positive digital experience…

  • meets the customer’s needs – Enabling the customer to solve their problem is a must-have.
  • is easy to do – This is also really important, as customers don’t want to exert significant mental and physical effort learning how to use new products or services.
  • is enjoyable – Once you’ve ticked off the two items above, the next step is optimising the experience so that customers leave with that ‘warm, fuzzy’ feeling and are keen to return and recommend it.

It’s also worth noting that DX is often mistaken for UX (user experience), but these are not the same thing.

UX focuses on the customer-facing aspects of the product or service that a person is using, such as the interface of a website or app.  It is one of the factors that contributes to the overall digital experience.

Why positive digital experiences are so important

Unfortunately developing positive digital experiences is harder than it sounds and while many companies have ambitions in this area, they don’t always succeed.

For those organisations that do succeed however, the benefits are very worthwhile.

Here are some examples:

  • Improved conversion rates – new customers are expensive to acquire, so you want to ensure their first experience of your brand will motivate them to complete the initial transaction (e.g. sign-up for your newsletter, make an enquiry, make a purchase) before they leave.
  • Improved retention rates – Completing the initial transaction and successfully onboarding the customer to your brand is important, because you will want them to keep on returning for more in the future, especially as returning customers are significantly more profitable than new customers once you have covered their initial acquisition cost.
  • Improved referral rates – Happy customers who have had a positive experience will be glad to refer your company to friends and colleagues, which means you get more customers without having to spend so much on acquisition marketing. At the same time unhappy customers who have had negative experiences are less likely to return and will probably advise others not to use your business.
  • Increased brand value – Positive experiences increase the value of your brand, which in turn helps you avoid competing on price, allowing you to charge premium prices and increase profitability.
  • Increased efficiency – Improving customer experiences forces organisations to look at ways to become more productive and efficient, making them more profitable in the process.
  • Happier employees – Staff are core to all organisations and the increased levels of training  and autonomy helps to reduce staff turnover, meaning less disruption to service and lower recruitment costs.

Learning how to manage the digital experience

As digital has become central to the success of nearly every organisation, it is vital for businesses to have the knowledge, tools and skills to continuously improve the digital experiences they provide.

This blog has been set up to become a hub of experience design resources, where people can learn more about digital experience design, find new ideas and inspiration.

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