Two weeks ago I wrote an article on how consumers’ habits will change in the next 21 days (if you have not read it, click on the link below) where I discussed how the importance of habits for product strategies, how macro-factors in our environment help form these habits and why Covid-19 will be a game changer regarding this.
What has happened so far?
In my previous article, I used online supermarkets as an example of a product that thrives due to macro-factors as they make the majority of their revenue when it rains as users stay home and order online.
To quote the previous article, below is a few snippets to give more context on the above:
“An interesting occurrence that is seen with this 3% online supermarket sector is that the majority of the sales happen when there is rainy weather as consumers would prefer to stay home and have their groceries delivered to them. This is a clear example of how Macro factors can work in favour for business.
Coronavirus is a macro factor on steroids and how is this an opportunity to create a habit for your business?
Just like if it had to rain for 21 days straight, this would increase the about of habit-driven customers using online supermarkets, the coronavirus can be your window to create a habit that will drive revenue to your business”
To stick to this example, below is what has happened to online supermarkets since Covid-19 has become mainstream news to Malta and the article was written:
Above are the average searches for the keyword ‘online supermarket’ on Google in Malta, as you can see that traffic has 5Xed and online supermarkets sales will spike as a result. So far, most people would have predicted this and won’t be surprised with this occurrence.
What will surprise most business owners is that this is not a temporary change.
While a minority of business owners have recognised the effect this period will have on their business, majority have not and are waiting for this period to be over and for everything to go back to normal. In my experience with launching 20 products in the past 3 years, there is nothing to suggest that this will happen.
Below is a graph that is of the core principles behind habit forming, which is Frequency vs Perceived Utility.
To simplify the above if you do something often enough and it provides enough value, it will become a habit and since users will look to maintain their quality of life as much as possible (Perceived Utility) while doing most activities remotely for a sustained period of time (Frequency), they will more than likely pick up new habits and replace the old ones.
Another example of this –
What will happen to marketing agencies and their customers?
The customer of a marketing agency is obviously a business, so let’s breakdown the current behaviour of businesses.
Majority of businesses are struggling like never before, which means they are currently creating business continuity plans. This involves creating an expenses list of their entire business and reducing it as much as possible to help with cash flow. Without them knowing, they will ask themselves three questions:
Since a marketing agency is a 3rd party service they are more than likely to fall underneath questions 2 & 3 and not be considered an essential if they are offering services like building websites or social media services as that can be done cheaper through freelancers or in-house at this precarious moment. There is no doubt that there will be marketing agencies in this period that will not make it.
The marketing agencies that will service are the ones that fall under question 1, that the businesses consider them as strategic product partners that will get them through this tough time. Campaigns and websites can get done in other ways, but only agencies only have mountains of historical data from all industries on how to get results for your business and products.
Ok you now know what’s happening – It is time for customer centric product strategy.
Creating a product strategy
With keeping in mind the fast changes in user behaviour taken place, your company needs to move with it.
Your product strategy is the set of choices in which you make when setting out what you will be selling to your customers. This is mainly driven by the following:
- Your Mission Statement – What is your company’s Why?
- What habits do your customers have in your sector – how much do they spend? How often do they face this problem? What motivates them? What are their pain-points?
- How will we effectively communicate this?
- Action plan – what finances and tech do you have at your proposal to create your product?
The main driver of success when building a product = are you customer obsessed?
After reading this title you will ask – how do I know if I am customer obsessed or not?, so here is a list of questions to confirm this:
- If you had to break down your business into 3 personas, who would they be?
- Are you capable of splitting up the 3 personas into percentages?
- What is the main motivator that is communicated per persona?
- What is the retention rate per persona?
- What is the referral rate per persona?
- What is the total revenue per persona per annum? In our experience, products that make below 700 euro per customer per year in most cases end up stopping.
If you haven’t asked yourself the above questions, it’s time to get cracking. This black-swan event is leading to consumer habitual changes. The companies who adapt their digital product strategy to capitalise from these changes will prevail and disrupt customer preferences.
ANCHOVY. Are offering product strategy calls where we will build a straight to the point action plan to scope out your new digital product and services where we will scope the above.
To get in touch, contact firstname.lastname@example.org