Understanding the Value of Customer-Centric NPD

New product development is a misleading term. Despite having the word development in it, NPD is a multifaceted process with many stages. Essentially, it starts with recognizing an opportunity and ends with delivering a product to the market, so the key steps commonly include:

1. Outlining the strategy

2. Generating ideas

3. Fleshing out the concept

4. Gathering business intelligence

5. Developing the product

6. Testing and refinement

As you can see, the actual development is only a fraction of what you’ll need to do. So, full cycle product development companies are increasingly relying on the study of customer expectations and communicating these expectations to all the involved teams. Fortunately, once established, the customer-centric culture can yield many long-term benefits to business operations.

What Makes a Successful NPD?

Because of its complexity and the number of people involved, NPD needs to be strategically aligned to achieve success. First, it should be systematic, in that the flow of ideas should be coordinated and promoted through innovation management. This can be anything from using common tools such as product lifecycle management and brainstorming to appointing innovation managers. This approach is necessary for creating a culture of innovation crucial for long-term success.

Second, new product development has to be team-centered. That is, the teams involved in the process should work closely together and maintain clear communication, creating what is known as a cross-functional environment. This can be relatively easy to arrange for smaller startups, whereas large companies with multiple locations may require a collaboration platform to include all of the involved parties. Nevertheless, the team-centered approach pays off in the long term by reducing the number of errors tied to miscommunication and saving time and resources.

Finally, NPD needs to be customer-centered. Essentially, this is a sophisticated way of saying that the innovation is guided by what customers want from the product. While this may sound self-evident, there are actually good reasons to pay attention to customer success in the age of digital transformation. The abundance of accessible, high-quality digital products has raised the expectation bar to the unprecedented high: nowadays, more than three-fourth of customers expect exceptional user experience and will go looking elsewhere as soon as the product fails to deliver. In such an environment, a product that is not laser-focused on fulfilling those expectations will have a hard time gaining a competitive edge.

Benefits of Customer-Centric NPD

Nevertheless, it would be wrong to view user-centricity simply as a way to keep up with the competition. In fact, there are several ways a customer-centric approach can actually benefit your business:

• Boosting sales

• Reducing maintenance costs

• Fostering customer engagement

• Optimizing performance

• Differentiating from competitors

• Guiding future growth

The first option is perhaps the most intuitive. The product that addresses customer needs lives on while those that don’t fade into oblivion. On top of that, being in contact with your user base is helpful for keeping the development team on track by detecting and addressing issues early on. A more subtle, yet equally important aspect of customer-centric NPD is the sense of agency your customers get from observing the effects of their feedback. By answering questions and addressing concerns of its audience, the business can demonstrate commitment to delivering value and, over time, create a positive feedback loop where both sides benefit from communication.

Finally, the data gathered from users can provide invaluable insights into your business operations that extend far beyond the product itself. For instance, the shortcomings of the marketing campaign might help to avoid similar stumbles in the future. In the long term, this data can also be useful for better aligning your operations with the company‘s vision.

Checking with the Customers: Example of Mixpanel

The brightest examples of user-centric NPD come from web development services probably because of the central role of UX in this domain. Web platforms usually need to keep up with the pace of change by continuously improving every aspect of their product, which may require digital transformation consulting for larger organizations. In the case of Mixpanel, the powerful analytics platform, this proved to be challenging once the gap has emerged between functionality and user interface. The users reported feeling overwhelmed by the options and menus. Not only did it deteriorate the customer experience but also slowed down the development cycle considerably, as teams had to agree on each new feature.

Mixpanel approached the challenge in a truly user-centric manner. After drafting the changes in UI, they have conducted a series of usability studies and surveys assessing user expectations. They then ran business intelligence analytics to corroborate the findings. This allowed coming up with the optimal design and tweaking the UI to create a smooth experience.

Wrapping Up

New product development is a complex process that relies on a coordinated effort of multiple teams. This is why it is important to maintain a strategic perspective in delivering value to customers. To be fair, product development companies already have their approaches aligned with customer-centricity by relying on user feedback throughout the process. In this light, it makes sense for the management to build upon it by strengthening coordination between departments and maximizing the value of their products.