Businesses today produce thousands of units of product every day. It can be anything: educational courses, online casino games, clothing, IT technology. But they have to be useful and valuable to the customer in order to make a profit. The product approach can help with that.
What Is the Product Approach
Today, the product approach is the most effective method of developing a company’s product that makes a profit. It solves business problems in any environment.
The product approach is a methodology of work, which gives a result in the form of created products. It brings value to the client and business with minimal risks and time costs.
The product approach can be applied wherever it makes a profit. Even in everyday life.
For example, if we want to define a person as a product, we have questions: “What is this person so useful to society and the people around him or her? What result do we need to get in order to increase their value and maximize earnings from it?” After answering those questions, we test to see what skills are really important for that and further test to see how we can get those skills the fastest. Then we have hypotheses about who to sell, automate, and scale that result to.
We looked at the human being as a product, but you can do this with anything: learning, developing communication with people, renovating the house. Our whole world and everything in it is one big product in a chaotic system.
To create a product, you have to take a comprehensive approach to a task. It consists of many subtasks that overlap with each other.
For example, we want to enter the preventive medicine market and talk about the importance of prevention and diagnosis. But we did not take into account that this niche is a long term game. The market exists and will grow, but the client’s need is not fully formed, and because of this, the value of the product is low. It will be difficult to make money from the product.
When we are looking for business development opportunities, we use a set of tools and approaches: an analysis of the market, competitors and trends, audience research and determining the context in which the consumer lives.
At the same time, we define the business and product model, calculate the economics and estimate how and when we will start earning. So it’s hard to talk about individual tools, because they are very interrelated. But we can distinguish four big blocks:
- Market analysis – TAM/SAM/SOM, PESTELI analysis, SWOT analysis, Blue Ocean Canvas, Porter’s 5 forces.
- Business and product – Business and Lean Canvas, Value Chain, Kano model, Market segmentation.
- Research – Persona Canvas, JTBD canvas, Value proposition, Empathy map, CJM.
- Analytics and Finance – NSM metrics, Unit Economics, ABCDX segmentation, RFM / Cohort analytics, AARRR funnel, AIDA model.
Separately we can highlight HOOK model, TRIZ, RAT approach, HADI cycles, and Customer Development approach.
But using only one of the tools will not help to solve the problem. To achieve the goal, it’s necessary to use the product approach comprehensively.