DATA – the fuel that drives Product Management

Hashedin

Judelyn Gomes and Gaurav Arora

19 Aug 2020

In our previous blog we focused on how product management is the key to surviving disruption. In continuation with our series, this blog emphasizes on the importance of data-driven decision making in product management. Experts widely agree that data plays a vital role in the development of the product as well as the company. Every product manager at some point of time talks about data driven product management but in what way would data-driven decisions enhance the product management journey?

 

The importance of data-driven decision making in product management

 

Data-driven product management has become the talk of the industry lately. The astonishing fact is that product managers have been following a data driven pattern for quite a while. Long gone are the days where gut feeling mattered, data is now every individual’s new best friend. How important is data driven decision making?

 

 

Data-driven product management life cycle

 

Gartner predicts that by 2021, some 75 percent of independent software vendors will embed software usage analytics in their products to inform product management decisions and measure customer health.1 A data-driven product management life cycle constitutes of the following:

 

Problem solving and product assumptions: Problem solving is the key feature of any product management cycle. The major decision that needs to be taken into account is the criticality of the problem and the time involved in solving the same. As we ideate to make a better decision, the one that is backed with data always takes the upper hand. The potential features and assumptions of the product can be built on the data collected and improved by validating the same. Data lies as the base of any product story-line and is the foundation for any product strategy.

Sampling inspection and feedback: The product samples should be inspected based on the data collected and the feedback received from the customers. The best way to improve a product and its sales is by implementing the feedback received from the customers and making the product a customer satisfactory one. According to Product Craft, “A number of software companies offer design partner programs where they recruit customers to test and validate the features of a product before the product gets announced as GA (general availability) in the marketplace.”2 

Data analysis: Data analysis or data evaluation plays an important role in determining the growth of a product. The data collected from customer experience or usability improvement are certain qualities that adhere to professionalism in building a product with facts. It is necessary to maintain a centralized database and enhance a structured data governance for a better outcome of the product and the organization. An analysis of the data collected helps the organization to determine a roadmap which would help them reduce risks and avoid operational losses. 

Tracking and reporting data in the right format: Tracking and reporting of data paves a way for the sales and marketing teams to determine and build a pipeline to launch the product in the market. The data collected should be formulated in the right format as it would help with metrics of usage frequency and retention that are two major key factors that determine the sale of the product. To take a data-driven decision, it is important to keep in mind the following factors, customer conversion, product retention, and engagement scores.

 

 

How can your organization become data-driven?

 

According to Product Management Insider, “91% claimed it’s important or very important to make data-driven decisions, but only 57.4% often or almost always do so.”3 Being data-driven helps navigate the growth of an organization, here’s how:

 

 

The journey to become a data-driven organization can evolve. But the major concern is the momentum lapses that happen once the project is over. The key to growing your organization is to be patient, disciplined and endure the strenuous yet fruitful path to becoming a data-driven organization. As W. Edwards Deming quotes, “Without data, you’re just another person with an opinion.”
 

References:

  1. https://www.dataversity.net/characteristics-data-driven-product-management-development/#
  2. https://productcraft.com/best-practices/the-four-keys-to-data-informed-product-managemen
  3. https://medium.com/pminsider/the-role-of-decision-making-in-the-product-development-journey-cb3f0cbac484

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