Persona usage for product development

Stop making people want your stuff – make stuff people actually want!

Have you ever heard of that saying? In this article, we investigate how data-driven personas assist in developing products with an actual market need and choosing the right product strategy type. This strategy should answer essential questions, such as who the product is intended for (personas), what benefits it will bring to these personas, and what goals the company will pursue with the product during its lifecycle.

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Whether it makes sense to develop and introduce a product to the market, you need answers to the following questions:

  1. What is missing in the current market?
  2. What are customers’ actual needs?
  3. Will the product sell?

And this is where data-driven personas come into play!

Apart from secondary demographic features, the heart of personas is the customers’ needs, pain points, emotions, and triggers towards a product. If you can link these core persona features with current market trends, you have the answers to these questions.

There are many ways to investigate and answer them. Still, we believe that Persona-Product Trend Analysis (PPTA) is probably the most effective way because it combines the benefits of personas like personalization, granularity, and tangibility with the strategic guidance of market research.

Market research papers are often abstract, whereas personas embedded market trends are concrete and provide clear advice to product development, CX, and UX.

To run a successful Persona Product Trend Analysis, you need to investigate the market’s status quo. The first step is to answer the following questions through a qualitative Voice Of Customer analysis based on internal and external data sources.

Does a similar product already exist?

Suppose there is a similar product in the market or within your portfolio. In that case, there is certainly enough data to perform a corresponding analysis based on internal data sources such as surveys, emails/chats/call logs, and external sources like social listening, reviews, blogs, and forums.
You will identify missing product features that clients highly request. Of course, it is essential to cluster those “requests” to prioritize them.

Additionally, by analyzing the Voice of Customer of your competitors, you end up with insights to build a competitive advantage for your own business. You can develop product features that are missing from your competitors’ products and thereby gain market share by promoting precisely these features.

Product Strategy Concept

If the analysis indicates that a new product development makes sense, the next step is to choose the right product strategy.

A product strategy is a roadmap needed to develop your product or feature. It includes all the tasks and information your team needs to ensure a successful launch and encompasses the product’s benefits for the company, describing the problem the product solves and its impact on customers.

70% of companies use this document to guide when questions arise, or critical decisions need to be made. Therefore, it is essential to develop a detailed and thorough strategy to ensure all tasks are completed correctly and on time. It serves as a basis against measuring success before, during, and after production.

No company launches a product that was developed precisely according to the original plan. Things change over time, and product managers need to be prepared to adjust their strategies and priorities to deal with those changes.

A clear product strategy acts as a lighthouse, as a reference point, that will help you to make smarter strategic decisions about how and when to adjust your plans, especially if resources are lost.

This is so important because developers are sometimes overwhelmed by all the details and lose track of the overarching purpose of their work. A product strategy clarifies this for them.
Once the product is ready to hit the market, it guides marketing and sales to articulate its benefits and unique selling proposition. Furthermore, the customer success team will have a clearer understanding of the product’s use cases and allow for better support for users’ frustrations.

Timing is vital when launching a product, so the guide should be dynamic, i.e., adapt quickly to changes in the market. Dynamic data-driven personas can be very helpful here, as they reflect changing customer preferences in real-time.

Product Strategy Components

A product strategy consists of three main components. Let’s go into a little more detail about each element in the following sections to understand where and why personas can play an important role.

product strategy

Market Vision

The market vision describes who will use your product and what impact it will have on the business. It also outlines the target customers and illustrates how you should position your product and how it will perform compared to competitors in this space.

The market vision also describes the go-to-market strategy that identifies customer needs and explains a competitive offering. Persona features such as emotions, needs, or go tos can help do just that. It would be fatal to base a market vision on conjecture alone and not have completed a data-driven persona creation beforehand. This way, the differences to the competitors can be worked out, making the whole process more goal-oriented.

Product Goals

A product strategy only works with key objectives. These precise goals and metrics define what is to be achieved with the development of the product and how to measure success.

Personas can be the tool to define realistic and accurate goals. Your customers usually tell you which products or features they want next. The personas’ representativeness will assist in correctly setting the priorities.

Product Initiatives

Product initiatives are not the same as product goals but similar. They are more conceptual and paraphrase broad ideas or trends for the future.

When we started Mnemonic AI, we didn’t just want to bring “normal” personas to market, mainly consisting of demographic features. Our goal was to redefine personas and to give them a new meaning and significance. We wanted our personas to be helpful to a wide variety of businesses and represent customers’ actual depth and complexity. That’s also why we keep working on our neural networks with a precise goal in mind.

Types of Product Strategies

Types of Product Strategy

Now that we have analyzed the individual building blocks of product strategy, it is time to look at the different types of production strategies. They are divided into three major areas: Business Strategies, Competition Priorities, and Competition Advantages. The importance of data-driven personas depends on the type of strategy you choose. For some, specific persona components are essential to creating them; for others, their importance is less severe.

The top 3 business strategies for product development

Let us look at the three different types of strategies that are bundled together under Business Strategy.

Differentiation Strategy

The company tries to differentiate itself from its competitors through better quality, quantity, prices, appearance, or customer service. For instance, it offers more features and facilities, demonstrates more flexibility in dealing with customers, or offers faster and better delivery.

There are many ways in which a company can differentiate itself from its competitors. If it maintains this uniqueness and difference in product quality or customer service, it can charge higher prices. Personas can play an essential role by demonstrating the most apparent areas for a differentiation strategy. The cluster with the most prominent differentiation feature should be pursued and prioritized accordingly.

Is it perhaps only a small but essential feature that customers miss in the competition and can now lead to an enormous competitive advantage through a minor adjustment of your product.

Cost Leadership Strategy

The company aims to minimize its production costs by producing goods on an immense scale, benefiting from economies of scale. The larger the production scale, the lower the price since the unit cost of raw materials, labor, advertising, sales promotion, research, development, etc., will decrease. Whether this strategy makes sense depends mainly on how price-sensitive customers are. If the personas reflect that the acquisition costs play a minor role, this indicates that this strategy is somewhat inappropriate.

Market Segmentation Strategy

Here, the company divides the market according to the types of customers and produces goods and services according to the customers’ needs. Especially for this strategy, data-driven personas are extremely valuable. As you may remember, needs are the heart of any persona that defines and targets desired products and features.

Personalization is probably the differentiator of the future. Therefore, it makes absolute sense to build products around customer needs and pursue the goal from the first sentence: Finally, build stuff people actually want.

This is why the market segmentation strategy is also called the focus strategy.

The Top 6 Competition Priorities for Product Development

competition-priorities

Cost or Price Strategy

In this strategy, the company sells its product at a meager price, especially when prospects cannot distinguish its product from its competitors and price is the only differentiator. Of course, his strategy only makes sense if customers are price sensitive. In this scenario, a personalized customer approach is often challenging because the customers have the same perception and need for the product. Personas, therefore, play a secondary role.

Quality Strategy

A company that follows the quality strategy produces and sells mainly or exclusively high-quality goods and services. Accordingly, the prices for such goods and services are very high, thus attracting those customers who prefer high-quality products and are willing to pay the required reasonable prices.

It is vital to pay special attention to the design of products. It is expected from the market that product design is constantly improved and new product features are added to meet its customers’ current needs and requirements. Since poorly designed products fail in this market segment, the company must invest wisely to produce high-quality, innovative products free from defects.

The less relevant personas were to the last strategy, the more important they are here. Many companies work with personas that are years old and miss the boat. Data-driven, dynamic personas allow companies to stay on top of changing market conditions and identify changing customer needs promptly. It also becomes easier to prioritize desired features as the personas ideally reflect their importance.

Delivery Strategy

The company delivers its products and services as early as possible and within a specified period. The highest priority is the rapid delivery of products and the availability of services. Therefore, eliminating the problem of shortages and unnecessary delays in the market is critical.

The delivery strategy is a sales tactic to combat predatory competition. Personas play a secondary role in this strategy. If the personas show that fast delivery has no relevance for them, it makes little sense to pursue this strategy since mainly only increased costs result from fast deliveries.

Product-Mix or Flexibility Strategy

When an organization follows a flexibility strategy, it produces and sells a product mix, a group of products. The company does not depend on only one product to survive and grow, which offers many advantages.

However, only large companies with large production capacities can use this strategy. The problem is that especially these organizations have difficulties establishing Customer Centricity. If the portfolio consists of only one product, it is easier to deal with the market and its customers in detail. Personas that reflect specific homogeneous product groups can help counteract a one size fits all approach and develop a personalized marketing strategy, at least on this level. In addition, personas can provide information about whether it makes sense to offer other products in the range to these specific customer groups.

Service Strategy

Here, the company attracts and retains its customers by offering faster and better customer service than its competitors. For example, it provides personalized 24-hour customer service, without long waiting times, with well-trained personnel. This service is delivered directly through the company or a network of call centers. If you analyze customers’ emotions in the course of persona creation, their attitude towards customer service is usually undeniable. In this way, it is possible to identify the current problems in customer service and the areas in which there is an urgent need for action. Our customers often pay special attention to the service step in a customer journey analysis since a high retention rate is usually the decisive point for how successful the company will be in the long term. For this purpose, customer journey-specific personas are created based exclusively on data from clients who already had experience with customer service.

Environmentally Friendly Products

If an environmentally friendly strategy is followed, the company produces and sells environmentally friendly products, also known as green products. This production strategy is relatively new as there has been a shift in sustainability in the last decade. The company tries to reduce pollution by recycling certain materials such as plastic, metals, and paper and producing new products and packaging.

Whether the company is doing it to really do something for the environment or just boost sales by jumping on this trend remains to be seen. But one thing is sure – the company is informing the public about its environmentally friendly production concept through advertising and is thus trying to win over or retain environmentally conscious customer groups. We also see how this trend is reflected in many persona profiles nowadays, and companies try to meet this need specifically on their landing pages, ad copies, etc.

Competitive Advantage

competition advantages

Flexible Response Strategy

A flexible response strategy is when a company makes necessary adjustments in its production plans according to emerging market changes. The emphasis lies on speed and reliability. The company must maintain a strict production schedule to ensure regular and fast delivery of goods to its customers and avoid shortages of goods on the market at all costs. In addition to being a very agile production facility, it requires strict and granular monitoring of the market and changing needs. The company must ensure that the insights are passed on to production in real-time and implemented accordingly. For this process, dynamic personas are used to make the changes tangible.

Low-cost strategy

Here, the company combats massive competition in the market by selling its products at meager prices, but it must maintain the quality of its products. The goods can only be sold at minimum prices if production and distribution costs are kept low. Personas can also provide information about whether the market is suitable for such a strategy at all. If, for example, the zenith of the product life cycle has long been passed and the company still pursues this strategy, it can quickly lead to overcrowded warehouses and takes up resources that are better used to develop new products or features.

The Bottom Line

There is rarely a single valid product strategy. The decision depends on numerous factors and also often on the different types of customers. A product never only has one persona, i.e., a homogeneous group of customers with the exact requirements, needs, and emotions. On average, we see 4-8 personas per product with various attitudes and conditions. Therefore it is essential to get a clear picture of the size and importance of the different customer groups to choose the right data-driven strategy accordingly. If the customer groups are large enough, it also makes sense to pursue and implement different strategies for different customer groups.

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