Sunday, October 18, 2009

Dealing with Customer Enhancement Requests

As a product manager, I often get my usual share of product enhancement request (ER) from customers - usually from the lead customers. In my company we have built an excellent process to document these enhancement requests & all ERs get duly documented and reviewed periodically to develop the Product Requirement Document (PRD).

Good thing about this process is that if we have missed a big functionality in the product, we have a feedback mechanism for customers to request those features and functionalites in the next release. So if it is major functionality - say for example Metro Ethernet or support for BGLP protocol etc, these ERs will get rolled into the PRD and customers will get those features they requested. However, the process has one flaw - minor enhancements which are "nice-to-have" gets dropped out almost every time we drawup the PRD, these Priority-3 requirements will never get built and customer will never get it.

These "nice-to-have" features may not mean much to the product functionality, but implementing this can have big impact on customer satisfaction & customer retention.

I call this as a problem as a hole in product management process. The impact of not doing such "nice-to-have" features is not much in terms of revenue, but it can have a substantial impact on customer satisfaction & customer retention.

Just imagine as a user you made certain requests for new features in MS Outlook and Microsoft delivered it - would be pleased about it? I bet you would be. And if someone from Microsoft calls you up personally and tells you that the feature that you had requested is now available in the latest release of MS Outlook, I bet you will go for the upgrade. Not only that, in such cases, you will remain a loyal customer of Microsoft and may become a evangelist for Outlook as well.

I heard a similar story about Mahindra Scorpio SUV, the owner had given several recommendation for improving the vehicle, and Mahindra implemented those features in the next years model. Now that person never gets tired of promoting Scorpio to all people he could meet.

I have done my inquiry & research with other product managers and found that this problem of "Nice-to-have" priority-3 features is almost universal in the software world. So I decided to find ways to solve it - and there are several ways to solve it. In this article, I have documented three practical methods to solve this problem.

1. Every product release must have 4-5 "Nice-to-have" features.
Since the problem in product development phase is that engineering tends to ignore the priority-3 requirements, make a few of those "Nice-to-have" features mandatory. Product management should classify all the "Nice-to-have" ERs based on customer/market segment importance and then make 4-5 "nice-to-have" & easy-to-do features mandatory in the PRD. This way, few of the requests will be fulfilled.

Do not implement these "nice-to-have" features if it takes substantial engineering efforts or costs.

2. Use the patch release to add small features.

All products will go through minor enhancements/upgrades every year/quarter/month. In the software world, these minor releases can be a monthly release. So every time there is minor release being planned, add 1-2 "nice-to-have" features in everyone of the minor releases.

3. Co-create with customers

This is the era of Open-Innovation, customers are often willing to join hands with the vendor to develop the product. Take advantage of this, and in the early stage of product development, involve the customer to invest engineering resources to develop the feature which the customer wants.

Co-Creation is not for all features or customers. One must exercise caution in choosing co-creation ventures. Ideally, choose your most loyal customer or the lead customer who is really committed to your product. Ask customer to commit time, money, & resources for the project, and once all the commitments are met, go ahead with execution.

Ideally choose features that are important to that customer and that require substantial investments for co-creation projects. In the process negotiate to implement the new feature in ways that helps all other customers as well - avoid getting into a "custom solution" trap where the new feature helps only one customer while it breaks other customers.

Product management should take the lead role of coordinating & negotiating with the customer for the co-development project.

In software world, there are several interesting options for implementing new features. One other way to co-develop the feature with the customer is to provide a product development kit - i.e, a set of tools to the customer so that customer can develop the feature they want themselves and then share that development with the product vendor.

Take the example of iPhone or Facebook. Facebook encourages its customers to develop Facebook apps. Facebook opened up the APIs and software interfaces for third party development and now customers can develop their own applications for Facebook.
When properly implemented, co-creating strategy is the surest way to keep your product relevant to customers & lower the cost of product development at the same time. A customer who has committed to the product by developing certain features in it will never abandon the product.

Closing Thoughts

Product management owes to respond to customer for every product enhancement request. Yet in most organization, many of these ERs which get classified as "Nice-to-have" features get routinely dumped, and product management loses face to answer the customer - this in the long run erodes customer loyalty and can even lead to customer loss. So the solution is to develop the product development process in such a way that these "nice-to-have" features get implemented without costing much. There will be few ERs that require big investments - so choose them carefully and ask the customer if they are interested in co-development of those features. Co-creating, co-invention, co-development are surefire techniques to increase customer loyalty. Co-creation, co-development also places additional burden in product management & project management and if a proper contract is not done, it can open invitation for legal problems. Co-development is not for everybody, it requires a solid legal agreements, customer commitments and solid project planning, project coordination for successful implementation. So chose your co-development projects carefully.

Also see:

Customer as Co-Innovator

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