Customer Experience — March 13, 2024

Building confidence in your digital products

How following a CX-driven product development process can help you fail smarter, move faster, and build digital products with confidence.

by Jennifer LaRue

Innovation Product Development

Designer and developer collaborating digitally, building confidence in your digital products

We’ve all heard the statistic: 95 percent of new digital products fail. While this number has faced some scrutiny, its underlying principle holds: it’s hard to build a successful digital product that delivers value to both your customer and your business.

A 2023 survey of 400 US tech executives found that 51 percent have seen no increase in performance or profitability from their digital transformation investments in the past two years. And while digital transformation done well can produce extraordinary value (as much as $1.25 trillion), an ill-advised approach could jeopardize as much as $1.5 trillion.

A crisis of confidence

With statistics like these, it’s understandable that companies are sometimes reticent to invest in digital initiatives. Sure, the rewards can be immense but the risks are even greater–and the numbers aren’t on your side.

This crippling combination of pressure to innovate, build, and launch new products and the risks undertaken by doing so is enough to paralyze even the most bold and forward-thinking among us.

The insurance industry, which was notoriously late to digital transformation, made tremendous strides during the pandemic years. But with an uncertain economy, inflation, and record-breaking insured losses, spending on digital investments, while still increasing, is understandably more cautious. Decision-makers want assurances that their investments will have an impact.

How do insurance companies move beyond inertia and confidently invest in building digital products when the chances of failure remain high?

Embracing failure

The potential for failure is seldom a good reason for not doing something. Even the smartest ideas with the best intentions can fail when poorly executed. In fact, as cheesy as it sounds, failing is a necessary part of success. Building digital products people love that make money for your business isn’t about avoiding failure – it’s about finding better ways to fail: ways to fail faster, earlier, and smaller. It’s about embracing failure as an opportunity to learn and improve, or, in other words, adapting a beta mindset.

Embracing failure isn’t just a switch you can turn on and off. There are tactical strategies built into a CX-driven product development lifecycle that help teams embrace and learn from failure, all while building confidence in what they are making. While these aren’t fail-proof strategies, they will increase the likelihood that your product will not only someday see the light of day, but will also generate profit and revenue.

Before you build: building the right thing

Building the right thing requires building on a solid foundation. One of the biggest mistakes we see our clients make is coming to us to design and build a digital product without doing their due diligence first. They don’t have a clear vision for the product, they aren’t sure who it is for, or if their customers are truly even interested in it. 

The most important thing you can do to build confidence in your product is to know you are building the right thing from the outset. Investing in UX design and research early to define the vision, check assumptions, validate concepts, and test demand with users before moving forward will de-risk your investment, and if need be, help you fail faster—long before spending thousands or even millions of dollars on development. 

How do you know you are building the right thing?

Depending on the product, the scenario, or where you are in the journey there are many ways to go about this. Here are just a few, which all involve getting to know your customer better and uncovering and empathizing with their needs to ensure you are building something they want:

Do exploratory research

If you are in the innovation stage and looking for opportunities for new product development, exploratory research can help you further explore a problem space to identify experience gaps and opportunities. Exploratory research can be done in a variety of ways – often through surveys and/or qualitative interviews. For example, you might be interested in developing a new pet insurance product geared toward GenZ consumers. Instead of relying on your assumptions of what GenZ pet owners want in a pet insurance product, you might field a small survey to gut-check your assumptions and identify interesting trends that you can explore through further research, or conduct a handful of qualitative interviews with GenZ pet owners to surface problems or needs not being addressed by the current pet insurance market.

Do ethnographic research

If you’ve already identified your problem space but aren’t sure exactly how to address the customer need, ethnographic research can help; it’s a type of research used to observe people and understand their needs before worrying about available features.

For example, agents have been complaining that their quote and bind tool is “dated” and “difficult to use.” They are constantly requesting new features. In observing agents conducting their work through ethnographic research, you may find that while your agents said they wanted a print function to download policy information, what they need is an easier way to compare information between policies. A print function was just a clunky hack for an already clunky system. Instead of continuing to throw good money after bad, ethnographic research can help identify the actual problems your users are facing so you can design more eloquent solutions that get to the heart of the problem and create more value for users.

Prototype and test with users

Once you’ve done your customer research and start working toward a solution, prototyping and user testing can be a quick way to validate concepts and designs. Even sharing a simple paper prototype with users can yield useful insights: confirming that you are (or are not) on the right track, helping you prioritize certain features, and helping you make decisions early that can save you money later.

As you move through these research methods and validation techniques, you might find that a market is over-saturated, that the solution your customers need is not within your wheelhouse or feasible given your budget, or that the prototype you designed is just not resonating. 

While these might be considered “failures,” uncovering this information early on –before development gets involved—is the point. Now, you have the insights you need to go back to the drawing board and design something better or cut your losses and move onto something else, equipped with more experience and knowledge about your customer because you did the work.

While you build: building the right thing the right way

Just because you did your research doesn’t mean you are in the clear. Often, the development phase is where projects start to break down. Design and development are misaligned, legacy systems or performance issues mangle good UX, unanticipated technical hurdles extend timelines, or, not infrequently, all of the above. 

A common mistake we see insurance companies make is trying to build a flawless product that includes every desirable feature and functions seamlessly in the first release. This is where adapting a beta mindset is critical. Going into development aligned on a clear vision of your MVP and planning for an iterative release cycle can help your team stay focused on what matters and get to the finish line with something that may not be perfect, but is well on its way and will deliver immediate value to users.

How do you know you are building the right thing the right way?

As you start development, there are a handful of high-impact things you can do to avoid these breakdowns and move through the development phase with confidence.

While every company is different and faces unique challenges when it comes to getting products live, these strategies are universally applicable:

Get design and development talking ASAP

Opening the lines of communication and bringing development into the design process as early as possible (even as designers are prototyping) can jump-start development and is among the most important things you can do to keep the project on track. The last thing you want is for your developers to spend two weeks working on something that doesn’t look or function right. Formal design QAs and discovery spikes are good ways to keep everyone aligned and talking regularly.

And if you’re worried your developers don’t want to talk to your designers, you are probably wrong. Recent Figma research found:

  • 80 percent of developers think their business would benefit from designers and developers working more closely together
  • 55 percent of front-end developers want to be brought into the design process earlier.
  • 55 percent think improving the relationship between developers and design would achieve a faster time to market

Use a flexible modular design system

Design systems are, as one designer described them, “the DNA for product design, encoding the principles and elements that define the very experience users interact with.” They often include tech specs, documentation, best practices; component and pattern libraries; and foundational elements like color and typography. Not only do they help keep your UX consistent and on track, but they can save you a lot of time, money, and headaches when it comes to development and will set you up to efficiently scale your product (and other future products) over time. While they may be time-consuming and expensive to build, they have the potential to boost efficiency by up to 7x.  

Build in customer feedback loops

As you build your MVP, keeping sight of your next release is critical. One of the benefits of releasing your product in phases is that it gives you the chance to release your most valuable features and get customer feedback on them to help optimize your product for the next release. Creating your customer feedback loop before your launch will help keep you moving toward phase 2. 

Planning for how this feedback will be gathered (through surveys, customer service touchpoints, unmoderated user tests, and customer research) and fed back into the product development process is work that sets you up to continuously improve your product over time and get ahead of the dreaded product “failure.”

Building a digital product isn’t something “the developers do.” It’s a collaborative process involving multiple stakeholders–designers, developers, product managers, etc. Regular standups where in-progress work is shared and reviewed and where developers and designers solve issues collaboratively can help you identify when things are going off track and reprioritize as necessary, building confidence among your team along the way. And just as in every step in the product development lifecycle, points of failure are more often than not learning opportunities for improving both processes and the products you are building.

After you launch: making sure the right thing is still the right thing

Arriving at the launch phase of a project is a massive accomplishment. 60 percent of products never even make it into the market. Still, getting to market is by no means a guarantee of success. Only 24 percent of products that make it to market ever generate any revenue. 

The good news is that putting in the work early on – to understand your customer and their needs, to validate your product with users, to align on an MVP, and to keep design and development aligned and accountable to one another–puts you in a much better position to succeed. You should feel confident in your digital product, especially if you’ve already planned for an iterative release cycle. 

How do you know the right thing is still the right thing?

At this stage, the most common mistake companies make is treating the project like it’s over. Good digital products are never set-it-and-forget-it. The best digital products are constantly in Beta. Think Apple’s IOS, the AirBnB app, or Spotify. These products are in a continuous cycle of iterative releases: taking in customer feedback and performing user research, designing, testing, and validating new features, and then launching these features with each iterative release. 

Now that your product is live, it’s time to prepare for the next release. What does this process look like?

Hit the backlog

Your MVP is just phase 1. As you were moving through the previous stages of the product development lifecycle, you were likely prioritizing and deprioritizing features based on user research and testing, issues that emerged in the development process, etc. Now is the time to hit that backlog, using your product roadmap and a product prioritization framework to figure out what will make it into phase 2.

Analyze feedback and keep doing research

Before launching your product you ideally already created your customer feedback loop and are ready to start taking in feedback via survey deployments, analytics, semi-automated testing, customer service touchpoints, and continued customer research.

As you start to see a higher volume of users and gather more feedback, capitalize on it. Use it to revisit your plan for phase 2, reprioritize updates and features, and update your product roadmap. 

Make incremental optimizations and evolve with users over time

As your customer feedback loop gets turning and new insights emerge, they should inform the product roadmap, feeding into each iterative release. Remember that even if your product finally feels “complete” your customers will continue to evolve. Pressing on with research and incrementally updating your product will help you move beyond your MVP and ensure your product evolves alongside your customers.

Remember that even if you do “everything right” some products still fail. Still, once a product has gone to market, there is no way to know if the product has failed without clear metrics for success to evaluate against. Some metrics may be tied to specific releases (ie. the success metrics for the MVP are…) while others may be more concrete, passed down from the higher-ups. An iterative release cycle can help you work toward and optimize against these success metrics. 

If, over time, you find you are not meeting your criteria for success, it might be time to pivot. And if you do decide to pivot, remember that everything you did and did not do along the way matters. If nothing else, through this process you got to know your customer better—something few insurance companies can say after a so-called “product failure.” In the best-case scenario, looking back on this process will help you identify points of failure and success and optimize the process for whatever you build next.

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