Most companies looking to launch new products are aware of what the development process entails. Yet research shows that regardless of company size or reputation, 70% of new products fail to meet sales expectations — if they even make it to market. So, what can companies do to improve their product outcomes and likelihood of market success? The answer lies in product due diligence, a robust assessment of various product aspects. From strategy and processes to design, user experience, and team structure, due diligence is designed to identify risks and ensure informed decision-making. In this piece, we’ll examine the most prevalent product development issues and how due diligence can help companies overcome them to release stronger products.
The cost of poor product strategy
Product strategy helps companies outline product goals and map them to the development lifecycle. The costs of poor product strategy can be significant, affecting a company’s bottom line and its long-term market position. Without a well-defined strategy, companies risk their products missing the mark on customer needs, leading to low adoption rates, underwhelming sales, and diminished brand credibility. In addition, poorly optimized product processes often lead to decreased efficiency of product teams, missed deadlines, and a reduction in product quality. Ultimately, these shortcomings erode customer trust, driving dissatisfaction and churn. Let’s take a look at some of the other common product development pitfalls.
Vague or unclear value proposition
A strong value proposition clearly communicates the unique value of your product to a defined target audience by addressing their specific needs and challenges. It articulates the problem being solved, highlights key differentiators, and outlines the benefits for the customer. Without a clearly defined value proposition, companies can make it difficult for customers to understand why they should choose a particular product. This leads to poor market differentiation and customer interest.
Undefined development and strategy processes
Companies need to create a process for product strategy development that maps each phase of the lifecycle to concrete actions and team responsibilities. Without this, they risk poor prioritization and resource allocation, development delays, and inconsistent product quality. Such misaligned efforts can ultimately undermine market competitiveness and hinder overall product success.
No plan for growth and evolution
One of the biggest misconceptions is that once a company launches a product, the work is done. In reality, failing to plan for a product’s growth and evolution can undermine long-term success. Products must adapt to market changes and emerging trends; if not, companies will miss opportunities for innovation and be unable to maintain a competitive advantage.
Failure to collect and incorporate customer feedback
Without a customer feedback loop, companies risk making decisions based on assumptions and quantitative data alone. Without qualitative customer feedback, this limited product perspective can lead to features that don’t resonate with users and critical issues that impact customer satisfaction.
Lack of coordination between teams and departments
Team coordination aligns individual efforts and responsibilities, ensuring the company can reach product goals. When teams are siloed, it can significantly hinder development timelines and final product quality. Poor team coordination can lead to conflicting priorities and disjointed efforts, causing delays and wasted resources.
The strategic edge: What robust product due diligence brings to the table
Product due diligence can help you remove potential roadblocks, mitigate risks, improve your product strategy, and enhance design quality, operational efficiency, and user satisfaction. The comprehensive product assessment should encompass the entire product lifecycle to include vision and goals, target markets, value proposition, and competitive analysis. Due diligence should also help refine the product roadmap, go-to-market strategy, and key performance indicators (KPIs) to accurately measure product performance, adoption, and user satisfaction. Let’s explore the most important features of a complete due diligence approach.
Enhancing product strategy and execution
Research shows that a staggering 95% of newly launched products miss the mark. A lack of market research, poor product-market fit, and inadequate planning, testing, and execution can cause even great ideas to fall short. Assessing product strategy and execution can help companies improve their chances of success. Here is what an assessment should cover:
- Market research and competitive analysis: This analysis determines whether your product addresses a significant market need or pain point, potential market size, customer segments, and how your product is different from other solutions on the market.
- Strategic alignment: Evaluates how the product vision aligns with broader business goals and long-term objectives.
- Testing and user feedback loops: Analyzes the product’s quality assessment results and customer feedback, integrating both through iterative improvements.
- Development roadmap: Clearly defines milestones, timelines, and resource allocation to ensure timely and efficient product delivery.
- KPIs: Assesses performance metrics related to the product’s success, such as user adoption rates, customer satisfaction scores, and financial performance. It’s crucial to evaluate these metrics against industry standards to ensure they are relevant and effective measurements of progress. This comparison helps identify areas for improvement and ensures that the product is meeting or exceeding industry benchmarks.
Improving the product operating model
A product operating model is an organizational framework that determines how teams and processes deliver value through products. Assessing this model evaluates the efficiency and scalability of a company’s processes, ensuring performance and growth optimization and alignment with overall business objectives. The analysis should include:
- Product and development team assessment: Examining the team’s size, structure, roles and responsibilities, and collaboration practices to ensure proper goal alignment and prioritization.
- Process and workflow assessment: Analyzing current workflows to identify inefficiencies, bottlenecks, redundancies, and scalability potential.
- Tech stack assessment: Evaluating a product’s technology stack, focusing on the specific tools, their integration capabilities, and alignment with the project’s objectives.
Elevating design and user experience
Research shows that 70% of Gen Z expect websites to know what they want intuitively. This stat demonstrates how companies will have to pivot to their design strategies to keep up with younger consumers. To ensure product design ticks every box of user preferences, companies should quickly assess the following:
- Visual design quality, usability, accessibility, and UI/UX: Ongoing assessments of these aspects are essential to ensure both aesthetic and functional elements of design align with customer expectations and industry best practices. Incorporating user feedback and conducting usability testing allows companies to provide a more seamless experience.
- Design alignment: Assessing how all design outputs, artifacts, and processes align with user needs, business goals, and brand identity. Alignment audits ensure a unified approach that enhances user engagement, boosts customer satisfaction, and creates a coherent brand image.
Improving cost-efficiency
Well-executed due diligence helps reduce the likelihood of expensive recalls and delayed or failed launches by catching potential issues during the planning and development phases. A thorough due diligence assessment should also examine possible cost strategies, focusing on cost-benefit analysis and the product’s long-term financial feasibility.
Improving user satisfaction
Product due diligence offers useful data-driven insights by focusing on user feedback and key user satisfaction metrics, such as the net promoter score (NPS) and customer satisfaction score (CSAT). This allows companies to adapt products to meet user preferences in real time, ultimately driving higher satisfaction and long-term product success. In fact, research shows that 66% of users want to have a say in the product creation process.
The price of neglecting product due diligence
As the product development landscape rapidly transforms with advancements in technology, a thorough product due diligence process is crucial for companies aiming to innovate and scale effectively.
What works for a certain geography, market, or industry may not necessarily translate to another due to varying consumer behaviors, regulatory environments, and competitive landscapes. Tailoring due diligence to reflect these specific expectations is essential for companies to stay relevant and competitive in today’s dynamic market. In addition to leveraging due diligence to address specific market concerns, the process can be used to mitigate risks and uncover valuable insights that can drive strategic decision-making and enhance product-market fit.
Validating every stage of your product lifecycle with speed and confidence
Whether you want to scale your products vertically or horizontally, improve your company’s overall product strategy, accelerate time to market, or assess and enhance internal product capabilities, HTEC’s due diligence services can help you optimize and safeguard your entire product lifecycle. Using a bespoke 85-checkpoint process, our product and design experts provide personalized recommendations to address potential issues, drive strategic improvements, and ensure your product’s success at every stage.
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