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The importance of digital product pages

In an online retail course which I did recently, its instructor Ian Jindal talked about the importance of retailers getting their product pages right, making sure these pages are relevant to the consumer. Even though consumers don’t think in terms of traditional sales funnels, and might use a variety of sources to come to a purchase decision, product pages clearly have a very important role to play within this decision-making process.

Ian stressed the opportunities that a product page can provide: (1) to sell in the moment, (2) to cross- or up-sell and (3) to start a conversation with the consumer. One of the main things that I learned is the importance of understanding customer needs and the category that a product fits into. When you’ve built up this understanding, you’ll be able to help the consumer understand the product, its features and its benefits. The way in which one presents a product can be broken down into these three key bits of information:

  • Expertise (product)
  • Support choice (customer)
  • How to buy (operations)

A good example is the website of Nothonthehighstreet, a UK-based site which sells products created by small, creative businesses. Their product details are well presented, acting as a good starting point for a conversation with the customer. Also, customer reviews of the product are integrated in a simple but effective ways as is the relevant delivery information (see Fig. 1 below).

Intrigued by what Nothonthehighstreet have done, I looked at some other good examples of well designed product pages:

  1. Cross-selling – Cross-selling is about offering a similar or complimentary product to the item that the customer is looking at. Amazon and IKEA are good at this, using their “Frequently Bought Together” and “You Might Also Be Interested In” functionality respectively. I’ve learned more about the value of cross- and up-selling through a great Leapfrogg blog post, and I’ve included some of the important value points in Fig. 2 below.
  2. Product imageryMade.com is a good example of compelling product imagery. Made.com is a furniture website which offers its potential customers with clear and detailed visuals of its products. A good example is the product page for the “Bramante” dining table (see Fig. 3 below). People interested in this product will be able to get a better idea about the size and extension of the table, purely from looking at the pictures on the product page.
  3. Product copy – It was interesting to learn more about what makes good product copy. On my aforementioned digital retail course, the instructor Ian Jindal talked a lot about Search Engine Optimisation (‘SEO’) and the importance of product copy reflecting customer search terms. Another key point is highlighting product features and benefits (see Fig. 4 below). It’s easy to get all technical or detailed when describing a product, at the risk of losing the customer in the process. Dyson are a good at keeping it simple; when describing their vacuum cleaners they use technical detail where necessary but prefer to keep it simple when describing product benefits (see Fig. 5 below).

Main learning point: It was good to learn more about the role of product pages and to understand how to get the most out of these pages. If anything, it made me realise about the amount of work and thinking that goes into creating good product descriptions and pages.

Fig. 1 – Screenshot of product details for a grapevine gift crate – Taken from: http://www.notonthehighstreet.com/thegluttonousgardener/product/mini-vineyard

NOTHS 1

 

NOTHS2

NOTHS3

Fig. 2 – The value and examples of cross-selling – Taken from: http://www.leapfrogg.co.uk/froggblog/2012/07/ten-great-examples-of-ecommerce-functionality/

Using a well-executed cross-selling strategy will likely result in:

  • Increased transactions as customers find what they want with greater ease
  • Increased average order values as they add additional items to their basket
  • Greater exposure of your product range
  • Greater exposure to higher margin products
  • Increased customer satisfaction as related products help complete their shopping process quickly

Good examples of cross-selling are IKEA and Amazon:

Screenshot of IKEA’s “You Might Also Be Interested In” and “Complimentary Products” functionality

Screen Shot 2014-12-16 at 07.49.58

 

 

Screen Shot 2014-12-16 at 07.53.18

 

Screenshot of Amazon’s “Frequently Bought Together” functionality:

Screen Shot 2014-12-16 at 07.55.49

Fig. 3 –  Screenshot of the “Bramante” dining table – Taken from: http://www.made.com/tables/bramante-square-extending-dining-table-white

Screen Shot 2014-12-16 at 08.07.17

Fig. 4 – Guidance from content practitioners on how to write good product copy – Taken from: https://econsultancy.com/blog/63911-what-makes-great-ecommerce-product-page-copy

  • Product names should reflect customer terms
  • Copy that reflects the company’s tone of voice and is consistent throughout all products
  • Positioning on the product page
  • Key features and benefits
  • Check for errors
  • Testing all content on the site
  • Write for your user base
  • Think about how much copy is needed
  • Differentiate your product copy

Fig. 5 – Screenshot of the Dyson DC50 – Taken from: http://www.dyson.co.uk/vacuum-cleaners/upright/dc50.aspx

Screen Shot 2014-12-17 at 07.18.20

 

Related links for further learning: 

  1. http://blog.ometria.com/bid/334247/Top-Product-Pages-My-Analysis-of-5-Great-Examples
  2. https://econsultancy.com/blog/63911-what-makes-great-ecommerce-product-page-copy
  3. https://econsultancy.com/blog/63927-20-inspirational-examples-of-product-page-copy-2
  4. http://www.leapfrogg.co.uk/froggblog/2012/07/ten-great-examples-of-ecommerce-functionality/
  5. http://www.creativebloq.com/web-design/responsive-ecommerce-websites-12121456
  6. https://econsultancy.com/blog/65358-15-inspiring-examples-of-ecommerce-product-pages/
 
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Posted by on December 18, 2014 in Amazon, Design, Digital Content, eCommerce

 

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Looking at key omni-channel analytics – Part 1

Over the past few weeks I’ve been learning about retailers and how they sell via a multitude of channels. The next thing for me now is to learn about some key omni-channel analytics. Let’s start with some questions to ask when measuring omni-channel retail and marketing:

  • What is the impact of online channels on offline and vice versa? - Given the fluid nature of consumer decision-making, alternating between online and offline, it’s important to measure the impact of online activities on offline and vice versa.
  • What does the conversion path look like? – How and where do we convert people into paying customers? Where do we lose people and why? Which channels do contribute to conversion and to which degree?

I’ll start by looking at the impact of online activities on offline conversion. I learned an awful lot from a 2008 blog post on tracking offline conversions by data guru Avinash Kaushik. Before I delve into some of Kaushik’s great suggestions, I want to take a step back and think about potential things to measure and why:

  • What is the impact of online channels on offline conversion? – As a product person, I’m keen to understand the relationship between online activities and actual purchases in-store. This understanding helps me to focus on the right online and offline elements of the value proposition, comprehending which things can be optimised inline to achieve  a specific outcome in-store.
  • How do I best measure revenue impact of my website or mobile app in an omni-channel world? - For example, I’ve got a nice eCommerce site or app with a decent amount of traffic, 20% of which gets converted into actual online purchases. However, what happens with the remaining 80% of traffic that doesn’t get converted? Is my website or app delivering some value to this 80%!? If so, how? Can we measure this?

Now, let’s look at some practical tips by Kaushik in this respect:

  1. Track online store locator or directions – If I track in an analytics tool the interactions with the URL for Marks & Spencer’s store locator, I can start learning about the number of Unique Visitors that are using the store locator in a certain time period (see Fig. 1 below). In addition, I can look at the number of visits or visitors where a certain post code or town has been entered into the store locator. I can take this insight as a starting point to learn more about the people within a certain geographical area that have a tendency to use the Marks & Spencer site and its store locator. Once a user then goes on to click on “Show on map” or “Enter an address for directions to this store” you can make some inferences about the user’s intentions to actually visit the M&S store in question.
  2. Use of a promo code – Using an online voucher or promo code is an obvious way to combine online tactics with offline conversion (see a John Lewis example in Fig. 2 below). One can use the promo code as an event in an analytics tool and capture data on e.g. the number of codes or vouchers exchanged in-store vs the number of vouchers sent. I guess the only downside is that you’re unable to capture many interesting insights if a user doesn’t redeem her voucher or code.
  3. Controlled experiments – Running controlled experiments was the bit in Kaushik’s piece that intrigued me the most. The idea behind these experiments is to validate retail ideas in the real world (the same as “experimentation” in a ‘lean’ context, which I’ve written about previously). As Kaushik explains, “the core idea is to try something targeted so that you can correlate the data to your offline data sources (even if you can’t merge it) and detect a signal (impact).” I’ve included some prerequisites for successful experiments in Fig. 3 below. One of them is to isolate the experiment to different states that are far from each other. As Kaushik explains, this way you are isolating “pollutants” to your data (things beyond your control that might give you sub optimal results).

Main learning point: Learning about how online can affect offline conversion felt like a good starting point for my getting a better understanding of the world of omni-channel analytics. The next step for me is to find out more about the impact of offline on online conversion: how can we best measure the impact of what happens offline on the conversion online?

 

Fig. 1 – Screenshot of the results of Mark & Spencer’s store locator 

 

Screen Shot 2014-12-11 at 08.10.26

 

Fig. 2 – Sample John Lewis voucher – Taken from: http://www.dontpayfull.com/at/johnlewis.com

john-lewis-promo-code

 

Fig. 3 – Some points on prerequisites on controlled experiments by  (online) retailers:

  • Clearly defined customer segments of a decent size to quantify the impact of the experiment.
  • Design the experiment in such a way that the results can be isolated and compared in a meaningful way (e.g. IKEA umbrella sales on a rainy vs on a sunny day).
  • Random selection of customers in the control group (who get the current offering) and the treatment group (who get the experimental offering).
  • Clear assumptions and hypotheses which underpin the experiment.
  • Create a feedback loop which allows you to measure or observe how customers respond to different experiments.

Related links for further learning:

  1. https://support.google.com/analytics/answer/1191180?hl=en-GB
  2. http://www.kaushik.net/avinash/multichannel-analytics-tracking-online-impact-offline-campaigns/
  3. http://www.kaushik.net/avinash/tracking-offline-conversions-hope-seven-best-practices-bonus-tips/
  4. http://online-behavior.com/analytics/multi-channel-funnels
  5. http://atlassolutions.com/2014/04/07/atlas-insights-series-is-device-sharing-a-significant-problem-in-ad-delivery-and-measurement/
  6. http://www.kaushik.net/avinash/web-analytics-visitor-tracking-cookies/
  7. http://www.kaushik.net/avinash/excellent-analytics-tip6-measure-days-visits-to-purchase/
  8. http://www.practicalecommerce.com/articles/74215-14-Key-Ecommerce-Events-to-Track-in-Google-Analytics
  9. http://www.shopify.co.uk/blog/15514000-14-ways-to-use-offers-coupons-discounts-and-deals-to-drive-revenue-and-customer-loyalty
  10. http://en.wikipedia.org/wiki/Experiment#Controlled_.28Laboratory.29_experiments
  11. http://www.businessinsider.com/data-revolutionizes-how-companies-sell-2013-4?IR=T
  12. http://sloanreview.mit.edu/article/how-to-win-in-an-omnichannel-world/
  13. https://hbr.org/2011/03/a-step-by-step-guide-to-smart-business-experiments

 

 
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Posted by on December 13, 2014 in Data, eCommerce, Google, Measuring

 

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Learning more about omni-channel retail

I recently did an online retail course and one of the first things that our teacher Ian Jindal said was: “forget thinking about retail in terms of the classic ‘awareness to conversion’ funnel, consumers don’t think that way!”. He went on to explain that consumers nowadays come to a purchasing decision through a multitude of – online and offline – channels, and that they might well skip any customer journeys or experiences carefully designed by a brand or retailer.

As Agile Architect Jason Bloomberg explained in a recent Forbes article: “Omni-channel represents more than simply adding mobile and social media to the mix. It heralds an interconnectedness among touchpoints that from the perspective of the consumer, blurs the distinction among channels.”

It means that even if the traditional sales funnel with its classic four stages – awareness, consideration, intent and decision – still exists, its inputs are likely to come from a variety of online and offline sources. These sources are typically hard for marketeers to fully control or influence. I like how back in 2009, McKinsey described how consumers are shifting from a funnel to narrowing down their purchase options through more of a ‘loop’ (see Fig. 1 below).

These are some of the things that I learned about how to best cater for the changed ways in which consumers make purchasing decisions:

  1. Zero Moment of Truth – Google’s so-called Zero Moment of Truth is all about people making purchasing decisions at the “Zero Moment”; the precise moment when they have a need, intent or question they want answered online. These questions can be as diverse as “Which family car has got the most boot space” or “Which jeans do make my bottom look small?”. The point for brands is to be able to answer these questions at the right time and for the right customer and to be at the consumer’s front of mind when she looks for answers.
  2. Deliver on your promises – In our course, the instructor Ian Jindal stressed the importance of brands delivering on their promises to the consumer. For example, if a retailer promises to deliver within a certain time period, it can’t afford to fall short on this promise. Companies like Amazon and Ocado are all about delivery, so they have to make sure thy get this capability absolutely spot on. A recent MCA report mentions the growing need for omni-channel retailers to increase the number of choices of service offerings available to customers. This inevitably increases operational complexity, which means that back-end systems need to be deliver on the promises made at the ‘front-end’.
  3. The importance of in-store – Don’t think that because there’s mobile and online consumers have stopped caring about stores and their in-store experiences. People are likely to check online first before buying in store and vice versa. It seems that particularly for product categories such as furniture and fashion, bricks and mortar stores still have a significant role to play. A recent AT Kearney study among 3,200 UK and US consumers shows that about 40% of their shopping time is spent online and on mobile, leaving about 60% of shopping time spent in-store. It’s things like iBeacons, QR codes and in-store scanning that help retailers in linking the different channels that consumers interact with. A great example is John Lewis StyleMe, an in-store virtual mirror that lets consumers try on clothes from its online catalogue without people having to undress.

In tandem with having the aforementioned basic elements in place, it’s important to have a clear proposition and to implement this proposition consistently across all your channels. In the course, Ian Jindal talked about the following three perspectives to selling, and which  impact on the content and execution of one’s proposition:

  • Customer segment – Your proposition can be all about your customer; demonstrating customer needs, what makes them tick (and why), etc. A good example is House of Fraser who state that impact on customer satisfaction is a key driver for their development roadmap.
  • Product or service – You offer an excellent product or service, delivering the value for money that your (target) customers are looking for. For example, Aldi – who historically focused more on on price than product – has been growing its product assortment over the last few years to meet its customer needs.
  • Operational capability – Your proposition is all about your operational excellence. A good example of this are Amazon who clearly don’t have the most beautifully designed product pages but rely for a large part on their great service and delivery times.

I guess these are the main two things that I learned about having a retail proposition:

  1. Your proposition is always there - A proposition is something which, as a retailer, you don’t shout about all the time but which should underpin everything you do. As Ian Jindal put it: “proposition isn’t something you market, it’s something that you hear behind your back”. He mentioned Pret A Manger as a good example of a company that has a clear proposition and which is reflected in a lot of the things that it does, both in-store and in its communications (see Fig. 2 below).
  2. Build your proposition on at least 2 out of 3 elements – To build a successful and sustainable retail business you need to have at least two of the these three elements in place: customer segment, product or service and operational capability. John Lewis are a good example, with their focus on both product and operational capability (see Fig. 3 below).

Main learning point: Irrespective of the different channels that are relevant to a retailer and its customers; there are a number of key elements that need to be in place regardless. I believe that there are three key lenses which are applicable: customer segmentation, product or service and operational capability. It was important for me to learn how these lenses impact the retail proposition and how retailers position themselves. The next thing for me to learn about are the key metrics that play a role in retailers’ omni-channel approach to selling.

Fig. 1 – A graphic outline of “The consumer decision journey” by McKinsey & Company – Taken from: http://www.mckinsey.com/insights/marketing_sales/the_consumer_decision_journey

 

McKinsey

 

Fig. 2 – Example of Pret A Manger’s freshness proposition – Taken from: http://blog.kj.com/slow-fast-food/

Pret-A-Manger-Made-Today-Gone-Today

Fig. 3 –  Examples of Waitrose’s values with respect to product and operational capability

  • Product safety
  • Product provenance and integrity
  • Sustainable products
  • Local, regional and british sourcing

JohnLewis

Related links for further learning:

  1. http://tech.co/6-top-dynamics-creating-perfect-ecommerce-website-business-2014-11
  2. https://www.thinkwithgoogle.com/tools/customer-journey-to-online-purchase.html
  3. http://www.fitch.com/think-article/dreaming-exploring-locating-understanding-the-new-customer-journey/
  4. http://vonbismark.com/todays-multichannel-consumer/
  5. https://econsultancy.com/blog/65530-q-a-selfridges-simon-forster-on-the-brand-s-multichannel-retail-strategy
  6. http://futurethinking.ee.co.uk/from-funnels-to-loops-how-mobile-has-disrupted-the-consumer-purchase-cycle/
  7. http://dauofu.blogspot.co.uk/2013/01/multi-channel-analytics-why-every-web.html
  8. http://dauofu.blogspot.co.uk/2013/01/8-simplest-ways-to-track-multi-channel.html
  9. http://www.getelastic.com/omnichannel-vs-multichannel-and-the-store-of-the-future/
  10. http://www.forbes.com/sites/jasonbloomberg/2014/09/30/omnichannel-more-than-a-digital-transformation-buzzword/
  11. http://dauofu.blogspot.co.uk/2013/01/multi-channel-analytics-why-every-web.html
  12. http://www.mckinsey.com/insights/marketing_sales/the_consumer_decision_journey
  13. http://www.mca.org.uk/news/updates/omni-channel-in-2014-retail-at-a-crossroads
  14. https://www.udemy.com/blog/unique-selling-proposition-examples/
 
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Posted by on December 9, 2014 in Amazon, eCommerce, Measuring, Online Trends

 

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Mr & Mrs Smith – Learning from Tamara Heber-Percy

Last week I wrote about Mr & Mrs Smith, a 12-year old UK company that curates luxury boutique hotels, and its personalisation drive. A few days ago I attended a talk by Tamara Heber-Percy, co-founder and CTO of Mr & Mrs Smith. In this talk, largely aimed at MBA students at London Business School, Tamara talked about the history of Mr & Mrs Smith. She explained how the idea for the business had come about and what kind of lessons she and her husband, James Lohan (co-founder and CEO of Mr & Mrs Smith) had learned along the way.

These are the main three things that I learned from Tamara’s talk:

  1. The importance of brand and brand values – Tamara explained that for Mr & Mrs Smith “brand is everything”. For Mr & Mrs Smith, its brand stands for a number of things, which they live and breathe on a daily basis. For example, “trustworthy” might sound like a tired and overused value in some peoples’ ears, but one can easily see how important it is for Mr & Mrs Smith to win and keep the trust of the people making hotel bookings through their site.
  2. Customer understanding – Especially as Mr & Mrs Smith continues to grow and extend its brand architecture (e.g. through adding Smith & Family to its offering) it’s critical that it keeps a good understanding of the different customer segments that it serves. As I mentioned in my earlier blog post Mr & Mrs Smith has been concentrating recently on how to best serve different customer needs, making sure that it’s marketing approach is fully personalised and relevant. Tamara mentioned the importance of creating intent with the right customer, being in a position where Mr & Mrs Smith can be more proactive in offering the right “great find” hotels to the right customers. She also talked about omni-channel marketing in this respect as the decision-making process of today’s customer is a lot less linear than it might have been a decade ago.
  3. Creating and growing a team – Tamara talked about some of the challenges of managing a bigger team. However, it was her lesson learned about only hiring people “who are as passionate as you” that resonated with me the most. She quoted one of her colleagues who had talked about “hiring brains not bodies” and I couldn’t agree more. It’s so easy to look exclusively at attributes such as experience, academic credentials and skills whilst forgetting to get a sense of how much a future employee cares about the product, customers and brand.

Main learning point: Tamara Heber-Percy shared an inspiring story of how Mr & Mrs Smith started and how it has evolved. She was very open about some of the opportunities and challenges that her business faces. The importance of having a solid customer understanding was the aspect of Tamara’s talk that I related to the most; being totally customer centric and providing a personalised approach to each customer.

Tamara Heber-Percy – Taken from: http://www.marketingweek.com/2014/10/22/qa-tamara-heber-percy-mr-mrs-smith/

Tamara Heber-Percy

 
 

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Learning about relational data models and databases

The other day I did a mini-course online about relational databases with Stanford Online. The course is taught by Stanford Professor Jennifer Widom and is aimed at relative database novices like me.

Jennifer started off the course by providing some useful characteristics of a Database Management System (‘DBMS’):

“Efficient, reliable, , convenient and safe multi-user storage of and access to massive amounts of persistent data”

  • Massive scale – Jennifer talked about databases with the potential for terabytes of data.
  • Persistent – The database always outlives the programme that will operate on its data.
  • Safe – Power or hardware failures for examples shouldn’t affect the database.
  • Multi-user – Jennifer talked about concurrency control in this respect.
  • Convenient – The convenience of DBMS comes for a large part from ‘physical data independence’, i.e. operations on the data are independent of the way in which the data is laid out.
  • Efficient – This relates to database performance, e.g. thousands of queries/updates per second.
  • Reliable – Jennifer pointed out that with databases 99.999999% up-time is critical.

Jennifer then went on to break down the structure of a database into to its most basic elements, something which I actually found quite helpful:

  • Database is a set of named relations (or tables)
  • Each relation has a set of named attributes (or columns)
  • Each tuple (or row) has a value for each attribute
  • Each attribute has a type (or domain)
  • A database schema is a structural description of relations in a database
  • An instance contains the actual contents at a given point in time
  • “Null” is a special value for “unknown” or “undefined”
  • A key is an attribute whose value is unique in each tuple (e.g. a student ID) or a set of attributes whose combined values are unique
  • Having unique keys helps to (1) identify specific tuples (columns) (2) fast indexing of the database and (3) refers to tuples of another key

In the session, Jennifer gave a first flavour of how to create relations (table) in SQL, which is commonly used database programming language. I found below example which Jennifer gave to be very helpful:

Create Table Student (ID, name, GPA, photo)

Create Table College (name string*, state char*, enrolment integer*)  * These are all attribute types

She then went on to talk a bit about querying relational databases, outlining common steps in creating and using a (relational) database:

  1. Design schema – Create a schema which describes the relations within a database, using a Data Definition Language (‘DDL’)
  2. “Bulk load” initial data – Load the initial data into the database
  3. Repeat – Execute queries and modifications

Jennifer then finished off by giving an example of a SQL query that returns the follow relation: “IDs of students with GPA > 3.7 applying to Stanford”. In SQL this query would look something like this:

Select Student ID

From Student, Apply

Where Student ID = Apply ID

And GPA > 3.7 and college = ‘Stanford”

Main learning point: I’ve clearly got my work cut out for me, but I felt that this first mini-course on relational data models and databases was incredibly helpful and easy to understand. I’m hoping I can build on these first foundations and understand more about how to best structure SQL queries and interpret the relations that these queries return.

 

 
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Posted by on December 3, 2014 in Data, Measuring

 

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Mr & Mrs Smith’s personalisation drive

I’m pretty familiar with recommendations and personalisation in media; companies like Spotify and Netflix specialise in providing their users with relevant content based on their -implicit and explicit- preferences. The other day, I found out about luxury online hotel booking site Mr & Mrs Smith starting to provide more personalised content to its customers. I looked into what this means for a business like Mr & Mrs Smith and for its (target) customers:

  1. Why? – Mr & Mrs Smith wants to provide its customers personalised communications and experiences, tailored to the interests and preferences of the individual customer. The hotel booking site wants to create a single of view of its customers, across its multiple channels. Mr & Mrs Smith’s main channels are its website, its app, email and its call-centre. A more customised approach will help Mr & Mrs Smith in targeting its communications and in optimising the opportunities to sell hotel bookings to its customers.
  2. What? - I’m not a Mr & Mrs Smith customer myself, but I can think of a few scenarios where personalisation could be pretty useful to both the customer and to Mr & Mrs Smith as a business (see Fig. 1 below). I’d love to find out how Mr & Mr Smith currently go about aggregating all information for its individual customers into unique profiles.
  3. How? - Mr & Mrs Smith will use a solution by a company called Sailthru which will help the company to better understand customer interactions at multiple digital touch-points. Tamara Heber-Percy, co-founder and CTO of Mr & Mrs Smith, explains that “we appreciate that personalisation is about people, so we’re confident that our partnership with Sailthru will assist us in truly understanding our customers’ interests and ultimately in creating intelligent, tailored messages especially for each of them”.

Main learning point: Personalisation by Mr & Mrs Smith makes total sense. Targeting customers with personalised messages and offers is very logical from both a business and a customer experience perspective. This approach – and the subsequent customer insights that it will return – will no doubt give Mr & Mrs Smith the customer understanding required to tailor its marketing efforts and to predict future customer preferences.

Fig. 1 – Potential scenarios with regard to personalisation for Mr & Mrs Smith customers

  • A single customer profile and targeted campaigns- As a customer I don’t wanted to be spammed by Mr & Mrs Smith with big blast type mailing lists. I only want to receive communications about offers for hotels that could be of interest to me. I expect Mr & Mrs Smith to be smart about my previous bookings. For example, if I’ve previously booked child-friendly hotels through Mr & Mrs Smith, I don’t expect to be sent lost of info on Honeymoon Hotspots.
  • Personalised recommendations – If I opt-in to receive push notifications from Mr & Mrs Smith on my mobile, I expect these messages to be relevant and tailored to my interests. For example, Mr & Mrs Smith make it more attractive for me to engage with these messages by offering a window during which a discount for a specific hotel is available. I can imagine that Mr & Mrs will be particularly interested in the feedback loop related to its personalised recommendations. For example, if I don’t open the Mr & Mrs Smith email with “Discounts on all our Maldives hotels” what will Mr & Mrs Smith infer from this implicit behaviour?
  • Targeted messaging and editorial – I can imagine that Mr & Mrs Smith differentiate in the way they approach customers who maybe book 1 hotel per year compared to its “Goldmsith” members, who pay £400 per year for specific benefits. The type, frequency and copy of communications will vary per customer segment.
  • Personalised service – When I phone up Mr & Mrs Smith’s call centre with a question, I expect the person at the other end of the line to have all my information at hand. The person helping me with my query knows about my previous bookings through Mr & Mrs Smith, my preferences and the current booking that I’m calling about.

Related links for further learning:

  1. http://static2.thedrum.com/news/2014/02/26/mr-and-mrs-smith-looks-drive-personalised-marketing-communications-sailthru
  2. http://www.retailtechnology.co.uk/news/5336/boutique-hotel-booking-group-uses-automated-personalisation/
  3. http://ukhotelexperts.co.uk/2011/is-there-anyone-out-there-who-really-loves-the-customer
  4. http://www.luxurybranded.com/mr-and-mrs-smith-interview/

Mr & Mrs Smith

 

 

 
 

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Product management at Amazon – What is it like?

Since reading the well known answer on Quora about Amazon’s approach to product development and product management by Ian McAllister I’ve been intrigued about Amazon and its product management function. In his Quora answer, McAllister – General Manager for AmazonSmile explains about Amazon’s approach called “working backwards”.
I guess most non-Amazon product people are familiar with the internal press releases that Amazon product people write to announce the finished product, even though in reality this product has yet to be built (see Fig. 1 below). Apart from following Amazon and its product releases, I’ve always wanted to find more about Amazon and its approach to product.
Later this week, I’ll be speaking to a senior Amazon figure to find out first hand about Amazon’s product culture and what it’s like to be a product person at Amazon. In preparation for this conversation, I’ll look at three aspects related to Amazon’s product function: (1) product culture (2) product methodologies and (3) structure and approach.

1. Product culture

  1. Leadership Principles –  It was interesting to read Amazon’s Leadership Principles, which are meant to guide every Amazon employee (see Fig. 2 below). The principles that resonated with me the most were “ownership”, “bias for action” and “vocally self critical”. In addition, from my experience of Amazon product managers, a lot of them seem to possess a great deal of intellectual curiosity and a strong desire to get every detail of the product (experience) 100% right.
  2. Founding principles – Each year, Amazon CEO Jeff Bezos writes a letter to his shareholders. In his first letter in 1997, Bezos outlined some of the fundamental principles which underpin Amazon’s decision making. These principals reflect a clear focus on long-term and analytical thinking as well as on the customer and their needs (see Fig. 3 below).
  3. Judgment based decisions – In the 2005 edition of Jeff Bezos’ annual shareholder letter, he writes about the importance of judgment (in combination with maths and data analysis) in making decisions: “As you would expect, however, not all of our important decisions can be made in this enviable, math-based way. Sometimes we have little or no historical data to guide us and proactive experimentation is impossible, impractical, or tantamount to a decision to proceed. Though data, analysis, and math play a role, the prime ingredient in these decisions is judgment”. I would file this view under the data informed approach to product decision making of which I’m a big fan.

2. Product methodologies

  1. Working backwards – As I mentioned above, Amazon is well known for its approach to “working backwards”. As Amazon’s CTO Werner Vogels explained in 2006, the main rationale for this approach is “to drive simplicity through a continuous, explicit customer focus” (see Fig. 4 below). Not only does this approach entail writing a press release but also a Frequently Asked Questions document, a well defined customer experience and a user manual. All four deliverables are in my view testament to Amazon’s customer centric focus. In a 2009 Newsweek interview, Jeff Bezos explained that it all starts with the customer: “We start with the customer and we work backward. We learn whatever skills we need to service the customer. We build whatever technology we need to service the customer.”
  2. Continuous learning – Amazon say that they release code every 11.6 seconds. That’s a great figure, especially considering some of the lengthy release cycles out there, even for Internet only companies. This approach of releasing early and often, facilitates what I’d call “continuous learning”. Amazon seems not afraid to launch and iterate product initiatives such as “Amazon Locker” (see Fig. 5 below) and Amazon Storyteller, and are quite ruthless in ditching a product or service if it’s doesn’t generate the desired results.
  3. Product documentation and roadmaps – As someone who isn’t the biggest fan of having to write endless product documentation, I was delighted to find out that the use PowerPoint has been banned at Amazon, with Jeff Bezos arguing that with PowerPoint “you get very little information, you get bullet points.  This is easy for the presenter, but difficult for the audience”. Instead, Amazon meetings are structured around a 2 to 6 page narrative memo (see Fig. 6 below). Also, part of the meeting is spent going through the narrative memo together, before discussing it. One of my questions for my contact is how this approach applies to the way in which in Amazon creates opportunity assessments or product roadmaps.
  4. Goal setting – I understand that Amazon follow a similar approach to Google when it comes to setting goals.  Google introduced “OKRs” (i.e. Objectives Key Results) a few years ago and I’ve found OKRs a great way to make business objectives very tangible and specific (see Fig. 7 and 8).

3. Structure and approach

  1. “Two pizza” teams – I really like how Amazon works with so-called “two pizza” teams. The reason why these teams are called “two pizza” teams is because teams should never have more people than you can feed with two pizzas. As a result, most teams consist of 6-10 people. As Amazon CTO Werner Vogels explained, “if you have more than ten people in your team, you’ll need to have meetings”. It’s not so much about the team size, but much more about the team’s “fitness function”. A fitness function is a single key business metric that the senior executive team at Amazon (the “S-team”) agrees on with the team lead. It’s the equivalent of the P&L for a division: a single metric to provide the team with focus and accountability. I like that this provides team with autonomy and accountability, having the remit to ‘just get on with things’.
  2. Continuous deployment – Given that Amazon release code every 11 seconds, I’d be keen to find out more about release management at at Amazon. I can imagine that they work in iterations and release code throughout. I like how Etsy go about releasing up to 35 times a day. Naturally, Etsy is a lot smaller by comparison with Amazon, but I can imagine that Amazon use a similar approach whereby they use “config” flags (also known as a feature flags) which enables companies to switch features on or off at a moment’s notice. Through its feature API, Etsy is able to do A/B testing, completely enable or disable a feature or variants of a given feature. Also, I can imagine Amazon having a super sophisticated and easy to access monitoring tool through which everyone in the company can keep abreast with any releases or system failures. It was reassuring to read that Amazon don’t have Product Development Managers, but instead allow their Product Managers to decide on what gets shipped and why.
  3. Idea generation and evaluation – How do product ideas get generated at Amazon? Do Amazon product people use methodologies such as design thinking and empathy mapping to identify and prioritise customer needs? If so, why and how? I understand from the aforementioned Ian McAllister that product ideas can come from lots of different perspectives in and outside of Amazon and I get the sense that being able to articulate a product idea and its underlying rationale is a critical requirement for a product person Amazon. It was interesting to read McAllister’s 16 tips for writing upwards in this respect (see Fig. 9 below).

Main learning point: It was interesting to learn more about Amazon’s approach to product management. I’m now looking forward to finding out more from someone who actually lives and breathes Amazon’s product and customer centric approach. These are some of the questions that I’ll ask:

  • How involved are Amazon’s product people in its continuous deployments? Do they get to release themselves?
  • With Amazon’s continuous deployment mindset, do Amazon product managers apply assumptions and measurable hypotheses to each (major) release?
  • How do product ideas get generated at Amazon? What is the role of the product manager in generating, assessing and deciding on product ideas?
  • When “working backwards”, how much of the artefacts of this phase are actually used by (target) Amazon customers? How much user input is gathered at this stage (by the product person) and why?
  • How often, where and when do Amazon’s product managers interact with actual customers and why?
  • How do Amazon product managers interact with “Customer Experience Bar Raisers” who are Amazon employees especially trained to represent the (target) customer?
  • How much autonomy do Amazon product managers have to make product decisions and be held accountable for them?

 

Fig. 1 – Ian McAllister’s answer to the question “What is Amazon’s approach to product development and product management? – Taken from: http://www.quora.com/What-is-Amazons-approach-to-product-development-and-product-management

For new initiatives a product manager typically starts by writing an internal press release announcing the finished product. The target audience for the press release is the new/updated product’s customers, which can be retail customers or internal users of a tool or technology. Internal press releases are centered around the customer problem, how current solutions (internal or external) fail, and how the new product will blow away existing solutions.

If the benefits listed don’t sound very interesting or exciting to customers, then perhaps they’re not (and shouldn’t be built). Instead, the product manager should keep iterating on the press release until they’ve come up with benefits that actually sound like benefits. Iterating on a press release is a lot less expensive than iterating on the product itself (and quicker!).

Here’s an example outline for the press release:

  • Heading – Name the product in a way the reader (i.e. your target customers) will understand.
  • Sub-Heading – Describe who the market for the product is and what benefit they get. One sentence only underneath the title.
  • Summary – Give a summary of the product and the benefit. Assume the reader will not read anything else so make this paragraph good.
  • Problem – Describe the problem your product solves.
  • Solution – Describe how your product elegantly solves the problem.
  • Quote from You – A quote from a spokesperson in your company.
  • How to Get Started – Describe how easy it is to get started.
  • Customer Quote – Provide a quote from a hypothetical customer that describes how they experienced the benefit.
  • Closing and Call to Action – Wrap it up and give pointers where the reader should go next.

If the press release is more than a page and a half, it is probably too long. Keep it simple. 3-4 sentences for most paragraphs. Cut out the fat. Don’t make it into a spec. You can accompany the press release with a FAQ that answers all of the other business or execution questions so the press release can stay focused on what the customer gets. My rule of thumb is that if the press release is hard to write, then the product is probably going to suck. Keep working at it until the outline for each paragraph flows.

Fig. 2 – Amazon’s Leadership Principles – Taken from: http://www.amazon.com/Values-Careers-Homepage/b?ie=UTF8&node=239365011

Whether you are an individual contributor or the manager of a large team, you are an Amazon leader. These are our leadership principles and every Amazonian is guided by these principles.

Customer Obsession
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

Ownership
Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say “that’s not my job.”

Invent and Simplify
Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here.” As we do new things, we accept that we may be misunderstood for long periods of time.

Are Right, A Lot
Leaders are right a lot. They have strong business judgment and good instincts.

Hire and Develop the Best
Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others.

Insist on the Highest Standards
Leaders have relentlessly high standards – many people may think these standards are unreasonably high. Leaders are continually raising the bar and driving their teams to deliver high quality products, services and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.

Think Big
Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.

Bias for Action
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.

Frugality
We try not to spend money on things that don’t matter to customers. Frugality breeds resourcefulness, self-sufficiency, and invention. There are no extra points for headcount, budget size, or fixed expense.

Vocally Self Critical
Leaders do not believe their or their team’s body odor smells of perfume. Leaders come forward with problems or information, even when doing so is awkward or embarrassing. Leaders benchmark themselves and their teams against the best.

Earn Trust of Others
Leaders are sincerely open-minded, genuinely listen, and are willing to examine their strongest convictions with humility.

Dive Deep
Leaders operate at all levels, stay connected to the details, and audit frequently. No task is beneath them.

Have Backbone; Disagree and Commit
Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

Deliver Results
Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.

Fig. 3 – Some of Amazon’s fundamental management and decision making principles, as outlined in Jeff Bezos’ shareholder letter in 1997 – Taken from: http://www.sec.gov/Archives/edgar/data/1018724/000119312514137753/d702518dex991.htm

Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies. Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy:

  • We will continue to focus relentlessly on our customers.
  • We will continue to make investment decisions in light of long term market leadership considerations rather than short term profitability considerations or short term Wall Street reactions.
  • We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investments in those that work best. We will continue to learn from both our successes and failures.
  • We will work hard to spend wisely and to maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.

Fig. 4 – Four typical steps in Amazon’s approach of “working backwards” – Taken from: http://www.allthingsdistributed.com/2006/11/working_backwards.html

The Working Backwards product definition process is all about is fleshing out the concept and achieving clarity of thought about what we will ultimately go off and build. It typically has four steps:

  1. Start by writing the Press Release. Nail it. The press release describes in a simple way what the product does and why it exists – what are the features and benefits. It needs to be very clear and to the point. Writing a press release up front clarifies how the world will see the product – not just how we think about it internally.
  2. Write a Frequently Asked Questions document. Here’s where we add meat to the skeleton provided by the press release. It includes questions that came up when we wrote the press release. You would include questions that other folks asked when you shared the press release and you include questions that define what the product is good for. You put yourself in the shoes of someone using the product and consider all the questions you would have.
  3. Define the customer experience. Describe in precise detail the customer experience for the different things a customer might do with the product. For products with a user interface, we would build mock ups of each screen that the customer uses. For web services, we write use cases, including code snippets, which describe ways you can imagine people using the product. The goal here is to tell stories of how a customer is solving their problems using the product.
  4. Write the User Manual. The user manual is what a customer will use to really find out about what the product is and how they will use it. The user manual typically has three sections, concepts, how-to, and reference, which between them tell the customer everything they need to know to use the product. For products with more than one kind of user, we write more than one user manual.

Fig. 5 – Amazon Locker – Taken from: http://s0uls.wordpress.com/2013/03/28/amazon-lockers/

img_20130311_235727

Fig. 6 – Main components of Amazon’s 2 or 6 page meeting narratives – Taken from: http://www.quora.com/How-are-the-six-page-narratives-structured-in-Jeff-Bezos-S-Team-meetings

  1. The context or question
  2. Approaches to answer the question – by whom, by which method, and their conclusions
  3. How is your attempt at answering the question different or the same from previous approaches
  4. Now what? – that is, what’s in it for the customer, the company, and how does the answer to the question enable innovation on behalf of the customer?

Fig. 7 – An example of Google’s OKRs, by John Doerr – Taken from: http://www.businessinsider.com/googles-ranking-system-okr-2014-1

okr-deck

 

okr-1

okr-goals

Fig. 8 – Key elements of Google’s OKRs by Rick Klau – Taken from: http://www.gv.com/lib/how-google-sets-goals-objectives-and-key-results-okrs

  • Objectives are ambitious, and should feel somewhat uncomfortable
  • Key Results are measurable; they should be easy to grade with a number (at Google we use a 0 – 1.0 scale to grade each key result at the end of a quarter)
  • OKRs are public; everyone in the company should be able to see what everyone else is working on (and how they did in the past)
  • The “sweet spot” for an OKR grade is .6 – .7; if someone consistently gets 1.0, their OKRs aren’t ambitious enough. Low grades shouldn’t be punished; see them as data to help refine the next quarter’s OKRs.

Fig. 9 – Ian McAllister’s tips for “writing upwards” – Taken from: http://ianmcall.blogspot.co.uk/2010/04/16-tips-for-writing-upwards.html

1. Identify Your Audience
A good doc has a specific audience in mind. The same doc will never be ideal for audiences up, across, down or out. Once you’ve identified the audience, many of the choices you’ll make while writing the doc (e.g. altitude) will be much easier to make. In this post I focus on docs written to be circulated upwards.

2. Identify the Document’s Goal
Documents should have a goal in mind. The goal could be to communicate an operational plan for the year, provide a status update, seek approval for a specific course of action, or explain the root cause and steps to prevent reoccurrence of a problem. Once you know your audience (but not before), and the goal the document is intended to achieve, you’re ready to move on. If you’re unclear on either then punt on the doc or clarify the audience and doc’s goal with whoever asked you to write it.

3. Find Some Good Examples
Hunt around for other similar documents and pore through them. You may find some on your company’s Intranet and you can ask around among peers for good examples they’ve written or come across. I guarantee you, if you read 10 docs you’ll come away with a sense for which were effective and what you can learn (i.e. copy) from them. This is not cheating. Be aware that if you’re writing for a particular exec or group that the format they favor might be different than the format favored by others. Find this out ahead of time if you can.

4. One Doc, One Author
Co-authoring a doc is painful, and the Frankendocs that result are usually painful to read as well. Collaborate on the outline, perhaps, but either write it yourself or have your prospective co-author write it. Don’t tag-team.

5. Add an Executive Summary
Boil the entire doc down into a few bullets or a paragraph. Spill it. Your temptation will be to save the good stuff for the end of the doc to build suspense or get your excuses in ahead of time. Resist! If you are emailing your doc to a group of people many won’t read the whole thing. The exec summary communicates the highlights, which is all some of the audience needs to know. For those that will read the whole doc the executive summary lays out the structure of the doc and answers key questions that might otherwise have clouded comprehension.

6. Take Time on the Outline
Just like it is quicker to fix a software bug during unit testing than in production, it is much more efficient to iterate of the outline of a document than to rework a fully written doc. I often ask my newer product managers to review the outline of a doc with me and incorporate any structural feedback I have before going on to write the full doc. Sometimes I even provide them a rough outline of what I’m looking to get from a doc to help get them started. Simple bullets are ideal. I don’t want sentences or mini-paragraphs.

The outline should tell a story from top to bottom, and it shouldn’t be flat. An outline with 16 sections at the same level isn’t an outline, it’s a list. If you find yourself with more than 5-6 sub-sections underneath any one heading consider grouping them. This gives the reader a framework to attach the information to, and helps them understand what to make of it. You’ll know you’re getting really good at outlines when you can go from the outline to the full doc by replacing each bullet in the outline with a couple sentences.

7. Add Themes for Structure
Themes are a great way to provide structure for a doc. If you’re laying out an operational plan for the year you might want to communicate 2-3 themes for the year, why different themes will be focus areas in different parts of the year, and how resources are going to be allocated between the themes. Themes take a doc from the 100,000 foot view to the 10,000 view. If you skip them, then you risk losing your audience between the high-level content and the tactical content; they don’t know how they got there.

8. Anticipate Key Questions in the Main Content
As you write the individual sections, take the reader from the 10,000 foot view to the 1,000 foot view. Start with the minimum amount of content necessary to achieve your goal. Use plain words and declarative (not flowery) language.

Related links for further learning:

  1. http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/
  2. https://www.linkedin.com/pulse/article/20130805231302-25760-stop-the-presses-a-new-press-lord-appears
  3. http://daslee.me/reading-jeff-bezos
  4. http://www.sec.gov/Archives/edgar/data/1018724/000119312514137753/d702518dex991.htm
  5. http://www.businessinsider.com/jeff-bezos-told-you-how-to-take-over-the-world-2011-11?IR=T
  6. http://www.allthingsdistributed.com/2006/11/working_backwards.html
  7. http://www.quora.com/What-specific-constraints-does-Amazon-put-on-working-backwards-in-particular-on-length-content-and-other-of-the-press-release-Q-A-customer-experience-and-user-manual-as-part-of-working-backwards-for-product-development
  8. http://www.glassdoor.co.uk/Interview/Amazon-com-Senior-Product-Manager-Interview-Questions-EI_IE6036.0,10_KO11,33.htm
  9. http://brendansterne.com/2013/11/21/amazon-product-management-working-backwards/
  10. http://bits.blogs.nytimes.com/2009/12/24/is-amazon-working-backwards/?_r=0
  11. http://www.slideshare.net/nik123hil/brand-management-study-of-amazon
  12. http://www.wired.com/2012/04/ff_abtesting/
  13. https://news.ycombinator.com/item?id=2971521
  14. http://www.forbes.com/sites/netapp/2013/12/05/fail-experiment-amazon-starbucks/
  15. http://conorneill.com/2012/11/30/amazon-staff-meetings-no-powerpoint/
  16. http://www.reddit.com/r/technology/comments/1ebavs/amazon_staff_meetings_no_powerpoint/
  17. http://research.gigaom.com/2013/10/flipped-meetings/
  18. http://www.quora.com/How-are-the-six-page-narratives-structured-in-Jeff-Bezos-S-Team-meetings
  19. http://www.businessinsider.com/googles-ranking-system-okr-2014-1
  20. https://www.thinkwithgoogle.com/articles/start-up-speed-kristen-gil.html
  21. http://www.workboard.com/blog/use-okrs-to-achieve-bold-goals.php
  22. http://neilperkin.typepad.com/only_dead_fish/2011/10/two-pizza-teams.html
  23. http://blog.jasoncrawford.org/two-pizza-teams
  24. http://dev.podcasts.com/agile_nyc/episode/episode-78-stephen-hardisty-engineering-manager-at-etsy
  25. https://codeascraft.com/2011/02/04/how-does-etsy-manage-development-and-operations/
  26. http://www.infoq.com/presentations/etsy-release-cycle
  27. http://www.infoq.com/news/2014/03/etsy-deploy-50-times-a-day
  28. http://www.quora.com/What-value-is-having-product-management-experience-from-Amazon
  29. http://www.quora.com/How-can-I-get-over-my-failed-interview-at-Amazon
  30. http://www.quora.com/How-should-I-prepare-for-a-Technical-Program-Manager-interview-at-Amazon
  31. http://www.forbes.com/sites/georgeanders/2012/04/04/bezos-tips/
  32. https://socialsteve.wordpress.com/tag/jeff-bezos/
 

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