The Doritos Locos Taco has been hailed as a genius reinvention of the taco – it combined two things that many of the company’s core customers wanted, before they even knew it. In the quarter after the company launched Doritos Locos, Taco Bell’s same-store sales increased 13 percent. Such is the case with successful product reinventions.
At the other end of the product reinvention spectrum sits New Coke – a reformulation of the classic Coca-Cola introduced in 1985. Just 79 days after its launch, public outcry forced the company to reintroduce its original product as Coca-Cola Classic, though it kept New Coke on the shelves through the early 1990s.
While Coke survived, few companies have the cushion to fail as spectacularly as it did. To get reinvention right – to be more like Taco Bell than Coca-Cola – it helps to take the following steps:
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1. Have a Change-Ready, Competitive Culture.
There is comfort in having an established customer base that loves your product. Development is comfortable updating the product; the sales team is comfortable selling its features; and management is comfortable with the revenues it generates. But comfort should inherently be uncomfortable.
As a tech startup, we are not afraid (at an executive team level or a developer level) of taking calculated risks in order to push our products forward. It also helps that we are voracious competitors – once our developers see how an innovative idea to change one of our products can strengthen our leadership position, they become single-mindedly focused on making that idea a reality.
2. Ask Customers “Why?” Not “What?”
In the initial phases of product development, customer requests have the power to significantly influence a product’s direction.
But in product development, the customer is not always right. The customer may know what it wants in the end – or what it wants a product to help them accomplish – but he or she likely does not know the best way for that product to provide the desired outcome. If you align innovation too closely with a particular customer’s view, there is danger that your internal vision becomes secondary.
So instead of looking at what our customers are asking for, we look at why they’re asking. That’s what leads to the innovative solutions that make people say, “Whoa – that’s cool!”
3. Learn from Broader Trends.
OptionsCity serves professional futures and options traders, and for us – as well as any other niche software company – it can be easy to get tunnel vision. But because we keep our heads up and eyes open, looking outside the confines of our industry, we were able to find an innovative way to address our customers’ top priorities.
Our new approach, unheard of in professional trading circles, was to emulate the Apple iOS, making it easy for customers and third parties to create software that ran on our trading platform and provide them the marketplace (our CityStore) to enable that creativity. Had we kept our minds in our industry alone, we never would have moved in this direction.
4. Understand Customer Pain Points.
The decision on when and whether to remake a product is based on constant introspection about customer pain points. We continually examine and challenge our assumptions for how users interact with our products.
Understanding our customer’s pain points is intertwined with understanding their goals –the “why” mentioned in point 2. This is how you avoid throwing the baby out with the bath water. Are the pains just minor points of friction that don’t really impede the customer, or are they limiting your customers’ ability to be successful? Both demand attention, but at different levels.
5. Find Internal Pain Points.
Too many companies forget that it’s not just customers that interact with their products – their employees do, as well. When reinventing our flagship Metro product, we asked our employees how they interacted with it to find ways to make it easier to monitor, update and service in the future. We wanted to know: Were there common tasks that had been difficult to handle? Has it been difficult to educate our customers? Did our client services team have the tools they need?
6. Address Market Forces Head-On.
You need to look at the market as if you were a new vendor in your space. Ask yourself: “If I had to do it over right now, how I would do it?” The answer may surprise you. Architectural and design choices that were innovative a few years back may be obsolete. Functional requirements that made you a leader when you launched may have changed. Value propositions that once drove customers to you may no longer be relevant. And if you find your approach would be different if you were entering your market today, you can be confident the competition is already moving in that direction.
7. Tap Into Community.
What would the iPhone be without the hundreds of thousands of external apps created by outside developers? It certainly wouldn’t have changed the way that we think about phones. And what would social media networks like Facebook and Twitter be without the APIs that made it easy to share content from sites?
To help our customers get the most out of our new Metro NOW flagship, we opened up the platform and technology to a community of users whose creativity and innovation will help it realize its full potential better than we ever could alone.
It’s a scary thing to reinvent a flagship product. Moving away from something proven, something that for years has delivered value for customers, is not for the faint of heart. But if you consider each of the seven steps above, your chances for success will make the decision an easy one.
Victor Glava is the CTO and cofounder of OptionsCity Software, a global provider of electronic trading solutions for professional futures and options traders.
