Mapping Business Outcome to Product Outcome - I

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Hello readers👋 
It's been a while! I am here with a new concept which is quite easy to understand and is a must know for a product manager but many don't know about this. It's something which helps you take better decisions whenever you are working on a feature. Well it is quite similar to the title of the blog - Mapping Business Outcomes to Product Outcomes
But what are business outcomes and product outcomes and what is the meaning of mapping them? Let's interpret it 

How to Business Outcome(BO) and Product Outcome(PO) come into limelight

We generally talk about BO and PO when we have a proper vision and strategy in mind for a company as a whole. Business Vision and Strategy come into talks when there are multiple things a company can cater to but has to decide what is the true vision that a company is aiming for. 
There are many problems in the world that a company can solve. Swiggy could solve the flight delays (Indigo crisis as you know) but it didn't right?! Because this is not Swiggy's business vision and strategy. 
After confirming the business vision and strategy by company's main stakeholders, it is the product manager who picks up a problem which can solve a customer's pain-point and aid in their needs. This not only helps the end user but also generate considerable business value and growth. 


When a product team aims at achieving product outcomes, it places customers’ and users’ needs, wishes, desires, pain points at the heart of any effort. And it meets only those customers’ and users’ needs which contribute to business outcomes. By using this approach, the team can ensure delivering value to both the target group of people and company.


Some pointers that you must know -

1. A key factor in aligning and prioritising product efforts- The alignment with the company's business vision and strategy
2. What should be considered when deciding whether to build a feature around flight bookings?- The potential business value and growth it could generate
3. In order to ensure the success of a product, what should product teams focus on?- Understanding the true "why" behind the product. & Ensuring the product addresses a pressing customer need.

- The above pointers are taken from Nextleap

Business Outcome(BO) and Product Outcome(PO)

Business Outcome - It is a metric that moves a business forward. For example - Growing revenue, profit, margin, market share, etc, Reducing operating cost. 

Product Outcome - It is a metric that helps us understand whether the product is helping the business move forward. For example -  Improve Search CTR (Click through rate), Improve Shopping funnel conversion, Increase time spent by the user on the product.

Now since you know what BO and PO are, a PM must always track the PO because -

1. BO are lagging indicators i.e. it has already happened in the past and cannot be changed. PO are leading indicators i.e. they show how a user behaves while using the product and it is within the influence of the team. 

2. Leading indicators often drive the lagging indicators and hence the business vision + strategy is met by this.


Now, if we take for example - Revenue Growth as a metric that needs to be fulfilled then 

According the BO it can be achieved through different scenarios -

1. Selling more products that cater to the TAM
2. Price increase as compared to last year in this year
3. Taking a share of new markets and budgets/wallets in the market

According the PO it can be achieved through different scenarios -

1. Customers buying sooner that they actually do using the product features like - notifications, urgency messages(only 2 units left)
2. Cross selling recommendations like - those who bought this also bought ... (selling more product items in this way)
3. Building renewable discounts like - Dominos has a Rs 30 cashback option in the wallet which eventually makes the user spend more on the same product. Subscription pricing is also a tool. 

Hence, the heart of the matter is that we must focus on PO which eventually drives BO and it actionable + measurable. 

Anticipated human behaviour is the critical link between the
product outcomes and business outcomes.


Check the below image where I have mapped business and product outcomes together to increase the revenue of Netflix in a KPI Tree. We will be taking the KPI Tree segment in the next blog. Until then, Au Revoir☺



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