A solid framework for opportunity evaluation helps Product Managers avoid jumping right into solution mode – rather spending time thinking about potential features and early prototypes. The most critical exercise is to first ask the right questions that uncover customer needs, barriers to adoption, and factors that will make or break success in the market.
By clearly and objectively assessing five key areas upfront through research and discovery, you gain insights that allow you to evaluate if the opportunity merits investment or more investigation versus deprioritization. This helps avoid wasting precious resources and team bandwidth on ideas that may not solve real problems or provide strong value.
The five must-ask questions cover understanding the target customer segment, learning about their struggles, determining how to reach them, building iterative plans post-release, and setting metrics to gauge traction. Let’s explore a research-backed framework for opportunity evaluation, along with best practices within each area.
Question 1: Who is the customer? Understanding the target customer segment
Defining the specific customer segment that will derive value from the new offering is imperative. Often discovery exercises reveal a more natural product/market fit with a persona distinct from the originally assumed target buyer.
Approaches for researching and compartmentalizing the audience include both qualitative and quantitative methods:
- Interviews and observation provide authentic reactions and language around difficulties and needs as customers go about key tasks.
- Surveys and analysis of current segmented data ground hypotheses in larger sample sizes and trends.
Key attributes to outline for the new opportunity’s customer segment include:
Demographics:
- Who does the segment encompass? Descriptors may include industry, company size, department reach, and geographic location.
- What is the makeup across genders, age groups, income ranges?
Psychographics:
- What values, priorities, and preferences define their perspectives and guide their decision-making?
- What types of messaging will likely resonate?
Product needs and pain points:
- What features and capabilities do they need to address struggles they currently face? What workflows seem broken?
- What costs and barriers block access to solutions right now? How pronounced is their pain associated with lack of solutions?
Buying behaviors:
- How do they currently seek out and evaluate options in this domain?
- Who holds the power in determining purchasing decisions? What selection criteria applies?
By researching actual patterns within a potential beachhead segment versus generalizing across hypothetically expanded audiences long-term, you objectively evaluate who can gain traction with the product concept quickly upon release.
Question 2: How do we understand the customer’s problems? Running discovery
Discovery sits at the heart of evaluating customer problems relevant and pronounced enough to provide the foundation for a valuable product offering. Three primary mechanisms for running discovery include:
Interviews:
- Recruit 5-8 individuals who align with the target segment and buyer persona.
- Use a discussion guide to probe around difficulties they encounter connected to areas the product concept could alleviate or workflow steps it aims to improve.
- Take detailed notes on pain points and blockers that consistently surface.
Job stories and job-to-be-done analysis:
- Identify the functional, social, and emotional dimensions attached when a customer in the segment seeks to make progress or accomplish key objectives associated with concepts your product opportunity aims to facilitate or enhance.
- Use this framework to pinpoint where struggles occur that new solutions may ease.
Empathy mapping:
- Document what a typical customer within the segment is thinking, feeling, seeing, hearing, saying and doing as he/she attempts to complete relevant tasks and workflows your concept focuses on improving.
- Look for moments of tension that emerge.
The discovery phase provides perhaps the most significant and tangible insights on whether pursuing the product concept makes sense based on evidence around urgent and compelling customer problems. We will cover ways to document, analyze and apply findings in later sections.
Question 3: How will we reach the target customer segment? Crafting a go-to-market strategy
Once the target segment is defined and their struggles clearly validated through discovery, the next consideration is what channels provide the most viable means for reaching and marketing to this group upon launch to drive adoption.
Several options exist across three buckets:
Owned channels:
- Website
- Blogs
- Email newsletter
- SEO
Effective owned reach requires insight into how the target segment actively searches for and engages with information and options when addressing pain points the product solves.
Earned channels:
- Publicity through relevant digital publications and journals read by the target segment
- Industry events, panels and webinars the target segment attends
- Word-of-mouth and community sharing in circles of the target segment hold an influence
Earned reach requires insight into what influencers, information channels, and settings carry weight and trust with the target segment.
Paid channels:
- Paid search ads
- Social media ads targeted using interests and behaviors common in the target segment
- Retargeting off website traffic
- Streaming audio and video ads leveraging context to match the segment’s consumption patterns
Paid reach requires clear signaling for interest and high interest associated with the problem area based on discovery learnings.
When evaluating a new opportunity, assess whether owned, earned, and paid avenues for connecting with the intended segment align with capabilities and budget. If significant paid media spending feels a prerequisite to viability, the likelihood of mistakes on product/segment fit escalates.
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Question 4: How will we iterate on and scale the product concept over time? Roadmap planning
The most effective approach to rolling out a new product opportunity involves setting up transition states to first establish and then sustain solution fit as scale and reach increase incrementally:
MVP:
- The focus must remain squarely on problem validation with the identified target segment above all else. Resist stuffing in extra features that divert attention from testing core value.
- Measure interaction intensity with aspects that directly map to known struggles uncovered in discovery.
- Iterate rapidly based on behavioral signals and direct customer input on utility.
Early Adopter Stage:
- Having validated the MVP, integrate insights from the highest value early adopters to expand usefulness.
- Pay close attention to why these initial customers bought in and leverage their feedback to strengthen retention value.
- Set up technical architecture and analytics to monitor performance drivers as usage and customers grow.
Mainstream Scaling:
- With strong signals from early adopters, build capabilities to smooth onboarding, simplify internal workflows, and expand automated processes on the back end.
- Observe which parts of the sales cycle and post-purchase journeys lack friction before investing more into upfront marketing exposure.
- Keep customer feedback front and center to avoid overinvesting in sales before nailing product core value.
This roadmap philosophy helps leaders frame opportunity decisions through a prudent lens – validating early signs of traction before major resource allocation.
Question 5: How will we measure success? Defining key metrics
The appropriate metrics to determine whether the product opportunity gains traction differ across the transition states defined in the roadmap. Leading indicators should tie directly to the core value proposition and customer segment:
MVP:
- Conversion rate from trials to paid subscriptions
- Frequency and depth of usage across primary features
- Net Promoter Score and satisfaction ratings from early users
- Volume and quality of user feedback on product experience
Setting observable, actionable targets for these measurements provides clear signals on underlying product-market fit to inform build priorities.
Early Adopter Stage:
- Retention rate quarter over quarter
- Willingness to upgrade to higher-level paid plans
- Expansion rate selling into same accounts
- Referral and word-of-mouth trends
Monitoring engagement metrics indicates the ability to deliver full utility and loyalty long-term.
Mainstream Scaling:
- Customer acquisition cost
- Payback period
- Enterprise deal size and sales cycle length
- Upsell/cross-sell opportunity sizing
While more sales and marketing dependent, trajectory and efficiency dynamics for these financial metrics spotlight scalability.
Conclusion – Framework for Opportunity Evaluation
Asking the right questions about customers, problems, reach, iteration and metrics prevents teams from wasting time on solutions lacking sufficient market viability factors.
By objectively investigating the five areas above through discovery-based research, organizations can evaluate with greater confidence whether an emerging product concept merits entering the build stage or requires a more specific segment and problem validation before further investment.
The Framework for Opportunity Evaluation provides a template for leaders to quickly determine if opportunities in the pipeline rest on the necessary foundations for eventual success – saving resources for those that demonstrate genuine traction potential following a prudent roll-out roadmap.