Digital Product Stack Monsters

Scott Michaels
Nov 28, 2017 · 7 min read
Here Be Monsters

You’ve got your strategy team, your design team, your architect, and development team. Testing and quality assurance are waiting in the wings. You have all the pieces in place to make your product a success, right?

But how are you going to measure it? How do you ensure you hit the mark on release? As that mark moves, how do you ensure your product moves with it? What draws your clients in, and what turns them off? How do you guarantee integration in their day-to-day? How do you track the health of your product, as a contributing factor to your company operations?

To succeed, you must have a solid grasp of your customer journey, from birth to death which is your customer funnel, and the cost of acquisition (COA) to lifetime value (LTV).

Simply put, you need the data or you are blind. The only way to get that data is to have the right product stack in place to answer all the questions above, or you’re not committing to your product.

The good news is that products have been created with lots of investment to get you the data you need. The downside is that it’s a mess of overlapping functionality. From broadly sweeping integrations to niche functional specializations, there is a myriad of options for monitoring and effecting engagement between your offering and your customers. All of these solutions make up your digital product vendor stack.

The availability of options is a double-edged sword, as you must now navigate the murky marketing-speak for the truth. All these vendors are vying for your attention and your dollars. This has created a confusing mess with overlapping functions and offerings, compounded by the hyper-growth in the market. You are now their target, their potential customer, and their paycheque.

So, how do you decide the make-up of your stack? How do you decide?

The first question is simple to answer. Separate the substance from the noise.

While the market is growing, it has not yet matured and some vendor offerings are half-baked, others are too narrowly focused for practicality, some too broad without the depth in a speciality. In attempts to seem competitive, firms are growing their point solutions into platforms. Everyone seems to claim they do everything (mostly) (see our post on Agency Specialization), which is rarely possible. If you are trying to do everything, you are failing to do any of it well.

To answer the second question above, we defined six pillars for digital products. If you don’t encompass each in your solution, you drastically limit your chance of success:

1) User Acquisition
In campaign runs to acquire new users, we need to measure how much those acquisitions cost — combining the costs of the campaign, fees for various vendors, and the operating costs associated to additional operations and activities employed to capture new users (this includes any app store optimization or web properties used in promotion and marketing).

2) Attribution
In addition to the costs of user acquisition, we must know the success rates of such acquisition. Attribution quantifies campaign engagement activities and results, enabling its measurement and tracking. Evaluation of these numbers clarifies and defines what actually worked. Furthermore, appropriate attributions provide the granularity necessary to understand what worked for particular users, and what worked as extracted to particular user cohorts or segmentations.

3) Application Performance Management (APM)
APM measures and tracks the health and performance of your application. It is integrated into your user-facing engagement points, such as your mobile app, as well as your back end calling out to the providers. These measurements are essential for identifying and rectifying performance issues that result in user dissatisfaction and abandonment.

4) Analytics
Data collected on the regular day-to-day tracking of user operations within your application, as well as the higher level (rolled up) events and analysis. Analytics drive understanding user behaviour and activity, and enable your teams to devise appropriate strategies for development, design, marketing, communications, and more. Various KPI’s may be derived from the analytics collected on product usage.

5) Engagement
Ongoing engagement with users is required for the continued success of your product or application. Not just in the immediate experience with your product, but also in how they feel about it, about you, and about your company. What are the stories they tell themselves about the product? What are the stories they tell their friends and colleagues?

Tools geared towards customer relationship management (CRM), communications, retention, and reactivation help facilitate ongoing engagement. They also provide active feedback channels, with the primary goal of maintaining positive relationships, identifying your most valuable users and more importantly, reducing churn (particularly with those valuable users).

6) Optimization
The list of variables that can impact user response and engagement with your product is vast: price points, graphics, animations, asset positioning, promotions, notifications, and many more. Tools that enable A/B testing of features and content will measure user responses and deliver relevant insights. Constant testing and tuning translate to winning results to be slated for permanent inclusion in your product while losing results can be cataloged as failures or reconfigured and re-tested.

It’s never as simple as having a single solution which encompasses each pillar fully while meeting whatever price constraints you may have. One-size fits all solutions are not realistic and you need to weigh your most pressing needs in choosing your vendor stack. It’s important to understand which pillar(s) stands most prominently in your scope of need, and how that assignment change as your offering develops and matures.

Here is a plan that you can follow:

  • Break out the calculator
  • Focus on the main current problem of the business (i.e. acquisition cost)
  • Pick the point solution best for that problem, and work that till it’s literally not the aspect of the business that is on fire
  • Move to the next biggest problem and the corresponding best point solution

You Are: We Got Funded!

  • Analytics. You will have lots of reporting to do, lots of stakeholders. Let the tools do that for you, so you have time to keep working
  • Consider an aggregator to lessen your development time and to allow marketing to experiment and lessen the impact on development

You Are: We Exist, But It’s Not Really Cranking

  • Use the aggregator. Try out the various tools available to see which one gives you insights, in the formats you require
  • Broad use of many tools, quickly

You Are: We Have Our Act Together, But Always Can Do Better

  • Return to the point solutions, outside of the aggregator to get the maximum impact of the investment being made
  • Squeeze out every last bit of juice from the point solution, retire it and move on

The World has Changed

  • Marketing and product teams are enabled to make (semi-significant) changes to your product without having to engage your design or development teams
  • Integrated A/B testing and engagement automation enables greater breadth and depth of understanding of user activities and behaviour in response to changes in function, design, visuals, promotions, and more
  • What once required significant efforts in custom development to support basic and common KPIs is now available in out-of-the-box solutions, simplifying and shortening development time
  • There is a significant difference between the value derived from point solutions, and that gathered from aggregators. Understand the tradeoffs in order to identify which option is optimal for you.
Summary of Digital Product Stack Pro / Con

Break out your wallet

When comparing the cost of these tools, you must remember that while you can ‘part-out’ the solutions, the cost of integration and complicating your stack will undoubtedly cost you more time and money. So, unless you are a startup and value your own time at zero, find the product that satisfies as much of your needs as possible. And be sure to compare apples to apples.

Most tools have cost models based on some form of transactional metric, whether it is Monthly Unique Users (MUU), Monthly Active Users (MAU), data transactions, or volume of push engagements (though the latter has begun trending towards obsolescence). Be sure you convert pricing vectors accordingly in your evaluations.

Let’s get to the meat of it. It’s reasonable to assume that most of you will be landing in the $5k-$10k / yr spend until you grow to where you can see the ROI of each change you make in the stack.

Summary

What are your thoughts on the creating the right product stack? Comment below or tweet us at @apply_digital or to me at @scottmmichaels and let us know your thoughts.

Apply Digital

We make and market smart digital products.

Apply Digital

Apply is a digital product studio with offices in Vancouver, Toronto, Los Angeles, and New York City. Informed by human insights and empirical data, Apply makes and markets apps, platforms, and brand experiences that are smart by nature and intuitive by design.

Scott Michaels

Written by

Partner at Apply Digital, Chief Strategist , Techstars Mentor, let's talk!

Apply Digital

Apply is a digital product studio with offices in Vancouver, Toronto, Los Angeles, and New York City. Informed by human insights and empirical data, Apply makes and markets apps, platforms, and brand experiences that are smart by nature and intuitive by design.

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