Success Evaluation
In evaluating Nike’s new product’s success, key performance indicators (KPIs) would be helpful. KPIs are the best tool in making decisions regarding the success of a product or business. A key performance indicator can be defined as a measurable value used to show how effective a product or business is in realizing its key objectives and goals ( Parmenter, 2019 ). A company can use KPIs at different levels of the business to evaluate the success achieved in achieving a specific target. They can determine the progress/performance of a product and entire business. KPIs consider the particular activities related to a product, clients, and the whole process of presenting a product in the market. They can be used to rejoice about success or determine risks.
A KPIs metrics can be qualitative or quantitative. Qualitative KPIs describe a characteristic/variable/phenomenon through opinions or traits. The customer satisfaction survey is an example of qualitative KPIs. The survey data is qualitative, but the surveys’ measures are founded on subjective interpretation of customers’ opinions or experience. A quantitative KPI involves numbers, and it is measurable. It is the most commonly used KPIs because it covers a wide range of things such as sales and inventory, among others. KPIs must give the most relevant and essential performance data to help an organization make critical strategic decisions. In measuring the new Nike product’s success, both qualitative and quantitative performance indicators would be used.
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Key Performance Indicators and Metrics for the New Nike Product
Monthly Recurring Revenue (MRR)
Monthly Recurring Revenue (MRR) determines the amount of revenue that a business expects to make every month (Parmenter, 2019). This metric is critical in determining the profitability of a company or specific product. It measures the total revenue a product generates in one month. Nike can use MRR to determine how much revenue the new product makes and meet the set target. It is the amount of money that a business makes from a product regularly. Monthly Recurring Revenue provides a regular and reliable revenue source and does not need to go after new sales with the same clients now and then. By using this metric to measure the product’s success, Nike can decide if it has to look for new clients or devote time and resources to retaining the already acquired customers. If the new product’s income is regular, Nike can be sure that the product is solid and meets the needs of its clients.
Client Acquisition Cost (CAC)
The Client Acquisition Cost addresses all the costs incurred in attracting clients. It includes marketing costs, the team involved in sales, money spent on advertising, and other costs incurred to sell a product (Marr, 2012). In some cases, such costs also include the salaries for all the marketing and sales professionals involved in attracting clients. Nike can use this metric by setting a particular period and the amount of revenue generated from the new product to determine if the product is profitable or not and if it meets the set target. Besides, Nike can use the metric to determine if the target customers are giving the company less profit than the amount spent on them. It is necessary to change its pricing or marketing strategies to win more customers. The client acquisition cost can be calculated using the following formula:
Sales & marketing spending for a period of time / total number of customers generated for a period of time = CAC
Client Churn
Customer/client churn is the number of customers who opt out of buying a product over a certain period of time. It is the number of customers that a company loses within a certain period of time. This metric can be determined by identifying the cancellations made within a particular time and divide the number by all the clients received within the same time. The amount derived is multiplied by 100 percent. A small churn is crucial for business survival. Getting a new customer can cost a lot more than retaining an existing customer ( Parmenter, 2019) . Keeping a close eye on this metric can help Nike maintain things under control and make the right decisions.
Client Engagement
If the sales revenue of the new product and client churn values are satisfactory, the client engagement metric can be used to identify areas in the product that require improvement. For example, the company can determine how your customers prefer to interact with the company (Marr, 2012). To achieve this, Nike can compare social media, email, mobile, and its website engagement to determine the channels that give the highest value.
Net Promoter Score (NPS)
NPS is the number of clients who become loyal and can recommend the product to other clients who do not like it. A high number of distractors than promoters indicate that the product is not a success in the market (Marr, 2012). Therefore, in such a situation, the company should consider ways to address the issue to improve the product’s acceptability and penetration in the market. Besides, this metric can be used to create awareness in the company to motivate workers to create more value, respond to issues quickly, and identify the problems causing a lot of detractors for the new product.
Customer Satisfaction Score (CSAT)
Client satisfaction score is a loyalty metric used to determine if a product or company satisfies the needs of its clients based on their experiences with the product. The metric serves as a KPI for client service and the quality of a product (Parmenter, 2019). Although client satisfaction as a concept is wide, the client satisfaction score is more specific and defined. It is expressed in terms of percentage. If Nike gets a 100 percent score on client satisfaction, it means that the product is excellent. However, a percentage of almost zero percent indicates that the product is horrible, and there is a need to implement major changes or withdraw the product from the market.
Feedback Loops and Processes
Feedback loops are important, and they provide numerous benefits to a business. They can be used as a starting point for engagement with customers. Through feedback, a company is able to understand what clients need through their complaints, requests, or complements ( Srivastava, 2009) . Besides, through feedback, an organization or business such as Nike can identify new opportunities to develop a long-term relationship with clients and reduce product complaints by addressing them appropriately. In some cases, some ideas might appear perfect when being implemented by a product manufacturer, but it is the end-user who has the final decision on whether the changes or improvements were actually good or necessary.
By adopting a feedback loop process, the company would interact with current and potential customers and learn what their thoughts are about the new product and the features or aspects they like most about the product. Nike can use this type of information from customers to refine their new product so that it meets clients’ needs and perform better in the market. The following feedback loops and process steps can be implemented to support the new Nike product, ensure that it is on track, and make corrections as required.
Cataloging the various sources of feedback
Client feedback can be from different sources, and it is essential to consider each source, the strengths and weaknesses of the feedback obtained from each source, and ways in which each feedback aligns with the entire feedback system ( Srivastava, 2009 ). Nike can use client interviews and surveys, feedback from employees, and social media as feedback sources for its new product. The product team can conduct interviews with the current and potential clients to gain insights into what they need as consumers and the experiences they have with the new product. In this regard, the company can use client validation interviews and usability research, among others. Customer interviews are considered as one of the best and most reliable sources of feedback because much can be learned as one has access to the mind of a product user ( Srivastava, 2009 ). Although expensive and time-consuming, they are worth the effort and money because through them, Nike would gain a deeper understanding of how the target customers perceive the product and what needs to be done to make any required improvements.
Nike can use customer surveys to gain a statistical significance of findings/results. Surveys can be used in various ways, such as market research or feedback collection. In the case of Nike, the purpose is to determine the experience, and therefore, surveys should be used to gather feedback about the product from existing and new clients. For example, Nike can use a net promoter score survey to collect quantitative feedback about the new product. They complement customer interviews by providing a quantitative perspective of findings. Employee feedback is also a crucial source of product feedback. Nike employees using the new product can provide important suggestions. However, it is essential to be careful when using employee feedback because it can show power use feedback contrary to the ones using the experience for the first time and with less inspiration ( Srivastava, 2009 ). Nike can use social media to access and gather customer feedback. The majority of the people targeted by the company are young. Most young people have more than one social media accounts on popular platforms such as Facebook, Instagram, and Twitter. The company can use these platforms as a feedback source and a platform to engage customers as might be required or when appropriate.
Develop an Open Channel for Direct Access to the Product’s Feedback
An open channel ensures that interested individuals such as the company’s managers, the product team, and designers, among others, have access to primary feedback. All the feedback collected from different sources of feedback is shared in an aggregated manner on the channel. For example, if Nike’s product team implements several customer interviews, it is important to share links to the interviews on the channel. The support team can have an individual who sends feedback reports on the channel every week or month detailing the leading issues for further and appropriate action. Such channels are helpful because employees can have direct access to feedback frequently.
Create a Record for the Feedback system
The aim here is to develop a systematic process to ensure that every time feedback enters into the system from different sources, it is processed immediately in the system record. Every feedback about the product should at least have a description, product features, and accounts of the individuals who provide the feedback. Nike can use spreadsheets or project management, or product roadmap tool. Spreadsheets are the simplest way to record feedback in the system. The company can use a Google spreadsheet. This method is cheap and consumes less time. However, for it to be useful, the product team will be required to use the project management tool. A product roadmap tool helps plan a product and make feature priorities in product development or improvement. The tool can help Nike feedback data in a more advanced way to effectively analyze roadmap requests. After collecting data from feedback, it should be analyzed thoroughly to identify the recurring problems or requests and complaints and categorize them according to their frequency and relevance to the growth, goals, and objectives of the company. After identifying issues to address, the next step is to work on them to improve the client’s usability. Incorporate the Gathered Feedback into the New Product’s Roadmap
Incorporating feedback into the product roadmap is critical ( Srivastava, 2009 ). This is why making a feedback catalog for the new product is essential. When incorporating feedback, it is crucial to remember that the best way to conduct the process is to be cautious about the most frequent requests as the roadmaps priority. The product team should remember that client’s feedback is one of the many inputs that should be considered when deciding on the strategic priorities of a product ( Srivastava, 2009 ). In addition, feedback’s value is not just the features requested by clients. It also involves the synthesis of the lessons learned from the feedback. When conclusions on requests to be acted upon are made, the next step is usually to implement the fixes on the product.
The most critical issues related to the new product can be implemented first. The other small changes and improvements can be made simultaneously or with time. The feedback loop cannot be effective if the company does not inform clients about the changes made on the new product in the market. Also, the company should ensure that customers are informed of other upcoming fixes or improvements in the future. It is important to inform clients that their feedback was considered when decisions on the areas or features to improve or change were made. After making improvements or changes to meet consumer needs, Nike should go back to the customers and gather feedback again to identify factors such as their satisfaction with the new product and their perceptions about it.
Other Factors to that Might Affect the New Idea
There are other factors, differentiation, and promotion that might affect the new product. Product differentiation makes a product stand out from the products provided by competitors in the industry ( Shankar et al., 2012 ). It distinguishes what a company sells from what the competitor does. Differentiation is important because it creates a strong brand awareness leading to more revenue and growth. For Nike to be successful in differentiating its new product, it is must identify and communicate the distinct or outstanding qualities of its product that make it different from others in the market. However, if the company fails to differentiate its product, there is a high possibility of failure in the market. Successful product differentiation leads to a solid value proposition which makes the product appealing to the target customers ( Shankar et al., 2012 ). It can give the company a competitive advantage and stronger brand awareness. Promotion is a critical factor that can affect the new product. Nike should ensure that it conducts effective product promotion in the target market. Poor promotion has a negative impact on the success of a new product. Therefore, the company should consider marketing strategies such as paid advertising, the use of celebrities to advertise as it has been doing lately, and public relations, among other strategies. Identifying the appropriate media to link with potential customers is critical to a product’s success. Even if the company has a great product, lack of effective promotion can cause failure in its marketing.
References
Marr, B. (2012). Key performance indicators: The 75 measures every manager needs to know . Financial Times/Prentice Hall.
Parmenter, D. (2019). Key performance indicators (KPI): Developing, implementing, and using winning KPIs (4th ed.). John Wiley & Sons.
Shankar, V., Carpenter, G. S., & Hamilton, J. F. (2012). Handbook of marketing strategy . Edward Elgar Publishing.
Srivastava, R. (2009). Product management and new product development . Excel Books India.
