Before we understand what Product Design really is, let me ask you a question.
If companies like Netflix, Uber, WhatsApp, and Airbnb already have great apps and websites, why do they still have designers? Why do they still hire designers?
If you don't know the answer to this question, you'll know why by the end of the article. But before that, let's zoom out and look at an example everyone is familiar with.
The field of medicine is a noble one. Let's look at doctors. Why do doctors do what they do? Doctors care for the well-being of their patients. They like to help people and solve their health problems. However doctors don't provide their services for free just like any other service and they should be entitled to charge fees for their services.
They either open up their own clinic or work at a hospital. Even though the core objective of a hospital is to treat people with health problems, a hospital is still considered a business entity. And every business has to generate revenue to sustain itself.
What is the most significant factor for someone to decide which hospital to choose? Some might say that it's the cost, the distance of the hospital from their home, or it could be any other reason. But the biggest reason is TRUST!
No matter what decision you take, TRUST is always going to be a factor. Not just with healthcare. It's with any product or service you want to purchase. So how do hospitals build this trust factor? How do hospitals encourage patients to choose their hospital over others?
These are basically indicators that indicate the performance of the hospital. Here are a few examples of KPIs that every hospital measures.
• Average Treatment Costs
• Bed Occupancy Rate
• Patient Wait Time
• Staff Retention Rate
• Childhood Immunisation Rate
These are just a few. Every business entity is different and has different KPIs. In a hospital, multiple teams are working towards increasing/decreasing these metrics. Of course, all these teams sometimes work hand in hand to do it.
Working on these metrics is what will help the hospital provide a better service. This will build trust amongst people and will encourage them to visit that hospital over others.
A doctor is probably in charge of optimising specific metrics such as
• Ensuring Low Medication Errors
• Ensuring Low Patient Wait Time
So if you're a doctor who works at a hospital, your main role is to treat people with health issues but you're indirectly generating more revenue for the hospital.
Most of the people believe that Product Design is just about designing screens and user flows.
That's just a part of it. In reality, they are needed for something a lot bigger than designing screens.
The saddest part is that no one teaches designers why they do what they do. Be it an online course, design boot camp, or university. No one does. And so, even though there is a high demand for product design jobs worldwide, the supply of industry-ready designers is shockingly less. This proves that design education is completely broken.
By now, you should have understood why the Apple Music Team, Duolingo, Uber, and Google Maps still hire Product Designers. It's not about designing features or an app. It's about helping these companies optimise the Company and Product KPIs in an ever-evolving market and environment.
I highly encourage you to start looking at Product Design through this different lens.
Okay. Now let's dive a little deeper with a few examples.
Let's assume you're a designer at a company that has an app where you can invest in the stock market to grow your wealth.
First, you need to understand how your company generates revenue. How does it make money? Do understand that raising money from investors is not revenue.
Revenue is what is paid by your customers.
A food delivery app makes money through each delivery order, so it has to make its customers order more food. A content streaming platform makes money through subscriptions, so it has to get more people to buy their subscriptions.
Similarly let's assume your app generates revenue as transaction fees on every transaction made. Remember that these are just examples, and every product may have multiple revenue streams.
Now there are a lot of companies at different stages aiming for other things than generating revenue because of the stage they are in. I'll talk about that at the end, but let's continue.
So if your app has to generate more revenue, there are primarily 2 ways of doing it.
• Onboard more users to make trades.
• Encourage existing users to make more trades.
Every person working in that company indirectly contributes to the above. Of course, I'm simplifying things here, but things are a lot more complex in reality.
To accomplish the above 2, your company comes up with Company-level KPIs. Here is an example of what the KPIs could be.
• Increase the number of users creating SIPs (Investing a certain amount of money every month). The data shows that the majority of revenue is generated from these users.
• Increase the number of users with a minimum investment of X. The data shows that users who invested more than X tend to regularly invest. They could also be termed as active users.
The company, Slack, realised that teams who sent more than 2,000 messages continued using the product for a longer period of time, and a large percentage of those teams ended up becoming paid customers.
So, Slack decided to make sure that it introduced well designed features and that users understand how to use the platform. It needed to have a good onboarding experience so that users understood the features and benefits.
These KPIs are decided by the leadership team depending on various factors such as company goals, financial situation, market conditions, etc. These decisions are not made by designers.
As a Product Designer of a company, you need to be aware of your company's and team's KPIs. It's your right to know this information. It isn't confidential information.
If you are a designer in a product company and you don't know what they are, I would highly encourage you to ask your superiors about it.
So keeping these KPIs in mind, every team in the company aims to come up with problems, ideas, and solutions to improve those metrics as much as possible. Each team will come up with it's own set of KPIs to contribute to the company-level KPIs. Here are a few examples.
Marketing Team
Create campaigns that reward users for creating more SIPs and encourage users who don't have a SIP to start creating SIPs in the app.
Content Team
Create educational content that educates users about the long-term benefits of investing.
Insights Team
Design a feature where users can get insights on their investments which helps them understand the performance of their portfolio. This may motivate users to invest more, seeing the positive returns they are getting.
Assets Team
Introduce more types of assets that users can invest in, such as cryptocurrency.
Incentives Team
Improve the referral experience so that users understand how the referral system works and provide a referral bonus.
Onboarding Team
Improve the complex onboarding flow so that more users can access the app as fast as possible.
These are just examples. Every company has a very different way it structures and names its teams. Do remember that not all teams require product designers. Not all solutions require product designers. Every team has a different set of people who are skilled with solving different types of problems.
This is why almost every company with a digital product hires designers. Just designing new features is not the only job of product designers. How many features can you keep adding to an app?
Increasing the revenue of the company can also be achieved by reducing costs. There are ways in which the company can reduce its cost.
Let's assume that the customer support team has a few KPIs. One of which is to design a live-chat bot to solve customer issues. How does this help the company save money?
Let me explain with one of the many ways possible.
Let's say that the company acquired a user through a referral. This means that the referrer was given a cash bonus by the company for referring someone. First let's understand where is this money coming from?
This cash bonus is coming from the company's own pocket.
Now, this is not free money that the company can give away. The company has to recover this amount from the user. For the company to recover this amount, it needs the new user to make approximate 10-15 trades over a period of time. By doing this, it will be able to recover the money it initially gave out as cash bonus.
Now let's assume that the new user faced an issue when they were making a trade. It could be a tech issue, the user flow was confusing to make a trade, or the user had questions about how the process works. The user reaches out to the customer support team to get help.
If the customer support team does not do a great job, it loses the customer and loses the ability to recover the cash bonus it had spent to acquire the user.
The customer support team has to come up with solutions to prevent errors and provide a much better experience to the user. Here are 2 solutions.
• Build a live chatbot to quickly solve user's problems in real-time.
• Design a help centre for users to get answers to questions they may have.
So what's the benefit of doing this?
• The company reduces its cost of hiring external customer support executives.
• This, in turn, helps resolve user's queries faster.
• This, in turn, allows users to gain trust in the Product and service.
• This, in turn, enables users to make trades.
• This, in turn, helps the company recover the cash bonus it gave out to acquire the user.
• This, in turn, helps generate revenue for the company.
That's not all. There's more!
How would you go about measuring the performance of this chatbot and help centre? Here are a few examples.
Chatbot
• Number of issues resolved
• Average time taken to resolve an issue
• Customer satisfaction
• Chatbot usage rate
• Abandonment rate
Help Centre
• Time spent on the help centre
• Self-service rate
• Customer satisfaction
This is how you connect all the puzzle pieces to look at the big picture.
So this is how designers solve user and business problems. The business solution here was to reduce costs for the company by replacing customer service agents with a live chatbot and help centre. This also solves the problem of users leaving the platform.
The earlier you realise that product design is not all about screens and there is so much more to it, the easy it becomes for you to grow in your career.
You will unlock many more opportunities because the industry wants thinkers, not just pixel pushers.
It takes years of practice and experience working on great products with great people to develop this mindset.
As I mentioned before, only some companies give the opportunity to learn and grow. So it's essential to aim to work at a company that offers you this.
There are plenty of products out there whose primary goal is not generating revenue. WhatsApp is a good example.
A product needs a loyal customer base to start charging money for something in return. Hence the sole focus in the initial stages is to onboard more customers, build core features, test ideas, get feedback, and iterate.
Early-stage startups depend on external funding to run the company. They promise the investors that they will start charging customers once they have a solid customer base. So the company focuses on a different set of metrics to track until it starts charging customers.
But in the end, the role of everyone in the company stays the same. The goals are different depending on the needs and stage of the company.
Now, one confusion you might have is,
If this is what Product Designers do, who are UX Designers and UI/UX Designers?