Often I’m asked what the right balance is between new product development and investing in improving existing products. I suppose it’s natural for companies to want to have some sort of percentage guideline, but I try to get companies to think about these investments a little differently. To me, all of these projects are product investments, and rather than worry about whether you’re investing enough in new product lines versus existing product lines, I would rather have the team worry that they’re investing in the best opportunities.

Expanding your product offering so that you can offer additional products to existing customers, or acquire new customers, can be a great thing. Improving your existing products so that they generate more revenue from your existing customers, and make it easier to get new customers, can also be a great thing.

But the real key is that each of these projects is a product opportunity, and as such, it’s the responsibility of the product team to assess the benefits and the costs. Then it’s the responsibility of the management team (ideally the product council if you’ve already adopted that idea) to ensure the company is pursuing the best of the opportunities. This might be all or mostly new product opportunities, especially if the company is just getting started, or it might be mostly product improvement opportunities. It is not a bad thing to be opportunistic when it comes to choosing your product investments.

That said, I will say that many times the very best product opportunities are sitting right under the company’s nose. For example, often by far the biggest bang for the buck comes from improving existing products that are not performing at the level they should be, often for usability reasons. For example, you might find that for every 100 people that explicitly begin the subscription process for your product, only 9 are making it through to successful completion. You know that if you can improve that number to 18, you’ve essentially doubled the revenue for that product. That’s a pretty great opportunity if you can find a good solution. And the ironic thing about this type of opportunity is that it is often the most straightforward to solve. A bit of prototyping and user testing, and you can quickly identify the issues and come up with better solutions that are often not hard to implement.

Or, you may find that you’re carrying hundreds of customer service staff to help your users as they struggle to configure and use your product. A better design for your product can often eliminate the need for a large portion of that staff. And that’s just the cost savings. The even bigger win may be the improvement to customer satisfaction and your corresponding NPS score.

I often come into a company and look like a hero when I point out these “opportunities” and they generate big returns. But I think what’s really going on is that there is a tendency in software companies to assume that the product is essentially already as good as it can be, and continued investment won’t make much difference. Companies tend to believe that their products are inherently complex; or they think that a 9% conversion rate isn’t bad; or that they just need to spend more on customer acquisition marketing or advertising; or that investing in customer service is just a necessary cost of doing business.

But what’s actually going on is that the product is weak, and the company is just trying to make the best of what they have.

At one level this is just another symptom of companies under-investing in design and user experience. But more generally the truth is that many products out there are actually poorly done, and rather than improve a product to the point where it can generate real revenue and success for you, many organizations view it as easier to create a new product. But unless they change the way they produce that new product, they’re likely going to just end up with yet another product in need of improvement.

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Every so often I meet a product manager that tells me that they are not allowed to talk to their users or customers. Sometimes it’s because the sale reps want to control all access; or maybe it’s because marketing is supposed to be the interface with the customer; and occasionally there is literally a corporate policy restricting direct customer access because of worries about inappropriate statements or commitments. For whatever reason, if you work at a company where you’re told you can’t talk to your users, my advice is to first try hard to change this policy, but if that doesn’t work, dust off your resume and find a place where you can practice your craft and have a shot at creating great products.

I really don’t know how you can build products users will love without a deep understanding of those users, and you won’t get that without lots of direct communication, including face-to-face interactions.

Often, especially in larger companies, there are many different filters set up to try to “help” you as product manager understand the market. You’ll find marketing groups that commission surveys and focus groups that produce reports on what the users (think) they want, and sales organizations that will have someone like an SE (technical assistant to sales reps) designated to aggregate customer input and pass it along to the product manager, or customer service managers that are responsible for monthly reports on what the top issues are.

All that input is fine, but it is in no way a substitute for the product manager getting the direct interaction with users he needs to do his job.

To be very clear, I believe that the product manager should attend every user interview, every site visit, every usability test, and every customer advisory board/voice of the customer meeting that pertains directly to his product.

It is from getting to know enough of these people, and digging with each of them into their underlying needs, that we get the insights necessary to inspire great products. The insights won’t come from the surface level dialog of “I need to customize this page, and get a report with the time spent divided by the number of resources,” or, “72% of our users said they want higher resolution videos.”

By all means, leverage your organization. Many design organizations have user research capabilities that can be a huge help in facilitating and analyzing user interactions. Just make sure you’re there working with the researcher. It’s also fine to bring along a marketing person so they can start thinking about messaging and positioning. And I’m a fan of bringing along the lead engineer so he can start thinking about how these underlying issues might be solved.

But don’t abdicate your responsibility of understanding the user.

One final point. As you meet users, you’ll start to naturally find that some are much more useful to you than others in terms of fitting your target profile, or the level of insight they can provide. For these people, establish an ongoing relationship. Get their phone and e-mail and keep it handy in your office. As soon as you have a prototype, show it to them, and see how they react. When you’re in the middle of the project and a critical question comes up, give these people a quick call and chat about it. Make sure you always have 6-10 such user names handy. In addition to helping you to create a great product, if you play your cards right, these people will be great public references on the day you launch.

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