Face it: your digital product is a service

Digital products aren't like physical products - they don't have an enforced "finished" state. That's a huge opportunity - or a threat, if you're trapped in a company with an industrial mindset…

One of the biggest problems for traditional businesses over the last decade or so has been the fact that digital “products” are much more akin to services than they are traditional products. In the “industrial” age – or the pre-digital one, if you like – you designed, tested and manufactured a product, and revamped it when necessary. This even applies to products like magazines, which, while released frequently, only really revamped the core elements of the product every few years.

This was a factor of what it took to get a product to market – production, manufacturing and distribution mainly. Digital has none of those barriers. Products can be updated, seamlessly, in place, and in real time. Workflows and business structures which can’t adapt to that are in trouble.

This is why digital products are more akin to services. If you have a bad day in a restaurant, the staff talk, and they adjust what they offer for the next day. Mistakes can be more readily rectified, customer demands worked into the product at greater speed. If you apply an agile approach to the code underlying your digital product, you have the same opportunity – you just need a company structure that will support that sort of rapid decision-making and implementation.

This isn’t, I suspect, a transitional phase. This is a new way of doing business, and many of the old ways we structured our businesses are no longer fit-for-purpose. If you’re a new startup, you have to make sure you don’t end up automatically adopting the “product” mentality of the past. That’s tricky enough. Turning around a large business whose very structure reflects a dated way of thinking is an even bigger challenge.

Danielle Sheerin of social business consultants Nixon McInnes offers three steps to working around these problems:

  • Change your view of your customers in a fundamental way. Focus on the whole customer experience and operate with transparency and authenticity investing in your servicing for the good of your long term balance sheet.
  • Embrace social technologies. Look for ways to use social to innovate new solutions that deliver on the expectations that the next generation have for digitally enabled businesses.
  • Break down internal silos. Find new ways for information to flow around your business so that you can collaborate effectively both within and without the organisation.

You could characterise the tools needed for those three steps as:

  • Service Design
  • Social Media
  • Change Management

I see lots of people trying social media – but precious few bring service design or change management into the mix. These could be the new essential survival skills of the digital age…

(Of course, you could brush up on your service design skills by attending NEXT Service Design in Berlin on the 16th of September…)