The innovation tip: How to chose your first pilots and how to measure their performance
Choosing the right opportunity to test your MVP is not always simple. On top of that, you need the right kpis to measure the value of your first tests.
In this article, we’ll look at two things:
- How to classify your opportunities? Which opportunity should you start with?
- How to measure your first tests from a business and tech standpoint?
1. How to classify your opportunities to select the ones to start with
There are two criteria:
- Complexity: how difficult and costly it is to implement and deploy your project
-Value: how early will the value proposition be perceived by your customers
On the graph below you will find the four types of opportunities classified by Complexity x Value, with a small explanation of when to chose what.
So basically once you classify the opportunities and use cases in the above graph, you will be able to decide which opportunity to start with, and what are the ones to add to your backlog.
2. How to measure your first tests from a business and tech standpoint
Here is a set of KPIs I usually work with, that are pretty standard and apply to different industries and verticals. They can of course be replaced by sers of KPIs that are more relevant to your business.
Business KPIs (rate each kpi from 1 to 5)
-Conversion rate: depending on your target, do you see any increase of conversion?
-Average order value (AOV): how positive was the impact of your test on the AOV or average basket?
-Users acquisition: how many additional customers or opt-ins did you get?
-Sellout uplift: any uplift in total sales or transactions?
-Cost saving: how much costs were saved by implementing your solution? And how cheaper it is vs other solutions?
Tech KPIs (rate each kpi from 1 to 5)
-User Experience: how outstanding is the UX?
-API & Portability: how open and portable is your solution? Are your main features accessible and attivabile by web hooks or web services?
-Native connectors: any native connectors that can be leveraged to augment the experience? Ex: CRM/Data collect, email triggers, ERP, Payment solutions etc..
-Performance: what’s the loading time of your solution? How fast can it process data?
By combining the business and tech ratings (1 to 5) you’ll get the average grade for your different pilots. This will give you the different successes and failures you got, which will also dictate your next iterations: kill your projects, improve it, pivot, etc.
Conclusion
In a nutshell, we have two takeaways. First, properly identify and focus on the right opportunities (short term / long term), then measure to take the right decisions for your next steps.
