Product Experiment Template: A Guide [Free Template]

Thousands of products are released every year. Yet only 20%-30% of them succeed. Improper planning, lack of uniqueness, inability to meet customers' expectations, and pricing structure are reasons why products fail.

Building a successful product involves understanding the customers' pain points and offering features that help them with their challenges. It also requires optimizing your product according to your customers’ requirements. But how do you ensure your customers receive the features you build well? The answer is product experimentation.

Product experimentation is a crucial product development process that must not be addressed. It ensures you offer your customers exactly what they want instead of giving them your thoughts.

This article explains product experimentation in detail and shares a step-by-step guide to building a solid product experimentation framework. It also shares a ready-to-use product experiment template you can download to conduct experiments on your product.

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Understanding Product Experimentation

Product experimentation is the process of testing new features, designs, user experiences, or any other changes with the help of usability tests. It gathers intelligent product insights for making informed decisions about future product development and optimizations. Further, it helps you monitor how your customers engage with specific product changes and contribute to building a fantastic product.

Why Product Experimentation Matters

Product experimentation is essential because it helps you understand your unique customers' requirements and offer them a product as per their expectations. This increases customer satisfaction and ensures product-led retention. It provides valuable data that you can leverage to determine what is working and what is not. It helps you identify small changes in your product that would go a long way in meeting your customers' expectations.

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Further, by designing a product that appeals to the customers, you can create a product that is superior to your competitors. It gives you insights into how your product can stand out from similar ones.

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Product experiments help you identify the strengths and weaknesses of your product. This speeds up the process of catching the issues or pitfalls and resolving them before they pose a problem. Thus preventing customer complaints and dissatisfaction.

Types of Product Experimentation

Product experimentation is an endless learning loop and contributes to developing a quality product. You can run regular experiments to explore the possibilities for product improvements and new features.

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Some of the most common types of product experiments are:

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• A/B Testing

A/B testing compares two versions of your design, feature, or product. Both these versions are usually identical except for one specific change that determines which one performs the best among the chosen customer segment.    

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• Multivariate Testing

Like A/B testing, multivariate testing evaluates multiple variations of a design, app, website, or product feature. It helps you identify which combination of changes produces the best results. It is an advanced version of the A/B test where you run tests by changing multiple components rather than just one element.

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• Funnel Testing

Funnel testing works similarly to multivariate testing, i.e., testing multiple changes simultaneously. However, these changes happen across each step of the sales funnel to identify the areas where the customers are dropping off or abandoning the product.

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• Usability Testing

Usability testing tells you how your customers are utilizing your product. By analyzing the customer's behavior and interactions, you can identify friction points and areas for improvement in your product UX.

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• Click Tracking

As the name suggests, click tracking involves tracking and measuring customer clicks within your product or website. Auditing clicks helps you analyze the customers' clicks and navigational behavior for optimizing product UX.

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• Fake Door Testing

This type of testing enables you to check the demand for a new feature without actually investing time and effort in its development. It helps you gauge your customers' interest in a new feature, design, or product before its release.

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Popular Product Experimentation Frameworks

Product experimentation has always been part and parcel of the product development strategies of leading companies. These companies leverage it to conduct market research, understand customer pain points, analyze user behavior, and more.

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Here are examples of a few of them.

1. Google

Goal: To gather user insights

Google is famous for its hundreds of products and services worldwide. Have you ever wondered how it developed all these innovative products? It is by focusing solely on the users. The company reaches out to its users and gathers data about their problems, behavior, interests, and preferences to design a feature/product that the users would love. It releases these products as beta launches to gauge customers' reactions and capture their feedback to improve product functionality.

2. Netflix

Goal: To ensure customer retention

Netflix, a leading entertainment streaming service, focuses its product experimentation strategy on customer retention. The company constantly seeks to increase customer engagement and invest heavily in personalization to boost customer retention. It conducts regular product experiments to ensure that every customer goes through a unique experience when interacting with the application.

3. Typeform

Goal: To resolve customer pain points

Typeform, an online survey builder, noticed its customers needed help building forms with conditional logic using their tool. It was one of the most common feature requests they received. The company decided to develop the idea and offer its customers their most-requested feature. Upon development, the feature was released to a small set of customers and later made available to the entire customer base.

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So, how did these companies manage to conduct successful product experiments? It’s by building a product experimentation framework.

Building Product Experimentation Framework

A product experimentation framework offers a series of structured steps Here is how to do it.

1. Defining and Setting Goals

You need to set goals for your product experiments to ensure they align with your overall business objectives. Define the key metrics you are trying to improve via these experiments. For instance, if one of your KPIs is to increase the time your customers spend on a page, your experiments would focus on testing different variations of page layouts or banner designs.

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To ensure that your experiments stay on track, set realistic goals and key metrics to analyze the results of those experiments.

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Ask yourself these questions -

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• What do my customers need from my product?
• What are the different ways I can address those needs?
• How will my product benefit from this change?

The answers to these questions will help you set clear goals and save you from the hassles of working on pointless product changes. Track at least 2-3 critical metrics per experiment to measure your product experiments' impact accurately.

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You can also conduct customer research to identify the friction points they encounter while using your product. Leverage surveys, interviews, and more to spot the problem areas without climbing on the wagon of guessing games. This could also be a great way to define and set your experimentation goals.

2. Formulating a Hypothesis

Now that you have identified the problem areas, you focus on how you could fix them. There might be several ways to resolve the problem. However, you need to prioritize one of them to achieve your goals.

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A hypothesis is an assumption statement that shares a proposed solution for the problem areas in your product. For example, your goal is to reach 50 new sign-ups daily. In that case, your hypothesis might be, 'We can move the product explainer video to the page header because potential customers can view it without any confusion.'

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Here's how you can formulate a compelling hypothesis for your experiments.

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• Determine the key elements you are testing in your experiment.
• Note down the expected result and the assumptions based on your expectations.
• Write down your theory as to why it would occur.

You can follow the below-mentioned structure to create your hypothesis.

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'If [this experiment] occurs, then we expect [the expectations] because [the assumptions]'

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A hypothesis offers you everything you need to know about conducting your experiment.

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• What you are doing and why
• What metric are you targeting
• Who you are targeting

3. Planning the Experiment Strategy

Next up is planning your experiments. You must build a solid strategy to carry out these experiments based on your goals, KPIs, and hypothesis.

Choosing your testing methods

Determine how you want to conduct your experiments. Select the best-suited type of experiment for your product by considering your goal. Ensure that these experiments derive both qualitative as well as quantitative data. This will help you understand any experiment's 'what,' 'where,' 'when,' and 'why.'

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Consider experimenting with a landing page design. Quantitative data will help you decide the best-performing version of the design. And qualitative data will offer you insights into customers' behavior on each of the versions.

Setting up experiment parameters

Define your sample size for your experiments, i.e., the number of customers to test with. It is ideal to pick up a large sample size as smaller groups might give inaccurate results. Segment your customers with shared characteristics into different groups. This will help you efficiently analyze the results of your experiments.

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Similarly, determine how long you want to run your experiment. The length of your experiment could be anything - a day, week, or month. However, it is ideal to run your experiments for at least a week as customer behavior may vary depending on different days of the week.

Forming a product experiment team

Running product experiments is not a one-man's job. It is a collaborative effort of an entire team. Build a team of designers, developers, marketers, and so on, and assign them designated roles. Each of the team members can work together to conduct successful product experiments.

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Designing variations for your experiment

Once the team is ready, it is time to work on building the experiment. Let the designer work on creating various design mockups for the product. For example, if you are testing the onboarding workflow, your designer can design a few versions of the customer paths.  

4. Launching the Product Experiment

Now that you have developed the designs and assigned responsibilities to your team members start conducting your experiments. Launch your experiments with the help of some product experimentation tools. Let your experiments run for some time to gather a sizable amount of data. If you stop your tests too early, you might need to have data that accurately reflects your customer behaviors.

5. Reviewing and Interpreting the Experiment Results

The final step is to analyze the gathered customer data. Review the results to determine the outcome of your hypothesis. Communicate with your team and the stakeholders to determine the future action plan. A positive result means the change you tested must be rolled out to all the customers, while a negative result gives you insights to create another new hypothesis.

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Remember, product experimentation is an ongoing task. After a successful experiment, you can start brainstorming for your product experiments.

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We have created a product experiment template to help you document and run your product experiments successfully.

Product Experimentation Template for You (Download Now)

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How Can Houseware Help You Run Successful Product Experiments?

Product experimentation removes the guesswork from the development process and ensures you are putting efforts in the right direction. You need an innovative tool that helps you run these product experiments without any difficulties.

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Houseware helps you conduct successful product experiments with its unique features, which were developed to track customer behavior, monitor product adoption, and improve product performance. It offers you an all-in-one tool to conduct better product experimentation.

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For instance, the cohort analysis feature will help you group your customers into various segments based on their demographics, location, interests, etc. This will help you develop a solid product hypothesis for your experiments.

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Similarly, the funnels feature will complement your funnel testing efforts and help you analyze where your customers drop off, where they convert the most, and other essential aspects of the customer journey.

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Learn more about how Houseware supports product experimentation by booking a demo with our team.

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Wrapping Up

Product experimentation plays a significant role in building a product that adds value to customers. It is not a one-off strategy but a culture you should cultivate with your product. It is high time you recognize the power of product experimentation and its impact on your business. Start by setting simple goals, building a hypothesis, and running experiments on your product. And on the way, if you need help running product experiments, explore how Houseware can help. With user-friendly features and easy-to-understand docs, Houseware streamlines the process, making product experimentation a breeze.

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