When I hear the word ecosystem, I think of my science class as a kid. Specifically, I remember having to choose an environmental ecosystem to do a project on. I chose the tundra ecosystem and talked about how the living and nonliving things in this climate worked together to survive the harsh, frozen, and typically snow-covered environment — none of them would make it without the value each element and organism provided.
You might be wondering why I’m telling you this story (a valid thought on your part, if that’s the case). Here’s my logic: An environmental ecosystem functions in a very similar way to a product ecosystem. A product ecosystem is when products can coexist in a way that’s beneficial for the customer (not to mention, brings in more revenue for the business).
In this post, we’ll take a look at successful product ecosystems and why buyers want to be a part of them.
What is a product ecosystem?
A product ecosystem is created when a business offers multiple complementary products or services for their customers to purchase and use in tandem. The purpose of a product ecosystem is to simplify the lives of customers by providing products or services that can be used for a variety of needs. These products or services can coexist peacefully and integrate or connect with each other which makes them more powerful and valuable for users.
Why is a product ecosystem valuable?
The process of building a successful product ecosystem is valuable for businesses for numerous reasons — product ecosystems work ...
To solve for all of the needs of your customers — which helps improve brand loyalty and advocacy.
To boost revenue by making it easy for customers to expand their library of your products.
To prevent your customers from having to invest in other products that are sold by your competitors and other brands.
To make the lives of your customers easier by solving for a wide array of challenges within the system they’re already a part of.
To create products that support each other and coexist in a way that makes them stronger and more useful for customers.
To support the development of your product line over time by making updates that improve their ability to connect and work in tandem with each other.
To offer a greater range of services for customers and, therefore, improve your chances of becoming known as an impactful player in your industry.
Next, consider an example of a successful ecosystem to gain a better understanding of the way in which they function.
Example of a Product Ecosystem
An example of a successful product ecosystem is the one Apple has created. Apple has a host of products that connect with each other to effectively and easily meet the technological needs of its target audience. Read the following potential scenario to see what I mean.
Plug your iPhone into your MacBook Pro to view all details related to the phone including your storage, different aspects of your phone’s history, your music library, and more via your laptop. And speaking of your music, connect your AirPodsin just seconds to your iPhone and your MacBook for seamless listening opportunities cross-device.
Then, lock your phone and close your MacBook Pro prior to heading out on a run. Throw on your Apple Watch so you can leave those larger devices at home while maintaining access to your music with your AirPods. Don’t worry, your Apple Watch will still notify you of your call, text, and email notifications while out on the running trail. Meanwhile, your mileage, time, heart rate, and other workout details will also be recorded while you’re running. Then, when you return from your run, head into your home office and plug your Apple Watch into your iMac to view your workout summary on the easy-to-view display screen.
This is just one example of how a few of the products within Apple’s ecosystem coexist to improve their value to and simplify the lives of its customers.
How to Build a Product Ecosystem
You can build your product ecosystem in a number of ways. Below, we’ll review four of the most common steps when doing so. These steps are all-encompassing so you can incorporate them into your process no matter the industry you’re in.
1. Listen to your customers.
For a product ecosystem to be beneficial to buyers, you need to ensure your products or services are effectively solve the challenges and pain points of your target audience. To do this, listen to your customers. Ask them what they’re missing in your current products and services; ask them about the work they do on a daily basis so you can determine the best ways to meet and exceed their needs with the support of your product ecosystem.
Here are some ways to develop a stronger understanding of your customers, and listen to their needs, to ensure your product ecosystem is valuable:
Look at the product ecosystems of your competitors
2. Simplify the connections within your product ecosystem.
Part of the reason buyers want to be in a product ecosystem is the ease that comes from using the products of a single brand. For example, as a HubSpot user, you can manage your entire business, across all departments, within the one system. As the businesses of HubSpot customers grow and their needs expand, they can easily purchase or connect to additional products, tools, or Hubs within the software in mere seconds.
By making connections and integrations simple, your product ecosystem becomes more valuable for customers. This also helps you improve your brand loyalty, as customers will be less likely to get frustrated and spend time identifying the product ecosystems of other businesses that are simpler and more efficient.
3. Consistently update and improve your product ecosystem.
As mentioned, your first step in creating a product ecosystem requires you to ask for, and listen to, customer feedback. Continue to do this as your ecosystem evolves and expands, not just as you make your initial plans to build it.
This way, you create products within the ecosystem that effectively solve the needs of your customers. It will also help you update and improve individual parts of your ecosystem as needed in a way that makes being a part of it valuable for customers.
4. Make joining your ecosystem valuable for customers.
By working through the above steps, you’ll likely have no issue achieving this final step — however, it’s still important to reiterate the need for your product ecosystem to be valuable for customers to join.
Think about it — your ecosystem won’t succeed among your target audience and customers if it includes products with functions and features that aren’t cohesive or powerful when grouped together. After all, this is how any ecosystem functions — through the collaboration of each piece and member.
Build Your Product Ecosystem
Building a product ecosystem your buyers want to be a part of is how your business can improve loyalty among customers, boost revenue, improve retention rates, and become better-known as an industry leader. So, think about the needs of your customers, the ways in which you can better serve them with your ecosystem, and how an ecosystem can make your product line more valuable.
Originally published Jan 13, 2020 7:00:00 AM, updated January 13 2020