Once you pick an industry it can be defined with a simple equation

Industry — Demand, Supply, Exchange — Value Proposition

For example:

E-commerce — Buyer, Seller, Physical Products — Supply Chain (Fastest Delivery, Widest Selection, Lowest Price), Ex: Amazon, Flipkart, Rakuten

This context will let you then choose which part of the equation your problem statement lies in. Is it the demand, the supply, the exchange or the value prop.

In all industries there are 4 product stages:

1. Acquisition: How do you get your potential customers to pay attention to you
2. Activation: Get them to perform a core action that lets them experience the value proposition of your product
3. Repeat Action: Getting them to do the core action only once is not enough. You need to get them to repeat it.
4. Engagement: Once you’ve got them to repeat your core action enough number of times, the user starts to form an association between their need and your solution.

In terms of users interacting with products you can distill down the brain function in 4 main shortcuts:

1. Filter information: We have space for only few things in our memory hence we filter out most of the information.
2. Take Action: Our brain tries to be efficient and to act fast, it tends to take cues from our past experiences
3. Rationalise Decisions: When we are dealt with information we tend to fill in the gaps to make more sense.
4. Remembering: We need to remember information to build a mental model of the world which evolves as we pass through life.

Let’s look at an example of an e-commerce clothing company looking to reduce the return rate of their items. We know from the industry context that the issue could be from Buyer (demand), Seller (supply) or exchange (product). Let’s consider the reason for return majorly is that first time buyers are buying the wrong size. From the product stage this is an Activation problem.

Now applying how the brain works, we understand users ordering a size they usually order is a status quo bias. They aren’t paying attention to the size chart

In order for us to effectively change the behaviour, we need to understand that the status quo bias is a way for the brain to take action by taking cues from past experiences.

We can use the short cut of filtering information before the user takes action. We can use the attentional bias to bring attention to the size chart. This involves us adding a small micro animation on the size chart for first time users to catch their attention. So that they check the size chart before they order.

We can then run an A/B experiment to validate our hypothesis

And, There you have it! A new way to think about products — The Cognitive PM way. In the next articles I will write about different cognitive biases and how they can be used in different industry contexts, product stages and what shortcuts the brain takes. With this article, I hope I have been able to inspire you to lean into the product management role with an understanding of human psychology.