Opportunity scoring is one of several popular strategies for prioritizing features on a product roadmap. Product teams use this strategy when they want to learn which features customers view as important but are currently unhappy with. Improving these features can represent opportunities for the product to win increased customer satisfaction and loyalty and also to attract new customers.
What is opportunity scoring?
In product management, opportunity scoring is a way to prioritize feature development by identifying the features that customers consider important but underdeveloped or otherwise disappointing. You can think of opportunity scoring as an importance-versus-satisfaction analysis. (Not to be confused with value vs complexity analysis).
To conduct opportunity scoring (sometimes called opportunity analysis or gap analysis), you ask customers to rate the importance of several features in your product, and then to rate how satisfied they are with each. Those features that score high in importance and low in satisfaction represent your opportunities. In other words, these features promise a strong return for the development time and resources you will need to invest in improving them. However, bypassing opportunity costs in the prioritization process can lead to poor decision making.
What are other uses of opportunity scoring?
Opportunity scoring plays a prominent role in several areas of business other than product management, such as marketing, sales, IT management, and even investing. Business teams of all types use this approach, which they typically call a gap analysis, to determine where deploying their limited resources will help them achieve the greatest return on investment.
A standard opportunity scoring formula in a business might look like this:
- Step 1: Identify the current state of your business.
- Step 2: Determine the desired state for your business (where you want your business to be).
- Step 3: Pinpoint the gaps in the current state of your business (the specific differences between where you are and where you want to be).
- Step 4: Determine what steps you will need to take to bridge each of these gaps, and weigh the relative cost and benefit of each.
This final step is the key. When a business uses the opportunity scoring or gap analysis approach, they need to weigh the relative costs and benefits of bridging all of the gaps they’ve identified in step 3. The most strategically viable opportunities will be those gap-closing initiatives that represent high future value to the company but relatively implementation low costs (in terms of budget, resources, effort, or other metrics).
How can product management teams use opportunity scoring?
As you can see from the description above, opportunity scoring can be used differently in different fields of business. Some organizations and teams use it to assess the difference (the gap) between their current performance and the performance level they want to achieve, as well as the most strategic approaches to close that gap.
In product management, however, opportunity scoring represents a more narrowly-defined framework. Product teams use opportunity scoring to gauge the potential ROI from working on various features based strictly on which features customers say they value but currently find unsatisfying.
Where did this type of opportunity scoring come from?
The opportunity scoring framework product managers use today can be traced to the outcome-driven-innovation (ODI) method created by business consultant Tony Ulwick in the 1990s.
According to Ulwick’s ODI framework, which he designed to help businesses identify profitable product and service opportunities, companies often gather and analyze the wrong types of market and usage information. This is because customers often can’t articulate what they want in terms of a specific product or feature, but they can tell you what outcome they’re trying to achieve. For this reason, the ODI model places emphasis only on learning what customers are trying to accomplish, not how they think the product should help them do it.
One effective way to learn this information and to create customer value, according to the ODI model, is to learn what aspects of a product customers view as important but underserved in the product’s current state. This is why the opportunity algorithm aspect of ODI, which we’ll discuss next, takes a different approach from the typical gap analysis.
How product managers can use opportunity scoring
Using the opportunity algorithm developed as part of Ulwick’s ODI framework, product managers will place a great deal of emphasis on how important customers view a specific outcome a product might offer. Remember, under ODI, you are trying to discover what results your customers want to achieve with your product.
With that in mind, you can create both a list of product features and/or potential outcomes or results from the product, and then survey a sampling of customers by asking them to score each of these features on a 1-to-5 or 1-to-10 scale according to two questions:
- How important is this feature or outcome to you?
- How satisfied are you with how the product delivers today?
Whereas the standard gap analysis treats customers’ importance and satisfaction ratings equally, with Ulwick’s opportunity scoring algorithm you will give twice as much weight to your customers’ feature-importance scores as to their satisfaction scores. (You are trying to gauge the outcomes they value most.)
That weighted equation looks like this:
- Importance + max(importance – satisfaction,0) = opportunity.
Then you will plug your numbers into the following equation:
- importance + (importance – satisfaction) = opportunity.
Again, the features or outcomes that represent your strongest opportunities will be those that receive the highest aggregate “importance” and lowest aggregate “satisfaction” scores. These are your most fertile areas for development and innovation.
You might also discover a surprise benefit from an opportunity scoring analysis. In addition to identifying those features that promise the greatest return on investment, you might also discover some areas of your product where you’re devoting too many resources. If customers rate certain features as unimportant but say they are highly satisfied with them, those could represent areas you’ll want to shift development resources away from, and redeploy those resources onto the higher-importance, lower-satisfaction features.
Opportunity scoring: a great opportunity to find productive ways to innovate
Opportunity scoring is just one of many frameworks for prioritizing features, but it can offer unique insights into your customers’ most important or urgent goals, and how you can innovate new features (or improve existing ones) to help them reach those goals. For this reason, even if you also conduct one of the other feature prioritization approaches, you should also consider conducting an opportunity scoring analysis.