How do you conduct root cause analysis in product management?

This is the main question we explore in this article. We also explain why it’s important for product managers and share useful tips.

Let’s dive in, shall we?

Summary of root cause analysis in product management

• Root cause analysis (RCA) is a problem-solving process that focuses on identifying their underlying causes.
• RCA helps organizations eradicate recurring issues and not just symptoms. This is more cost-effective and allows organizations to improve the customer experience in the long run.
• The RCA process starts by defining the problem. Be specific, use data, not assumptions or speculations, and refrain from jumping to conclusions about possible causes.
• To get access to unique perspectives and expertise, build a cross-functional team.
• Collecting data about the problem’s nature and its extent is key to making informed decisions.
• Based on the data, formulate hypotheses on potential causes. Consider both internal and external factors.
• Next, conduct further research, run experiments, and dig deeper into issues to validate or refute the hypotheses.
• Once a hypothesis is proven right, generate solution ideas and prioritize them in terms of impact and technical feasibility.
• Finally, implement the solutions and monitor their impact. Iterate on the feedback if necessary.
• Userpilot offers advanced analytics and feedback features. Book the demo to see how it can help your team conduct RCA!

What is root cause analysis in product management?

Root cause analysis (RCA) is a problem-solving method. It’s used to identify the underlying causes of issues or faults in a product or the product management process.

The objective of RCA is to discover what caused a particular problem, why it happened, and how to prevent it from happening again.

Benefits of conducting root cause analysis for product managers

Root cause analysis is essential for product organizations for several reasons.

First and foremost, it helps teams find the actual cause of an issue instead of merely addressing its symptoms. This is important because fixing the root cause prevents the problem from recurring.

Dealing with root causes instead of symptoms helps organizations to save time and resources in the long run.

More importantly, through root cause analysis teams gain insights on how to improve the product experience. This translates into fewer complaints and support tickets and overall higher customer satisfaction and retention.

What are the steps in a root cause analysis template?

With the theory out of the way, let’s have a look at how to conduct root cause analysis, step by step.

1. Clearly define the problem statement

The first step in the process (and arguably the most crucial one) is to clearly and accurately define the problem.

This normally involves a detailed description of the problem: what is happening, where, and when.

When defining the problem statement, it’s important to:

• Be specific.
• Base it on observable facts rather than assumptions or speculations.
• Keep it objective and free from biases or predetermined conclusions about the causes.

For example, instead of saying, ‘Retention is declining,’ a more specific problem statement would be, ‘Retention has decreased by 8% in the last quarter.’

A clear problem statement helps you maintain focus throughout the RCA process and ensures that it is aligned with the actual issue rather than perceived problems.

2. Assemble a team for problem-solving

After defining the problem statement, the next step in root cause analysis is to gather a team dedicated to solving the issue.

While the product manager holds the overall responsibility for RCA, you can’t do it alone. That’s because without the perspectives and expertise of team members from across the organization you may struggle to come up with diverse insights into potential causes and solutions.

Depending on the problem, you may seek input from data analysts, customer success managers, developers/engineers, or the sales and marketing teams.

For example, to deal with declining retention, the PM is mostly likely to involve customer success, customer support, and marketing at the very least.

3. Collect and analyze data to understand the problem’s nature and extent

The third step in root cause analysis involves collecting and analyzing the data related to the problem.

The insights gathered at this stage guide the further steps in the RCA process.

For example, when investigating the root cause of declining retention, customer data may reveal that a specific user segment is affected in particular, while funnel analysis may help you narrow down the scope of your investigation to a specific stage in the user journey.

Moreover, you may be able to gain initial insights into potential root causes.

For instance, you may spot the correlation between falling customer retention and lower usage of a particular feature, or retention analysis can reveal that the retention started dropping after an update release.

4. Develop hypotheses of the underlying causes

Once you have a clear understanding of the problem’s nature and extent from the collected data, the next step is to develop hypotheses about what the underlying causes might be.

For example, your hypothesis may be that ‘the retention drop was caused by sunsetting feature X.’

When formulating your hypothesis, consider both external and internal factors.

Check for external factors

External factors that could impact the problem include:

• Market changes (new competitors, economic changes)
• Regulatory changes (new laws and regulations)
• Technological developments (new technologies making your product obsolete)
• Geopolitical factors (social unrest, conflicts)

List down internal factors

Internal factors to consider include:

• Changes in user behavior patterns
• Shifts in customer preferences
• New features, product updates, or changes to user flow
• Changes in internal processes
• Bugs and errors
• Organizational changes

5. Investigate and validate the root cause hypotheses

After developing a list of potential root causes, both external and internal, the next step in root cause analysis is to investigate and validate these hypotheses.

This step involves a combination of further data analysis, experimentation, and logical deduction to confirm or refute each hypothesis.

For example, to identify the causes of friction that could lead to user churn, you may conduct path or heatmap analysis and watch session recordings. You can also run in-app surveys and conduct interviews to gather customer feedback.

To dig deeper into each hypothesis, use techniques like the ‘5 Whys’, which involves asking ‘why’ repeatedly until you get to the bottom of the problem, and record the findings in the fishbone diagram.

6. Brainstorm and prioritize the solutions with the greatest impact

Once the root causes of the problem have been validated, the next step in the RCA is to ideate and prioritize solutions that will effectively address these causes.

This phase is about generating a wide range of potential solutions, so this is the time when involving multiple team members with diverse perspectives and expertise pays off.

Apart from regular brainstorming sessions, consider using techniques like brainwriting, the Nominal Group Technique (NGT), Storyboarding, SCAMPER, or Six Thinking Hats.

Having generated a list of solutions, prioritize them.

To do so, use frameworks like ICE, RICE, or Value vs Effort, or create your own scoring matrix. The latter gives you the flexibility of using criteria relevant to your situation. For example, you may consider not only the impact of the solution but also its technical feasibility.

7. Implement the solutions

The final step is all about implementing the selected solutions.

It’s good practice to do it gradually and test their impact before rolling it out for all users.

For example, you can conduct beta tests to ensure that the new solutions aren’t plagued with any issues like technical glitches or missing elements.

In this way, you reduce considerably the risk of releasing solutions that cause even further damage.

Releasing the fix isn’t the end of work for you. To ensure that it solves the problem, monitor the key metrics regularly. For instance, if your goal was to increase user engagement and retention, has the number of monthly active users actually increased?

Iterate on the insights and tweak the solution as necessary.

Example of a root cause analysis

Here’s what root cause analysis could look like in practice.

1. The problem was identified as a 30% increase in customer churn rate over the past three months, primarily among small to medium-sized business clients.
2. A cross-functional team is formed, including members from customer support, sales, product development, data analysis, and a senior product manager.
3. The team members gather data on customer usage patterns, support ticket histories, churned customer feedback, and recent product updates. They analyze trends and look for correlations between churn rates and specific product features or customer segments.
4. They develop hypotheses of the underlying causes, including:
   – Recent software updates may have introduced bugs.
   – Changes in pricing strategy make the product less attractive to small businesses.
5. To investigate and validate the root cause hypotheses, the development team reviews recent updates and tests them for bugs, customer service logs are analyzed for patterns in complaints or queries, and sales data and customer feedback are reviewed to assess the impact of recent pricing changes.
6. The following solutions have been proposed:
   – If bugs are found, prioritize fixing them in the next update.
   – Consider a tiered pricing model that remains attractive to small businesses.
7. Once implemented, the team monitors the impact of these changes over the next quarter, tracking customer churn rate and feedback to ensure that the problem is effectively resolved.

Tips for carrying out root cause analysis accurately

To wrap it up, here are a few pro tips on how to improve the RCA process at your SaaS organization.

Document the RCA process

Proper documentation is vital for effective root cause analysis, especially in complex SaaS products. Documenting the RCA process helps you avoid going around in circles and build a knowledge base that can inform future decision-making and process improvements.

Use a template like the one from Smartsheet to record every step of the process. Include the rationale for each decision and keep the record up to date.

Make it a continuous activity

Rather than seeing RCA as a one-time exercise, integrate it into the standard operating procedures to enhance problem-solving capabilities.

Such a proactive approach will help you identify and deal with potential issues before they escalate.

To achieve this, train all your team members in basic RCA techniques, establish feedback loops, and schedule regular reviews. More importantly, promote a blame-free culture and foster a mindset of continuous improvement.

Choose the right tool stack

PMs in SaaS are lucky because every user interaction with a product happens in the digital space. This makes it easy to collect user behavior data that’s essential to conduct RCA.

And with modern code-free tools, like Userpilot, even non-technical team members can analyze user behavior and act on the insights.

Conclusion

Root cause analysis is an essential aspect of product management. By getting to the bottom of the problem, PMs can prevent recurring issues that are expensive to deal with and have detrimental effects on customer satisfaction and product performance.

If you want to learn more about Userpilot and how you can use it for root cause analysis, book the demo!