How To Create An Awesome Product Strategy
What Is A Product Strategy?
It’s important that an organisation have a clear strategy and that the product strategy is intrinsically linked to an organisation’s strategy. A Product Manager must understands an organisation’s strategy, and be able to translate it into a clear and concise product strategy. A product strategy is a set of questions and answers an organisation works through in order to achieve its objectives. A product strategy allows an organisation to plan and guide itself from where it is, to where it wants to be. It shows an organisation which paths to take and which paths to avoid when achieving its objectives.
A product strategy is used as a communication tool to get buy-in and align all stakeholders. Many people are responsible for creating the product strategy but the Product Manager is responsible for its delivery. A Product Manager is responsible for leading the team to execute the strategy with the aim of delivering the organisation’s objectives. A well designed product strategy increases the chances of success when it comes to product development. Metrics should be used to measure the success or failure of the product strategy as an organisation moves towards its objectives. When complete, a Product Manager should be able to summarize the Product Strategy in a few sentences. A useful framework to use when creating the summary is as follows:
For [target customer], who has [need], [product XYZ] is a [market_category] that [one key benefit]. Unlike [competition], product XYZ [unique differentiator].
The Target Customer refers to the customer segment a Product Manager is building the product or service for. This information should come from the market research conducted along with the customer personas created. It’s critical the Target Customer appears first in the product strategy summary as the rest of the information flows from the Target Customer. Additionally, the Target Customer narrows the scope of the strategy to a specific customer segment and therefore a specific product or service.
Next, identifying and focusing on one and only one customer need focuses the strategy even further. Again, this information should come from research and user personas. It also focuses the product strategy on the problem, the pain or need of the customer segment and not on solutions or new technology. Narrowing the focus of the strategy based on one customer segment and their top pain or need allows a Product Manager to translate the product strategy into design choices.
Market Category is at the core of how a customer segment is going to think about an organisation’s product or service. Customers are going to put an organisation’s product or service in a category so they can organize, compare and understand it better relative to alternative solutions. Understanding how a customer does this will align an organisation’s efforts with the customers needs, perceptions, and buying journey. There are several main market categories;
- New market
- Existing market
- Adjacent and
- Niche markets
The best way to determine which category an organisation is in, is to speak to customers to learn how they categorize the product or service. In the CustDev interview process, towards the end of the interview, introducing the solution will allow a Product Manager to better understand how a customer thinks about the solution, if they understand it, how they compare it to other solutions, and how they categorise it.
Key Benefits And Competitor
Key benefits are the value that is created for a customer or the things it helps the customer accomplish. Before a Product Manager starts developing features, it’s critical they understand the customer segment, their pains, needs, jobs, and the benefits they are looking for. The key benefit in the product strategy should be the customer’s number one key benefit and align with the number one customer need mentioned at the beginning of the product strategy summary.
As mentioned in the Kano model, customers will use Satisfiers to judge an organisation’s product or service against its competitors. It is the responsibility of the organisation to categorise its own product and services to make it easy for its customers to choose its products over its competitors. If an organisation does not do this, the customer will determine which category an organisation’s product or service is in leading to an incorrect comparison of Satisfiers and reducing any competitive advantage an organisation may have. An organisation can use its direct competitors in the [competition] section of the product strategy summary to guide the customer in making more accurate comparisons.
The unique differentiator is the one thing an organisation would like to have that it’s competitor’s don’t. How an organisation creates and delivers the Basic, Satisfiers, and Delighters categories of its products and services, based of the Kano model, will determine how it differentiates itself from its competitors. All direct competitors should fulfill the same Basic category. Satisfiers are used by customers to judge an organisation’s product or service against others. An organisation’s customer satisfaction in relation to these Satisfiers are in direct proportion to how an organisation execute its Satisfiers. Delighters are an excellent way for an organisation to differentiate itself from its competitors. In order for a Product Manager to provide a competitive advantage, they must first understand all their direct, indirect, potential and substitute competitors for their products. To understand this, a Product Manager should conduct internal, external, qualitative, and quantitative research. This information on competitors should be captured in a feature table. The Project: ProofPop – Research Phase Part 1 blog goes into a lot more detail about how to complete this research. Below is a screenshot of the feature table.
Product strategy involves many different stakeholders. These stakeholders need to be identified and brought on board to provide input and support for the product strategy. The team that creates the product strategy should consist of stakeholders responsible for its approval, funding, and execution. These stakeholders are a mix key people form different areas of an organisation including executives, finances, sales, support, marketing, developers, and subject matter experts. These stakeholders need to be included throughout the product strategy design process so that a comprehensive product strategy can be developed, and so they buy into and become evangelists and enthusiastic supporters of the product strategy.
The product strategy should align with the organisation’s strategy which is a top down approach. But, it should also emerge from patterns and insights gained from internal, external, qualitative, and quantitative research which is a bottom up approach. These patterns and insights emerge over times. As such, it’s best to establish a basic product strategy initially, then begin executing on the strategy as information becomes available, and make adjustments along the way. Once the product strategy is operational, it’s important to pay attention to macro-economic trends, market shifts, metrics, amongst other inputs, make adjustments accordingly, and keep all stakeholders updated.
Once the key stakeholders have been identified and the product strategy team assembled, it’s necessary to collect input from each stakeholder, publications, industry experts, and additional research so the product strategy team can make informed decisions on which direction to take, then execute on the agreed upon strategy. The process for collecting this data is mentioned in the How To Research Like A Product Manager and How To Interview Like A Product Manager. A useful way to communicate the product strategy is to use a PowerPoint presentation. The PowerPoint presentation should follow the logical structure of a startup or funding style pitch deck. Everyone within an organisation should know what the product strategy is, how it applies to them and what they do. It is the responsibility of the leadership team to make sure the product strategy messages is distributed throughout an organisation and widespread adoption. Once the product strategy has been developed, it needs to be translated into outcomes. This is done by using a product roadmap. The aim of a product roadmap is to turn the product strategy into achievable milestones that help the business achieve its overall objectives. Different departments within an organisation uses the product roadmap to plan their workload in preparation for the product release.
In summary, a product strategy should be linked to the organisations strategy. It should how answer specific questions about what the organisation wants to achieve. It allows an organisation to determine where it sits in the market compered to it competition. It involves key stakeholders throughout the business so input is gathered from all areas of the business. Internal, external, quantitative and qualitative data is used as a bottom up approach to provide a more robust product strategy. Finally, the product strategy is used as a communication tool to keep the whole organisation moving in the same direction.
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