Product Strategy can be defined as the goal-oriented approach to successfully launching and growing new products to create shareholder value.
Here are five key factors that Product Managers should consider when developing their product strategy:
1. How will this product make money?
The first key factor in every successful product strategy is making sure there is a clear way for the product to make money, either directly or indirectly. Most companies generate revenue by selling products, services or advertising; therefore, aligning all efforts towards increasing revenue/profits is key if your company wants to continue to grow over time.
2. What makes us different from our competitors?
A strong differentiator can help set you apart from your competitors and increase customer loyalty – ultimately leading to better sales numbers. Being different from your competitors doesn’t always have to be based on price, as there are many examples of companies being successful with differentiators such as ease-of-use or product quality (e.g. Apple and Microsoft).
3. Why should customers care about our product?
This is a very important factor in the success of your product – without proper messaging, you may miss out on new opportunities and fail to capture the attention of key audience segments that could benefit greatly from your solution (Cisco’s messaging around Connected Life comes to mind). Additionally, it’s important to note that having an impactful message requires alignment across all company activities – this includes marketing campaigns, sales meetings and support interactions.
4. How does our product compare to the competition?
If you’re lucky enough to have a technical or unique selling proposition that differentiates your product from the competitors you face, then this is an essential question that deserves proper focus. A differentiation strategy should precede any messaging activity you undertake.
5. How does our product help customers achieve their goals/objectives? This is similar to Question 1 but specifically focuses on finding ways to make it easier for potential customers to understand how your solution helps solve real problems they are facing today. And be specific – by focusing on customer objectives, it’s much easier for prospects and customers alike to appreciate the value of your solution.
Some other key factors that Product Managers should consider when developing their product strategy:
1. Who are we? Just because someone else comes up to you and asks, “Who’s your customer?” doesn’t mean that the question is asked in a helpful way. This person may simply be trying to understand who will buy their solution when they launch it next year – but what if you can’t afford another year? First, try to understand how this potential customer defines “customer.” Is it someone who spends money or who could benefit from your solution? Now ask yourself two questions: 1) Who are our customers in terms of industry verticals and geography? 2) How does our technology/solution help them achieve their objectives better than they were previously able to do so?
2. What problem(s) do we solve for prospects and customers ?
It’s important to understand the problem(s) you are solving. Do some research! Where does your solution fit in on TechNavio’s list of top SaaS applications? Who are the competitors, and what do they solve for?
3. What can I/we do better than my/our competition ?
What is your unique competitive advantage? How does it help customers achieve their objectives better than your competitors’ solutions? How does it make you different from them?
4. Do we have a complete view of our market ?
There is always more market research to be done! Remember, there will likely be changes in technology, regulation, and customer needs over time. So stay informed of market trends and new developments that affect your industry. Also, put together a PDF or presentation that can be easily updated with the latest information to keep your team informed.
5. Are we going for growth ?
This is obviously important if you’re looking to grow something! There’s a whole process you can use to track everything from user adoption of a feature you’ve built to business metrics, but it starts here: Are we even tracking what will tell us if we’re successful? And how do we set up meaningful milestones for our company?
6. Are we going for profitability?
It sounds like an obvious question, but some companies don’t even think about setting up metrics that will tell them when they’re profitable or not. There’s a lot of debate around go-to market strategies about which is better: Top line growth or more sustainable bottom line growth – if you have one goal, what should it be? Regardless of your strategy, profitability matters! Setting financial ambitions helps your company grow more sustainably without relying too heavily on funding rounds or venture capital money.
Product Strategy is a way to get everyone on the same page with where you’re headed and how, and it’s a critical part of product management. Defining your product strategy will help everyone prioritize what’s important and how you’re going to get there.