How To Create Your Product Strategy? [Step-by-Step Guide with Tips]
We all hear the rapid development and introduction of new products in the market. But, do all these products succeed? According to a Harvard study, 80% of new products fail every year. They fail for various reasons, including a lack of market demand, a lack of consumer comprehension, etc.
If product managers look into each cause, they'll find that all the causes point to one thing: ignoring or lacking product strategy.
Product strategy is essential for developing a product, introducing it to the market, and ensuring its long-term success.Let's get started.
What is Product Strategy?
According to Wikipedia, a strategy is "a general plan to attain one or more long-term or overall goals under unpredictable conditions." That final section is crucial. A product manager doesn't need a plan if there is no uncertainty. They may get right to the details.
Product strategy is the work plan on what your business plans to accomplish with the product and how it is planning to do so. A successful product strategy covers everything from the vision to the metrics you need to keep tabs on to know whether you are on the right track.
Product strategy helps people across the teams from Development to Marketing to Sales to think along the same lines and work together towards the same goal.
A well-thought-out Product strategy will help you build a roadmap that takes into account the duly prioritized items, rightful resources, with an apt timeline.
A product manager must rely on a high-level, broad strategy under unpredictable situations. One that expresses their goals but does not specify how effectively product manners along with the team will attain them. It specifies direction but not speed or mode of transportation. It directs everyone's activities and decisions in the product team rather than telling them what to do.
Then, a product strategy is a plan for creating and improving a product to meet one or more business objectives.
The cornerstone of the whole product lifecycle is product strategy, designed to guide product managers on what they're developing, why they're building it, and how.
Aside from providing direction to the product manager and the entire team, product strategy should outline the procedures required to transform a product into a success.
As a result, it encompasses all areas of research and development:
A Good Product Strategy Should Include the Following Elements:
The 'Why' behind the product should be determined by its vision. Why are you creating this specific product, and why should anyone care? It should express the core of what a product manager aims to achieve with the product and how it will benefit those who use it.
Target Market/Customer Persona
Then it's time to respond to the 'Who' inquiry. Who will be the target market/audience for your end product? A product manager needs to figure out your target market - the group of individuals who are most likely to use and buy their product - their customer persona - their ideal customer, goals, difficulties, purchasing motive, and ambitions.
This will be vital in determining the product's appearance, how the product manager will connect with its audience, how they will contact them, and so on.
The term "product placement" refers to how the product fits into the market. Product positioning is the message of how a product manager will offer their product to the world and how their audience will perceive it, rather than making changes to the product itself.
However, the most crucial aspect of positioning is being realistic; positioning is ultimately determined by how people view their product.
Answer the following questions via product differentiation: What distinguishes your product from similar products on the market? What are the distinguishing features that make customers choose your product over another?
To properly differentiate your product, a product manager must do a thorough competitive study to learn about their competitors and determine how they might outperform them.
Goals and Initiatives
Finally, product strategy covers product initiatives and goals. Goals should be well-defined, quantifiable, and time-bound so that a product manager and their team know exactly what they intend to accomplish with the product. Following that, identify Initiatives that are high-level initiatives that will be required to attain the objectives product manager has defined.
Product strategy will serve as a road map for the whole product development process and both inbound and outward product management. As a result, strategy is critical for the entire team and should be shared with all stakeholders.
This article will establish the best practices for developing product strategy and show product managers how to design a clear, transparent strategy that will ensure that everyone on the team understands where their product is going and how they as an overall team intend to get there.
Why is Product Strategy Important?
It's difficult to determine whether a product manager's plans will pay off in an uncertain atmosphere. However, product managers must still make judgments and create outcomes that are in keeping with its business objectives. It's similar to navigating a ship.
A product manager can't go from point A to point B without a voyage plan and regular location checks. They have to make adjustments along the way. A product manager needs to watch other ships (you'd be shocked how many there are at sea) and adapt to currents and weather. A product manager might have to change its entire travel strategy to avoid a storm.
Remember that your product strategy is your product's journey map - A note for product managers.
Building and distributing strong products and being viable as a business require a clear product vision and strategy.
However, it is extremely tough to achieve.
That is most likely why most businesses and product groups lack one. And why so many product managers and teams fail to create one.
The reason for your product's existence is its vision. Why are you putting it together? What issue does it address? What kind of product or company do you want to be?
The product vision is inspiring and long-term oriented, and it links directly to the corporate goal. It serves as a compass for our products and teams. That is why it may be so challenging.
We call a good vision the tale we tell about our goods and even our organisation to the potential clients. Product managers need buy-in from the top of the company all the way down to the teams and individuals executing the task.
The product strategy is the plan for realising the product vision. It's a high-level strategy for determining what a product manager will focus on (and what they won't) to solve their product's problem(s) and how they'll accomplish it.
A solid product strategy allows the product manager's team and organisation to focus on and prioritise what is most essential. With a clear vision and plan, product managers can "choose wisely" and say no to opportunities that don't line with their goals.
A product strategy is essential since it aids in concentration. Staying on track and resisting the allure of that lovely tropical paradise along the road.
Many individuals believe that focusing means saying "yes" to something and disregarding everything else. It isn't. Saying "no" to anything that sounds wonderful but doesn't suit their ultimate purpose and idea is central to focus.
It's difficult enough to say "no." Everyone who has an idea has good motives for doing it.
It will be much simpler to say "no" and keep on track if the product team has a product plan because a product strategy is more than just a list of what they'll do. It also states what a product manager will not do. Whether explicitly or implicitly.
Maintaining Consistency and Agility
The voyage plan, or first course, conveys a defined product strategy.
Making rapid, confident judgments requires knowing where the team wants to go and what they want to achieve. This helps the product team adapt and adjust to changes in their company environment more rapidly while staying on track.
Consider a developer who is deciding whether to spend more time improving the user experience of a task in your product or finding a new technique to measure some metrics. If having the easiest-to-use product is part of your plan, the problem is solved: the developer understands the importance of focusing on the user experience.
Because you, as a product manager, know what you want to achieve, you won't have to tell your staff what they need to accomplish.
Furthermore, a product strategy affects not just your product and development teams but also marketing, support, operations, and...well, all of your company's departments.
As a result, you are no longer required to participate in decision-making processes within your business. Anyone can figure it out on their own. They'll come up with better ways to contribute to those goals than someone outside their department could because of their knowledge and competence in their respective fields.
How to Create a Successful Product Strategy?
Now that you've seen the aspects, it's time to figure out how to improve each and combine them to create a successful product strategy - a product strategy process.
Step #1: Define Your Product Vision
The strategy, roadmap, and backlog all lead to the product vision, which acts as a foundation. Everything will be based on the vision; therefore, you as a product manager must define it carefully.
Everything hinges on having a clear product vision when you've decided what you want to construct for your product and have a few ideas for how to make it a success. Removing all the unneeded fluff from your vision before beginning your product strategy means removing all the concepts you believe will not work.
Instead, concentrate just on the necessities. Choose the most important factors contributing to product success, determine what needs to be built, and begin working on this framework.
Your product approach has to be adaptable. It's critical to have a clear framework based on a clear vision that will assist you in staying on track. So don't squander your time by cramming your unique product concept with unnecessary fluff. Decide what is most essential and concentrate on it.
There are a few templates for defining the product vision statements.
These product vision statements should be feasible, simple, and have underlying motives (here, motivating the team to get as much information online as possible). Tie it to the company's objectives.
Step #2: Define Your Ideal Customer
A product manager must have a thorough understanding of the market they are targeting and the clients whom their product will serve. A product could cater to two to five different user personas, each with different wants and expectations.
A product manager must know the following to characterise its ideal customer:
- What are the qualities of customers?
- Statistics about the population (age, location, etc.)
- Psychometrics (Lifestyle & activities)
- Behavioural characteristics (purchase decisions)
- What are the issues and obstacles that customers face?
- What do customers expect from you?
- What does value mean to them?
After completing the questionnaire, the product manager will have a clear picture of their ideal potential client and what they need to do to satisfy them.
Step #3: Product's Value Proposition
More than simply, features and solutions provide value to the product. Your SaaS product is software or a tool that people may use to achieve their goals.
Your product's value proposition refers to a "unique identifier," which implies a product manager to have a unique value that their clients receive from their product that none of their rivals can match! It's a critical factor in why customers choose you over your competition.
A product manager must go deeper into the challenges he/she wishes to address for people and the influence on its product to develop the value proposition for their product. As a result, make sure to include the findings of this research in their product plan.
Step #4: Market for Your Product
How well does your product/market fit? To do so, you must create the correct product at the right moment, determine which product is most required by your customers, and create a roadmap for it. It's not a smart idea to design a product on your own without considering the demand. To be successful, you as a product manager must create a product with a unique proposal that meets the demands of a market and its prospective clients.
Product/market fit, on the other hand, entails identifying target consumers and providing them with the appropriate product or solution. When building your product strategy, make sure your product vision is wholly linked with market demands.
Step #5: Determine Company's Objectives
A product manager can only assess performance through specified metrics if they have clear business goals in place. "Increase the number of consumers by 50% in three months" or "Improve brand recognition in a certain region by the end of the quarter" are examples of goals. These objectives have an impact on a variety of product development functions.
How do you as a product manager determine or define your business objectives? The steps are as follows:
- Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). This allows you to assess the current situation and find opportunities for improvement.
- Create objectives based on the SWOT analysis.
- Examine them with your team and choose the best.
- Set SMART objectives (Specific; Measurable; Attainable; Relevant; Time-bound)
- Set KPIs to track their progress. Creating KPIs compels your company to specify the performance measurements to help you reach your primary strategic goals. KPIs are made up of four main features, and the end result should be 5-7 distinct KPIs for your goal.
Step #6: Come Up With New Ideas
Product initiatives are the big goals that go along with the product goals. They must be applied to meet the company's objectives.
Roadmaps are used to break down initiatives into smaller actionable pieces. These projects include everything from features to goods to platforms.
Let's say your product's purpose is to increase the learning environment's quality; a related endeavour may be, "Provide instructors with the best training and technology."
Step #7: Have a Comprehensive Stakeholders List
Get to know your stakeholders' ecosystem so you can identify the most important target group and prioritise them in your plan. After that, look around to identify internal and external stakeholders, industry partners, key influencers, investors, the C-Suite team, industry media, and your target audience. Take all of those lists and prioritise them according to their needs.
Create a relational environment that will help you realise your product idea. You'll need to answer the following questions to figure out who your significant stakeholders are:
- What is my line of work?
- For whom am I building a platform?
- Who can assist me in achieving my ultimate goal?
- Whom should I recruit for my team?
- Who is the ideal person to discuss the thoughts with?
- Who would be the best person to help me develop my network in a meaningful way?
Answer these questions as best you can. It will give your product strategy a new dimension based on the individuals you can benefit from and who can help you grow.
Step #8: Set Essential Distinguishing Factors
There is much competition on the market. There are 4-5 options for every product. "What distinguishes your product?" To understand this, a product manager must first establish the differentiators. Their value proposition and unique selling point are determined by these criteria.
Product difference demonstrates what a product manager can give potential clients that their competitors cannot. One significant aspect of the difference is that it works best when expressed in terms of customer benefits. The following are the many forms of differentiation.
The product offered is identical; thus, the decision is purely personal. Coca-Cola vs. Pepsi, for example.
Differentiation occurs when just one element is considered. If two products are of equal quality, for example, the decision is decided based on price.
Differentiation happens when many elements are considered together.
You can base your differentiators on one of these primary contributors to differentiation.
- Product quality
- Customer service
- Channels of distribution
- Marketing efforts
Step #9: Consider Product's Longevity
A solid product strategy will always provide a product manager with a long-term view of their product's growth, expansion, and ultimate fall. After all, all a product manager has to do now is prepare for the final stages of their SaaS product. As a consequence, answering all of the following questions while building your product strategy is crucial.
- Time duration for your product to evolve?
- What are the dangers?
- What variables may threaten your current situation?
- What are the many possibilities for the decline?
Answering these questions will help you be prepared and knowledgeable enough to modify your overall approach, regardless of how lengthy your product's life cycle is.
Step #10: Evaluate
Now that you have a clear product vision, goals, and a clear understanding of your target audience, you as a product manager must concentrate on developing a plan. Collaborate with the entire product team for better results. When your product strategy is complete, you may use it to create a roadmap.
However, this implementation will take time. You'll have to judge whether it's clear enough. Keep in mind to evaluate your product strategy on a regular basis.
Best practices for defining your product strategy
Be Distinctive - Provide a Service Rather Than a Product
Consider the most recognizable and iconic products in the world. Apple, Doritos, and IKEA are among the first names that spring to mind.
What makes these products so popular? Especially with so many identical products available. They are unique in that their product approach is to meet fundamental human requirements, such as:
- The desire to be a part of or identify with a group
- The desire to be heard and understood
- The desire to succeed and be self-sufficient
Doritos was never merely a Dorito manufacturer. Even its Dorito pack displays its standing as a unique brand with a worldwide perspective. Apple symbolises more than just smartphones and computers; it is a way of life and a creative mentality. No one has altered the way things look, feel, or operate more than Apple, the first $1 trillion US public firm.
People don't only buy furniture with a minimalistic design approach from IKEA. Working with their hands or practising frugality gives them a sense of accomplishment.
Customers benefit from such disparities since rivals can't readily match them. And the solutions you, as a product manager, are providing aren't restricted to product features or characteristics.
A product manager’s product strategy may rely on the convenience provided by your company's ability to get prime retail shelf space or its use of consumer data mining to assist in developing new items.
Problem-solving adds value.
And your product's worth will always make it stand out.
Make sure you can identify the challenges your clients have and the answer your product delivers in your product strategy. Take some time to reconsider if this becomes challenging.
Accept and Adapt to Industry Changes - Avoid Becoming a "One-hit-wonder"
People are drawn to items (and enterprises) that provide value that no one else can match. This worth isn't only based on price. It's how a product maintains its competitive advantage or how a company with the help of a product manager seeks to remain relevant to its customers.
Customer loyalty shifts. If your product is already a success, a product manager should fight the temptation to get complacent. So, here product managers need to make sure that their product strategy should include situational awareness.
And if a shift or upheaval in your sector creates an opportunity, seize it.
As an example, the phrase "on-demand" has become commonplace.
Netflix’s CEO, Reed Hastings, requested $50 million in exchange for selling the company. Netflix made its greatest ever profit in the United States in 2018, with $845 million.
Blockbuster closed all its 300 corporate-owned outlets in the United States by January 2014. It had formerly controlled the video rental industry. However, its management failed to see the value in purchasing Netflix's booming DVD-by-mail business.
Netflix changed its product strategy to embrace internet streaming and begin producing original television.
Customer loyalty changes as industries change. As these product strategy examples demonstrate, a product manager must be prepared to adapt or adjust their product offering as needed.
Cherry on top, these advantages should be considered by product managers for quick wins just in any case.
Inspire Long-term Development and Innovation - Focus on Self-disruption
Nothing lasts forever. Market demand and long-term growth are similar.
People's interests shift with time. Your product's once-large audience begins to dwindle, gradually being replaced by a new generation of buyers—one having unique tastes and viewpoints. Eventually, demand for your goods will become stagnant.
In this case, you've fallen victim to your product's past success.
A product manager working in the technology domain here must be aware that the life cycle of products is on perpetual repeat.
- Your new product is a hit and is gaining traction.
- A new product appears, increasing the level of innovation.
- These usurpers expand as well, only to be removed.
According to Christensen, long-term success comes from actively striving to eliminate your cash cow before someone else does. Rather than preserving what you currently have, your attempts to innovate may be required to destroy it. You may have a product strategy that will last in the long run if you are ready to cannibalise your present audience.
Sure, the iPhone ate into Apple's iPod market share. In addition, the iPad has reduced Mac sales. Nonetheless, Jobs' product approach won out because he realised the bigger audience he intended to reach—the vast Windows market.
Do you think that Apple would be successful to date if Jobs had limited his ability to design new products?
When Amazon launched the Kindle, the world's largest book shop, it made a similar strategy, knowing that it would compete with physical book sales. Amazon soon realised that if they didn't offer a digital product to their end-customers, someone else will and they’ll lose the market.
In your product strategy, be fearless. Your innovative new product may disrupt existing sales. However, you being the product team, are the ones who maintain your company's innovation at the forefront.
For a winning product strategy, you need to start with identifying the right audience. Understanding whom you are building for and why you are building solves a lot of complex problems.
There is no point in reaching out to them after the product is out. So, before even you sit on the product strategy, talk to them as much as you can, and understand their needs. How your product can fulfill their needs. User research is an integral part of any product strategy.
What is a journey without a destination? This is what is a product without a product vision. End up reaching nowhere (in this case, no user). A product vision gives you a clear picture of where you are headed with your product. It also gives you an opportunity to look back and see whether you are traveling in the right direction, and change your path whenever you go wrong.
KPIs and metrics
It is hardly possible to measure success without the metrics. Imagine, you think you have built a great product you think your users will love. How do you actually know whether the product is adding value to the users or not? This is why defining the number right in the beginning is very important. Set up metrics for product management that matter to your business and align well with your business goals. Whatever metrics you come up with, should be easily measurable.
The success of a great product strategy lies in how well you are executing it. Execution is also the trickier part because more teams are involved in the execution of the strategy. So, clear communication and decision-making are some of the effective skills that come in handy for the efficient execution of the planned strategy.
It is important to keep in mind that product strategy will be the primary factor in determining the overall quality of the user experience. The product strategy should be the primary tool you employ when attempting to defend the choices made by your customers.
Every single product design initiative needs to begin with a crystal clear definition of the experience you want your customers to have with your product or service. This is the first step in the process.
The final objective of the product is to provide the customers with the very most outstanding feature and the best user experience possible. Do not be hesitant to get in touch with Zeda.io if you are interested in getting in touch with the specialists to learn about product strategy. We offer the greatest tools and in-house experts to help you design the optimal service, also known as the strategy for your future product.
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