- What is a Product Strategy (and Why Does it Matter)?
- Terms to Know
- Product Strategy Frameworks
- Measuring the Effectiveness of Your Product Strategy
- Product Strategy Scenario Example
- Working With a Product Strategy Consulting Firm
Product launches can be a nerve-wracking experience for product leaders and teams. With so many moving parts and potential roadblocks, it's easy to feel overwhelmed. However, having a strong product strategy in place can help mitigate these challenges and set you up for success. In this blog, we'll dive into what a product strategy is, why it matters, and the key components that make up a successful one.
What is Product Strategy (and Why Does it Matter)?
Product strategy refers to the high-level plan for developing and marketing a product. Basically, it reminds the team how the product supports the business strategy and goals and explains the tactical methods to do so through product roadmaps.
Encompassing many angles of the product, a product strategy usually includes:
- A vision of the future with this product
- The ideal customer profile/market to serve
- Go-to-market strategy
- Areas of investment
- Success measures
As a Product Manager, having a product strategy playbook can serve as a source of truth for decision-making and new product initiatives. It helps keep the team aligned with the common goal and reminds them of the overall vision, which is essential when a problem arises or a difficult task ensues. When discussions have been held and agreements have been made, a product strategy playbook can be a catchall to prevent wasted time on repeat conversations and clarify feature prioritization that keeps momentum when approaching a big product launch.
It’s important to note that a product strategy is not a product roadmap. While a roadmap outlines the tactical steps for bringing a product to market, product strategy defines the big-picture plan and serves as a reference point for navigating changes or uncertainty during the agile development process. By maintaining a clear focus on the product’s core values and vision, a comprehensive product strategy can ensure that a team stays on track and delivers a successful product.
Terms to Know
When creating a product strategy there are a few key terms you ought to be familiar with to guide your journey. Here’s a list we gathered of our most important terms to know:
- Product Lifecycle: The product lifecycle refers to the stages a product goes through from introduction, growth, maturity, and decline. Understanding the different phases of the product lifecycle can help businesses make informed decisions and maximize a product’s potential.
- Prototyping: Prototyping is the process of creating a preliminary model or sample of a product to test its design and functionality. This step is crucial in the product development process as it allows teams to refine the product and identify any potential issues before moving forward.
- Value Chain Analysis: This is a systematic approach to examining the various activities involved in creating a SaaS product. A value chain analysis can help businesses identify areas for improvement and increase efficiency in the agile development process.
- Target Audience: Defining the target audience for a product is a crucial step in the product strategy process. This involves identifying the specific group of people who are most likely to buy the product and tailoring the product to meet their needs and preferences.
- Roadmap: A roadmap is a high-level visual representation of the product development timeline and milestones. It outlines the steps and timeline for bringing a product to market and serves as a reference for navigating changes or uncertainty during the development process.
- SWOT Analysis: SWOT analysis is a tool used to evaluate an organization's strengths, weaknesses, opportunities, and threats. This analysis can help organizations understand their competitive position and make informed decisions about the future of their product.
- Product-market fit: Product-market fit refers to the degree to which a product meets the needs and wants of its target market. Achieving product-market fit is essential for success as it ensures that the product is well received and can achieve its goals.
- Product Differentiation: Product differentiation is the process of distinguishing a product or service from others to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as from a firm's other products, to stand out in a crowded market.
Product Strategy Framework
Product strategy is a vital component of a successful product launch and ongoing product development. It outlines the steps a company will take to reach its vision and goals for a particular product. While there is some room for customization, a comprehensive product strategy typically covers several key processes to plan an efficient product roadmap.
Generate a SWOT analysis
The first step in creating a product strategy is to assess where you are now. A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is an effective tool to help your team understand the current state of the product and the market. Conducting a risk analysis at this stage is also beneficial to ensure that the product strategy is headed in the right direction.
Define product-market fit
Defining the product-market fit is crucial to make sure you are building a product that the target market will use. It’s important to do initial research to understand a users’ perspective before pouring money into full-scale product development. Defining a product-market fit involves researching the target customer, identifying their needs, creating a value proposition, conducting a competitor analysis, and defining the minimum viable product (MVP) feature set. Prototyping and testing can validate your assumptions and help achieve a concrete product-market fit.
Once you understand a gap you can fill in the market, where you have a competitive advantage should become more clear. Examples of competitive differentiators include
- Ease of use
Once you’ve written down your competitive differentiators, discuss your findings with your team. Putting this on paper will help make sure everyone understands why your product is better and teach your team how to communicate benefits to customers and stakeholders.
Create a product vision
The next step is to define where you want to be with your product. Your product vision should be simple, clear, and backed by data that supports your market opportunity. Don’t forget to dream big! Casting your product vision is meant to align the company with your core mission - how you get there is what can change along the way.
Develop a roadmap
After defining what you want, you need to paint a picture of how you get to your vision. This will help keep all team’s weekly tasks aligned with each other and allow for accountability in meeting your goals.
Establish a go-to-market strategy and approach
With the vision and roadmap in place, the next step is to develop a go-to-market strategy. This includes determining the user groups for the alpha and beta releases, testing and iteration plans, and pricing strategies. Good product strategy and user research are critical in this stage.
Set success measures
Finally, to measure the effectiveness of your product strategy, it's important to set measurable outcomes. This will help keep product development aligned with the initial product strategy and make it easier to address any issues or make changes as needed.
Measuring the Effectiveness of Your Product Strategy
Effectively measuring the success of your product strategy is crucial to ensuring that you are on track to achieve your company vision. To do this, you need to establish both qualitative and quantitative metrics. These metrics can take the form of Objective Key Results (OKRs) or Key Performance Indicators (KPIs) at both a high-level and a granular level. By setting OKRs and KPIs, you can hold your team accountable to the goals they set, track progress, and make necessary adjustments along the way. It is important to regularly evaluate and adjust your OKRs to align with your larger objectives and ensure that your product strategy stays on track.
KPIs and OKRs are tailored to fit the specific needs and objectives of your product and industry. E-commerce companies place a strong emphasis on maximizing revenue through driving online sales, increasing online traffic, enhancing conversion rates, and maximizing the average order value through targeted advertising and personalized product recommendations. On the other hand, SaaS companies typically focus on growing their monthly recurring revenue (MRR), reducing churn rate, minimizing customer acquisition costs (CAC), and improving conversion rates for a more efficient and profitable business model.
Example Scenario of Creating a Product Strategy
Let’s suppose as the Product Manager, you have an end-of-the-year stakeholder meeting where you need to present how the team will launch and capture market share for the Elite Green membership over the next 12 months. This membership costs an annual fee but grants users more benefits and the ability to give back to the environment for every dollar they spend.
For this example, we’ll outline our vision, and work our way down to a business goal, who we want to impact, and some tactical ways we will accomplish this.
Creating a successful product strategy requires a deep understanding of the market, target audience, and competition. This scenario highlights just one example of the steps involved in launching a new product and capturing market share. It's important to note that developing a comprehensive strategy can be a complex and time-consuming process. For companies looking to maximize their chances of success, outsourcing expert insights and assistance from a professional agency can be a valuable investment.
Working With a Product Strategy Consulting Firm
A successful product strategy can be the difference between a smooth and well-informed product launch and one that is plagued by preventable roadblocks. That's why having a strong product strategy in place is crucial for business success. However, many companies overlook the importance of strong user experience (UX) throughout the entire product development process, from ideation to launch. This includes having well-designed prototypes, conducting user testing, and incorporating continuous customer feedback into your roadmap.
At Scenic West, our team of seasoned UX/UI designers and product strategists specialize in bringing B2B SaaS products to market, enhancing conversion rates and user experiences for e-commerce companies, and driving growth in the education tech industry. Our team has a proven track record of success demonstrated through our partnership with venture-backed travel app startups like AmiGo, AdTech platform Brandzooka, e-commerce company Bartesian, and more.
Partnering with a product strategy consulting agency like Scenic West offers product leaders and teams valuable insights and guidance. Our experts have the skills necessary to help you strike a balance between aligning business goals and incorporating customer feedback, create a roadmap that is both detail-oriented and visionary, and avoid common roadblocks and user experience design mistakes that could hinder your product launch and overall usability.
In conclusion, a well-crafted product strategy is the cornerstone of a successful product launch. By understanding the key terms, frameworks, and methods for creating a strategy, you'll be able to measure its effectiveness and make informed decisions along the way. And if you're looking for additional guidance and expertise, consider partnering with a product strategy consulting firm like Scenic West to help bring your product vision to life.