Do you want to know how to create a good product strategy?
Product strategies are important for any company that wants to grow and succeed.
They can lead to increased revenue, increased customer loyalty, and an overall better business.
A good product strategy will help you make decisions on everything from pricing models, features of the products themselves, marketing campaigns and so on.
If you don’t have a plan for your products then it’s highly likely that customers won’t show any interest in them – which means less sales and more wasted time spent trying things out.
It doesn’t matter if you’re just starting out or already established, every business needs a good product strategy in order to thrive today.
Let’s explore what a product strategy is and how you can go about creating one for your company:
What is a Product Strategy
A product strategy is a high-level plan that describes what a company wants to achieve with its product and how it plans to achieve it. Your product strategy is a road map for creating a product or feature. It lists all the tasks that your team has to accomplish in order to meet the company’s goals.
This document will serve as a guide for your team, and they will read it whenever they have doubts.
In fact, 70% of companies consult their product strategy when making important decisions. As a result, it’s essential to develop a detailed and comprehensive plan to ensure that each task is performed correctly and on time.
The product strategy describes how the product can help the company. It explains the issue that the product will solve as well as the effect it will have on customers and the business.
Once you have a clear strategy, you’ll be able to provide a clear product definition of what you aim to develop and when.
The product strategy then serves as a benchmark against which you’ll measure your success before, during, and after production.
An effective product strategy consists of three key points. Let’s go over each one of them in more detail in the sections below.
The product vision explains who will use your product and how it will affect your business. Product Vision emphasizes your target buyers, how you’ll position your product, and how it will compete with other products in its category.
A go-to-market strategy, that outlines your consumers’ needs and how you’ll produce a compelling offer, should also be a part of your product vision.
Without clearly defined goals, it’s impossible to develop a product strategy.
These are particular objectives or benchmarks that you can meet as a result of building your product. They provide guidance to your development team and assist you in measuring success once the product is launched.
When setting goals, it’s crucial to make them time-bound so that you have a sense of urgency about when you’ll achieve them.
When you add a time constraint on a product’s development success, it gives it even more importance.
Initiatives are high-level themes that should be implemented in order to meet business goals and included in the product roadmap.
These are big goals, so the product team must break them down into smaller, more manageable chunks.
You should be familiar with the core components that go into designing a product now that we’ve clarified the anatomy of product strategy. However, the way you use this information can vary depending on the product you’re working on and the management’s expectations.
Product Strategy Example
Since the release of the first shoe in 1971, Nike has been widely recognised for its innovative products.
However, in 2005, the company took a big risk in launching the Nike Free, a new shoe concept.
Many employees were concerned that the bold, distinctive look of the running shoes would not appeal to their target audience.
However, Nike exceeded these expectations by creating a product and marketing campaign that unexpectedly resonated with its customer base, thanks to its well-thought-out product strategy.
Let’s take a look at Nike’s strategy for ensuring Nike Free’s success.
Nike Free Market Vision
Nike’s market vision was based on “natural technology,” as described by its research team. It intended to develop a running shoe that was both innovative and familiar to the consumer.
As a result, the study team polled track coaches to find out what their athletes’ needs were.
They ended up at Stanford University, where the track coach had his athletes run barefoot.
While this went against Nike’s traditional vision, it was exactly the type of innovation the product team needed to be able to create a game-changing product.
Nike Free Product Goal
Nike needed to set goals for its new shoe after determining its vision and its market fit.
It also required a differentiating factor that made it stand out if it was going to look unique; it needed to make athletes run faster than they had ever run before.
Nike had ten men and women run without shoes on to accomplish this. The research team used high-speed cameras and pressure sensors on the athletes’ feet to record exactly how the foot reacts as they run barefoot.
Using this information, the product development team set out to create a shoe that mimicked the motions seen in the video.
Nike Free Product Initiatives
However, before the product team could get to work, they needed to establish some initiatives for the product. Since this was not going to look like a typical running shoe, they had to prove that athletes would buy it. So, the marketing team was called to address the major concerns of stakeholders regarding the product’s design.
Although the shoe would help athletes perform better, Nike’s marketing team thought it was too risky to rely on consumers to switch from their current shoes.Instead, they’d educate consumers about the benefits that the product could give them during training and therefore positioned the product as a training tool.
As a result, Nike was able to find the best way to ease the pressure of sales pitch and better communicate the product’s unique selling proposition.
Product Strategy Types
This is a successful approach since it focuses on the needs of a specific group of people and develops a tailored solution for them.
When it comes to acquiring new customers, this is a perfect way to build brand loyalty.
The purpose of the cost strategy is to create the best product for the least amount of money. It evaluates the available resources and decides where money can be saved during the manufacturing process.
This is a good technique for low involvement purchases like cleaning supplies.
Most of us don’t think about these things when we shop because all the products there are exactly the same and we don’t feel any sense of loyalty towards a particular brand.
In these sectors, if you can produce a product that is less expensive than your competitors’, it will be a guaranteed success.
When it comes to differentiating a product, the price isn’t the be-all and end-all.
There are a variety of other ways to make it stand out in your industry.
Maybe it’s a high-end item made from the finest material. Or it could have some ground-breaking features.
This strategy, whatever it is, focuses on giving your product personality that makes it memorable and enjoyable to your customers.
How To Create A Good Product Strategy
It’s not easy to develop a product strategy. It entails taking a closer look at your product or idea and making adjustments to your design process at the right time to help shape the product design direction.
Every product is unique, so it’s difficult to have a one-size-fits-all guide to developing a specific strategy, but I can give you some very useful tips that will help you.
So, here are nine tips to help you and your team get started on developing a good product strategy.
1. Identify your target audience
One of the most common reasons for a startup failure is a lack of product-market fit.
Too many businesses expect to figure out their strategy after releasing a product to the market.
As a result, they send out a product and measure its effectiveness
And this rarely works out right.
Since they are built without a solid understanding of the target audience, it’s not uncommon to find thousands of launched products on the market that are still searching for customers. Usually, these products were created to solve problems that did not exist.
Since products are used by people, it’s always a good idea to prioritize users and their needs.
That is why, long before you begin creating something, you must have a deep understanding of your target audience’s desires and needs.
This is of crucial importance if you hope to offer them something that adds value to their lives.
Making user research an important part of the product design and development lifecycle can help you understand what your potential users need.
- To better understand who your customers are and what they want, conduct a series of field studies and user interviews.
- Use this information to create personas which are model characters that represent different user types based on the most relevant information collected from different target users.
- Personas that have been well-researched will serve as a proxy for the user.
Product teams typically create descriptive rather than predictive personas.
Predictive personas make product design much easier because they help product teams understand not just what their customers like and dislike, but also what makes a person want to become a customer.
2. Understand the problem
In product strategy, problem definition is essential. Your product should help your customers in solving their problems.
You must not only define the problem, but also determine if it is the one worth solving (i.e. that your target audience really needs a solution for this problem and is willing to pay money for it).
It’s important to know the reason why you want to create a product in the first place (your business motivators), and then to assess your product decisions in terms of the value they provide to your customers (potential conversion).
3. Define your product vision
Product strategy defines a product’s journey. And as with any journey, you must have a clear idea of where you want to go. Many product teams mistakenly believe that product vision and product strategy are the same thing, but they are not.
“Vision is an inspiration for making a product; strategy is a guide on how to do it correctly.”
The reason you’re creating a product in the first place is because of your vision, which is an ultimate view of where the company is going. Therefore, your business’s north star becomes a clearly defined product vision. It encourages everyone to see the big picture when working on a product.
Here are a few things to have in mind when defining your product vision:
- Establish the long-term goals. When you have an inspiring long-term goal, it’s easy to create a vision (i.e. what the product will look like in 2 or 3 years).
- A vision should be motivating and it’s crucial to get emotional buy-in from your team members when it comes to motivation.
- It’s also crucial to define your product vision and make sure that everyone on your team is on the same page. Many companies use a video for this purpose because it is much easier to communicate a message this way.
4. Define the current state and target condition
For many companies, there are two states that can be defined:
- Current state (the current state of your product experience)
- And target condition (the ultimate user experience that you’re striving for).
- Vision helps you define a destination (target condition). (pullquote image)
By focusing on exactly what you need to create, you can plan your route to the target destination. You can change the direction of your product efforts by setting a goal (challenge).
Before your team begins working on your project, it’s important to spend time analyzing, measuring, and quantifying challenges.
5. State product design principles
It’s risky to make product decisions. No matter how hard you try, there will always be an element of doubt in your decisions. However, by adding a basic but effective tool—product design principles—you can make the decision-making process easier. Product design principles will help in defining what good design means in your business. Principles that are clearly established reflect the product design philosophy and are genuine.
“Direction over choice,” for example, is one of Medium’s design principles. During the creation of the Medium editor, the Medium design team applied this principle. They intentionally traded guidance and direction for user interface (layout, type, and color choices).
6. Stay in sync with other teams
It doesn’t matter how good the product concept is if no one knows about it. The product strategy should be formulated as a result of cross-functional collaboration between the core teams within the company such as design, development, marketing, and sales team.
“You should expect to get the same answer from everyone in your company when you ask them what you’re building and why.”
7. Stay focused
Before you begin working on a problem solution, you must first gain a thorough understanding of the ultimate experience you want to create.
This is a move that many businesses miss.
Although they understand the problem, they believe that adding more features to their product would make it more valuable to the target audience. As a result, they keep adding too many unnecessary, poorly built features, jeopardizing the user experience (this effect is known as feature creep in the software industry).
When Apple released its first iPhone in 2007, it had just a few features, but they were well-implemented.
Copy and paste, one of the very important features today, was missed out in the first edition of the iPhone. Since the copy and paste feature did not reach the team’s minimum expected experience, it was not included.
Rather than releasing a buggy feature, they released the iPhone without it and only added it once it reached their standards for the user experience.
“Product teams must understand that successful product strategy involves more than just shipping a large number of features.”
8. Define success metrics
Setting direction alone isn’t enough; you still need to keep track of how quickly you’re moving towards the goal.
Metrics allow a team to track their progress and measure their performance.
I suggest starting with Objectives and Key Results, or OKRs, if you’re looking for practical advice on how to choose the right metrics. The goals in this model are what you want your business to achieve, and key results are how you intend to measure that goal.
What numbers will change as a result?
The goals should be inspiring, and the key outcomes should be measurable.
9. Execute the strategy
You won’t be able to establish an ideal product strategy on Day 1 if you’re missing the key pieces of information.
Also, you won’t be able to develop an ideal product plan on Day 1 if you don’t have all of the knowledge you need.
However, beginning with clear goals and willingness to try new things will help you create a well-defined strategy.
“Look at your product strategy as a living, breathing organism that evolves alongside your company.”
Start with the basics and work your way up. The earlier you get the feedback on your product strategy after launching, the faster you can implement it.
A comprehensive revision of the product strategy is also needed. When you learn more about what works and what doesn’t, revise your metrics and adjust tactics.
Remember: The user experience is shaped by product strategy.
When it comes to justifying customer experience choices, product strategy should be your primary tool. Any product design project should begin with a definition of experience you want your customers to have with your product or service.
The ultimate goal of product strategy is to deliver the right features with the right user experience for the right people.