A product strategy is a high-level plan that outlines what a business aims to achieve with its product and the methods to accomplish those goals. It answers critical questions, such as who the product is for (personas), the benefits it offers to those personas, and the company’s objectives for the product throughout its lifecycle.
Why is Product Strategy Important?
Developing a product strategy before starting development is crucial for three key reasons:
1. Provides Clarity for Your Company
A clear and well-communicated strategy ensures that your team delivers their best work.
Developers understand how their contributions align with broader company goals, avoiding the risk of getting lost in details.
Marketing and Sales teams can effectively articulate the product’s benefits and unique selling propositions.
Customer Success teams gain better insight into product use cases, enhancing their support capabilities.
2. Helps Prioritize Your Product Roadmap
Once stakeholders agree on your proposal, translate the strategy into a high-level action plan and build a compelling product roadmap.
Avoid skipping the strategy stage; it guides prioritization and prevents misallocation of resources.
A clear strategy helps define what you aim to achieve, ensuring your roadmap is strategically sound.
3. Improves Tactical Decisions
No product is launched exactly as planned. Changes will occur, requiring adjustments.
A clear product strategy serves as a reference for making smart strategic decisions, especially when facing resource constraints or timetable changes.
A Product Strategy Template
Use this template to guide your product strategy development:
Define Your Vision
Describe the problem you aim to solve, the personas, competitors, and other relevant factors.
Develop a clear vision for your product.
Establish Your Product Goals
Set quantifiable goals with deadlines to track success.
Create Your Product Initiatives
Translate goals into high-level themes for your roadmap, which your team will break down into detailed tasks.
Key Components of a Product Strategy
Product management expert Roman Pilcher suggests the following key elements:
Product Vision: A long-term mission statement that articulates what the company hopes to achieve. For example, Google’s early vision statement for its search engine was, “Organize the world’s information and make it universally accessible and useful.”
Goals: High-level strategic goals influenced by the product vision. Examples include increasing free-trial downloads, improving customer ratings, and generating revenue. Use SMART goals (Specific, Measurable, Attainable, Relevant, Time-bound).
Initiatives: Strategic themes derived from goals placed on the roadmap. Examples include improving customer satisfaction, increasing lifetime customer value, and breaking into new markets.
Where Does Product Strategy Fit in the Development Plan?
The product strategy bridges your product vision and the tactical steps to achieve it.
Develop the Vision: Create a high-level mission statement.
Draft the Strategy: Answer key questions about personas, problems solved, differentiation, and goals.
Translate to Action: Prioritize themes on a product roadmap and build a detailed plan, including a product backlog and project timeline.
Effective Product Strategy Business Models
Here are examples of effective business models to consider:
1. Product-Led Growth
Focus on making the product your marketing and sales representative. Offer a basic service for free, charge for advanced features, and utilize network effects.
2. Product Segmentation
Create different versions of a product to meet unique needs of various personas. For example, a consumer version focused on background data protection and an enterprise version for IT compliance and real-time security monitoring.
3. Lean Product Differentiator
Offer a product that performs a single task exceptionally well, solving a real problem with a focused approach. This strategy can differentiate your product in a crowded market.
By following these guidelines, you can develop a robust product strategy that clarifies your vision, prioritizes your roadmap, and enhances your team’s decision-making capabilities.
