A product strategy is a business plan that sets out the goals and objectives for a company’s product development and marketing activities. The strategy should take into account the company’s strengths and weaknesses, the competitive environment, the needs and wants of target customers, and the company’s overall business strategy. In this blog, we’ll learn more about what a product strategy means, the template, the different types, and also understand why it is important to have a strategy in place.
If you wish to build a career in product management, take up the PG Program in Product Management and Analytics and enhance your knowledge.
- What is a product strategy?
- Product strategy template
- Key components of a product strategy
- Types of product strategies
- Why is a product strategy important?
What is a product strategy?
A high-level plan that describes what a business aims to achieve with its products and how it plans to achieve these goals is known as a product strategy. This strategy acts as a roadmap to develop your products and answers questions such as who the product will serve (product persona), how the product will benefit personas and the company goals. A product strategy acts as a guide to allow users to know what tasks they should complete in order to achieve the business goals. Creating a detailed product strategy will ensure that tasks are completed on time and efficiently.
It also outlines how the product would benefit the business by describing the problem that the product solves and how it will impact the customers. This strategy can be used to explain what product is being built and when, it gives a clear definition of the product. It acts as a baseline to measure success before, during, and after product development.
Product Strategy Template
- Define your vision
- Establish your product goals
- Create your product initiatives
1. Define your vision
Based on the template shown above, you can describe each of the outer circles. This consists of – competitors, personas, go-to plan, strengths, weaknesses, etc. Through this process, you should be able to get a clear picture of what problem you are trying to solve and who this will help in the long run. This is how you can define a vision for your product.
A product vision statement talks about the long-term mission or goal of the product. It should be written in a concise manner such that we can articulate what the product may achieve. It should remain static. For example, one of Google’s early vision statements was “Organise the world’s first information and make it universally accessible and useful.”
2. Establish your product goals
After defining your vision, add goals for your product. For each goal that has been decided, figure out a quantifiable method of tracking its success. Set a deadline for achieving your goal.
Examples of product goals:
- Generate $1.5M in revenue in the first two years
- Increase the free-trial downloads by 40% in the upcoming 6 months
- Improve the average customer ratings
Using SMART goals is an approach that can be followed for efficient goal-setting. Read our blog on SMART goals to learn more about the same.
3. Create your product initiatives
Once you have established the goals, you need to add them to your product roadmap for the cross-functional teams to be able to review them, break them into smaller detailed tasks, and begin working on them.
Examples of product initiatives:
- Increase customer value
- Improve customer satisfaction
- Break into new geographical areas
- Increase mobile adoption
- Sustain product features
Key components of a product strategy
Roman Pilcher, a product management expert, suggests that a product strategy must contain the following key components:
- The key differentiators or USP (Unique selling proposition) of the product
- Company’s business goals in accordance with the product
- The needs that the specific product will address and it’s market
Ask yourself the following questions while setting up the product strategy:
- Who are the personas for this product?
- What problems are we solving for these personas?
- How can our product stand out in the marketplace and win the market?
- What are our short-term and long-term goals for this product?
Types of Product Strategies
Here is a list of the different types of product strategies.
1. Cost Strategy
Being able to create a product strategy in a cost-effective manner is helpful. It allows us to assess the resources that are being used and helps us determine where money can be saved. This strategy is good for low-effort purchases and for certain industries only. If there’s any such product that is typically similar to other products and customers do not have any loyalty towards one particular brand, undercutting the competitor’s price point will make you a favorite among the customer base.
2. Differentiation Strategy
This approach focuses on ensuring that your product stands out from the competition in the market. There are several factors that can be kept in mind when differentiating your product from others in the industry. Use of the best materials for luxury products, ground-breaking features, or any other factors that provide a USP to your product.
3. Focus Strategy
Creating a product strategy that caters to one specific customer or buyer persona is helpful when a company has a large customer base. It is an effective way to target a select group of people and create a personalized solution for them. This also helps in creating brand loyalty while acquiring new customers.
4. Quality Strategy
To stand out from your competitors, one aspect that can surely help you is the quality of your product. Focusing on creating a product that has the highest quality in the market will help you stand out. Several customers may go out of their way to purchase a product if it has a greater quality compared to others in the market since it is worth their investment.
5. Service Strategy
Customers will base their decisions on customer service provided by a brand. If the company does not provide customer service, people become wary of purchasing decisions. Providing customers with quick after-sales service and response will attract brand loyalty like no other.
Why is a product strategy important?
There are several reasons why a product strategy is important to the organization. Here are a few reasons:
1. Provides clarity to your employees
Once a clear and well-thought-out product strategy is in place, the team will be in a better position to deliver their best work and achieve the set targets. The developers will also have a clear understanding of the product they are working on. It’s easy to lose sight of the goal, but with the help of a clearly communicated strategy, you always have something to fall back on.
The sales and marketing teams will be able to better articulate the USPs. And finally, your customer success teams will also understand the use cases to help in providing better customer support.
2. Helps in prioritizing the product roadmap
Building a compelling roadmap and a high-level action plan will help you prioritize the right tasks. Without a clear roadmap and strategy, the team may prioritize the wrong tasks, measure the wrong metrics, and misuse their time and resources. Having a clear roadmap will help in working towards the right goals.
3. Improves your team’s tactical decisions
There is an ever-changing market and eternal factors can always affect our plans. Thus, being able to adjust plans accordingly will help in improving the team’s tactical decision-making skills. If you have a clear goal in mind, being able to adjust the plan or change the estimated timelines becomes easier.
This brings us to the end of the blog on product strategy. Being able to form a thorough strategy to reach your target audience will help in setting yourself up for success. Take up the PG Program in Product Management and Analytics and enhance your knowledge to power ahead in your career.