Six-step framework for a high-performing product strategy

You’ve got a great idea for a new product. Then you start thinking about product planning, but there are a lot of details to address. How will that product come to life, how will stakeholders get on board, and how will the product be developed and launched? It’s easy to get lost in the nitty-gritty. You need a product strategy.

What is product strategy?

Product strategy is a high-level plan for developing a new product. It defines what you want to achieve and how you’ll get there. Think of it as the big picture that encompasses the vision and goals of product development.

There are four major elements of product strategy:

1. Identify your customers. Who will buy your product? What’s your target market? What need are you trying to meet? Learning about your potential customers, interviewing them, and creating personas will help you tailor your product to your target audience.

2. Understand your competition. Knowing your competitor’s strengths and weaknesses can help you determine how to make your product stand out. Where will your product fit in the market? Will you produce something similar but better to what’s already available, or will you do something different

3. Making a profit. How will the product make money and provide a return on investment to satisfy stakeholders? How will customers buy the product? What’s the product lifecycle? Will there be a one-off payment or a subscription?

4. Macro environment. Factors outside your business, such as politics, economics, culture, technology, and social influences, may affect your customers’ buying habits. Consider how you’ll mitigate these.

Why product strategy is important

Without a clear plan for product development, it’s easy to get lost in the details, forget the purpose of the product, and go off on a tangent and start developing a product that isn’t what your potential customers want or need. A product strategy keeps you focused and moving in the right direction. It provides clarity for the whole team so they can work together towards a common goal.

Product strategy vs. product roadmap

Product strategy and roadmap are sometimes thought of as the same thing, but they’re different.

A product strategy is a high-level product development plan. It answers the “why” you’re developing this product. A product roadmap answers the “how.” It’s the guideline on how to execute the product strategy. It steps out the product development process and provides a timeline on how to bring together a successful product. The roadmap sets and communicates priorities, keeping product managers, product teams, and stakeholders on the same path, working towards the same vision.

A product strategy framework in six steps

Ready to create a successful product strategy? Let’s get started.

1. Create a product vision

A product vision is the essence of the product and identifies its long-term goal. It answers the “why” you’re developing the product, sets the strategy, and aligns the product team. Understanding the reason for the product and the goal you’re trying to achieve can keep the team focused when you hit roadblocks or start straying from the original path.

Think of the motivation behind the product to find the vision. Say you’ve got an idea for an app that shows walking trails close to where someone lives. The vision might be “help people exercise” or “help people get out and explore nature.”

Take a look at a real-world example. Google is a search engine, but its vision is “to provide access to the world’s information in one click.”

2. Understand the customer and the problem

After establishing the “why,” you need to look at the “who.” Who will buy and use your product?

Here are some ways you can find out about your potential customers:

• User research. Talk to people to help you understand the customer, their needs and motivations, and what problem you’re trying to solve for them. You can set up interviews, focus groups, or send out surveys.

• Create personas. A persona is a fictional person who represents real people. They’re created from the data obtained during user research, and you can use personas to determine how some user groups, such as the busy parent, might use your product or service and what the pain points might be.

• “Job-to-be-done” (JTBD). Applying the JTBD approach to product development helps you discover the job the customer wants done and their motivation. The customer might buy a blender to do the job of making smoothies, but their motivation behind the purchase is to consume healthier food.

• User story mapping. This is a great way to understand user experience. Collecting many user stories can show you how customers interact with your product, which helps with prioritization. You’ll identify the minimum functionality needed for the initial release and what can be included as new features in updates.

3. Understand the market

When buying your product, customers hold a lot of power. You might develop a great product, but customers will still do their research and compare your product with alternatives. Here’s how you can better understand the market:

Market research

Gathering information about your target audience can give you an idea of how successful your product might be. Really understanding your potential customer’s needs, their pain points, the journey they’ll take with your product, the way they think and feel, and what’s important to them will help you know how to differentiate and optimize your product. The personas you created earlier will come in handy here.

Also, look at how alternative products are performing, what’s trending, and if there are any anticipated changes in the market.

Competitive analysis

Before going too far with product development, it’s important to know what’s already available. Identifying and evaluating a competitor and their product and knowing its strengths and weaknesses can help you see opportunities for differentiation. What values and unique new features could you add to your product to draw interest away from the competition?

Product positioning

Product positioning is how you present your product to the market and the messaging you’ll use to influence how potential customers perceive it. Look at the language competitors use, what problem they’re trying to solve, or what user need they’re trying to meet. Consider the user pain points and your product’s differentiation to address them. Then you can create messaging that resonates with people because it explains why your product is better than the alternatives.

4. Identify success metrics

Ask yourself what you want to achieve with the product. What are your goals? Setting key performance indicators (KPIs) gives you data points you can measure to gauge your product’s success. You can also tie these metrics back to your business objectives when reporting to stakeholders.

Consider collecting metrics on:

• product usage or adoption

• customer retention

• quality (how many bugs or issues are reported)

• customer acquisition cost

• monthly recurring revenue

These valuable insights can help you make better decisions about your product.

5. Build the product roadmap

The product roadmap is an important step. As a product manager, you get to take all the data and ideas you’ve collected and transform them into an actionable plan to set priorities and start the product team on a path to developing the product. A product roadmap isn’t static but evolves to match changes in customer needs and market demand.

The type of product roadmap you build will depend on the audience. Options include:

• Release roadmap for planning your product releases.

• Features roadmap to show the timeline for when features are delivered.

• Strategy roadmap to show high-level efforts and planned initiatives.

• Goals roadmap to plan the achievement of objectives.

Whichever one you choose, make sure it’s suitable for the audience. Make it clear and appealing, and include just enough information not to overwhelm but keep everyone on track.

6. Execute, measure, iterate

Now it’s time to think about how to develop your product and get it out to customers.

Taking an idea for a product through to delivery to market is a collaborative process involving cross-functional teams. That’s where your product roadmap will come in handy. It’ll ensure the product’s vision and development actions are communicated across different teams. Think about the best methodology to develop the product (it might be agile, scrum, or waterfall, for example).

When your product is ready, consider how you’ll launch it. Think about:

• launch goals

• key messages

• marketing materials and what channels to use (e.g., social media, emails)

• how newsworthy the product is

After the product launch, you’ll use the success metrics you identified earlier. Feedback on product performance can help you identify issues to address in updates or with new features. This iteration process is a cycle that keeps the team testing and improving the product.