Effective product strategy steps (example and template included)
What elements do all effective product strategies have in common? How do you create a product strategy that unites your team around strategic objectives? Let’s get into it!
Written in partnership with Stephen Walker II, Senior Director of Product Management at Productboard.
To sum it up in one sentence, being a good product manager is to champion the voice of the customer while also advancing broader business goals. At the same time, you have limited resources and can’t do everything at once.
That’s where product strategy comes in.
What is a product strategy? A definition
A product strategy is a plan that outlines what a business hopes to achieve with its product, what it takes to get there, and how this plan fits into overall business goals.
A good product strategy outlines how you plan to address your users and their needs. It provides a framework that guides the allocation of resources. Done well, it steers your team towards a set of shared priorities.
Every product strategy looks different depending on the size and stage of your business, the maturity of your product, the nature of your market, and the seniority of the person crafting it.
The same goes for the timeframe of your strategy. It depends on your business whether you plan a quarter, 6-months, 12-months, 18-months, or even further out.
No matter the format or timeframe, your product strategy should be a fairly stable document to assure continuity and allow for the execution of long-term initiatives. You will want to revisit it regularly, but don’t expect to make major changes unless there are significant new market developments or discoveries.
The building blocks of an excellent product strategy
Though product strategies will vary based on the factors mentioned above, good product strategies do share common elements:
- A vision statement summarizes an ideal future state of your product and how it contributes to the overall company mission. It should be short and simple enough for everyone on your team to understand, repeat, and share.
- The timeframe of your strategy is how long you need to accomplish your goals. This window varies depending on your company’s industry and maturity.
- Business objectives tie your strategy to the bigger picture and articulate how your plans will advance business goals.
- A well-defined audience (perhaps an ideal customer profile or profiles) ensures that everyone knows exactly who you are optimizing your efforts for.
- Your product objectives are the key problems you’ve decided to solve — different areas of investment your product team will ultimately focus on. Objectives provide a roadmap for teams to rank and prioritize features and fixes that make sense for what you’re trying to achieve. Uniting your team around objectives empowers them to problem solve on their own.
- Measurable outcomes and metrics help you stay outcome-driven and track the progress you’ve made towards your objectives.
- Tactics are more granular initiatives that will help you advance your product and achieve your objectives.
6 steps to a clear, unifying product strategy
1. Define your product vision
Why does your product exist? Think about how it contributes to the overall company mission and what it needs to become in order to achieve your business goals. You should have an ambitious but attainable vision of what the product will be by a specific time in the future, with a particular focus on how it helps customers.
Your product vision must be short and simple enough for everyone on your team to understand, repeat, and share. It should also be backed by data that supports your vision and demonstrates that you have a market opportunity worth pursuing.
2. Identify your target market
Who is your product for? You might have an aspiration that your product will be used one day by everybody, but before you get there, you need to find your first group of customers and expand from there.
Once you have a vision for how your product helps customers, you need to specify that audience. If your product is for individuals, figure out which income levels, occupations, or personality types you’re targeting. For B2B companies, you may want to focus on certain industries, geographies, or company sizes.
Begin your product strategy by identifying a narrow customer segment you intend to target, along with 1-3 specific needs your product will address for that segment. That will allow you to stay focused in product development and prioritize building specific features that both target needs and drive revenue. With Productboard’s Salesforce integration and dynamic customer segmentation, product teams can import customer and prospect data from Salesforce or another CRM, saying goodbye to manual segmentation efforts.
Shawna Wolverton, Zendesk’s EVP of Product explains that Productboard’s segmentation “Gives us clarity on where our sweet spots are for product fit and guides product strategy. Using these segments, we can prioritize features and build the right products that accurately reflect those specific customers’ needs.”
3. Decide what problems you’re solving
What are the main needs of your target audience? You’ll need to talk to them and understand the problems they face, why they’re important, their expectations of any solution, and where existing solutions fall short. It can help to divide product needs into three buckets:
- Performance – the more performance needs you can meet, the better.
- Must-haves – these are “table stakes” or “cost of entry” — boxes that must be checked for customers to be satisfied with your product.
- Delighters – provide unexpected benefits that exceed expectations
You should think about all three buckets when selecting which needs your product will address first. You want to come up with a product that is so much better than existing alternatives that people will want to switch to you.
4. Pinpoint your competitive differentiators
How does your product stand out? Unless you’re creating a completely new market, your target customers may already be using other products. Your solution will not only need to be on a par with those offered by competitors but also provide something new and delightful that will persuade people to switch services.
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 them how to communicate benefits to customers and stakeholders.
5. Develop your high-level strategic roadmap
Which are your main areas of focus? Your strategic roadmap should consist of a set of clear objectives and key results. These are informed by your target customer segments and prioritized according to customer impact.
Strategic product goals should be set by product leadership and listed as part of the product strategy. Each goal should be sufficiently ambitious that they provide multiple avenues for success without dictating direction (that decision should be left to the product team).
As you come up with new strategic objectives, note them in your strategy document along with the key results you’ll use to measure success over a specified time period.
6. Outline your go-to-market approach
The final section of your product strategy document should provide an overview of how you’ll bring your product to your chosen market. For example, you could start by targeting a small segment of customers who have the most experience with the problem then expand to others later. Or you could aim for a larger audience with a free solution to a smaller problem then monetize later with premium features.
Why list your go-to-market approach in your product strategy? Speed is crucial for the survival of a new product and you can’t afford to waste time arguing about priorities. A clear outline for how you’ll distribute your product will help you achieve organizational alignment on what you’ll build next.
Product strategy example and template
Let’s go through a product strategy exercise together. We’ll be using our own work here at Productboard as an example
Today, customers experience a number of pain points when using Productboard roadmaps.
These include getting started with building a roadmap, finding the right roadmap to share with stakeholders, and sharing roadmaps with stakeholders who don’t have a Productboard login. We believe that we’ll be able to differentiate ourselves and delight our customers by addressing these gaps.
For this exercise, we’re planning over a 12-month period.
We start with a high-level vision statement that summarizes the ideal future state of our product:
“Productboard aims to be the source of truth for where the product is headed and why.”
Keep in mind that a vision statement should be short and simple enough for everyone on your team to understand, repeat, and share.
Then, a business objective that ties our strategy to the bigger-picture vision:
“Make it incredibly easy to get started with Productboard and create a roadmap that is ready to share in minutes.”
We always recommend defining a clear audience in this process. After all, how are we going to build the right products and features if we don’t know who we’re building them for?
And, tying things back to broader business goals, you want to select a segment that will fund your business and keep innovation going:
“Our Ideal Customer Profile here is a 300–400 person company with 15–25 makers, including product managers, designers, and engineers.”
Next, we dive into product objectives — key problems we’ve decided to solve, and the different areas of investment our product team will ultimately focus on. Objectives empower teams to rank and prioritize features and fixes that advance product strategy.
Here, for example, we want to enable users to build and share roadmaps right away, find the right format of roadmaps for their needs, and easily share their roadmaps with stakeholders.
These objectives then inform measurable outcomes that help us keep track of progress.
For us, these metrics are:
- time-to-first roadmap
- adoption of timeline roadmaps,
- and the number of roadmaps shared with non-Productboard users.
Note that these are quantitative metrics. You can also include relevant qualitative metrics.
Finally, we map out our tactics — granular initiatives that help us achieve our objectives. Here’s what it looks like when we put all this information together in a table.
|Vision Statement||Productboard aims to be the source of truth for where the product is headed and why|
|Business Objective||Make it incredibly easy to get started with Productboard and create a roadmap that is ready to share in minutes|
|Ideal Customer Profile (ICP)||A 300–400 person company with 15–25 makers, including product managers, designers, and engineers|
|Product Objectives||Measurable Outcomes (Metrics)||Use Cases/Tactics|
|Enable users to build and share roadmaps right away||Time-to-first roadmap — how long it takes users to create their first roadmap||
|Guide users to the right roadmaps for themselves and their stakeholders||Adoption of timeline roadmaps||
|Make it easy to share roadmaps with stakeholders||An increase in roadmaps shared outside Productboard||
As you can see, the process of creating a product strategy is both top-down and bottom-up. You need to work closely with executives to understand broader business goals and incorporate customer feedback related to their problems and needs. Your strategy should meet both of these inputs somewhere in the middle.
As one of Productboard’s PMs advises: don’t sweat over perfection when it comes to your product strategy because it’s unattainable. It’s more important to have a clear view of where you want to get to. Be crisp and brutal of the prioritization of how you’re trying to get there. Pave the path forward, tell people why, and get buy-in from others. But you’re never going to please everyone, and every plan will be imperfect in some form.
Homework: Get this printable, ready-to-use template and begin defining your product strategy with your team. Remember to focus on actionable, customer-centric problem solving rather than simply listing problems or solutions at face value!