Why you need a product strategy framework to build a great product
Product strategy framework
It takes three things to build a great product: a vision, a strategy, and a roadmap. We often associate product management with roadmaps, since it’s the tangible piece of the process other teams see. Product managers are also known for articulating the vision for a product as well. But it’s the strategy that connects these two and yet trickier to identify ownership. Does the CEO drive strategy? Does Sales? What does ownership of this decision making look like?
When ownership and process of the strategy is ambiguous, it can make the reasoning behind the roadmap difficult to understand by various organizations in the company. It negatively impacts the organization’s credibility in making decisions. A confusing or inconsistent strategy makes it harder to rally everyone to deliver the very best product experience, which impacts customers.
That’s why product managers need to take the lead to build a coherent and repeatable process to reliably drive Product Excellence. Having a documented and well-communicated framework for how you determine strategy connects vision and roadmap in a scalable way that grows with the company.
Frameworks can be flexible, and they can change, but ensuring you’re following some a structure proactively keeps teams engaged and aligned and customers happy. Without a framework, you’ll be jumping from feature to feature, putting out fires when they arise.
Four elements of a product strategy framework
We’ve found that a strategy requires four different elements: user insights, clear objectives, competitive analysis, and market analysis.
User insights allow you to connect your product to your users. Clear objectives connect your company goals to your product. Competitive analysis keeps your competitors in your sights. Lastly, market analysis helps you understand what’s going on with your industry, outside of just your competitors.
If you skip one of the elements, there’s a chance you’ll get at least one aspect of your roadmap wrong and miss your destination. This is essentially your “one-degree” phase. That means if you skip one of these four elements, it might put you one degree off course now. If that happens, you’ll be much further off course later on in your roadmap.
If you want to build a great product, you need to have a deep understanding of your customers. It’s something many great companies do to build great products. Getting a deep understanding of your customers can come from analytics, surveys, interviews, and more.
Figure out where all your user touchpoints are.
Here are some example questions you should answer before moving forward:
- Are we going to survey our customers?
- Are we going to conduct user interviews?
- Are we going to use analytics to learn how our customers use our product?
- Are there other tools such as support, chat, or social media channels we should use?
There are a variety of ways to capture insights, and you should lay out all the options in front of you. You may not decide to use them all, but having clear reasons as to why or why not will solidify your strategy.
Your company’s clear strategic objectives need to be a part of the calculus in your product strategy.
Take the time to understand what major objectives your product can achieve. Are you focused on growth or retention? What higher-level metrics play into those things? NPS? Profit margin? Number of users?
What can happen sometimes happen to product managers is getting stuck on ‘vanity metrics,’ or more simply metrics without context. Maybe trial signups are going up, but profit margins are going down due to increased customer acquisition costs. Well, I might argue that trial signups, in this scenario, is indeed a vanity metric. But you may tell me that we’re focused on growth and getting our name out there, in which case trial signups are entirely appropriate.
Consider and clearly outline how big of an impact your product can have on those specific goals. There might be some goals that have nothing to do with your product. That’s fine; don’t worry about those for now.
Your competitors have to play a role in your product strategy. If they are doing things that are improving their product to a higher degree than you are, you’re eventually going to get left in the dust. That’s why it’s essential to learn what your competitors are doing so that you can outperform them and, ideally, take market share from them.
Here are a handful of questions you should think about:
- Who are your direct competitors?
- What about indirect competitors? These are the companies that have a different product but still satisfy the same need for your customers.
- How are you going to find your competitors’ strengths and weaknesses?
- Are there any product review websites that you can use to read reviews from your competitors’ customers?
- Is there any way you can objectively test out their products?
- Can you interview anyone who uses a competitor’s product?
Those six questions will help you plan your competitive analysis, but it’s not an exhaustive list. Spend time thinking about your specific competitors. How can you learn more about them? This phase is time-consuming because you need to make sure you’re getting a good snapshot of your competitors, which is easier said than done.
It’s also important to look at your market as a whole when building your product strategy. It’s different from a competitive analysis because you’re taking a much broader view of the market where your product exists.
You need to examine the following:
- Complementary products. These are the ones that don’t compete with your product but have some effect on it. Classic examples of complementary products are cars and gasoline: Gas prices affect the types of cars people buy, but they certainly don’t compete.
- Changing laws and regulations. What laws affect your industry or your product? For example, the California Consumer Privacy Act (CCPA) might affect how your product collects data about your users. You need to be aware of these and adapt accordingly.
- Potential for disruption. Disruption happens in most industries. Unfortunately, many companies are blindsided by it and struggle to keep up. That’s why you need to spend some time looking at the little guys — the startups doing exciting things in your industry. Right now, they might not be competitors, but they could be very soon.
Where are you going to get this information? How are you going to keep up with new regulations and disruptive technologies? Larger companies can pay market research firms to help. Smaller companies will have to lean a little harder on traditional networking, meetup events, online research, and such.
The product strategy framework = standardization
The key to your product strategy framework is standardization. Building a product is hard, and the process can seem chaotic. But it’s mainly in these moments when falling back on a set structure is most helpful. Again, the frameworks you create can be flexible and change over time, but you should feel confident in knowing that they’re available.
If your framework always includes these four elements, it’ll help ensure that your decision making consistently leads to delivering product excellence.
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