10 Steps to create an effective Product Strategy

The Product Manager leads a cross functional team to build products and services that delight customers and create shareholder value. As a Product Manager, one of the first steps is to understand the market, customers, competitive landscape and formulate a product strategy to ensure a viable product and business.

The following are ten steps to guide in the journey.

  1. Mission – The mission of the product should express its core purpose. This should be powerful enough to rally the product teams (Product Management, Development and Quality Engineering).
  2. Vision – The vision of the product is the desired future state. This could be about two to three years out.
  3. Understand the customer – Complete a customer segmentation study. A mind map is a useful tool for analysis. Who are your customers? What kinds of attributes are similar in your customer base? Can you put them in categories?  What problems do they currently have? Why do they buy your product? Does your product solve their current pain? Are there any future problems you can identify in this analysis? What capabilities in your product trigger buying decisions? Any future product ideas?
  4. Market Analysis – A thorough understanding of your current product and its capabilities is required as you understand the market. Doing a SWOT analysis will benefit. Look at your competition. Never forget “in house” development of capabilities as a competition. Be objective. Do a competitive analysis. Go down memory lane and study the past trends in the space. What can you predict in the future?
  5. Financial Analysis – You want to be in business to make a profit. Establish sound fiscal planning and reviews during the product life cycle. Forecast revenue projections a couple of years out. Break them out by quarter. Include revenue by geos and partners. Calculate gross margins and product profitability by phase of the product. Take into account any environmental factors that could impact revenue.  
  6. Marketing Mix – Address the product launch plan. How do you plan to market your product? How will you create the demand for the product? Through which partners? In which geos? What is the optimal product price and discounting strategy? Adjust this by phase of the product. For new product introductions, there could be some early bird pricing.
  7. Business Performance – Quarterly Business Performance reviews are good to evaluate your product adoption and issues with customers. Examine service and support data and recommend any additional features or enhancements for the product. Can some of these be addressed with additional training and documentation to increase customer satisfaction? Explore for “Key Moments of Truth” opportunities.
  8. Roadmap – A two to three year roadmap is a useful tool to communicate with customers, stakeholders and partners.
  9. A looking glass into the future – Stay current on shifts and trends in your market, customers and competition. Look for adjacent opportunities to provide an “end to end” solution that addresses customer’s problems. This could include potential M&A opportunities and recommendations. Present these ideas and opportunities.
  10. Measure. Learn. Adapt. – Ensure that you have the right KPIs to measure business performance. Learn from it. Analyze data gathered in the process to guide product decisions in the future. Try to ensure that data used for analysis is accessible, auditable, automated to guarantee sound decisions.