A product strategy is a crucial aspect of your business growth. It outlines a strategic vision for your products by showing where your offering is going and how it will get there and succeed. It is a guide that shows your team what tasks they should accomplish to achieve your organization’s bottom line. A product strategy ensures tasks are completed efficiently and on time, but how do you create an effective product strategy? In this article, we highlight eight tips to help you and your team build an effective product strategy.

1. Define your target audience

Perhaps one of the most significant reasons for small business failure is poor product-market fit. Most organizations consult and brainstorm with their internal team before developing and launching a product. They then try to figure out a strategy once the product is in the market. This does not yield the desired results often because the product is not made with the end user in mind. For this reason, it is critical to understand your target market, their needs, and their pain points before creating a product. 

Be sure to incorporate user research into your product development and design cycle to enable you to understand what your prospective customers want or need. Conduct user interviews and field studies to determine where your potential customers live, their gender, occupation, estimated income, age, and personality traits. You should then use this information to create personas. Personas allow you to establish how your target audience looks, acts, and thinks. This enables you to create a product that can meet your target audience’s needs. 

Creating a product that resonates with your target audience can be challenging. Click here to get help creating a logical strategy that accounts for your target market, pricing, and competition and yields a high-quality product.

2. Determine the problems you’ll be solving

Problem definition is a critical aspect of your product strategy. Your product should provide a solution to your target audience’s needs. 

Establish the situation or the pain points you might have encountered when researching your target audience and the background. You should then determine the risks or complications involved if you do not provide a solution to the difficulty or situation. Once you understand the situation, you should then define your company’s opportunity or problem statement. 

Defining the problem is not enough. You should further establish that your target users need solutions to their needs and that they would be willing to invest cash in finding a solution. An excellent problem statement should be SMART: specific, measurable, achievable, relevant, and time-based. 

3. Facilitate ideation and brainstorming workshops

Once you identify your target audience, their wants, and needs, and define the problem, consider facilitating ideation or brainstorming workshops with your team. Ideation entails generating, creating, and communicating or sharing a specific idea. By facilitating an ideation workshop with your team, you develop various ideas and brainstorming techniques that foster innovation. 

An ideation workshop enables you to bring together experts from different disciplines or departments, providing solutions to your target audience’s problems from different perspectives. Consider facilitating a follow-up session after ideation or brainstorming to help your team prioritize ideas. Include representation from engineering leadership, key stakeholders, product, and UX/design in your brainstorming sessions.

4. Establish your product vision

Your product’s vision is the overall view of your organization’s direction and the primary reason for creating a specific product. It is the inspiration behind your product. For this reason, you must capture your product vision before defining your product strategy. The following are tips for defining high-level product vision: 

• Define your business’s long-term goals. Determine how your product will look in the next three to five years.
• Obtain emotional buy-in from your team to make your product vision motivating or inspiring
• Ensure your product vision is clear and easy to understand
• Opt for a broad vision to engage more people while enabling you to pivot

5. Identify your competitive differentiators

How will your product stand out from the competition? Unless you intend to launch a completely new product or service to the market, the chances are your potential customers are already using similar products to yours. For this reason, you should strive to create a product that does not only meet the current market expectations. It should also have an additional value that convinces users to switch services. Some ideal competitive differentiators you could leverage include:

• Reliability
• Affordability
• Performance
• Ease of use
• Safety
• Privacy

Be sure to communicate and discuss your competitive differentiators with your employees. This ensures each team member understands what sets your product apart, enabling them to share your product’s benefits with stakeholders and potential customers.

6. Establish your product’s goals

Once you establish your product vision, you should then use it to define high-level objectives you want your products to achieve. For instance, you could determine that the most crucial thing your product could accomplish is increasing your customer’s lifetime value or attracting a new user persona type.

Once you establish your goals and objectives in order of priority, you can use them to dictate your company’s plan for functionality and features, among other aspects of the product you intend to create.

7. Develop Key Performance Indicators (KPIs) 

Once you establish your product objectives, you should develop Key Performance Indicators. KPIs highlight how effectively your business achieves its product objectives, enabling you to make necessary adjustments. Typical Key Performance Indicators include:

• Attract 15, 000 new clients by 2023
• Lower churn by 8% by Q1 2023
• Improve customer experience and satisfaction by 12%
• Increase your new product free-trial downloads by 60% within six months

8. Highlight your go-to-market approach

Be sure to outline how you intend to bring your offering to your target market. For instance, you could provide a free solution to a broader audience base and then develop a monetizing plan as you add more premium features to your product. Alternatively, you could give a solution to a small segment of your target customers who have more experience with the problem you are trying to solve and then expand your outreach later. 

By highlighting your go-to-market, you will speed up the product distribution process, enabling you to accomplish organizational alignment on what to produce next.

Endnote

An effective product strategy is critical to making vital decisions on every aspect of your product, from pricing models and product features to marketing campaigns. Define your target audience, understand the problem you want to solve, develop product vision and goals, identify your competition differentiators, and highlight your go-to-market approach to create a good product strategy.