What is a product strategy?

Creating a product that will survive organizational procedures and appeal to users' needs over time is a big project. Make your entire project easier and more cohesive by using a product strategy.

A product strategy is a high-level plan establishing a new product's purpose, audience, and goals. This encompassing plan is based on data and creates a foundation that can be referred back to maintain a sense of direction over the project's entire lifecycle. 

A winning product strategy will focus on blending user needs, company mission, and product features into a cohesive plan that clarifies key goals. This stable touchpoint adjusts according to data and the market to keep the product viable.

What is in a product strategy?

A product strategy will establish a product's key audience and market placement. It will contain benchmarks and guidance for different parts of the organization to complete a cohesive plan that directs the entire lifecycle of a new product.

Simply put, your project will lack clarity and direction without the high-level, encompassing plan that a product strategy provides.

Here are three specific reasons to invest time in your product strategy:

It provides clarity for your company

Because a product strategy begins with comprehensive research into your target market and users' needs, the final iteration will keep your organization on track to meet those needs. Ensure all departments can access the high-level plan to ensure they stay aligned with the key goals.

It helps you prioritize your product roadmap

When you create your product roadmap, every step will be organized to ensure your product reaches its core goals. Every team must refer to the overall strategy to avoid being too focused on their own interests and instead collaborate towards achieving the common goals.

It improves your team's tactical decisions

It is natural for design and marketing teams working under the same project manager to have differing opinions on what to prioritize. The product strategy, which prioritizes user needs and company goals, will give the project manager a touchstone to refer to when deciding which part of the project will be prioritized next.

When everyone understands the overall plan, friction can be minimized, and the project can proceed in a focused way.

A product strategy can benefit any project to produce or enhance a product. It is particularly useful when a market has been identified, but the approach to reaching it is uncertain. In such cases, it is advisable to establish a strategy.

When there is no strategy in place, companies and their products may be hastily pushed to the market without a proper and essential understanding of what they are or how they may affect their position in the market.

A product strategy is the sum of your idea foundation, product vision, effective business models, and a key-in focus on market positioning.

Foundation

The foundation of your product strategy should include a specific target market. Using extensive market research, find and truly understand your ideal user. 

Vision

Once you understand who you are designing for, create a vision for your product that focuses on what problem you are solving for your target market. Use feedback surveys to understand what your users hope for and design accordingly.

Business models

Explore different business models to ascertain how to solve problems in the way that makes the most sense to your market. Find longevity opportunities for your company to grow in the market with your unique product.

Positioning

Adapt dynamically using ongoing surveys and research where your product will fit in the current market.

There isn’t just one definition or method that makes up a given product strategy. Many companies mold structures to their own strategies. For the intents and purposes of this article, we will stick to these four elements of a product strategy.

Because every product and organization is different, remain flexible during the product strategy development to ensure that your strategy reflects your users and your brand's voice. 

Although the end product may look different for every unique product, developing the product strategy should include the following:

1. Dedicating time and research to understanding your user and market trends

Building a brilliant product strategy begins with intense research. Pulling existing reports and big data where available, running surveys, and researching the target market's needs and wants will create the backdrop of the entire strategy.

2. Designing a product that serves a clear purpose for your user

Based on your findings, you’ll then adopt metrics that make sense to achieve usefulness to your target market.

3. Keying in on your product's core value proposition

Aligning your products or services to your users’ needs means you are now valuable enough to purchase.

4. Communicating with each department that has useful insight into the lifecycle of your product

Work with the stakeholders who define the company to ensure your product strategy meets their long-term expectations.

Bringing in existing internal insights is a great step to build buy-in across your company while ensuring no work is redone. First, communicate your initial data to the involved teams. Then, put together their insights into priorities that align with your main objective of providing users with what they want through the lens of your organization's priorities.

5. Leveraging any existing data and trends, business analysis, or other departments your company may already have

Review and clearly articulate the strategy to your entire organization. Use it to identify your company’s position in the market and pinpoint where the users’ needs and the organization's goals meet.

6. Testing and adjusting

Create a feedback loop between your company and your users to ensure continuity with your strategy today and into the future.

7. Creating core goals that communicate shareholder’s expectations

Create core goals, including metrics and benchmarks for checking progress, and give teams the autonomy to do their part in reaching them without too much oversight.

8. Creating a product process that moves your product through its goals most efficiently

Put together a working product process that creates effective and predictable progress with the right amount of flexibility throughout the product’s lifespan.

9. Staying flexible with your product roadmaps and backlog

Once your product strategy has been established, understand that to stay dynamic, you may need to stray from your backlog or roadmap or abandon them completely to keep up with competing and changing markets and hold your share. 

Some of the biggest companies in the world use product strategies that lead them to the top of their markets. Think of Netflix.

Netflix wasn’t always the top streaming service on the market. They started as DVD vending machines before streaming ever existed. Technology grew and developed, creating a new opportunity. Without seeing into the future, it’s hard to say if it was or wasn’t their plan. Still, they certainly secured themselves a strong enough foothold in the market that once the technology caught up, they could easily usher their existing users to “stream” rather than rent and return their DVDs—essentially nullifying their own business model into a much more dominating model. They became the leader in their industry by following a very successful product strategy to provide entertainment conveniently to customers.

After their success, other companies, like Hulu, employed a challenger strategy and created a rival service that brought its unique take on what people wanted in their streaming entertainment.

Since then, many companies have followed suit, creating various options at varying price points to attract both niche and market share customers.

Your product strategy should involve anyone in your organization with data and trends to share, including stakeholders in your organization. 

At its inception, a product strategy that will lead to ideal results will benefit from as much data, business acumen, and perspectives as possible. 

Because a key element in your product strategy is the users’ needs, involve your target market as much as possible by conducting exhaustive research. You can do this through feedback surveys or ethnographic studies.

Insufficient research during the initial investigation

One of the biggest challenges in developing a product strategy is completing enough research into your users and target market to create a product that can stand the test of time. 

Being too rigid in your initial version of your product strategy

Failing to be flexible to user feedback and data analysis results could cause an outdated product strategy that cannot accommodate your product's desired lifespan.

Many of the mistakes that occur when creating a product survey boil down to impatience. When creating your product strategy, take the time to fulfill all the best practices.

Once you have developed your product strategy, it's important to remain open to deviating from it to capitalize on emerging opportunities. A great example is Netflix, which shifted its focus to streaming when it became a viable option. 

Adjustments can be made to keep your product relevant in the wake of unexpected circumstances or new information. The key is to find the balance in your strategy and stay flexible enough in the market space you compete in.

A well-crafted product strategy keeps your product useful to your users and beneficial to your organization throughout its entire lifespan. While it might require some patience to develop a successful strategy at the beginning of a project, the time you save by avoiding conflicting perspectives later on will ultimately make your initial patience well worth the effort. Use your product strategy to touch base with your core goals as your product improves user experiences throughout its lifespan.