A product strategy It is the instructions that will tell your company what initiatives you must carry out in order to have a relevant product for your users and meet the key objectives of your business.
Incredible as it may seem, there are ventures that are thrown into the ring without strategic support. This means that, even if you have a very good product to satisfy a need of potential customers, lacking a plan or process that contemplates the vision of the business and its objectives, can represent the failure of that product.
For this reason, here we will explain what a product strategyhow to prepare it and what are the different types that exist so that the good or service you want to sell is interesting for your users and helps you to have a profitable business.
What is a product strategy?
A product strategy It is the plan that defines the initiatives necessary for a good or service to meet the needs of your potential customers. All this aligned with the objectives, both strategic and commercial, that the product must meet.
If you wanted to explain it to someone in even simpler terms: It is the instructions that will tell your entire company how you will make your products generate interest in your users, sell well and strengthen your brand in the market..
The purpose of having a product strategy —at the development, marketing and sales levels— is to have a well-defined guide of what you need to activate and the results you expect to obtain to achieve your business goals —such as generating a new version of a product , launch a new or meet a —, always focusing your decisions on the user and their needs.
Although it is difficult to believe, many ventures fail due to the lack of a well-planned strategy. The British financial firm London & Zurich cites the lack of planning and strategy as one of the .
And the numbers don’t lie when we talk about product strategy within companies; carried out by the consultancy Product Focus, showed how the interviewed product managers spend 52% of their total working time, “putting out fires” or dedicating working hours to unplanned activities during the creation of a product.
With those numbers, it’s worth having a product strategy to increase your chances of success. 👍🏼
How is a product strategy developed?
To make a product strategyThe key is to never lose sight of these three essentials along the way:
- Vision of your product
- Objectives of your product
- Initiatives and Actionables
Let’s look at each one in detail to understand why your business needs this trio to succeed.
Vision of your product
Very much in the style of the vision (which we explain to you along with the ), the vision of your product consists of defining what the future looks like if that good or service that you market is successful. Basically, why do you want your product to reach the user?
This has the purpose that you understand the purpose and that need (or needs) that you will solve for your users. That’s right :lThe vision of your product must be focused on the user. After all, what is the use of making a product if there is no one to use it? 🤯
There are questions that will help you define your product vision more clearly:
- Why is my product relevant to the user?
- What problems does my product solve in the user’s life?
- What does my product offer that no one else has?
- If my product is successful, what else will the user get?
Don’t be afraid if the answers have some ‘aspirational’ charge. That’s fine, and just like your company vision, it’s always about working toward a version of the future you’d like to live in, right?
Objectives of your product
An essential part of your strategy is knowing what your product will bring to your company. Whether it is about positioning a new brand or meeting a goal of a Your product goals are those results or milestones you want to achieve when marketing your goods or services.
Like the rest of your company’s goals, such as For example, your product goals should be:
- Measurable
- achievable
- clear
Did we already say ‘measurable’? You will forgive us for emphasizing this part, but of course your results must be quantifiable. After all, what’s the use of knowing how far you want to go, if you won’t know for sure how far you’ve come? 😉
There are also questions that will guide you in shaping your product goals:
- Is the success of my product quantifiable?
- How and under what parameters will I measure the success of my product?
- Who or who will be responsible for working on that measurement?
- Do I have the necessary means (budget, personnel, etc.) to reach those goals?
- Do those involved in managing, developing, and selling my product understand how success will be measured?
The objectives of your product may involve one, several or all areas of your company. Therefore, it is important to always specify the measurement parameters. Thus, each participant within the product strategy will know what is expected of their work and will be able to contribute to achieving that result.
Initiatives and Actionables
You already know why you want your product to reach the user, and also how you are going to measure the results you expect from that link in your company. Only one small detail remains: what will you do to achieve those results and keep the product relevant to the user? Then, initiatives and actions are all the activities that you will launch in order to achieve the objectives of your product.
This is perhaps the part of the process that will require the most work, in the broadest sense of the word. You must define, in great detail and with the participation of the areas involved, the activities that you will carry out to achieve each objective.
And of course, here are also questions that will help you define those initiatives and actions:
- What areas of my company will participate actively to achieve the objectives of my product?
- Do I have data from those areas to determine the activities I can do to reach those goals?
- What kind of market information do I have to know what my product will face?
- In addition to the traditional channels that I already use, what other channels can I take advantage of to support these actions?
- What kind of activities can I carry out that facilitate the relationship between my product and the end user?
- How do these activities help achieve my product goals?
- Do I have the necessary means (budget, personnel, etc.) to start these activities?
- Is it possible to know what the user thinks of my actions and my product in order to improve both?
Did you notice? As you get closer to initiatives and actionables, the questions increase, and this is because this part of the strategy must be kept aligned with the previous two elements: the vision and goals of the product. After all, what is the use of dreaming about something achievable and that makes you very happy, if you do nothing to make it come true? 🤩
What are the types of product strategy? (And examples to understand them better)
Depending on the type of product you have and the initiatives you will use to bring it to the end user, types of product strategy most used are:
- Price
- Segmentation
- Differentiator
- Quality
- Service
- Product Led Growth (PLG)
Now, let’s review what each one consists of so you understand which one can work best for your product and your business.
Price
Undoubtedly, the most used strategy for its ease of coupling to any product. It consists of focusing the strategy on the price of the good or service to make it more attractive in the market, either raising it to appeal to luxury and exclusivity, or lowering it to reach a broader audience.
Examples: an exclusive price club that sells products wholesale or an outlet that sells fragrances at a permanent discount.
Segmentation
If your product allows it, an attractive strategy due to its ability to convert a product into multiple options is segmentation. Here what you are looking for is to offer different versions of the same product —with more or less functionalities and features activated for each one—, this in order to attack different target audiences.
Example: a gym that offers different alternatives and services depending on the type of subscriber; a family, a couple, an individual, a company, etc.
Differentiator
We speak of this type of product strategy when the good or service offers a recognizable and characteristic element —ideally related to its value proposition— that seeks to distinguish it from the rest of the competitors in the segment. The strategy, of course, includes communicating this difference.
Example: a company that manufactures garden furniture made from 100% recycled materials.
Quality
These types of strategies seek to place products to the liking of users through processes and initiatives that increase their value and recognition above the competitive standards of their segment. Sometimes, a certification or award is enough to generate a strategy of this type.
Example: the campaign to attract clients generated by a spa that won an award as the best treatment and relaxation center in the tourist area of Los Cabos.
Service
Very much in the style of the previous example, these strategies seek to position their products with the help of a promise of attention and a more attractive experience than that offered by the competition. A good can reveal insights of the general failures of an industry to improve them and use them in your favor.
Example: a restaurant ghost kitchen that offers service midnight snacks or late-night snacks for those who work late into the night during the week.
Product Led Growth
One of the types of strategy that has generated the most interest in recent years is the Product Led Growth o Product Led Growth (PLG). This part of the idea that the product is capable of selling itself, as long as all areas of the company work and are in perfect synchrony to create a product that generates an excellent, self-sufficient and unobstructed user experience.
This type of model, although attractive for what it represents, is very difficult to achieve. This is because it requires a star product that meets the needs of the user, generates loyalty due to its benefits and virality due to its competitive advantages. In addition, of course, from a company capable of sustaining and constantly evolving this product.
Example: few companies in the world have successfully managed to fully implement a PLG strategy, and among them Slack, Dropbox and Calendly stand out.
In summary
Now you know what it is and why you should have one product strategy. It is that instruction that will guide your company to make your products relevant to your users, meet their objectives and strengthen your brand.
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