Your Product strategy is the most important long-term document you ever create for a Product. It helps you imagine the future of your Product. It helps focus your team on the activities that will generate the greatest value for both customers and the business. It helps you manage your internal and external stakeholders and gain their buy-in for further investment. It does all sorts of great things…
But before you can craft your Product strategy you need to know — what’s going on?
Asking “what’s going on?” helps you understand your current situation as it relates to both internal and external environments.
Understanding what’s going on allows you to respond to change more effectively.
What’s going on in your internal environment?
What’s going on with your existing customers should be the first area you focus on in the strategy development process. And, it’s not a ‘set and forget’ document, you also should review it on a regular basis so you have a thorough understanding of your most important customers.
Some things you should know are:
- What problem is your Product solving? (This may change over time.)
- How are your customers using your Product?
- How engaged are they?
- What do they like and dislike about your Product?
- How has their behaviour changed over time as your Product has evolved?
- Who are your most profitable customers and why?
- Who are your least profitable customers and why?
Customers that have left you
Understanding what’s going on with these customers can help you identify opportunities to re-engage them as well as help you avoid losing similar customers in the future. Here’s what to focus on:
- Why did they leave you?
- What (or who) have they replaced you with?
- What prompted them to leave you? (Both the trigger and the context.)
A happy team is a high performing team, so it’s crucial to understand what’s going on here. What’s working and what’s not working? If you conduct regular retros you should have a good indication of what’s working and what areas need to be improved. Understanding your team’s capabilities, how these have evolved, and any gaps, will help inform your Product decisions.
If your Product team is part of a large organisation, it’s important for them to know what’s going on in the rest of the business.
- What’s the business strategy?
- What are the business goals and how does your team contribute to these?
- What areas is your organisation investing more heavily in?
- What are the priorities for other areas of the business?
What’s going on in your external environment?
As well as looking inwardly, it’s also important for a Product leader to look outwards. Ideally, you should understand what’s going on in your immediate external environment, as well as much more broadly — as things further removed may impact your Product’s success in unexpected ways.
Talking to your competitors’ customers is a good place to start understanding what’s going on. Some things to understand are:
- Why have they chosen your competitors’ Product(s) over yours?
- What do they like and dislike about your competitors’ Product(s)?
- How do your competitors’ customers differ from yours?
You have two main types of competitors — direct and indirect. Direct competitors offer the same, or very similar, Products. Indirect competitors solve the same problem as you in a different way. For both types of competitors it’s important for you to understand what’s going on, things like:
- What is the value proposition they are offering?
- How does this differ from yours?
- Who are the new entrants in the market?
- What are they doing differently?
- What’s their Product offering?
- What technologies are they using?
- What’s their business model?
Changes in consumer behaviour
Consumer behaviour is constantly evolving and understanding how it’s changing is critical to the creation of your Product strategy and designing the customer experience. Some of the questions you should ask are:
- How has consumer behaviour changed?
- How do you think it will continue to change?
- How will these changes impact what you are trying to achieve?
- What are the things that are influencing/driving these changes in consumer behaviour?
If you don’t understand what’s happening in your market you could be blindsided by threats to your business or miss opportunities. You also won’t know whether you need to make the leap to new markets or maximise the opportunities in your current one. All of these questions can help you understand the direction of your Product:
- What’s going on in the market?
- What’s the total revenue?
- Is the market growing or shrinking?
- How is it growing or shrinking and what’s causing this?
- What’s your share of the market and how do you expect this to change?
Technology is moving FAST!! It’s one of the areas that Product leaders should monitor on a regular basis to assess how this will impact their Product strategy. Some things to monitor are:
- What are the emerging technologies?
- How will these impact your customers?
- Will changes in technology create a new customer segment?
- What are the emerging technologies that will help improve your Product?
- How are customers reacting to new tech trends?
A topic that has been gaining prominence recently and is driving action and changing consumer decision-making is the environment. As a Product leader you need to understand which environmental factors will impact your Products and how, for example:
- How have people’s attitudes towards the environment changed?
- How will this manifest in relation to your Product?
- What impact are you expecting to see?
- What impact does your Product have on the environment and how could you reduce/improve this?
Another macro lens which can have a big impact on your business, Product and your customers. Some key questions to ask are:
- Is the local, national and global economy expanding or contracting?
- Is this the same in the economies where your key customers, suppliers and partners are?
- Are interest rates, employment rates and CPI dropping or rising?
- What does that mean for your customers, for your Product, for your business?
Small changes to laws and regulations can have a massive impact on businesses. The Consumer Data Right (CDR) is a great example of how regulatory changes will impact businesses and Products. Keeping abreast of these changes can create an advantage. Ask what’s going on with rules and regulations. What changes are happening that will impact your business, Product and customers?
COVID-19, a virus that is believed to have started in China, is a perfect example of something which is now having an enormous global business impact. What else is going on globally that might impact your business?
- What are the big global issues right now and are they likely to impact your business?
- What might you be able to do to reduce the impact?
- What other threats are there which may develop?
- What global trends are gaining pace?
An area that is often overlooked but is well worth exploring is what’s going on in similar industries.
- Are there any parallel solutions?
- Are there any meaningful value propositions?
- What can you learn from parallel industries?
- Are there any Products in similar industries which might compete with you in the short or long term?
This is by no means an extensive list of either questions or areas you should look at when developing your Product strategy but it’s a good starting point. Different organisations will focus on different things depending on their size, industry and overall business strategy. It’s important for Product leaders to identify the areas that are relevant to their Product and business and where they’ve chosen to play.
Product strategy development is hard work and it’s not just about filling out a blank canvas. When you understand “what’s going on”, you are in a much better position to create a successful Product strategy. Then, once you’ve captured, synthesised, analysed, discussed and debated you should be able to determine how to create the greatest impact and achieve your business goals.