How do you develop a product strategy
Why companies fail without a product strategy - and how they survive
Why is a product strategy so important?
A product strategy is a basic requirement for every successful product. When you define your strategy, you are not just focusing the entire team on a common (and clear) goal. They can also make design and product decisions more quickly, counter advances by competitors better and create products that exactly match their target groups.
Without a product strategy, your success is determined by chance - there are too many variables that you have not considered.
According to a study by CBINSIGHTS, 42% of startups fail because there is no market for the product. 19% are thrown out of the market by the competition, 17% fail because of user-unfriendly products, poor marketing (14%) or because of lost focus (13%). You can avoid all of these reasons for failure with a product strategy!
"A strong product strategy reduces the risk of developing a product that nobody uses - and increases the chance of standing out from the competition and successfully establishing products on the market."
Manuela A. Sanmiguel, Branding Expert at SANMIGUEL
Convinced? Let's look at how to define an effective product strategy.
Everything starts with the product vision. Your vision answers the question of why a product should be developed or improved - focus on the answer to that question, not on what should be developed. The product vision is all about the reasons for developing a product! The product strategy is then based on the vision and defines how you will realize your product vision.
Put the customer first. Instead of focusing immediately on the product features, start with your target group: Who should buy and use your product? Create buyer personas and define who your ideal customer is. A precise definition of target groups and an understanding of the users and their needs is the be-all and end-all of every product. Even during product development, you should always keep the customer in focus - this can be achieved with user experience design.
Successful products solve problems. Look for problems that your product can solve while also aligning with your product vision. To do this, you need to put yourself in the shoes of the customer and understand behaviors, habits, desires, beliefs and fears. This is how you often discover problems that would have flown under the radar without a deep understanding of customers. You then identify a key problem and formulate your value proposition.
Analyze the competitive landscape. Is your product idea unique? If not, what makes your product special? Talk to customers, test competing products and get a comprehensive overview of the market. Then describe your product idea and name three to five characteristics that make your product desirable - and differentiate it from the competition. With the USP, focus on the characteristics that are important for your target group!
Validate your product strategy. Plan product features and develop prototypes - whether with pen and paper, interactive mockup tools such as InVision or quickly coded prototypes. You then bring these concepts to your target group at an early stage in order to test ideas and collect valuable user feedback. With this feedback you can refine your strategy and adapt your prototypes accordingly. Stay flexible and don't be afraid to admit mistakes and misjudgments!
The OTOBO Helpdesk project is a good example of how to combine user needs with the goals and ideas of the customer when developing a product. By means of a UX workshop, we created a fixed framework together with the customer in advance and were able to define clear, strategic cornerstones for the concept.
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