Product Development Strategy: 8 Best Practices and 3 Key Reasons to Use It

According to Forbes, most software products fail due to the lack of agreement between the stakeholders, misunderstanding of customers’ needs, and pressure to release goods as soon as possible.?

And here comes the question: how can you develop a product that will succeed? Well, I’d say start with the well-thought-out product development strategy.?

Define a clear direction to follow to make the most of your resources, determine your top objectives, and ensure a seamless product development process.?

To help you do this right, I’ve written this post covering the best practices, benefits and experience of my team in creating perfect product development strategy.?

3 key reasons to start with Product Development Strategy

A product development strategy can boost customer satisfaction, assist expansion into new markets, increase product sales, and support corporate growth.?

• Larger businesses that have a more robust product portfolio can identify new opportunities to capitalize on.?
• Start-ups can build a solid foundation for all future development and scaling activities.

Product development strategy is especially helpful when you hit a revenue sales plateau and want to assess your future moves. Consequently, a product development strategy is essential to a product's continued success and expansion, which in turn helps the company as a whole.

Here are some main reasons why you should invest your time and resources in building your product development strategy.?

1 - To mitigate risks

With a product development strategy, a team has a better chance of developing a product that meets all users’ needs. The strategy should be based on research of a comprehensive market, competitors, target audience, etc. With this approach, you will remove the guesswork and make data-driven decisions.?

2 - To save resources

The product development strategy outlines must haves and shouldn’t haves. As a result, the team doesn't invest resources in increments that have nothing to do with the product development plan and vision. By focusing on the objectives defined in the strategy, you can speed up your time-to-market.

3 - To improve team coordination

Reworks caused by misunderstandings are among the most frequent problems during product development. The team needs to establish effective communication so everyone is on the same page and knows what to do to release a product on schedule.?

In this situation, a product development strategy is a helpful tool to keep the team focused on the main goal regardless of the roadmap they decide to follow.

3 hidden benefits of a Product Development Strategy

A sound product development strategy is full of advantages that can assist your business in developing an idea into a profitable product and highlight new opportunities. You can:?

• Adapt your product to market changes - by keeping track of your growth, analyzing the performance of your current products, adjusting or revising your plans, you can be flexible and modify your development strategy to fit your current needs.
• Eliminate under-performing products - by receiving feedback on your product's development progress you can make quick evaluations of products that need to be hitting the mark.?
• Provide a bigger picture - with a product development strategy, development team guides cross-functional teams toward priorities that will advance the result and impact sales generation.?

8 best practices of creating a PDS?

Now it is time to share some best practices that you can use while building your own product development strategy, depending on your current situation and end goals of course.?

1 - Modify existing product

Encourage your clients to buy an upgrade by developing a new version of an existing product with minor changes.

This approach focuses on determining what features customers want to see changed and implementing those improvements. Apple releasing a new iPhone with minor changes every two years is the most prominent example of this strategy.?

2 - Add more value to your product

Many businesses attract clients by bundling extra benefits with purchasing a product. You can raise the value by offering more products, enhancing customer service, or including exclusive features.?

Due to the extra features, potential clients may be attracted to your product, and current ones may decide to buy from you again to get a great deal. IKEA is a vivid example of a company that consistently offers high-quality furniture at affordable prices.

3 - Offer product trials

Customers who might not have purchased the full version may be persuaded to try your product by providing a free or inexpensive trial version.?

This strategy depends on the quality of the product since it anticipates that many users of the free trial will also buy the full version. Trials of their streaming services are available from companies including Netflix, Prime, Disney, and Amazon.

4 - Create package deals?

By offering package deals, you may encourage clients to buy more of your goods. This tactic introduces clients to a range of your items through sample packs or assortments that may address various customer issues.?

Additionally, package deals introduce clients to a product they might not have otherwise bought and persuade them to do so in the future. For instance, computers are frequently sold in bundles with mice, webcams, and other accessories.

5 - Specialize and customize

Many products can be tailored to target a specific customer segment or made just for you to provide a one-of-a-kind gift.

Customers may be more inclined to purchase your product over a rival that sells a generic version if you allow them to customize it to suit their wants and lifestyle. For instance, Moonpig.com offers personalized occasion-specific templates to customers.

6 - Modify your ideas

If a market isn't responding well to innovation, a corporation might consider investing resources to determine what that market wants.?

A willingness to modify ideas as necessary can be a successful strategy because not all ideas will lead to a successful product. Coca-Cola, for instance, develops new flavors like Diet Coke and Coke Zero, considering customers’ preferences.

7 - Discover new markets

Consideration of marketing an existing product to a different market or demographic is a great product development strategy.?

This can entail focusing on businesses rather than single customers, marketing to a particular age group, or geographically expanding your offering. For instance, Amazon initially sold books in the US but gradually expanded its offerings to sell a range of goods worldwide.

8 - Build new product

New product development strategy is another way to expand your product line. Consider your customers' needs while developing new products, but avoid making them less likely to purchase your current offerings.?

Any new items should enhance rather than replace what your current product offers to the customer. For example, Gap started as a record store selling jeans before expanding its product line to include clothing and apparel.

Expertise of my team in Product Development Strategy

My team, Artkai, is an award-winning full-cycle product development company. We use best practices of product strategy development to create products that matter and are consistently successful.?

We believe that creating profitable products shouldn't be a matter of chance. As a result, we ensure that every product we develop benefits people and businesses. Here's how we accomplish that.

• Better market position. We strengthen competitive advantage, improve brand equity, and accelerate time to market.
• Greater financial results. We help to boost conversion, maximize sales and revenues, cut costs, and foster greater client loyalty.
• Improved product quality. We enhance user experience, increase product usability, and boost customer satisfaction.

Let’s look at some case studies of product development strategy implementation by the Artkai team.?

Development of the iOS mobile app

The client requested to undertake extensive field research and design the logic for a new system based on an analog conceptual framework of the financial journey of individuals.?

We brought this vision to life by:

• Delving into the industry.?
• Mapping customer journey.?
• High-fidelity prototyping.
• Testing the experience.?

As a result, our team created the mobile app, which promotes the formation of trustworthy community support systems and aids in developing good financial habits.

Enterprise product development and design

The goal of our next client, Ukrainian power grid operator, was to make managing and paying electricity bills easier.?

So we started working on a digital solution allowing online, account-based electricity consumption and bill management. To achieve the client’s objectives, we did:

• On-site workshop with the company.?
• Personal interviews with different representatives.
• High-fidelity prototypes.
• A brand new design system.
• A solution architecture based on gathered requirements.

Now the customers of our client can access precise information easily, and the app helps them manage their energy use and reduce costs seamlessly.?

Building a new digital ecosystem for a bank?

The client wanted to create an easy-to-use user experience to keep the bank's current clients and draw in new audiences in 13 other countries.

The challenge was to accomplish this while considering all the technical, legal, and unique characteristics of their core banking system and a wide range of devices and operating systems.

So our team designed and implemented consistent communication for the bank, having built a new digital ecosystem. To achieve this, we:

• Conducted five pieces of research.
• Performed employee interviews in the bank’s offices.
• Did discussions with the client’s IT department.
• Divided redesign into stages and implemented them step-by-step

Over the years of partnership we have managed to сreate an omnichannel platform for a variety of banking products and improve overall client experience.?

E-Commerce platform design and development?

My team needed to create the brand, UX, and technical solution from scratch for an automotive seller that helps users customize vans to their needs.

We offered a comprehensive and reliable solution based on a data-driven approach that included:?

• Qualitative desk research.
• Competitors analysis.
• Features prioritization.
• Developing a visual concept.
• Parallel design and development.

As a result, our client built a strong brand and automated customer acquisition and data management processes by combining CRM with third-party applications.

Digitalization for automotive supplier

A specialized provider of automotive accessory solutions wanted to increase the efficiency of the business and add more automation.?

So my team’s task was to support the client’s strategy for growth and find ways to reduce operational issues. We worked closely to develop a strategy and performed:

• An interactive discovery workshop.
• Business analysis to set up a product backlog.
• High-fidelity prototyping for Admin panel and website.
• Front- and Back-end development.
• QA testing.

Wrapping it all up?

Product-led growth is a smart way to ensure your stable growth. However, it is hardly imaginable without a robust product development strategy. It helps businesses:

• mitigate all possible risks,?
• adapt existing products to market changes,
• remove underperforming products,?
• see a big-picture direction forward.?

And if you have any difficulties with building your product development strategy, now you know who to contact and ask for assistance. My team can provide you with a free consultation and help you boost your product efficiency or build new products from scratch.?