Unlocking Success: 3 Key Questions to Shape Your Product Strategy

What is product strategy?

This is one of the more often asked questions in the product management community, and how should a product manager go about crafting their product’s strategy is topic that deserves a series of posts, and probably a course of its own, however in this post, I explore 3 key questions that have always helped me in thinking of and approaching the creation of any product strategy.

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Why do you need one?

As a product manager, a well-crafted product strategy is vital for whatever product you’re responsible for, as a junior/associate PM that is just starting in their career, creating a strategy for your product is rarely your responsibility, however the more senior you become, creating one becomes one of the important skills you need in order to progress further in your career!

Product strategy serves as the guiding force behind product development, ensuring that companies effectively address customer needs and achieve business viability. However, creating a winning product strategy requires addressing three fundamental questions that form its backbone. In this article, we will delve into these questions and explore how they pave the way for a successful product strategy.

1- Who is our customer?

Defining the target customer(s) is the foundational step in crafting a product strategy. A thorough understanding of your customer base empowers you to design and deliver solutions that resonate with their needs, preferences, and pain points. It's essential to go beyond surface-level demographics and create detailed customer personas that reflect their motivations, aspirations, and challenges.

“Know what your customers want even before they do” HBR article describes the importance of know what your customers want, and take it as far as the statement, the article discusses use cases in retail, but the essense of the message is, to be able to serve the customer, you need to understand them first.

To gain deeper insights into your customers, employ a variety of methods such as market research, customer interviews, and user testing. User personas, empathy maps, and customer journey mapping can be valuable tools to develop a holistic understanding of your customers' pain points and expectations.

2- What are we solving for them?

Once you have a clear picture of your customers, it's time to identify the problems or needs you aim to solve for them. To create a product that resonates with your target market, it's crucial to align your offerings with their pain points and goals. The key to success lies in uncovering those unmet needs and developing solutions that provide tangible value.

Marty Cagan, a leading voice in product management, emphasizes the importance of problem-solving:

"Great products are not built by chance; they are the result of disciplined problem-solving."

Employ various methodologies like customer interviews, user surveys, and data analysis to gain insights into what frustrates or hinders your customers. By focusing on these areas, you can identify opportunities to create innovative and impactful solutions.

Consider using techniques like design thinking or customer journey mapping workshops to foster collaboration across your company, starting with your cross functional team, and generate fresh ideas. Additionally, user testing and prototyping enable you to validate and refine your proposed solutions, ensuring they align with your customers' needs and expectations.

Some sources of new fresh ideas are:

1. Customer Feedback: Actively listening to customer feedback through surveys, interviews, support channels, and social media can provide valuable insights into their pain points, needs, and desires. Identifying patterns and common themes in customer feedback can spark ideas for product improvements or new features.
2. User Research: Conducting user research studies, such as usability testing, ethnographic research, or contextual inquiries, allows product teams to observe and understand how users interact with their product or similar products. These insights can uncover usability issues, unmet needs, and potential areas for innovation.
3. Data Analysis: Analyzing quantitative data, such as user behavior metrics, customer usage patterns, or conversion rates, can reveal trends, bottlenecks, or areas of opportunity. Data-driven insights can guide product teams in making informed decisions about feature prioritization, optimization, or identifying gaps in the market.
4. Market Research: Conducting market research helps product teams gain a comprehensive understanding of the broader market landscape, including competitors, industry trends, and emerging technologies. This research can unveil potential market gaps or niche segments that can be targeted with innovative product offerings.
5. Industry Trends and Best Practices: Staying abreast of industry trends, attending conferences, following thought leaders, and reading industry publications can inspire product teams with new ideas, innovative approaches, and emerging technologies applicable to their product space.
6. Internal Brainstorming and Collaboration: Encouraging cross-functional collaboration within the organization can foster creativity and ideation. Conducting brainstorming sessions, design thinking workshops, or hackathons involving diverse team members from product, design, engineering, and customer support can lead to fresh perspectives and inventive ideas.
7. Competitive Analysis: Analyzing competitors' products, features, pricing, and customer feedback can help identify areas where your product can differentiate itself or identify unaddressed pain points that can be solved in a unique way.
8. Customer Support and Sales Teams: Engaging with customer support and sales teams can provide valuable insights into customer pain points, frequently asked questions, and common challenges. These teams interact directly with customers and can offer real-time feedback on areas for improvement or new product opportunities.
9. Innovations from Other Industries: Looking beyond your immediate product domain and exploring innovations from unrelated industries can spark creative thinking and inspire new approaches or features that can be adapted to your product.

Tip: I often recommend teams to use Miro’s brainstorming templates

3- Is solving these pain points or needs viable for our business?

While addressing customer pain points is crucial, it's equally important to assess the viability of solving these needs from a business perspective. A sustainable product strategy should align customer value with your organization's goals, capabilities, and resources. Understanding the economic feasibility of your product concept is vital to avoid investing in endeavors that may not generate the desired returns.

Dan Olson highlights the importance of balancing customer needs with business objectives:

"Viable product strategy means balancing what is valuable to customers with what is feasible for the business to create and deliver."

To determine viability, evaluate the market demand, competitive landscape, potential revenue streams, and cost implications associated with developing and delivering your solution.

Conduct a thorough market analysis to assess the potential size of the target market and identify any market gaps or opportunities. Assess the level of competition and evaluate your organization's capabilities and resources needed to deliver and sustain a competitive advantage. Develop a sound business model that aligns customer value with revenue generation and establishes a path to profitability.

Tying it all together

Its important to remember that creating your product’s strategy is a process, and it shouldn’t be done in a void, a product manager should work with his/her team to develop it, one of the ways I really like teams to use the Lean Canvas which ties the above 3 steps together with a few others, once completed you should have the building blocks of your strategy.

Here is the sequence you should go about filling the canvas

This is Miro’s lean canvas, I’ve added the sequencing numbers to it as they dont mention it, #10 and 11 are optional.

Remember, understanding your customers at a deep level allows you to design solutions that truly resonate with their needs. By identifying and addressing their pain points effectively, you establish a strong value proposition. Finally, assessing the viability of your product strategy ensures the alignment of customer value with business goals, ensuring long-term success.