Having a product strategy makes all the difference when developing products. It guides your product team in developing a strategy that aligns with the company’s vision and user experience.

Without a product strategy, your product roadmap may not prioritize the most critical stages, causing resources to be allocated to stages with little impact on the product’s success. It could also lead to a product release that neither meets the company’s goals nor the users’ needs.

An effective product strategy addresses all stages of product development and how to achieve them, including pricing, features, marketing, customer feedback, and more.

Here’s how to develop a successful product strategy that achieves your business objectives while increasing sales and customer satisfaction.

What Is Product Strategy?

Product strategy is the processes and techniques involved in developing a new product or service. It is the road map that product teams use to develop products or services, as well as the promotional efforts that are used to position them favorably in the market.

Building a product strategy isn’t just for determining how new products should be introduced to the market; it also serves as a guide for product improvement. An excellent product strategy includes all of the steps and stages that a product must go through to meet the company’s goal and users’ needs.

Also, drafting a product strategy creates a guideline that teams can refer to when launching a new product or feature. Marketers and product managers typically use it to assign tasks to team members and ensure that the team efforts are aligned with the company’s goals.

Using a product strategy also helps evaluate the effectiveness of a product- the plan versus the product. It highlights the problems that the new product or improved version should solve for the company as opposed to what it is currently solving.

Why Is a Product Strategy Important?

• It Provides Clarity and Direction

A product strategy outlines the steps involved in developing a product and how they affect the company’s goals. A well-designed product strategy clarifies the product teams’ tasks to meet the product objectives.

A solid product strategy helps to unify all of the teams involved in developing the product, including engineering, product management, marketing, and others. It enables each team to contribute to the product launch without conflict or roadblocks.

For example, the product management team can assign tasks to each team to ensure that everyone stays on track. While the engineering team concentrates on creating a product that is in line with the company’s vision.

• It Helps Build an Efficient Roadmap

Product strategies provide a road map to guide the company through the stages the product will go through before, during, and after launch. It helps design a roadmap that captures the company’s vision and guides each department through the product development stages.

Ideally, the product strategy should always come before the product roadmap; the strategy guides what the roadmap should include and achieve. Starting with strategy allows you to create a roadmap with a clear picture of what you want the product to achieve for customers and the company.

Without a proper product strategy, the roadmap may focus on stages that have little impact on the product’s success. It helps companies prioritize product development tasks so they can channel resources to the most impactful stages.

• Improves Product Team’s Decision-Making

Having a product strategy doesn’t mean everything will go exactly according to plan. But it helps you prepare for incidents and eliminate delays.

When there is a clear guideline for what the end goal should be, it is easier to make decisions and solve problems. A product strategy can help you direct your resources to the most pressing issues, resolve them, and ensure the product goal is achieved.

What Are the Key Components of a Product Strategy?

A successful product strategy needs to be tailored to the users’ needs and the company’s goal. Here are the steps to creating an excellent product strategy that reflects your company’s vision and provides a positive customer experience:

• Product’s Vision

Creating an effective product strategy involves more than just outlining the steps to create the product. It tells the story behind the product, connecting the organization’s vision to customers’ needs.

A product vision is the product’s long-term mission; what will the product achieve for the organization and how will it impact customers? They are typically statements that keep the product team focused on the product’s goals.

A product development strategy helps the product team avoid getting bogged down in details that don’t align with the product’s vision. It also helps in creating a roadmap that focuses on achieving the product’s vision and purpose with the resources available.

• Customer Needs

The goal of developing a product is to provide users with what they need while also generating revenue for the company. So, a great product strategy should prioritize user pain points.

Start by assessing the difficulties that users encounter when using your product when developing a product strategy. Knowing customers’ pain points will allow you to develop a strategy that improves their experience with your product.

• Cross-collaboration

Creating an effective product strategy requires team collaboration to ensure that tasks are aligned with the product’s vision and goals. The goal of collaborative teams is to pool their resources and design their tasks to achieve the product’s vision.

If the team does not work together to develop the product strategy, there is a good chance that there will be gaps in product development that will impede its progress and actualization. 

For example, if the design team does not receive feedback from customer success about existing users’ satisfaction, they may end up designing a product that does not meet existing users’ needs, resulting in low retention.

• Goals

Every product strategy has an endpoint, a goal it wants to achieve. The goal is what the product intends to do for both the organization and its users.

Goals are what create a hierarchy in the product roadmap. They help prioritize the stages and tasks that have a high impact on the product roadmap.

The key to creating product goals is for them to be SMART (specific, measurable, attainable, relevant, and time-bound). Creating a product goal that’s not specific means generic goals that don’t give the product team a clear insight into why they are developing the product.

A measurable and attainable goal also makes sure the team is focusing on the tasks that matter and they are not getting overwhelmed. A time-bound goal also makes sure there’s a set time for when the product is due for launch and helps product managers in setting up an effective calendar across departments.

• Initiatives

After identifying and clarifying product goals, the next step is to split them into actionable tasks and objectives. While this might seem very easy, it can be very difficult.

Rather than wasting time and resources attempting to break down goals into tasks without a guide, create product initiatives. Product initiatives bridge the gap between goals and tasks by breaking down goals into objectives.

For example, the product goal is to launch a product that helps 70% of US market researchers collect information and analyze feedback from their target audience in less than 24 hours. But its initiative is to build a product that:

• Provide a better customer experience
• Increase mobile downloads
• Launch in new regions
• Retain existing customers
• Create an all-in-one platform for customers

While product goals are very specific, initiatives aren’t, they are simply there to help make it easier for the product team to translate goals into actionable tasks to create the product roadmap.

Different Types of Product Strategy

There are several product strategies to accommodate different company goals, user needs, and resources available. Here are some of them:

• Cost Strategy

When employing this strategy, your primary goal is to provide a product that meets all of your users’ needs at the most affordable price. This strategy maximizes resources by examining the product development phases and reducing costs.

This strategy is effective for a product whose target audience isn’t particularly loyal to any brand; they choose the cheapest and most efficient option. For example, most people aren’t particularly loyal to detergent brands.

As long as you’re not comprising quality, there’s a high likelihood that people will your product because of it’s low-cost.

•  Differentiation Strategy

Differentiation strategy focuses on making your brand stand out from the crowd. There are several approaches to this, starting with your brand’s personality.

For example, if other organizations in your industry are formal, you can be a joyful, friendly brand.

•  Focus/Niche Strategy

This strategy is ideal if you have a large target market but are launching a product to target a specific buyer persona. 

By focusing on a specific persona, you can tailor the product to their needs. This makes it relatively simple to acquire and retain customers from that segment.

•  Quality/Challenger Strategy

Customers notice the difference when you create a challenger product. Knowing they have a premium product assures them of its quality and durability, and motivates them to pay more.

If you decide to pursue the quality strategy, your prices will most likely be high, but your customers will be loyal.

•  Service Strategy

This product strategy is built on providing excellent customer service. This strategy is based on the principle that most customers prefer companies with excellent customer service to those with the best product.

Outstanding customer service fosters brand loyalty and easier customer acquisition because of the brand’s reputation for treating its customers right.

Product Strategy vs. Product Vision

Product strategy is heavily focused on the company’s goals and the needs of its users, but it is not the same as a product vision. The product vision conveys why you are designing the product and what you hope it will accomplish.

While product strategy can change to optimize resources or optimize the product for users, product vision remains constant. Product strategy is more malleable than product vision, but it’s not something that can be changed at the drop of a hat.

Product vision is more of a statement of what you hope your product to be, while product strategy is how you actualize the product.

How Formplus Polls & Surveys Can Help Product Strategists

Product Surveys

A successful product strategy combines the vision of the company with its users’ needs. Find out what your customers need with a product survey.

For example, if your product strategy is to improve an existing product, you can conduct a user satisfaction survey to learn what your customers want you to improve in your product.

Usability Survey

Sometimes it’s not your product’s features that need to be improved; it’s just that your product isn’t user-friendly. Formplus usability surveys help you to assess how easy or difficult it is for customers to use your products.

Brand Personality Survey

If you want to stand out from the crowd, start by determining your brand’s personality from your customers’ perspectives. Then, use the feedback to adjust your tone and voice to differentiate yourself from other brands.

Conclusion

An effective product strategy directs your company’s efforts toward developing a product that provides the best user experience while also generating a sizable profit. 

Without a product strategy, your chances of developing a great product are slim because you don’t have a solid plan to conceptualize your product vision.