By: Leanne Armstrong
As covered in a previous post, a product strategy is a plan outlining what you intend to accomplish with your product and how you’ll meet those objectives.
In this post, we’ll look at a few product strategy examples to help you understand how to create the framework for your plan.
The intention of any product strategy is to achieve one or more business goals. Accordingly, your plan could involve using your product to break into a new market or industry, reduce customer churn, or become the go-to provider for an underserved market segment.
Before tackling any of these objectives, you’ll first need to create a framework (or roadmap) that includes the following three core elements of product strategy:
- Product vision. This includes the main reason for developing your product (i.e., the user problem it will solve or the need it will meet), who your target customer is, how you’ll position your product in the market, and what sets it apart from potential competitors.
- Product goals. These are the time-based objectives your product will help your organization achieve (e.g., increasing your monthly sales by a certain percentage). You’ll need to establish a baseline, decide which data or metrics will best measure the results of all your strategic planning, and set an end target (a specific change or improvement) that signals the success of your product plan.
- Product approach. Since each type of product strategy is characterized by a different sales or marketing angle, you’ll need to outline the approach you’ll be taking to accomplish your goals (e.g., if you’re intending to increase sales by developing a less expensive version of an existing product, you may need to find ways to reduce your manufacturing costs).
A well-developed product strategy framework is grounded in a thorough understanding of the market and where your idea fits in. Laying out that framework visually will help you and your team stay focused on the tasks that will have the biggest impact and drive your plan forward.
Here are three product strategy examples you can use as inspiration to create the right framework.
1. Become a market leader
To position yourself as a market leader, you might choose to frame your product strategy around differentiation.
By developing an innovative new product (or feature), you can set your business apart from the competition and help your product stand out in a saturated market.
Let’s take a closer look at what this strategy entails.
Develop your product vision
When breaking new commercial ground, conducting market research is essential for gauging the potential use cases as well as the need for, or interest in, your product.
You should aim to discover all you can about these customers—especially their goals, motivations, and pain points—to create a detailed positioning statement and marketing strategy.
To learn more about your target audience, you might run online surveys or hold focus groups to learn what features or functionality customers want to see in products, or how they’d like to see a product’s design enhanced or performance improved.
Set your product goals
Becoming a market leader may mean upselling existing customers or attracting users in a brand-new industry, market, or region. This means you’ll need to establish ways of measuring and analyzing results around product awareness, sales leads, or customer lifetime value (CLV).
Plan your approach
Because this product strategy usually revolves around what’s different—or even revolutionary—about your product, be sure to include the following elements in your approach:
- Emphasize what’s unique about your product in terms of the specific features, superior performance, or material quality it offers—and the benefits your user stands to gain as a result. (E.g., Will it save them time, reduce mistakes, or last longer than similar products?)
- Leverage your brand name recognition or reputation (if you’re an established business), to get the word out. For example, you might offer a discounted, introductory price to loyal customers to try your new or enhanced product.
- Encourage your sales and customer support teams to increase awareness around your new product—both during initial conversations with new leads and when helping clients interact with your existing products.
Focusing on product differentiation and becoming a market leader can be a valuable strategy when your new product idea is coupled with solid funding and/or a large potential customer base with a common wish list or set of concerns.
Examples of businesses that have benefited from this product strategy include a host of former underdog brands, including ice cream makers Ben & Jerry’s (with their use of fresh, local ingredients), honey stand owner Burt Shavitz of Burt’s Bees (with his introduction of an all-natural recipe for beeswax lip balm), and Snapchat (with their talent for capitalizing on the selfie).
2. Challenge a market leader
To challenge a market leader, you might choose to frame your product strategy around price.
By creating a more economical version of a popular product, for example, you can avoid the risks of innovation (e.g., lack of market interest, cash flow issues, or the reputational damage caused by quality, safety, or delivery concerns) while appealing to a cost-conscious segment of an established market.
Let’s take a closer look at what this strategy entails.
Develop your product vision
There’s frequently demand for lower-priced product derivatives that include the same features and/or benefits as their more expensive counterparts.
But even with a lower-priced alternative product, you’ll need to conduct research to determine:
If you’re developing a cheaper model of one of your own products, speaking with existing clients is a great way to gather opinions from actual users on what features and functionality are essential, and what you may be able to remove or reduce.
Set your product goals
Some common goals for challenging a market leader based on price include lowering production costs, increasing sales volume, and increasing your market share while decreasing that of your competitor(s).
This means you’ll need to measure, analyze, and compare results around sales volume, sales revenue, or profit margin.
Plan your approach
Because you’ll ideally be looking to develop the best possible product for the lowest possible price, your approach may include the following elements:
- Source the most cost-effective suppliers of raw materials, components, or packaging, and/or find more affordable production or manufacturing services.
- Work with your finance department to determine where business expenses can be reduced (e.g., negotiating a better deal for basic office supplies, replacing some travel expenses with virtual technology, or downsizing to a smaller physical office space).
- Experiment with different pricing strategies to strike the best balance between marketability and profitability. This could include running customer polls, consulting a focus group, or conducting A/B price testing.
Using price to challenge or piggyback off a market leader can be a valuable strategy if your product targets a lower-profile industry where brand loyalty is relatively fluid, or in a market dominated by high-cost vendors.
Examples of businesses that benefit from this type of product strategy include suppliers of generic household goods (e.g., lower-priced “no-name” cleaning supplies), electronics manufacturers (e.g., companies that sell brand-name-compatible parts or supplies), and smaller, prepaid phone carriers (e.g., Straight Talk) that lease cell towers to bigger companies such as AT&T.
3. Focus on a niche market
Another way to gain a competitive edge is by creating a product strategy that uses a niche focus.
By targeting the unmet needs of a small, specialized, or otherwise overlooked audience, you can attract and delight—and ultimately retain—customers from an un-serviced (or under-serviced) market segment.
Let’s take a closer look at what this strategy entails.
Develop your product vision
You’ll likely need to define your product market by identifying common but unusual user- needs or outside-the-box applications.
These needs could stem from what your potential customers do for a living (if they’re a consumer), what products or services they offer (if they’re an organization), or how they’re currently using a product (whether yours or a competitor’s) to meet their needs.
Examples of niche customer needs include all-weather work gear for people who work outdoors (e.g., construction workers) and industry-specific accounting software.
In addition to using various business diagrams to compile market research, consider interviewing current customers or gathering input about their unique needs from your sales or customer representatives.
Set your product goals
Goals for achieving a niche product- focus range from improving customer satisfaction, building brand loyalty, and reducing churn to becoming the leader in a brand-new or untapped market.
Relevant metrics might include net promoter scores (NPS), the ratio of customer lifetime value to customer acquisition cost (CLV to CAC), and customer churn rates.
Plan your approach
Typically, the characteristics of product strategy with a niche focus revolve around creating a product (or personalizing a solution) for a smaller category of buyer. Your approach might include the following steps:
- Sit down with your customer service, support, or sales management team to identify unique user needs. For example, you could ask about the different ways customers use your existing product, what common issues they raise, and what new features they often request or inquire about.
- Figure out where you can reduce or forego investments. If your target market is smaller, you’ll likely be able to turn your focus away from investing in larger, more saturated markets.
- Generate awareness by offering your new or revamped product on a trial basis to targeted user groups.
Using a niche focus to target a unique or poorly served market can be a valuable strategy when market research, or your own customer personas and/or feedback, reveal a group of buyers with specialized needs.
Examples of businesses that can benefit from this product strategy include service or software companies with the capacity to cater to distinct market segments (e.g., educational institutions, healthcare organizations, or government agencies).
Sage is one example of a single company that creates unique accounting software for various industries, including construction, manufacturing, healthcare, and legal and educational services.
Regardless of which product strategy is the best option for your organization, drawing inspiration from the examples here will enable you to create your own unique strategy.
Another good tip is to use visual maps and diagrams when planning your project strategy to identify and set goals, plot key action items and tasks, and measure your progress.
With a wide range of built-in, customizable diagrams and timelines, MindManager® makes it easy to set out milestones, incorporate user or stakeholder feedback into your product strategy framework, and adjust and assign tasks and timelines accordingly.
Did you find these examples helpful? Stay tuned, because we’ll take a deeper dive into how to craft the perfect product strategy in a future post.
