INTRODUCTION TO PRODUCT STRATEGY
From thin air, revolutionary items seem to emerge. There are imaginative or disruptive ideas that, in a good way, catch individuals by surprise. But behind every effortless launch is a strong consumer- and market-driven plan.
Product strategy describes what you want to accomplish, gives meaning to the market in which you operate, and directs the main work trends that will help you achieve your goals. You want to unite the company around a common dream and keep everyone focused on the job that matters most.
A goal-first approach is the best way towards creativity for a product manager. Before you dive into the thorough work of designing your roadmap and introducing new features, strategic planning should take place. Well done, you will be able to tie each feature back to a greater target, so that your work gives consumers and the company real value.
From capturing the big picture to evaluating effective KPIs, product strategy components include:
Foundation: What you want to do
- Business Models
Market: The customers and the landscape of the market
- Competitive Analysis
Imperatives: The task you’re going to do
Foundation: What you want to do
Your strategic foundation underpins all that you are doing. This is where you imagine your strategic strategy and connect it to business models and templates for positioning, both of which reinforce the roadmap for your product.
Product vision reflects the product’s fundamental meaning and what makes it unique. It should be something that everybody deeply understands in the company—the “why” behind the item that you are all responsible for.
Who are your clients, exactly? What are the issues that you help them to solve? What possibilities and challenges are you facing? You will understand the true meaning of your product and create a mission statement that is both precise and aspiring, by dealing with these questions.
Business models should be used to better understand the consumer challenges you are going to solve, the solutions you are going to make, and the opportunities for growth that exist in your market. When you launch a new product or want to adapt your approach as the market evolves, models are useful.
Positioning is a strategic exercise that is normally performed prior to the launch of a product. It helps to identify the marketplace where your product suits and the specific advantages that you have. Your marketing campaign, brand storytelling, and all content created for clients are backed by strong positioning.
Market: The customers and the landscape of the market
In order to create a product, they would enjoy, you need to understand your customers profoundly and what they need. Some of the best ways to grasp the business environment are creating personas and studying rivals.
Personas are imaginary characters that bring to life your clients. One way to build empathy for your clients is to create user personas. You log their preferences and dislikes, professional goals, obstacles, and more. All these specifics help guide the way you construct features to solve your problems.
Competitive research requires gathering data relating to alternative solutions. You will easily see where they excel and fall short of these offerings. Doing this form of research offers visibility into where you fit and what opportunities exist within the wider market.
Competitive analysis should be an ongoing activity, helping you to discover new issues that your product is ideally placed to solve by keeping up with the competitive environment. It is convenient for the team to remain up to date with how the product stacks up by having this information in a shared location.
Imperatives: The task you’re going to achieve
You can now approach what many consider the most difficult and most satisfying aspect of strategy on the basis of the fundamental work you have done so far. This is the moment to set out the priorities and main initiatives that will help you achieve your dream.
Goals are measurable, time-bound goals that have specifically defined indicators of progress linked to them. There are benchmarks that you want in the next quarter, year, or 18 months to reach.
For instance, choose specific performance indicators and a time frame for completion if you are trying to increase sales and expand into new territories. One target would be to “increase revenue by 30 percent in the third quarter.” In the first half of the year, the second would be to “expand into five new countries in the first half of the year.”
A helpful exercise is to map targets based on the depth of investment (for your team) and the effect on a table (to your customers). This gives you a holistic image of how your priorities match up against one another, as you can see in the screenshot below.
Initiatives are high-level efforts or main work subjects that need to be introduced to accomplish the objectives. These strategic investments connect your priorities to everything on your product roadmap that is planned.
WHAT IS PRODUCT VISION?
Have you ever been lost while visiting a new city or on a road trip? As you go, it can feel a little exciting and lead to discoveries. But wandering aimlessly, if you have a destination in mind, is not sustainable.
In business, the same is true: in order to generate real value, you need to know what you are trying to accomplish. To accomplish your goals and represent your clients, you need a North Star that everybody in the company is working towards together.
Part of the leading constellation is product vision. A clear product vision, connected to the overall mission of the organization, helps you create a forward-looking and customer-driven product strategy. It is the central essence of where you want to be in the future with your product and what you are creating.
Many product teams have problems seeing the big picture without a clear vision. They sometimes change direction and seem to disagree about what to do next. When you can’t tie your job to the value it offers, it can feel disorienting and demotivating. Moreover, it is a bad situation for the brand and consumers as well. If you are not clear about why you are delivering it, you cannot provide the experience that clients want.
Vision brings into daily work the future. It allows the whole company to consider the product’s broader intent. It inspires and motivates everyone to do their very best job when done correctly.
Who’s responsible for product vision?
The vision of the product is normally led by the Chief Product Officer (CPO) or VP of the product, assisted by other executives to ensure that it supports the vision of the company. The vision of the company is the shield that sits over the vision of the product. Where the company goes for the long term, where the product has to go to help it would have a direct impact.
Product and market vision can be the same in a single-product corporation. Each product or brand may have its own vision for organizations with a product portfolio. To create a coherent whole, product leaders are responsible for knitting together these visions. And product managers are ultimately responsible for implementing the given product vision against (s).
It can be frustrating if you are working on a product that does not have this sort of clarification. You may, however, be part of leading the transition.
What are the steps taken to build a vision for a product?
Establishing a vision for a product or refreshing a stale vision is a collective endeavor. Start by getting your manager and the product team’s help. Other teammates, team leaders, and even current and prospective clients may also be spoken to. The steps below will help you get started:
Vision begins with respecting the clients and what they need. You have to understand their problems profoundly and how your brand can benefit. Research the market to consider who your target market is and what they need if you are working on building a product vision for a new offering. When the vision for an existing product is renewed, communicate directly to clients and customer-facing departments such as support and sales. Your knowledge of who you serve can be extended by their perspectives.
To answer these questions, request answers:
- Why does our product exist?
- In the same space, what does our product do better than others?
- What are our competitors doing?
- What do our clients think of our product and company?
- What do our employees think of our business or product?
- For the next year, what are the market opportunities? For 3 years? For 5 years?
- In the next few years, what are the most important obstacles we intend to face?
- What are our targets for revenue?
Take what you have collected and try to synthesize a phrase or two that expresses the meaning of your commodity. For instance:
The [target buyer/user] who [has this problem] will use [name of your product] because [explanation of why other deals fail] to achieve [the main advantage or value you will provide] and will feel [the following feeling].
To capture this detail, you can also use a product positioning statement:
[company/product] is a [category/solution] for [group of users] that [need/want]. This is uniquely solved by [benefit].
These exercises allow you to zero in on the most significant data. But they are not synonymous with a vision statement for a product. To uncover a mission statement that feels true to your company, you may need to dig deeper.
The main promoters of the vision of the product are product managers. But you still want to believe in the vision of other teams, too. Take time to circulate it around the company and ask for input while you fine-tune your vision statement. Does the vision resonate with all of them? Is it easy to express how their work affects the vision for teams?
Be prepared to discuss the vision and make revisions with key stakeholders. You want to pick a statement that feels inspiring and enduring, something for the near future that everyone will rally around.
For anything you do, a clear vision becomes the foundation. In prose, formalize it. Add it to your internal wiki or website. Reference it regularly. Vision is not something that should be identified once and forgotten.
When documented, make your vision open and top of mind for other teams when making product plans. Technology for product management allows it easy to set a plan, prioritize work, and build visual roadmaps to chart the product’s progress towards your vision.
WHAT ARE PRODUCT GOALS AND INITIATIVES?
Product priorities help fulfill the vision and business goals of the product. The goals should be linked to the wider plan for the product. They should also be easy, actionable, achievable, and observable to comprehend.
Aligning goals with the vision of the product is just the first step. You must also align and roll product targets up to the overall company goals as Product Manager. This illustrates how the distribution of the item will improve the company’s performance.
It also highlights how their special work matters to product stakeholders. For a product release, you rely on several teams, from Sales and Support to Engineering and Production. Product priorities help each team understand at a high level how their work contributes.
Your product goals need to have observable end results that can be accomplished in a set timeframe (typically 3-12 months). Your goals should reflect the critical milestones necessary to make your vision a reality. They highlight what you hope to achieve, and are also stepping stones to drive business development and to clarify bolder goals. They should be pretty easy to track as well, so you know how your team does against them.
Be sure that by linking releases to the priorities they push; you’re preparing what counts. You can define what matters (and what doesn’t) by considering the priorities (and initiatives) a release helps affect.
In order to indicate strategic significance, it is also necessary to relate characteristics to objectives. This will especially assist with feature prioritization. Having well identified priorities helps to keep the team on track and empowers you to convince key stakeholders why the right approach is your plan.
Initiatives are high-level efforts that in order to accomplish an objective you can complete. They are, along with vision and priorities, a central piece of strategy. When you develop programs, you clearly define the work to be done in order to achieve the objectives and to conform with the broader plan that has been set.
At the organization, product line, or product level, you can build programs, and they do not necessarily have to be tied to goals. Initiatives may be topics that fit with particular organizational or business goals (e.g., thought leadership). They may be projects that need to be finished, even though it is over a few months, within a given period of time. Multiple launches or sprints are frequently crossed by projects which contain several stories or specifications.
For instance, there are five initiatives by Fredwin Cycling:
- Enhance Tour de California coverage
- Launch Giro d’Italia site
- Mobile cycling tracker app upgrades
- Partner self-serve sponsorship portal and API
- Support Galileo GPS system
As we create our Fredwin Cycling releases and product features, we relate these different initiatives to the work that is being carried out in our features and releases. In this way, through our product roadmap, we can track progress over time and then evaluate our success against our objectives. Throughout our roadmap, this helps complete what we call the red thread of strategy, and helps us remain in alignment.
You can be inundated with ideas when you think about which projects you want to pursue for your company. It helps to take each initiative into account according to the value it will bring and the effort it will take to achieve it. This exercise will help you prioritize the programs are most important and therefore merit the most attention.
WHAT IS PRODUCT POSITIONING?
Positioning is where the marketplace suits the product or service. It is a strategic exercise that explains what makes your brand special and why it is better than alternative alternatives. In this way, distilling the reality of your product informs your communications so that you can clarify the importance of your service to potential customers effectively.
Why does product positioning matter?
The foundation of your marketing tale is your strategic positioning. The aim is to distill who your customer is, what they need, and how your brand can help, all so that you can build target messaging. Establishing how you want your product to be recognized in the market immediately sets the groundwork for how you can convey the importance of your product to consumers.
For business success, the ability to express the main advantages of your item and the issue it addresses is crucial. It keeps your marketing campaign focused on the real value of what your brand offers. This means that your promotional efforts resonate with clients and makes them understand why the best choice to meet their needs is your product.
What influences how it perceives a product?
Brand positioning is composed of key building blocks that illustrate the unique value of your product. You will align the wider team with the best way to position your product for success by putting the client, industry, and product expertise together.
Here are the main elements that determine the positioning of your product:
Vision – The general route to where your product is going.
Mission – How are you going to make your vision come true?
Market Category – The sector in which you are and your main segments of customers.
Tagline – You use a catchphrase or slogan to describe your business or product.
Challenges from customers – Big points of distress for your clients.
Differentiators of companies and products – Special, value-creating features of your business or product.
Essence of Brand – The key values for which you want to be recognized.
What is the best way for a positioning strategy to be developed?
It is a collective activity to establish a positioning technique. To identify the essential meaning of your product, it also includes product management and product marketing working closely together. You will need to put your knowledge of the following fields together:
Understanding the customer
Your positioning should capture who your clients are and what they need in a succinct manner. Describe the characteristics, including demographic, behavioral, psychographic, and geographic information, of your target clients. You may also want to have insights into the client’s key issues that they are trying to address. To inform your positioning, use your persona profiles and help the wider team develop empathy for your clients.
Analyze the market
In order to highlight what sets your service apart, you need to know what consumers have alternatives to your product. To understand how they represent the needs of your clients, study your direct and indirect competitors. This will allow you to separate your product from the competition and help you illustrate to potential customers that the best choice for solving their problems is your solution.
Assess the product
Your positioning needs to be focused on the unique value that your business and product offers. A helpful way to critically evaluate what the product is doing well and where it can do better is to perform a SWOT review. This means that the marketing message aligns with the experience of the product, thus helping clients make educated choices.
What is a positioning statement for a product?
Develop a brief positioning statement that explains your target audience, what sets your product apart, and why consumers should care about it, once your positioning strategy is established.
Using an example firm to speak about this would be beneficial. We’re going to use Fredwin Cycling. The target group is mainly fans of cycling who are interested in enhancing their health. Your consumer and client research indicates that consumers are worried about their health, but are struggling to adhere to an exercise schedule. By interacting with like-minded peers, users want to remain inspired. By providing a social cycling group that encourages friendly competition and monitors workout results, the product addresses this need.
What influences how it perceives a product?
Your positioning forms how you want to be recognized in the market for your product. But there are several different variables that can impact how the item is viewed. When they actually use your product and engage with your business, the main influence is what customers encounter. It is the Complete Product Experience (CPE) description that decides what consumers think about the product and feel about it.
Seven key areas apply to the CPE:
Marketing – How potential customers learn about your item and determine if it might be a match.
Sale – Why prospects get the data they need in order to make a buying decision.
Technology – The central set of characteristics that clients pay for.
Systems support – The internal processes that make the product possible to produce.
Integrations by Third Parties – The ecosystem of goods used by the client.
Support – How consumers receive training and assistance from goods.
Policies – The rules that govern how business is done by your organization.
Note, the positioning is either improved or undermined by each contact point with your company. Therefore, while you should actively plan how to position your product, you should think broadly about every aspect of the adoption process, so your clients will decide what they really think about your product.
WHAT IS PRODUCT DIFFERENTIATION?
What makes a product standout apart from the crowd? This is the fundamental issue behind the differentiation of goods, the method of separating an offering on the market from others. You need to identify the specific advantages of what you offer and convey these advantages to potential customers. Some individuals may hear you refer to this as your specific selling proposition. The aim is not to concentrate on rivals, but instead to prioritize what sets your product apart and why you should be selected by customers.
Why is product differentiation important?
More options than ever before are open to consumers. Customers can easily become confused when faced with too many options and can even walk away without making any purchases at all. This is why it is important to identify and convey the specific benefits of your product.
Good differentiation in goods helps you to build a competitive advantage. Your target market finds your product or service to be superior to what your rivals offer. They are more likely to be interested in trying it when prospective consumers understand what makes the product different (and how it can fix their issues).
Usually, product teams are responsible for identifying what a product does and differentiating it from those on the market. Using business plan models is one way of organizing the thinking around the product. These instruments help you identify your product’s unique value, better understand and empathize with your clients, and evaluate the market. In designing how your product would stand out from the competition, think about those main areas.
What are some ways the products can be differentiated?
Only for the sake of being different, you do not want your product to be different. Think what matters most to the clients, instead. Gain a deep understanding of who they are, what they desire, and how their issues can be overcome. You will create a unique product that they enjoy when you really understand what your customers need. You should also study the competition carefully so that you know about the alternatives available and the advantages they bring.
Of course, the overall product vision, the “why” behind what you are creating, still needs to be taken into account. When you decide how to better bring value to clients, this will guide you.
Here are some of the key ways in which the product can be differentiated:
Compared to others, what benefit would clients hope to gain by using your product? What problem can the product solve? How is it going to make the lives of people simpler and better? For instance, the only solution offering a time-saving mobile app can be your product.
Does your product look different from others or perform better? A product that is elegant and offers a clear user interface, for instance, is more enticing than one that is clunky or dated.
Dream about the Nest thermostat’s new design sensibility. The company opted for a circle with an easy-to-read, color-changing monitor instead of copying the rectangular form of other thermostats. Strava, the running and cycling tracking app, is another example. Its architecture helps you to monitor and measure your work out details while creating a social network as well. Customers would be more likely to engage with your product when you have creative designs and interfaces.
Is your product priced lower or higher than that of your rivals? The overall value you provide should reflect the price of your bid. If clients agree that your product provides unsurpassed efficiency, you can justify a higher price.
This is how a luxury brand like Ferrari will command their cars at a top asking price. However, the price is too low, and clients cannot see the product as very important.
Will your product simply perform better than the products of your competitors? Will consumers expect a longer period of the product than other products? A strong competitive advantage can be given by selling a product with superior construction and dependability. Take the business for clothes and outdoor products, L.L. Bean. Thanks to the company’s reputation for producing quality goods that last several years, many customers opt for their utility boots and recreational equipment.
Is your business offering a full product experience, including outstanding customer service? Your product’s characteristics can be in many respects identical to others, but you can distinguish yourself by assembling a stand-out support team and gaining a reputation for being ultra-responsive to the needs, demands, and ideas of customers.
For instance, “deliver wow through service” is the #1 core principle for Zappos, and they thrive even if they do not always have the lowest price. The next morning, a customer who orders shoes by midnight can receive their shipment. This customer service focus pays off, judging by the fact that 75% of their sales are currently from repeat customers.
Serious thinking and analysis are needed to distinguish the product or service. An unreasonable decision or a reactive reaction to whatever your rivals are doing should not be the way you distinguish. You have to understand the overall plan of the business, the priorities and initiatives of the product, and what your clients really need. This is how you develop an excellent product that provides the people who matter most, your clients, with real value.
HOW SHOULD I PRICE MY PRODUCT?
A company’s aim is to have value that clients are willing to pay for. In the end, setting a price is about finding the dollar sum that individuals can pay for a commodity. It takes knowing customers well and recognizing what matters most to them to arrive at that price.
In the field of pricing, often companies make errors, setting their prices too high or too low, or selecting the wrong pricing structure altogether. The implication is that they do not find enough buyers to purchase the product, and their company fails to take off. It is not an easy decision to make to set a price, and should not be taken lightly.
Companies also need to test various prices to see what would get the best response. Pricing is all about the understanding of the consumer and ensuring that the value offered matches up with the price being asked.
That is why companies should take a strategic approach to setting prices for their goods, like the rest of the company. First of all, taking time to spell out these information helps them find the correct price for their goods. The following should be considered by enterprises:
The type of item sold
They know if they sell software, equipment, or a service, some type of goods, or some form of intellectual property. But is the product a total solution or a vertical product that performs one feature simply? Understanding this can help to set a price that is compatible with what is being offered.
The commodity business landscape
Businesses need to identify who their clients are and what they want, the rivals they face and the pricing environment they face. In terms of how much market share they expect to take with their offering, they should also explain the potential.
The product’s positioning
They should also decide whether they are a brand of value that appeals to practicality or a brand of luxury that attracts the wealthy. How does the product compare to other goods they offer (or will they sell in the future?) For certain products and businesses, such as Walmart, a low price may be a point of differentiation; nevertheless, prices must be higher than costs.
Your product’s specific value proposition
What separates the product from the competition? The product should be considered by consumers to be distinct from other goods available. Additional attributes or an ultra-responsive support staff that makes the product stand out as special may be differentiating factors.
Coming up with your cost
Businesses must take into account the expense as well as the desired image of the commodity in the market when arriving at a price. They must also cover their fixed and variable costs, which include the expense of the product being made, stored and promoted.
The demand for the item, which could change based on consumer preferences, the cost of related goods, the level of income and the number of potential customers, and the expectations of future increases in prices, must be considered.
With that said, below are numerous pricing choices that can be considered by businesses:
With this pricing option, by applying a percentage markup to the unit cost of a commodity, the selling price is calculated. Which takes direct material costs, direct labor costs and operating costs into account, which is then added to a certain profit margin.
Return pricing targeted
This form of pricing takes into account what an investor would expect from their investment to earn. The price is determined on the basis of the amount of investment that must be recovered, plus an investor’s anticipated benefit. The price is then calculated for the money’s time value, which means that it is easier earlier than later to obtain the money.
Pricing dependent on value
An organization depends on what the consumer perceives to be the value of the product or service in this pricing model. Customers may be prepared to pay more for a commodity that they believe has higher value. Companies need to perform analysis and evaluate consumer data and how their rivals market their goods in order to arrive at a value-based price.
There are several distinct pricing models, in addition to the exact price point, that may be ideally suited to a commodity. Here are some of the most common mechanisms that businesses use, and their benefits and drawbacks:
For a fixed rate (one-time cost)
This pricing model has the benefit of being simple for consumers, but companies need to continuously find new customers that are able to make a one-time purchase.
Subscription (pay as you go)
A subscription-based model, given that the cost and conditions are clearly defined, may be an appealing choice for consumers. The subscription model provides the company with recurring revenue and helps with cash flow. It will take more effort, however, to win customers’ long-term commitment.
Freemium with Upgrade
For any portion of the deal, the product will be free and only pay for the added value that is offered. For new clients, this pricing model can be an entry point. If consumers gain sufficient value from the free section, the danger is that they can see little reason to upgrade. The freemium model can also harm the product’s perception, devaluing it in the client’s eyes.
The pricing psychology
When deciding pricing, consumer understanding is a significant factor, but it is not always straightforward. That is why the commodity does not always win out with the lowest price.
Consumers are value-conscious, but if they believe there is more risk involved, they will not always go for the lower-priced alternative. Consumers, for example, opted for the higher-priced brand they remembered as a better bet when comparing bottles of aspirin.
Pricing is a business decision that will have an immense effect on the company’s performance. Ultimately, what the target consumer is prepared to pay for the item falls down to. When the company has a clearer understanding of what they offer, who they sell it to and why, they are in a stronger position to decide if their price aligns with their company’s broader strategy.
HOW SHOULD PRODUCT MANAGERS RESEARCH COMPETITORS?
Competitive research, particularly when new products are being introduced, can be a huge time-saver.
It could take months or even years to spend time and money building and selling a product. That is why investing in a few hours of competitive analysis will provide product managers and their companies with tremendous long-term benefits, if they can validate early on how their product adds value. They need to know, after all, what makes their product stand out in the industry. The best way to do so is for them to study and compare everyone else in the business.
What is competitive research?
Competitive analysis requires collecting data on the metrics of rivals that matter most to your own business. Brand managers should start by defining who the product is up against in the market and what it is up against. This gives them a powerful perception of how unique their definition really is. This is also a significant first step in understanding whether more of their valuable time and effort is needed by their concept.
These key questions can be answered through competitive research:
- “Are there other companies doing exactly what I (want to) do?”
- “Are my potential customers getting a product or service at the level that they want or need?”
Product managers must distinguish between direct and indirect rivals to address these questions:
- A direct competitor is a business that, within the same market, provides (more or less) the same product or service. Coke and Pepsi, for instance, are direct rivals.
- An indirect competitor is a business that offers the same need to serve a particular form of product. Sprite and Pepsi, for example, are indirect rivals. And for both Sprite and Pepsi, water is an indirect rival.
Product managers should make sure that all direct and indirect rivals are investigated, since all forms of research are highly useful. Understanding the pain points of the consumers of their rivals will help product leaders identify issues that are theirs to address. In their pitch, this can give them a significant business advantage to use.
Why does it matter?
Product managers must show that their company and future customers are building vital components that matter. Products should never, after all, be designed in a vacuum; they should meet real market and consumer needs. As the CEO of the product, before encouraging the product team to develop, promote, distribute, and help the solution, they have to identify these two things.
Products Managers need quantifiable metrics for:
Compare their task to the contest
See where holes in consumer rivalry can be filled.
What is the required information?
Brand managers may know why competitive analysis is relevant, but they do not know what to look for during their tests. To begin making a meaningful strategic research strategy, they should look for some key facts.
Product managers should decide the final targets of their rivals for their products, their visions of where these products are going and what they are trying to accomplish in the market. They should spend time on the websites of rivals and determine how they portray themselves to clients and prospects in order to accomplish this. “Why do these products exist?” They should ask: “Which problems do they purport to solve?” Most importantly, they should ask if there are any problems that these products do not appear to solve. There are potential holes in the market to fill.
Managers of goods should try to grasp what pushes their rivals to do what they do. Out of intense, personal passion and necessity, many items are constructed. On LinkedIn, business blogs, and other online profiles, it is wise for product managers to spend time studying the founders’ histories. They should then ask: “What does the competition excel at? What insight and experience do the founders bring to the table?”
Challenge for Customers
What are competing users grappling with? What things are missing in these products? Brand managers should spend time in taking product tours of rivals to consider all facets of their products in order to address these questions. Then, to read reviews and perspectives on these items, they can search for related online forums. Three possible sites that give impartial views about what clients and prospects think are Quora, Product Search, and LinkedIn.
All great products have relevant personas, profiles of the ideal consumer demographics of that product. Such personas are fictional, but they should represent actual groups of customers. Brand managers can question who these items are intended for, when studying rivals, and revisit consumer feedback to look for trends. By seeing similarities between names, occupations, years of experience, etc., they can infer which people rivals are targeting.
How are their products sold by competitors? To explain what they sell on the market, what language do they use? What core problems are solved by these products? Product managers should study the marketing messages of their rivals on both their business websites and external websites. This lets them decide where within this shared market they see their own position.
When conducting competitive research, it is necessary to identify the market landscape. A detailed study of the market confirms consumer desires, shifts in the sector, and fiscal opportunities. Brand managers must also know where they fit into the larger market, they share in order to consider competitors.
For each direct and indirect competitor, product managers should gather this information and then store it in a central place accessible to their team. It allows them to evaluate all rivals at a high level. When they see where their rivals succeed and fall short, they will find ways to stand out for their product.
Product managers should check in with themselves at each stage of the competitive analysis to benchmark their success. They should ask if this method helps them understand their core market and how a particular issue can be solved by their product or feature.
HOW SHOULD PRODUCT MANAGERS DEFINE CUSTOMER PERSONAS?
Product managers must make educated choices about who their clients are, what they need, and how a solution is offered by their product. Personas are fictitious characters that help product managers make these choices and direct how customers love the team to create features.
There are two key types of customers and consumers of consumer personas. Buyer personas reflect a potential buyer’s ideal profile, offering insights into the individuals who decide to buy your product or service. User personas reflect the individuals who use your product directly, bringing them to life in a memorable way that anyone can comprehend. The buyer and customer may be the same person, but based on their user persona and their purchaser persona, they will have different preferences.
What is the user personas’ purpose?
A user persona’s main aim is to create empathy with clients. An important aspect of product management is knowing and relating to what matters to the clients. In order for you to create an educated roadmap, this includes continuous research on target user segments.
Personas are an efficient way of collecting this research and communicating it. The most critical characteristics of individuals who use your product, such as their ambitions, challenges, likes and dislikes, can be distilled. This knowledge forms the approach of your product and keeps the entire product team focused on delivering an exceptional customer experience.
The main advantages of identifying user personas are here:
- Explain the “why” behind decisions on goods
- Rely on the needs of the most relevant groups of users
- Prioritize features that address issues for real users
- Implement new features in accordance with how clients will actually use them
It is important to remember that several kinds of user personas exist. For example, if you have a technology product, for the consumers who use your product every day, you would need one persona and another for the people who run your product.
How to create user personas
This guide outlines the steps taken to generate user personas and provides a prototype to capture the knowledge.
Understand who is going to use the brand
Personas need to be as real as possible, so it’s important to spend time learning about your target users as much as possible. What is their position? How long were they in their business for? What are the likes and dislikes they have? This knowledge allows you to imagine a typical consumer from their viewpoint and view the product.
Based on your business, sector, and type of product, the precise information you need to capture will differ. Here are the various forms of data that can be useful for collecting:
- Personal data: age, education and position
- Professional background: Job title, level of income, talents, tasks, and experience
- Psychographic data: goals, problems, likes, and dislikes
To inform your study, you can use qualitative and quantitative data, such as interviewing users directly, reading support tickets, talking to teams who work with users, and evaluating the use of items.
Grouping your usual users
To represent various groups of users, you will most certainly need to construct several personas. Look for different characteristics and activity patterns once you have collected sufficient data. To describe a set of user personas, let’s use an example company called Fredwin Cycling. Fredwin Cycling is an app that links athletes and encourages friendly competition with social fitness. Professional cyclists, casual riders, cycling vendors, and event planners may be main classes of users.
There is a particular collection of goals, needs, and wants in each category of user personas. It is important to understand the differences between these groups to direct how new product characteristics are prioritized, planned, and produced.
Create a sample user persona
You are now able to create your own identity. Offer each one a name and pick a photo to make your persona unforgettable and reflect it. Then, write an outline that distills the basic elements of their interests and context.
Share the team with user persona
When developed, share your people with key organizational members. Whatever format you select, making your people easily accessible to the whole team is important. Associating people with your ambitions, projects, releases, and characteristics will keep your customers top of mind and present with everything you do.
Well-crafted user persona are a perfect way to share knowledge about your target clients. These are helpful reminders of your product’s ultimate purpose: to fulfill the needs of real people. You will have solutions that really delight them if you know exactly who your customers are and what they want to do with your product.
WHAT ARE SOME EXAMPLES OF A BUSINESS MODEL?
A business model is a template for how value can be generated by a business. Ultimately, it distills a business’s potential down to its core. It addresses basic questions about the problem you are going to solve, how you are going to solve it, and the potential for growth within a given sector.
It’s important to build a business model, whether you launch a new company, grow into a new market, or change your go-to-market strategy. You can use a business model in one position to capture simple expectations and choices about the opportunity, setting the course for success.
Business models are of several varieties. Based on the form of entity and offering, each one differs considerably. A manufacturing company, for instance, would have a somewhat different model than an advertising agency. Business models differ even within a single industry. Here are a few typical business models used by companies in technology:
- Retail Sales
In order to meet their clients and expand over time, most organizations end up using a mix of business models.
Why is a business model crucial?
To construct something meaningful, you need a clear direction. A strategy for how you can achieve your vision is defined through the process of creating a business model. It sets out the plan behind a new venture or investment and offers a mechanism for progress monitoring.
It takes deep thinking and research to construct a business model. Businesses and food suppliers must look from the outside, reflecting on market requirements and what matters most to consumers. Sharing the business model around the company promotes alignment once established. This holds everyone accountable for what they are working on and why, and directs time and money investments.
How are business models used by firms?
Business models are used by companies in every sector and at all levels of maturity. Some rely on lengthy procedures to construct complex models, while others work rapidly to express the fundamentals. It forces internal alignment to have the discipline to work with this planning instrument.
A business model is also a living structure for existing businesses that is checked and adapted periodically based on changes with clients, staff, and the industry. A business model can help to get them off to the right start for businesses launching new products or entering new markets to ensure that early product and marketing decisions are tied back to the plan.
What are a business model’s components?
A business model should address major questions about the organization and set forth a clear business strategy. A business model should include main components relating to your target consumers, the industry, the strengths and challenges of the company, basic elements of the product, and how it will be marketed. The next planning tool – your product roadmap – directs the creation of this base.
What are some examples of business models?
In the sense of a two-to-five-year forecast for costs, growth, and sales, several individuals equate business models with long documents explaining the challenge, potential, and solution of an organization.
Business models, however, need not be a lengthy text. A succinct, visual document is an easy way to distill the core elements of the plan and ensure that the high-level approach is understood by all.
WHAT IS ENTERPRISE TRANSFORMATION?
There are big expectations from consumers. They want goods and services that are highly customized, delivered quicker than ever before and without hassle. All this requirement means that it is possible that the company has to change how it works dramatically. An business transformation is the structural improvements that companies make to provide a better customer experience.
The idea of business transformation, of course, is nothing new. To remain competitive and keep up with new demands, organizations of all types and sizes need to change. But business transformation goes beyond incorporating new ideas-just it’s about rethinking how you represent your customers in any relationship they have with your business.
A full product experience is the outcome of this holistic outlook (CPE). To adopt a CPE mentality needs long-term thinking about what consumers actually want from you outside of the product or service you offer. It means thinking holistically about how you can reshape the whole company to serve consumers with your staff, technology, and business data.
The definition of digital transformation, which refers to the implementation of new technology and processes to modernize your business, may be familiar to you. Digital transformation has gained attention because it offers more customized digital interactions for consumers and greater organizational productivity, an exciting model for innovation. In reality, digital transformation is only one component of the transformation of a total organization.
The transformation of businesses requires all three of the following:
- Investing in the right technology and processes to modernize your structures, infrastructure, and digital capabilities: Digital transformation.
- Transformation of the solution: Changing how you build and market the product to prioritize consumer interactions and performance.
- Transforming data: Placing data and analytics at the heart of the processes of creativity and decision-making.
Absolute and permanent improvements are required throughout the company to effectively transform. A clear strategy and sometimes a multi-year plan to get there are needed for this degree of change and complexity.
Efforts to transform are extremely demanding and can also be emotional. Overhauling the organization’s culture and mentality ensures that certain individuals can respond with insecurity and cynicism. People might wonder how they’re going to fit into the new environment and whether the organization’s changes will stick. This is why, with strong leadership from the CEO and executive team, it is necessary to include everyone in the transition.
Who is involved in an enterprise transformation?
Every organizational team has a role to play in business transformation. The most effective transitions start with constructive coordination across departments as an executive mandate. In order to lead the charge, some companies also form innovation groups or transformation teams.
What does it take to transform an enterprise?
It is a years-long, continuous process to embark on an organizational transformation. Since the company lacks consistent strategic planning and coordination, several transformations stall. In order to get started, you need these six elements: mentality, people, process, technology, go-to-market, and measurement.
Mindset: You must turn your attention to enhancing the experience of the customer. And this needs to be fully recognized across the entire organization-everyone needs a customer-centered attitude to be embraced.
Staff: Find the best people to help drive the company forward with the necessary skills. As well as leadership and communication skills, this relates to technological skills (digital, cloud, DevOps).
Technology: In order to offer the experiences that consumers want, you possibly need to introduce new technologies: cloud, web, Artificial Intelligence (AI).
Go-to-market: Reinvent how, at each point of the consumer lifecycle, you market, distribute, and help the product or service to eliminate friction.
Measurement: Reassess the existing main performance indicators (KPIs) and pick milestones and measures that tell your clients a richer story.
It takes a much more collaborative approach to make meaningful improvements in all six fields than most companies are used to. If you have broken down silos and incorporated a customer-centric approach to everything you do, you cannot fully deliver on the promise of a CPE.
WHAT IS DIGITAL TRANSFORMATION?
A digital transformation is a major program of change that helps a business in the digital age to succeed. The introduction of agile practices, including cross-functional and self-organizing teams, DevOps, Scrum, and Kanban, is part of that shift, embracing new technologies such as machine learning, micro services, big data, and the Internet of Things (IoT). As businesses digitalize their business, business models also tend to change; customer relationships, pricing models, partner and supplier relationships, cost factors, and other aspects are likely to be affected. But in order to take advantage of new and current digital assets, align them with physical products and services, create a seamless user experience and increase the overall value created, businesses require dedicated, qualified product professionals who take care of digital assets.
Technology is changing the expectations of clients. A few of the digital advances that drive a global shift in consumer behavior are widespread access to the internet, mobile devices, artificial intelligence, and virtual reality. Customers today demand products that are easy to use and free of hassle. Services have to be fast, responsive, and customized. And across every interaction, both human and digital, the entire experience must be frictionless.
Imperative of Digital Transformation
To modernize their offerings and better serve their customers, many businesses are investing in a digital transformation strategy. This goes beyond prioritizing isolated technology initiatives to improve “business as usual.” Instead, it requires understanding the opportunities offered by technology and rethinking the way a whole company operates in the digital era to compete.
Here are a few ways in which digital transformation drives profound organizational transformation:
To solve customer issues more effectively, the entire company must adopt a customer-centric mindset that combines human and digital experiences.
In order to drive product innovation and make the right technology investments, organizations must hire individuals who understand how to apply technology.
To provide ongoing value to clients, an agile approach is essential. This helps companies to respond to feedback quickly and adjust to evolving demands.
The best way to leverage new technology, reinvigorate product offerings and modernize the infrastructure needed to support them must be determined by businesses.
It also involves redefining the entire Go-to-Market experience, including marketing, distribution, and support, when companies change how goods are distributed.
To represent the desired business results and assess the progress of the transition, KPIs need to be modified.
Digital transformation allows businesses to think about the end-to-end consumer experience differently and to alter their business model to deliver it. The forward-thinking businesses who really understand what their clients want and can deliver on the pledge are the ones that are going to achieve sustainable success.
WHAT ARE THE TYPES OF BUSINESS TRANSFORMATION?
“Business transformation” defines the various forms of widespread organizational change necessary to deliver improved outcomes for consumers and employees. Not fresh is the notion of transformation. Businesses have always had to innovate and adapt.
To achieve successful market change, three main techniques are used. They are also individually adopted, but all three are employed by many businesses as they strive to maximize the value they offer. This includes the application of emerging technology, an emphasis on solutions, and data leverage.
In order to enhance all facets of the consumer experience, a digital transformation applies modern technologies. This means designing or implementing the right technologies for the modernization of goods and the processes and services underlying them that sustain them.
This goes beyond digital capabilities being built up. It takes a thorough understanding of what modern clients want and a proactive digital mindset to rethink their entire business models.
The transformation of a solution focuses on addressing the problems of a client in a holistic way. This means rethinking how products to provide a full product experience are designed, bundled, and sold.
The transformation of a solution realigns all aspects of the company to what clients actually want. This especially affects well-established businesses that over the years have developed and acquired many products but still go to the market with an isolated collection of point solutions.
The transformation of information alters the way companies make decisions by placing information at the center of the process of creativity and product creation. It helps businesses to gain in-depth insight into all facets of customer service and informs areas of change.
In addition to implementing new data management capabilities, companies need to cultivate a data culture that relies on market intelligence to constantly evaluate, experiment, and learn what customers want, rather than opinion. Then software builders can verify that the product functionality that has been delivered is currently used by clients.
WHAT IS THE ROLE OF PRODUCT MANAGEMENT IN ENTERPRISE TRANSFORMATION?
Today, several corporations are experiencing dramatic changes. Customer preferences are shifting the driving factor: growing demand for customized goods, frictionless service, and diverse support. It takes a major change in thought to boost creativity and how clients are served. This is distinct from merely managing and delivering new capabilities to programs. Change at this stage is called an enterprise transition because it radically changes the emphasis of the entire company to offer a full product experience (CPE).
Although the idea of business change is not recent, new innovations are being introduced by many businesses. Instead of point goods, they concentrate on the sale of solutions or bundled offerings. These businesses are using data to serve consumers better. Often, product managers are at the forefront of organization transitions.
Why is product management important to the transformation of businesses?
For both the product and the consumer, product managers are advocates. A cross-functional initiative is to design and deliver new features. The team that oversees the overall go-to-market process for both current and new clients is also led by product managers.
But it makes sense that product managers are prepared to direct the perceptions of new consumers. You have a keen knowledge of the market and the position of your product within it. The product roadmap, which is arguably one of the most critical instruments for servicing consumers in a new way, is often produced and guided by you.
WHAT IS CUSTOMER EXPERIENCE?
Customer experience (CX) is the description of all of a client’s and an organization’s experiences. In a single instance or over an extended period of time, these experiences may take place. Customers are acquired or lost in today’s marketplace based on the overall collection of interactions they have with a business and what they think and feel about them.
Organizations that offer superb experiences successfully reap great rewards. Lifelong brand loyalty, greater customer retention, decreased turnover, and increased sales will result in exceptional CX. Apple, Amazon, REI, Southwest Airlines, and USAA are examples of businesses doing this.
Great businesses recognize the significance of providing a full customer experience, like those listed above. They see the advantages every day in their company. But how exactly do you quantify the vital importance of enhancing the experience of customers? There are a couple of statistics to remember here:
- 70% of purchasing experiences are focused on how the consumer thinks that they are being treated.
- For a great customer experience, 55 percent of customers will pay more for.
- In the United States, the approximate cost of moving customers due to a weak experience is $1.6 trillion.
- Companies that excel in customer service boost sales 4-8% higher than the average
Seven key customer experience areas
Emphasis and continuous development of all facets of the customer relationship are needed to provide outstanding experiences. Specifically, when it comes to developing and enhancing consumer interactions, there are seven main areas to mobilize the company behind:
Marketing is how potential clients learn about a product and decide if it might be a fit to solve a problem for them. It’s the promise of a product. As people become more and more social, marketing strategies are taking on new forms. Social media, online reviews, and company-published content comprise these latest types.
Sales comprise the stages of consideration and assessment of the purchase process. With the aid of the agency, prospects inform themselves about the product and decide whether the solution is right for them. This is achieved through a combination of platforms for self-service and through communicating with representatives of the organization.
Software refers to the central collection of software or services paid for and used by clients. For software firms, the real software is the technology. For some forms of businesses, consider technology, such as a phone, credit card, or insurance policy, to be the actual product or service offered.
Supporting systems enable the product or service to be provided by the business. There are internal processes that are rarely used by the consumer, but have an effect on the CX, such as billing, provisioning, analytics, and more.
Integrations by third parties enable customers to easily integrate new technologies into their existing solution ecosystem.
Help defines all the activities associated with support that direct the client to accomplish something positive with a product. This may be anything from answering questions about consumers, training, offering tools for self-help, or helping to align the product with existing processes.
Policies are the guidelines set by corporations to regulate how they do business and how the company’s people behave. For instance, with no exceptions, a business may have a flexible, no-questions-asked return policy or uphold higher restrictions. The CX is affected by these types of procedures.
Some of the ways in which consumer expectations are changing are listed below.
Why does it matter?
With rising consumer preferences, delivering a good product at a fair price is not enough. The clients want more. In reality, by 2020, customers will care more about how they connect with a brand and the business that provides it than what it costs. The overall experience is what will matter most, and as the main brand differentiator, customer experience will surpass price. Challenges with enhancing customer experience
Unfortunately, businesses often do the exact opposite of what is required in order to have a holistic customer experience. They concentrate on each stage of the journey of the customer and every feature, such as the sales team, that is independently involved. This enables each group to try to optimize its behavior, but it ignores how the groups work together and how clients affect certain points of overlap. Customers do not know or care that there are corporate borders.
Research demonstrates that the overall experience may still disappoint, even though organizations perform well on individual touchpoints. When the entire journey works well, patient satisfaction with health insurance is 73 percent more likely than when only touchpoints work. Similarly, hotel customers who get the right journey will recommend 61 percent more than hotel customers who only concentrate on touchpoints.
Customers are expecting solutions that are tailored to them in today’s digital-first environment and they do not want to wait. Organizations are increasingly looking to product managers to identify the needs and lead the overall customer experience. For software and technology firms, this is particularly true. The best cross-functional leverage point for product managers is to help digitally enhance consumer interactions, make data-driven decisions, think of complete solutions, and eventually deliver a complete product experience.
Improving CX and offering a full experience means thinking more deeply about the goods and services provided and how each part of the customer journey can be optimized. Incremental adjustments do not go sufficiently far. To offer a full product experience, companies need to put the customer at the core of everything and radically change their business.
Investments and decisions must revolve instead of technology around consumers. This is a radically different approach to innovation for companies and product producers from what happened just a few years ago.
To enhance the customer experience, take the following steps.
Understand the customers’ journey
Great CX begins by knowing what the client is thinking and feeling about. Organizations need to consider their lives to have empathy with clients. Before they can support them, businesses need to learn what they care about and what they fear. In order to do this, teams map out the obstacles faced by the client and the path they are on to overcome them. Expected changes should be put on a roadmap when the present journey is completely understood, including all experiences and pain points.
Prioritize all things
Every aspect of the customer experience matters in order to create something unique. Increased selection and increased value are causing consumers to see goods as interchangeable. Customer satisfaction is at a poor level due to this. Every aspect of the customer experience matters when designing something holistic with the aim of providing delight. This implies that it must be a priority to maximize all of the contact points with a client.
Needs and preferences of customers change. Therefore, while beginning with a deep understanding of the customer experience and setting goals for the change is a great start, continuous feedback is crucial. Customer reviews must be closely incorporated into the lifecycle of product growth. This is why businesses need a structured way of collecting internal input from stakeholders and consumers to ensure that the best ideas and CX changes are applied to the roadmap.
For CX to improve, more transparency is required. Organizations need to control that consumer interactions are improving and overall, the product is performing. This is another reason why the product management discipline is rising. Product managers are prepared to place consumers at the forefront of their strategic planning and roadmap and to help teams produce great products and experiences.
Report on Progress
In their strategies and development, companies need to be open so that everyone can further enhance the customer experience. Teams should schedule, work, and test consistently to be their best. And teams can more effectively measure progress towards targets by placing metrics in place. Just what they can calculate can be changed by businesses. Reviewing metrics keeps teams accountable and motivated to meet their targets.
You now have everything you need to build a perfect product strategy for your product. And you know when and how to get the assistance you need to conduct it and be sure that you are on track along the way.
So, take the plunge and start working on a vision for an inspiring product. It will be your North Star that will guide your choices, assist you to say “no,” and prevent you from feeling like you are being pushed in every direction.
It is hoped that the following contents has provided a clear basis for a proper understanding of product strategy towards improved and sustainable company performance. A product manager needs to relate to such units as research and development, engineering, manufacturing, marketing, finance, advertisement, procurement, etc. Thus, in order to succeed, a brand manager is expected to be a good diplomat and a team player.