Strategize: Product Strategy and Product Roadmap Practices for the Digital Age

by Roman Pichler

Quantitative and Qualitative KPIs

Lagging and Leading Indicators

Looking beyond Financial and Customer Indicators

Financial indicators, such as revenue and profit, and customer metrics, like engagement and referral rates, are the two most common indicator types in my experience.

Say your product is meeting its revenue and profit goals, and customer engagement and referral rates are high. This suggests that your product is doing well; there is no reason to worry. But if at the same time the team motivation is low or the code quality is deteriorating, you should still be concerned. These indicators suggest that achieving product success will be much harder in the future. You should therefore lo...

Leveraging Trends

Sample KPIs

Track the Product Performance with a Product Scorecard

As mentioned in the last section, you should be clear on the business goals your product serves. Prioritize them and ensure that they are measurable. Select only relevant indicators that will help you determine if you are meeting the business goals.

Take team motivation, for example. If you use the sprint retrospective to gather feedback from the development team to find out how motivated the team members are, the data is collected manually, and it becomes available only once every few weeks. You may therefore find yourself updating the finance and customer perspectives of the product scorecard more often than the other two.

Complement KPIs with Operational Metrics

While KPIs are great for measuring the overall product performance, they are usually not enough. You should consider using ad...

KPIs and help you understand how well you are meeting specific product goals—for instance, increasing retention and enhancing the user experience, or making it easier to add new features. I recommend capturing these goals on the product roadmap t...

this sounds confusing, then a different example might help. As an avid cyclist, I might choose win an amateur race as my overall goal. After selecting the race, I would identify the training goals required to win the race, for example, increasing my climbing or my sprinting abilities. Next I would break down my training goals into weekly progress goals, such as doing three sessions of interval training. This leads to three different goal levels that are derived from one another but measured individually.

Engage the Stakeholders

As brilliant as it may be, your product strategy is useless if the other people involved in making the product a success don’t support it.

Vaya que si lo sé.

Stakeholder Identification

In order to identify the stakeholders, ask yourself whose help you need to develop, release, and provide the product.

Stakeholder Analysis and Engagement

Stakeholders with high interest and high power are called players. These individuals are important partners for you; they help you create, validate, and review the product strategy and ideally continue to work with you on the product roadmap. Aim to secure their buy-in, leverage their ideas and knowledge, and establish a close and trustful relationship with them. You should also ensure that these individuals are involved with the product continuously to avoid loss of knowledge and handoffs.

Be aware that collaboration requires leadership. As the person in charge of the product, you should be open and collaborative but decisive at the same time. Aim to build consensus with the players, but don’t shy away from difficult conversations. Don’t settle for the smallest common denominator. Have the courage to make a decision if no agreement can be achieved. Great products are not built on weak compromises. As the saying goes, “A camel is a horse designed by committee.”

Subjects are individuals with high interest but low power—for example, product managers and development teams who work on related products. These individuals feel affected by the product and are keen to influence it, but they can’t veto or change decisions. Subjects can make great allies who can help you secure understanding and buy-in for your product across the business. Keep them involved by inviting them to bigger strategy-review meetings, for instance, or by sharing ideas with them and asking for their feedback.

People with low interest but high power are called context setters. They affect the product’s context, but they take little interest in the product itself. Context setters are often powerful senior and executive managers who can make your life difficult if they are not on your side. Regularly consult them to ensure that their opinions are heard—for instan...

allow them to dictate decisions. Be strong and have the courage to say no. Use data and empirical evidence to back up your argume...

Everyone else is part of the crowd. As these individuals are not particularly interested in your product and don’t have the power to influence the product strategy or other product decisions, it’s usually sufficient to keep them informed; give them access to the product’s wi...

Collaborative Strateg...

Be aware that the workshop is the first step toward a valid product strategy. The objective is not to create a definitive and correct plan of action, but to establish a shared initial strategy. Consider asking the ScrumMaster or a qualified facilitator to set the right tone, establish a trustful and collaborative atmosphere, and facilitate the workshop.

Review and Update the Product Strategy

I find four factors to be useful to take into account when reviewing the product strategy: the product performance, the competition, the trends, and the company goals and capabilities.

Looking at your company and any changes in its business strategy will help you understand if the business goals captured in the product strategy are still valid. Adapt your strategy appropriately. Be aware that this may not only mean smaller adjustments but more drastic changes, including pivoting or even killing the product.

How often you assess the strategy depends on the product maturity and the market volatility. For younger products and dynamic markets, I recommend reviewing the product strategy once per month; for more mature products and markets, perform a strategy check every quarter. Involve the stakeholders—particularly the players—in the review to keep them up-to-date, leverage their knowledge, and secure their buy-in. Align the review of the product strategy with the evaluation of your product roadmap. Any issues in executing the roadmap can indicate that your strategy is no longer valid. Strategy and execution are interconnected; they form the two sides of the same coin.

STRATEGY DEVELOPMENT

Segment the Market

Your segments should be clear-cut so they do not overlap. To put it differently, you should be able to tell who belongs to a segment and who does not.

What’s more, each segment should be homogenous, and the people within it should respond to your product in the same way.

Segmenting by Customer Properties and Benefits

You can form segments that are based on the customer properties, or on the benefits that your product provides. Common customer properties include

demographics such as age, gender, marital status, occupation, education, and income; •psychographics, including lifestyle, social class, and personality; •behavioral attributes like usage patterns, attitudes, and brand loyalty; •geographic regions such as Europe, Middle East and Africa (EMEA), and Asia-Pacific (APAC);

•industries or verticals—for instance, automotive, education, finance, and health care for business markets, also called business-to-business or B2B; and •company size, such as small and medium-size enterprises (SMEs) for B2B products.

An alternative approach is to divide the market using the benefit the product provides or the problem it addresses (Christensen and Raynor 2013). This suggests that you first and foremost consider people’s needs. For example, if the main benefit of my healthy-eating app is to help people better understand how much they eat, then there are two groups who may benefit from it: people who would like to lose weight and people who want to better way to determine their calorie intake, such as athletes and people with diabetes. While the first group could contain single men aged 20–30 with poor eating habits, it could equally include married women with young children who want to lose weight but don’t have the time or energy to follow a strict diet or exercise regularly.

Focusing on the needs and benefits can therefore result in different segments, and consequently a different product.

Choosing the Right Segmentation Approach But how can you tell which segmentation approach is preferable? Should you segment primarily by customer or by benefit? My answer is simple: look at the innovation type your product represents. Whenever you create an adjacent or disruptive product, segment first by benefit. Once you have created your initial benefit-based segments, you can refine them by using appropriate customer properties. In co...

The great thing about benefit-based segmentation is that it reduces the risk of overlooking people who are likely to take advantage of your product; it also offers you the opportunity to reconstruct the market boundaries.

Whichever way you segment the market, avoid the following two mistakes: First, don’t blindly follow predefined segments. I have seen product managers cling to existing customer-based segments while trying to create new, innovative products. Unsurprisingly, the outcomes were rather poor. Second, don’t discard an idea because it does not fit into predefined segments.

Muy importante

Segmenting the market often results in several groups that your product could serve. In the case of my healthy-eating app, I could focus on people who live with diabetes and have to watch what they eat, busy mothers who would like to shed a few pounds, or athletes who would like to improve their performance. Addressing all three segments at the same time would be overwhelming. It’s therefore a good idea to choose one of them. But which one should I pick? To select the right segment, evaluate the different groups and opt for the most promising one. A great tool to do this is the GE/McKinsey matrix (Coyne 2008). While

Several criteria may be used to determine how attractive a segment is, including the following: •Need: How strong is the need, and how much does the group benefit from the product? •Segment size: How big is it? •Growth rate: Does it show signs of growth? •Competitors: Who are the main competitors, and how fierce is the competition? •Entry barriers: Are there any barriers for entering the segment—for example, high switching or high setup costs?

therefore recommend qualitatively evaluating the segments. Perform a quick assessment; spend hours rather than weeks or months and test if you are indeed addressing the right people as part of the strategy-validation effort (explain in more detail later). If it turns out that you have picked the wrong target group, then select and test the next segment.

Use Personas to Describe the Customers and Users

Personas are fictional characters that usually consist of a name and a picture; relevant characteristics, behaviors, and attitudes; and a goal. The goal is the benefit the persona wants to achieve, or the problem the character wants to see solved. Different personas can have different goals. For instance, I could create a persona for my healthy-eating app who wants to lose weight, and another persona who wants to experience fewer digestive problems. Understanding the personas’ goals allows you to create a product that does a great job at creating value for the customers and users. It avoids the fallacy of a solution-centric approach: worrying more about the product and its features and technologies than the reason people would want to buy and use it in the first place.

Persona Tips