Build products that align with your vision using a well-defined product strategy.
Originally published on April 18, 2022
Browse by CategoryA product strategy is a plan to define your product's vision and identify how you will realize that vision. It’s built with the “big picture” of your product in mind, helping you justify your product’s existence and how users can benefit from it. A well-tuned product strategy ensures that everyone is working in sync toward the same high-level business goals.
Your product strategy prioritizes your product’s most critical aspects, such as features and timetables, throughout development. It keeps your organization’s collective product management efforts focused on customer needs, market positioning, and overarching business goals. This focus on value enables your team to launch products, ensuring that every feature aligns with your original vision.
key takeawaysA product strategy bridges the gap between conceptualizing your product and creating your development plan. You might have a terrific idea, but jumping straight from product dream to reality can be challenging.
A product strategy outlines your product’s purpose and the work required to bring it to life successfully. It helps you answer three essential questions about your product:
The answers to these questions will inform your product's broad-stroke planning. These big-picture strategies include your product's features, a general blueprint for product development, and the measurable objectives your company hopes to achieve.
People often confuse product strategies and roadmaps, but they serve distinct purposes. A roadmap is a timeline of action items that outline how your product will come together. A successful roadmap establishes your vision and timelines and ties to the goals established in your product strategy.
Your product strategy is a reference point as your product roadmap changes throughout development. Deadlines, tasks, and goals are all bound to shift or change during product development in response to feedback, testing, and unexpected obstacles. Adhering to a set product strategy enables you to handle changes and devise solutions aligning with your product’s vision.
A product strategy helps you align your product’s trajectory with customer and internal expectations. It’s so important that 76% of product professionals say that investing in product strategy is one of the most essential investments a team can make.
A quality product strategy:
Though every team within your organization undoubtedly supports your product, they likely will have differing views on the best way to get there. When faced with uncertainty or disagreement, your teams can refer to your product strategy. Leaders can compare potential decisions against your product strategy to determine which proposal best suits your product's intent.
A clear, well-documented product strategy framework facilitates transparency for every employee tasked with building, selling, and supporting your product-to-be. When you set your product strategy in stone, you create a resource for stakeholders to reference at every stage of development. It also helps keep your product and company vision at the heart of every decision your team makes for your product.
The basic framework for an effective product strategy looks the same whether you’re building an ecommerce site or a crypto trading app. Product strategy frameworks typically include the following steps:
Using a product strategy template makes it easier to define your product strategy. Amplitude’s three-step product strategy template can help you jumpstart your efforts, using insights from your data to inform your product strategy and providing resources related to:
The details of your final strategy will look different from every other business because your company’s values and objectives are unique. However, nearly every product strategy encompasses these elements:
Conducting audience research before crafting your product strategy ensures you have an audience for which to build a product. Research will also identify existing competitors and help you determine how to position your product against them.
Through diligent research, you can uncover deep insights into customer needs and preferences, paving the way for products that make a difference to users. This proactive approach ensures a ready market at launch and enhances your positioning by aligning product features with well-researched customer pain points.
At the heart of product strategy is a single question—“What are customers looking for in a product?”—and your product data is the key to answering it. Behavioral analytics will reveal the product features from your existing offerings that provide the most customer value. These insights give you a frame of reference for defining your new product, user base, and initiatives.
Leading companies find that data-informed product strategies are crucial to success, but many businesses struggle to achieve data democracy. Data is often siloed within departments, limiting visibility to valuable marketing, sales, or product insights across teams. Since every team in your company will adopt your product strategy, using a unified data management system like Amplitude helps ensure maximum data accessibility.
You can’t solve a customer’s problems with a hypothetical product. Goal setting establishes a timetable for developing your product and synchronizes expectations for delivery across teams. Start with long-term goals for your product, like the official date for product launch. Once you establish these big-picture goals, you can divide the timetable into shorter phases to create more focused goals and expectations.
Goals are only helpful if they’re measurable. As such, ensure you have a way to gather metrics and data to determine your progress toward each goal. For example, a goal for your music streaming service may be to have a million active users by the end of your first year. A digital analytics platform like Amplitude would help you track your users from their first visit to your website through the user onboarding process and beyond.
Standard metrics and KPIs used by companies to measure product strategy goals include:
No single product strategy fits every company’s goals, products, and target markets. Some examples include:
This product strategy model works best for products that are unique and different from existing offerings on the market. It attracts customers with unique features or capabilities they didn’t know they were missing. The cell phone industry has long been a battleground for companies touting everything from wireless charging to bendable screens to differentiate themselves from competitors.
The key to a differentiation strategy is to develop a product that stands out, and there are multiple ways to do so:
Another approach to product strategy is to create the best possible product in terms of reliability, capabilities, and experience. A quality strategy positions your product as the premium option against inferior competition. Apple enthusiasts continue to buy their devices because they’re accustomed to the high-end aesthetics, operating system (OS), and digital ecosystem the company offers with remarkable consistency.
Products built with quality in mind can’t afford to focus on pricing. Hiring the brightest minds and creating the best products will take money and resources, which are reflected in the product’s final pricing point.
A company like Lamborghini doesn’t compromise the quality of its cars to appeal to a lower pricing point, which only makes the product even more desirable despite its hefty price tags.
The cost strategy focuses on making a valuable yet inexpensive product. Products in this category are cost-effectively built to go to market at a lower price than competitors. This strategy works best when your new product isn’t differentiated from existing offerings through new features, UI/UX improvements, or other value-centric aspects.
For example, a company making plastic forks would prioritize making the highest volume of functional forks for as little cost as possible. Customers are unlikely to pay attention to the aesthetics or brand of their forks so long as they work.
Cost strategy works best if your improvements target the development process. The cheaper it is for you to develop a competitive product, the lower you can price your product while still remaining profitable. However, a pricing race to be the bottom often elicits bias from skeptical customers. Many believe an inexpensive product can’t be high quality and will pay more for something they believe to be of higher value.
This popular approach to product strategy focuses on building a product to appeal to a hyper-specific market. Focus strategy enables companies to dedicate their resources to developing features for a well-defined segment. The result is a product that performs exceptionally within a niche market instead of underwhelming a broader market with just a little bit of everything for everyone.
Examples of potential product niches include:
Focus strategy narrows your field of competition and enables you to satisfy the specific needs of a small group.
Consider this: 10% of people are left-handed. However, for most of human history, scissors have been made exclusively for right-handed users. The company that released Lefty Scissors in 1967 went from competing for the whole market to owning 10% of it by focusing on the needs of a single group.
Your product strategy is meant to provide stability to your product development process. Constantly changing your strategy undermines its ability to provide consistent guidelines and expectations for your teams over the course of development.
Take time in the initial planning stages to ideate and revise your strategy so that your long-term vision holds up across the product development lifecycle.
That’s not to say that you should never evaluate your product strategy. Quick and routine assessments of how your current product roadmap aligns with your product strategy provide opportunities to identify and correct “strategy drift.”
Additionally, product strategy is an iterative process. Once your most recent product plan has run its course, evaluate your latest strategy. Careful analysis will reveal what worked and what didn’t, helping you build even more effective strategies and products in the future.
Thinking through your next product strategy? Leverage product strategy worksheets from The Product Strategy Playbook: A Guide to Flywheels and make sure you’re measuring the right goals by following the North Star Playbook.
