What is Product Strategy? A Complete Guide to Building a Successful Plan

Building and launching a product that people love takes work. For every successful product out there, hundreds never take off or get the results the team expected.

There are a lot of factors that go into developing a product and even more that go into determining its success. A solid product strategy is instrumental in bringing these elements together and driving business success. Let’s explore what a product strategy is and what defines an awesome one.

What is Product Strategy? An Overview

Product strategy framework is your roadmap for achieving business goals, outlining how your product will help you get there. This plan describes the vision for the product, the target audience, how it will be positioned in the market, and other factors involved in getting it to market successfully. It also covers post-launch activities like customer support, tracking KPIs, product updates, and gathering feedback.

The product strategy begins or develops from the product vision. The product vision shows what the product will do for it and where they expect to see the product. The target audience, the product plan, marketing strategy, KPIs, metrics, and other elements of the product strategy evolve from this.

The central theme of a product strategy is to give the organization an overall picture of the product. It acts as the basis for every decision as the product goes through its life cycle. It has all the information the team will need to take the product from its first breath and throughout its entire lifecycle.

Why Product Strategy is Crucial for Business Success

Why should a company even bother creating a product strategy roadmap? Can’t they make and launch a product without one?  Sure, some companies skip over this step and go straight from goals to execution, because they think it’s faster.  And that’s true: it is faster.  But it’s also significantly more likely to lead to failure.

Here’s how having a product strategy framework sets the business up for success:

1. A product strategy framework simplifies communication with the entire organization.

Taking a product from the initial vision to launch and product updates involves a lot of people all over an organization. It may need product managers, designers, developers, a manufacturing team, a marketing team, a customer support team, and many more people to back these teams.

These teams must understand the KPIs and metrics to take the product through the different stages.

The stakeholders need all the information to judge if the product will generate a good ROI and decide if they should go ahead. The designers and the product development team need to understand the critical features and design parameters the product needs. The marketing team must know the target audience and how they’ll position the product in the market.

A product strategy roadmap helps everyone involved in product development to get a clear picture of what they’re trying to build, what they want to achieve with it, and what their role is.

2. Product strategy streamlines decision-making for the organization.

The product development process is full of decisions. If a team is developing a web application, they will have to decide on the tech stack, the architecture, the cloud solutions, and other aspects. The designers will have to make designs regarding the design, and the marketing team will have to decide on the different channels.

Without a product strategy, the team will have to spend a lot of time asking around, discussing, and answering these questions. However, with a detailed product strategy, the organization can empower the individual teams to make decisions that are tightly aligned to the business goals.

3. A product strategy keeps product development on track and aligned with the organization’s overall business goals.

The entire product lifecycle can take quite a long time, and the product can get sidetracked during this period, or other priorities may arise. The product direction can also change over time, and without proper controls, it may no longer be aligned with the business goals.

A product strategy acts as a control or a reference to ensure that the product is in line with the business’s and its stakeholders’ long-term visions.

Key Components of a Successful Product Strategy 

“Vision without action is a daydream. Action without vision is a nightmare.” – Japanese proverb

This quote is the essence of what your product strategy can do.  Your investors don’t want a daydream.  Your customers don’t want a nightmare.  Everybody wants a nice, restful night of sleep that comes with a product strategy.

A good product strategy…

1. Aligns your product with the company’s long-term goals and future vision

A product strategy shouldn’t stand by itself as a distinct element from the organization.

When developing the product strategy, the product owners should consider how the product will help the business. The plan must consider how the product will build the organization’s brand and reputation. It should also consider how it will tie into the range of products and services it delivers.

2. Is something that the development team constantly uses.

A product strategy is not a trophy to be displayed on the mantel. It’s not to be developed and set aside to gather dust. The product development team should consistently refer to the product strategy and base their decisions on it. The team should keep track of the metrics in the strategy and use them to drive the product through its lifecycle.

3. Address the entire product lifecycle, from ideation to post-launch maintenance and updates

Product strategy should not end with launch. It should consider how the business will update and maintain the product and support its customers. It should have a framework for managing these and the resources the company will need for it.

4. Involves everyone associated with the product.

As is evident by now, product development consists of many teams and people, and the product strategy should reflect that. The strategy is aimed at every one of them – it should convince the stakeholders of its viability, guide the developers regarding its features, and help the marketing team present it to the market. The strategy should define what is expected of everyone – their responsibilities and goals and how they will be assessed.

The Role of Market Research in Shaping Product Strategy

A successful product strategy requires extensive market research. Before figuring out what to build and how to build it, it’s important to study what the users may need and what the existing solutions are. This means conducting extensive user research and competitive analysis. 

Solid market research can help you figure out how to position your product, who would be interested in the solution, and if it will be commercially viable. It will also help the team make decisions during the product development process, such as deciding which feature to develop first, or if users may need additional guidance while performing a certain task. 

Product Strategy vs. Product Roadmap: What’s the Difference?

The main difference is that a product strategy dictates the overall vision while a roadmap defines how to get there. 

A product strategy helps the team understand what they’re developing, who they’re developing it for, how they will market it, and the goals the product needs to achieve. It defines where the product needs to go. 

A product roadmap is more detailed and specific and is used to define how a product achieves the vision and goals defined in the strategy. It specifies the different milestones the product has to achieve, a timeline for different feature releases, and defines priorities for different activities during the product development. A product roadmap will be based on the overall product strategy and take into account the market research, business goals, and the resources available to develop the product. 

Steps to Building an Effective Product Strategy 

A successful product strategy starts with a clear vision and, more importantly, a deep understanding of your audience.

There are plenty of product strategy templates and guides out there, but before you start filling them up, gain clarity on your audience.

1. Figure out your audience.

When building a product strategy, begin with a good market study or user research. If possible, talk to many people about their struggles and pain points. Observe the solutions they’re using already (if they are), what they like about it, and what they don’t.

2. Understand your competition.

Once you have a good picture of your audience, study your competition and how they have placed their product — their marketing strategies, pricing, features, and what sets them apart.

3. Define your product vision.

Once you thoroughly understand the market and users, you will be in a position to define your product. Define what the product will be all about and how it will help the users. Using the product vision as the basis, specify the different features and design parameters your product will need.

So far you have defined what the product will be like and now you have to figure out how to make this a reality.

4. Define the resources your organization has and what it will have to acquire.

This includes everything from the manufacturing equipment to the sales and support team. Assess your organization and your product vision and figure out what your organization has and what will it have to acquire to make this product real. You’ll have to research the vendors and suppliers, the associated cost, and the time it may take.

5. Define the product roadmap.

Collaborate with your team to build a realistic product timeline that accounts for available resources. Make sure you take into account the available material and human resources during this.

6. Plan the design and development of your product.

At this stage of your product strategy, define your development strategy. This should include who’ll own the different processes and aspects of product development and how you’ll test and iterate it.

7. Prepare the marketing strategy.

At this point, you know how to get the product built. The next step is to decide how you’re going to sell it. Figure out a high-level plan for positioning your product in the market and which channels you’ll be using to market it. You can also include a pricing strategy here.

8. Planning the product maintenance.

The product strategy doesn’t end with the launch; you’ll also have to include details on how you’ll support the customers. You should also figure out how the team will collect feedback on the product and use it to build the next version.

It is vital to ensure every step follows the original vision for the product and that it fits with the long-term business goals.

Measuring the Success of Your Product Strategy

A product strategy can be considered successful if it helps the business achieve its goals. But product development teams use many different metrics to measure their progress towards these goals. 

For most products, a key measure would be customer satisfaction. If customers are satisfied, the company will be on the way to achieving its business goals. Net promoter score or NPS which gauges how likely customers are to recommend the product is a common metric used to measure customer satisfaction. 

Product teams also use different metrics such as engagement rate, retention and churn rates, as well as revenue per customer to measure the success of product strategy. 

How Product Strategy Aligns with Overall Business Goals

Product strategy is a tool that ensures that the product helps achieve business goals. A detailed product strategy can guide the team throughout the development process, and ensure that every step — ideation, launch, marketing, and maintenance — is aligned with the business goals. 

However, for this, it is crucial that the strategy is built with extensive market research, input from all the stakeholders, and consideration of the available resources.

Common Pitfalls in Product Strategy and How to Avoid Them

Here are some of the common pitfalls while building and using a product strategy: 

Keeping a fixed strategy

Product strategies are built for the long term, but it should also be dynamic. Market conditions, user expectations, and business goals change and the product strategy should be updated accordingly. A competitor may come up with a similar product and your solution may not have a strong USP. Or maybe during user testing or other activities, new information may come up showing that the existing product strategy won’t work. 

There should always be room to evaluate and update product strategy when necessary. 

Assigning a single person to develop the product strategy

Ultimately, a single person may own it, but the strategy itself should be built in collaboration with all the stakeholders. Everyone on the team should have a clear picture of at least their role in the development process and should be able to give feedback. 

This will also ensure buy-in from all the stakeholders and will help streamline execution. 

Not using the product strategy

Product strategy should be regularly consulted to make decisions and to make sure that the product will help the business reach its goals. However many teams develop a strategy and let it remain in an unopened folder. 

A strategy that doesn’t consider the entire product lifecycle

Many companies build a product strategy with details only until the product launch or only details the features it needs. They often fail to consider customer support, marketing, maintenance and repair, and end-of-life for the product. This can create unexpected expenses and a product that may be too costly to maintain. 

Having no strategy

This is often the most common mistake when it comes to product strategy. Many teams don’t realize the importance of a strategy encompassing the complete lifecycle of a product. Team members often end up taking decisions based on their experience and intuition and the result may be a Frankenstein product. 

Ready to Develop a Winning Product Strategy?

A solid product strategy is key to launching a product that stands out and thrives. If you’re ready to turn your vision into reality, contact us today to get expert guidance on crafting a customized product strategy that drives success. Let’s build something amazing together!

Frequently asked questions

1. What is a product strategy?

Product strategy is an overall plan or approach to developing a successful product. It outlines the vision for the product, how it will be positioned in the market, and every stage from development to end-of-life. 

2. Why is a product strategy important?

Product strategy is key to a successful product. It guides everyone working on the product — from designers and marketing to sales and support — to plan their tasks and activities, make decisions, and make sure that all of them are aligned with the business goals. 

3. How to create a product strategy?

There are many approaches to creating a product strategy. But generally, it starts with extensive market research, and collaborating with different stakeholders to come up with a product vision, product USP, the business goals associated with it, and a product roadmap. 

4. What are the key components of a product strategy?

 A product strategy should define the vision for the product, its target audience, the USP, the business goals associated with it, and the product roadmap. 

5. How often should a product strategy be updated?

Product strategies are usually built for a couple of years, but it’s good to check the strategy every three months or so. Product teams should also update their strategy if there are any new developments that affect the product, such as a competitor launching a similar product, the business goals changing, or new information coming to light during user testing. 

6. Can a product succeed without a strategy?

Probably not. There may be some teams that have just built and launched a game-changing product that became an instant hit. However, a strategy significantly improves the chances of a successful product. 

7. How can LunarLab help with product strategy?

LunarLab has worked with startups and businesses in many different industries to develop successful products. The LunarLab team can help you with all the aspects of a product strategy, from market research to product roadmapping and complete product development.