According to Forbes, over 84% of digital products fail to meet or exceed expectations. This is often attributed to the absence or inadequacy of a robust digital product strategy within organisations.
As we enter 2024, a year anticipated to be marked by turbulence and transformative changes, the imperative for a strategic approach to guide the design and development of digital products becomes more critical than ever before.
What is a digital product strategy
A digital product strategy is a high-level plan that defines the unique value proposition of a new digital product (such as a website and an App), its target audience and how the product will meet key goals across its entire lifecycle.
It involves strategic decisions and tactical actions taken throughout the development of a new product or the refinement of an existing product. It focuses on customer needs, competitive advantage, product roadmap, development and launch into the market, to achieve desired user and business outcomes. In essence, a product strategy sits between a detailed product plan, specifying features and deadlines, and a broad product vision, which articulates long-term business goals.
What are the benefits of a digital product strategy
As the foundation for the entire product design and build process, it empowers your team to remain focused on customer needs, market dynamics and organisational objectives. Some key advantages of a product strategy include:
Enhanced visibility: It fosters transparency company wide, aligns stakeholders, communicates the company's direction to peripheral departments and showcases the viability of your product development process to investors.
Alignment and focus: It ensures that the product remains aligned with overall business goals and customer needs – and that everyone involved in executing the product works along in concert.
Effective planning and prioritisation: It aids in prioritising features and directing resources toward realising the product vision. Once the strategy is clear, detailing the roadmap becomes more straightforward.
Adaptability to change: it identifies potential disruptive factors that affect growth and success, and formulates appropriate responses to address those changes and capitalises on forthcoming opportunities.
With a well-defined product strategy, every department and colleague understands how the product aligns with their goals and what steps are necessary for execution, leading to an increased likelihood of your product's success in the market, capturing a larger market share and contributing significantly to the bottom line.
What should a product strategy achieve
A product strategy should:
Ensure that your product addresses the correct problem by understanding genuine market needs and solving real issues for your customers
Prevent the development of superficial "nice-to-have" features with limited market traction.
Foster product differentiation, enabling more effective competition and investor attraction through a unique selling proposition (USP).
Reduce the likelihood of significant revisions or wholesale rejection once the product is exposed to the market.
Steer your product towards revenue success, incorporating factors such as seamless market adoption, market-accepted pricing and a cost structure.
What does a product strategy look like
Consider the following:
Perspectives on your industry, including current trends and how these trends relate to your product.
Your target audience, including attributes such as their needs and pain points.
How customers currently address a problem and potential areas for improvement.
Your competitors to identify opportunities.
Overall product positioning in the market and what sets it apart.
In addition to the market perspective, factor in execution considerations, such as:
Specific product features and benefits.
Technology stack, selecting appropriate technologies and frameworks for development in consideration of scalability, security and compatibility with future enhancements.
Goals, metrics and key performance indicators (KPIs) to measure success.
Keep in mind that your product strategy is a living document. While it serves as the cornerstone for execution, it should also be reasonably flexible. This flexibility allows you to revisit and adjust it as you gain more insights about your users and the market.
Types of a product strategy
While a product strategy encompasses intricate details, it’s valuable to consider them from an overarching perspective before initiation. You can categorise product strategies into these broad types:
Leader strategy: Create a product with the goal of industry dominance. Businesses adopting this strategy invest heavily in innovation, marketing, and brand recognition to establish their product as the go-to choice in the market.
Niche strategy: Instead of attempting to cater to every need, tailor a product to a unique market segment. This specialised approach targets a smaller but loyal customer base, fostering increased brand loyalty and potentially higher profit margins.
Quality strategy: Provide an enhanced product experience that challenges existing market players. This can involve superior product quality, better features, or top-notch customer support, to gain market share or command a premium price for the experience.
Cost strategy: Emphasise product affordability, appealing to price-sensitive consumers and designed to scale to a larger customer base.
Platform strategy: Build a digital platform that seamlessly integrates with other products or a single product that links to several related products sharing common core elements. This strategy facilitates collaborative value creation, expanding market reach and often focuses on monetising the platform.
Time-to-market strategy: In fast-paced markets, prioritise swift development to lead in responding to market changes and customer feedback.
Keep in mind, that a product strategy may incorporate elements from several of these strategies.
The process of building a product strategy
Let’s get started with the “how” of an all-compassing digital product strategy. But first a cautionary note: in developing a product strategy, you must follow a collaborative process. Siloes just won’t work. That means ongoing conversations with product team members, different organisational stakeholders and, of course, your users. Here at Adrenalin, we follow a process that looks roughly like this:
Foundation and gathering inputs
Firstly, decide whether the digital product strategy is something you want to handle entirely in-house or if you should seek input from a digital product design agency to guide the process, or even outsource it altogether. If you choose an in-house approach, ensure you assemble a team with a broad range of subject matter expertise and backgrounds. The ability to envision features that align with customer needs is just as crucial as the capability to execute those features.
Next, take a step back and develop a comprehensive view of the market:
Who is currently operating in your product space?
Have there been any new entrants since your last assessment?
Have any competitor products undergone major updates?
In what direction is the market heading? Is it in a growth stage, or is it reaching maturity?
Are there any cutting-edge technological innovations that could enable you to bring something disruptive to the market?
Could technological changes quickly disrupt the plans you are putting in motion?
With this groundwork, you have now set the stage to begin building the product strategy guide.
Uncovering customer needs
Product success is all about the customer – and it’s all about building empathy. Gather information about your customer’s needs, wants, challenges and aspirations. Most importantly, identify the most critical problems to solve and make informed decisions about how to solve these problems with matching product features. One way to achieve this is by creating personas that represent different segments of your target market which adds depth to your understanding of your customers and helps keep customers front and centre as you build features revolving around personas. That said, you can’t solve every customer's need or want; it won’t be cost-effective. To prioritise your customers' needs, you should consider the feasibility of developing a feature, the cost of developing the feature vs. the potential profit and get feedback from customers.
While the significance of understanding customer needs has occasionally taken a backseat in recent years, 2024 is poised to mark a resurgence in the importance of customer research. In addition to creating personas, incorporating other tools like empathy maps, journey maps and experience maps is indispensable in comprehensively gaining nuanced insights into the user journeys and overall experiences.
Defining your product roadmap
Now it’s time to look towards execution. Your roadmap provides details about direction and progress – aligning objectives, features, and so on with a realistic timeline for product development, ensuring everyone is working towards the same goals.
A well-crafted product roadmap establishes a product vision by wrapping up prior discoveries, and expanding into:
Features and requirements: These are the specific functionalities and characteristics that the product must have to achieve its vision. They are derived from user research, competitive analysis and other sources of insight.
Technology stack: Be sure to include software, programming languages, frameworks, and tools for both frontend (user interface and experience) and backend (server, database, and application logic).
Goals: Think about SMART product goals — goals that are specific, measurable, achievable, relevant, and time-bound. It's important to define actionable metrics or key performance indicators (KPIs) that are tied to your product's goals.
KPIs: Measure your progress in meeting your objectives. For instance, paid subscription apps might focus on the number of new subscriptions per month, monthly active subscribers, and the number of unsubscribed users.
Timeline: Outline a realistic development timeline for implementing features and requirements. It is important to be flexible and adjust the timeline as needed to accommodate changing circumstances.
Managing expectations is a core part of the product roadmap because team members should know what’s expected – and stakeholders should know when to be patient. The roadmap should clearly communicate the product's direction and progress, making it easy for everyone involved to understand what will be delivered and when. Regular updates and revisions to the roadmap help keep expectations aligned and ensure that the product remains on track to achieve its goals.
Achieving alignment and buy-in
Now that vision, strategy, and roadmap are committed to paper, you need to go back to your stakeholders to obtain buy-in because progress (and support for when the going gets tough) depends on everyone being on the same page. If you want ongoing support from key team members, the C-level, and investors, you need to ensure that they understand the goals and objectives of the product and fully support what you’re trying to accomplish. Keep the following tips in mind:
Be clear about the goals of the digital product strategy and what you hope to achieve by engaging stakeholders.
Identify the key stakeholders who should be involved in the review. These are the people who have a vested interest in the success of the product and who can provide valuable feedback.
Prepare a clear and concise agenda for the review. This will help to ensure that the discussion is focused and productive.
Be open to feedback and be willing to make changes to the product strategy based on the feedback you receive.
Follow up after the review to ensure that the feedback is being implemented and that stakeholders are kept informed of the progress of the product.
Overall, stakeholder alignment and buy-in are essential for executing, but there’s another key aspect to stakeholder engagement. Going for alignment with stakeholders is also a terrific opportunity to get their expert input, and to help you identify potential risks and challenges that may need to be addressed.
Prototyping + MVP launch
Once you’ve adjusted your digital product strategy guide with the input and advice you received from stakeholders, you can start to create a prototype that reflects your product strategy. This initial version should include the core features and design elements necessary to demonstrate the product's value proposition and functionality. Once that’s ready, follow this process:
Test and evaluate: Once the prototype is ready, test it with potential users to evaluate its performance and gather feedback. This helps you identify areas where the prototype may require adjustments or improvements.
Iterate and adjust: Based on the feedback received, iterate on the prototype by making necessary changes to refine the product. This process may involve multiple iterations to achieve a product that better fits the market's needs.
Build a Minimum Viable Product (MVP): After iterating and refining your prototype, develop an MVP that includes the essential features and functionality required for users to test and experience the product. The MVP should be a viable version of your product that can be tested in the market even though it’s not the final product.
Collect user feedback: Use metrics tools to track user interactions, identify obstacles, and gather Voice of the Customer (VoC) feedback. This information will help you understand user needs and expectations and improve the MVP accordingly.
These steps transform your product strategy into a working prototype and MVP, allowing you to iteratively improve your product based on user feedback and market needs – getting a ready fit for the market.
Achieving Consistent Product Success Through Strategy
A digital product strategy provides clarity and direction for the product team, ensures that your product meets the needs of the market, and supports your bottom line. Yes, it takes a bit of time to put in place. But at Adrenalin, we’ve found it is worth the effort time and time again because this codified strategy supports every part of our client’s product development process – both creative and practical.
On the flip side, we’ve seen that leading a product team with an ill-defined product strategy guide is a bit like taking one step forward and three steps back. Product managers lose valuable time and resources to indecision and uncertainty and move forward in stops and starts, if at all.
With an aligned, connected product team and a clear sense of your strategic priorities, you’ll be well on your way to developing a product that truly solves user problems and brings about customer delight.
So, if you're serious about developing successful products that disrupt the market, don't skip the step of creating a digital product strategy. It's one of the most important things you can do to ensure your product’s success.
If you’d like to learn more about how to design and develop market-leading digital products and services, then be sure to get in touch with the Adrenalin team.
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