Strategies keep businesses moving. Good strategies help businesses thrive. And better strategies help businesses win in the market of their choice.
What is a Product Strategy?
Strategies provide the big picture to managers and leaders, who can guide their team members to execute milestone tasks. When times are uncertain, organizations need them more; well-defined product strategies help employees understand what needs to be achieved and allow them the leeway to figure out the how. Giving direction without specifying speed or execution methods builds autonomy in the team and provides for a more collaborative environment.
Why is product strategy important?
The product strategy helps managers prioritize features and timetables faster to meet the most critical customer needs. A well-planned product strategy focuses on the collective product development efforts and customer needs, market positioning, and the ultimate business goals. This focus on value enables the team to deliver a product launch with every feature in alignment with the original vision.
- Provides Clarity on what the team should do, resulting in increased productivity.
- Enhances Strategic Decision Making by laying the foundation for a thorough roadmap. Following some product roadmap examples can help you figure out which one will work best for you.
- Prioritizes feature sets and future actions of organizations so that the roadmaps are dynamic and meet customer needs
10 Product Strategy Examples
A product strategy is a high-level, general plan that helps product managers go into detail. It does not tell what exactly to do but gives essential directions on what can be done to launch the product or features in the best possible way. Few overarching new product strategy examples that can help organizations plan their future course of action better are mentioned below.
1. Differentiation strategy
Differentiation is a product strategy example when the product is unique compared to existing solutions in the market. The special features, which competitors don’t possess, become highlights in communication. The idea is to draw customers in through capabilities they may need to extract maximum value from the solution they are using. This can be achieved by developing an entirely new feature, including related features, and providing a comprehensive experience, increasing the product’s usability.
2. Quality strategy
Quality and reliability matter a lot in B2B software, as business-critical functions rely on them. Ensuring the highest quality of reliability, experience, and capabilities positions the product as the must-have solution. If the customers get accustomed to the high-end aesthetics, this is a good product strategy example to get easier buy-ins into the ecosystem and offer more solutions. It is also important to measure the customer satisfaction using metrics like nps vs csat.
3. Cost strategy
Making a good yet affordable product is the idea behind the cost strategy. Products using this strategy are usually priced at a lower price point than their competitors. New entrants into an established market tend to start with this strategy, especially if the product differentiators and other value-centric aspects are incremental. This strategy is contingent on gaining enough customers and streamlining the development process. The cheaper it is for product managers to develop a competitive product, the lower they can price it – but the focus should always be on improving the value provided. A pricing race often makes customers skeptical, as the belief that an inexpensive product can’t be of high quality is prevalent. This is a good product strategy example that nudges customers to pay more for something they believe adds value to their systems.
4. Focus strategy
Product vendors operating in the B2B sphere can gain much using a focus strategy. Focus strategy allows organizations to develop features for a well-defined segment. It helps them target a particular demographic, geographic area, or problem segment across industries. Having a place to focus on also allows vendor organizations to be the thought leader in the sphere, which can attract newer clients looking for similar solutions.
5. Pioneer strategy
Providing quality without considering pricing is a high-risk, high-reward strategy, but product organizations can pull it off by hiring the brightest minds and building the best versions possible. But this expertise is costly, and the product’s final pricing reflects this. These products are often considered ‘luxury,’ but areas like data security and finance transactions need the most evolved versions of products at all times—which only makes the product more desirable. This example of product strategy forces customers to streamline their processes to make the most out of the solution they’re using.
6. Niche strategy
While focus strategy narrows the field of competition, niche strategies allow product managers to focus on narrowing the features to address the specific needs of a small group. Unfunded startups usually start with a niche strategy by serving a very narrow target audience to test their assumptions. Once they have a foot in the door, they find ways to expand their relationships & grow their target audience as well as their products.
7. Challenger strategy
This global product strategy example is similar to competing on price strategy but also encompasses competing on features provided by the market leader. The aim is to challenge the price, efficiency, or feature set status quo. Product managers should be clear about their product’s vision to identify areas where they can challenge the leaders. They can do so by creating an economical version of a popular product, a faster version of a feature, or any process that saves time and resources for customers.
8. Equivalence strategy
As the world progresses towards digitalization, businesses are also looking to make the most of the change. That means small, specialized, or otherwise, boutique organizations need solutions that cater to their payrolls, vendor management, points of sale, and various other touchpoints. Targeting such new product users can also give product vendors a captive audience waiting to be delighted.
9. Requests-based strategy
When managers and teams are clear about the goals of the product, they can be dynamic about their strategy. By establishing a robust feedback mechanism, product managers can streamline feature requests and evaluate them against the product vision. These requests can be discussed in an open forum involving all team members, and decisions on further actions can be taken.
10. Upselling strategy
Suppose the product is matured and serves a saturated market. In that case, it makes sense for product managers to consider adjacent problems that can be solved – and provide the highest quality solutions. They can emphasize user benefit by measuring and analyzing product awareness, sales leads, or customer lifetime value (CLV) results.
Conclusion on Building a Product Strategy
Ideally, product strategy should focus on creating a product or solution – but to arrive at that, product managers have to sit down with various stakeholders like customer service or sales teams to identify unique user needs. By understanding how customers use the product, they can understand the reasoning behind any issues raised. This understanding helps them assemble a list of new features or processes they need to work on and build the strategy on a solid foundation.