The most important element for building a successful SaaS is the product.
But you can't just create a product and hope it does well. You need a market-winning product strategy — one that positions your product as the best choice for your customers.
In this article, we'll outline the steps you need to take to create an effective product strategy from scratch. We'll also cover some common pitfalls to avoid and a few best practices to keep in mind.
Let's start with the basics.
What Is a Product Strategy?
Your product strategy defines how you plan to compete in your market. It outlines what features and benefits your product offers, how you'll position it against the competition, and what you need to do to make it successful.
A good product strategy is essential for two reasons:
- It ensures that you're building the right product for your market.
- It helps you focus your efforts and resources on the things that matter most.
For example, your product strategy can help you decide what features to prioritize and what market segments to focus on. It can also help you make better decisions about pricing, marketing, and even R&D.
Creating a product strategy can be challenging, but it's worth the effort. With a well-defined strategy in place, you'll have a roadmap for building a successful product.
What Is the Difference Between Marketing and Product Strategies?
Your marketing strategy defines how you plan to reach your target market and persuade them to buy your product. It includes your messaging, channels, and tactics.
Your product strategy, on the other hand, defines what your product actually is and how it compares to the competition.
In other words, your marketing strategy is all about getting people interested in your product, while your product strategy is all about making sure your product is the best choice for your customers.
For instance, if you're selling shoes, your marketing strategy might focus on highlighting the comfort and style of your shoes. But your product strategy should focus on differentiating your shoes from the competition by emphasizing the quality of your materials and construction.
At the end of the day, the two strategies need to work together to create a unified message that resonates with your target market.
How Do You Create a Product Strategy?
There's no one-size-fits-all approach to creating a product strategy, but there are some basic steps you can take to get started.
1. Define Your Market
The first step is to define your target market. Who are you selling to? What needs or problems are they trying to solve?
Your market definition should include:
- The target customer: Who is your ideal customer?
- The problem you're solving: What need or pain are you addressing?
You might also need to include other factors, such as the size of the market, demographics, and psychographics.
2. Research Your Competition
Once you've defined your target market, you need to research your competition. What are their products and features? How do they compare to yours?
You should also look at who your customers are currently buying from and why. What are they looking for in a product? Why do they prefer one product over another?
The answers to these questions can help you understand your target market better and identify opportunities to differentiate your product.
3. Outline Your Product Strategy
Now that you have a good understanding of your target market and competition, it's time to outline your product strategy.
Product strategies can be divided into three main categories:
- Product-market fit: This is all about finding a successful niche for your product. You need to identify a market segment that is underserved or unserved, and then build a product that meets their needs.
- Differentiation: This strategy focuses on making your product stand out from the competition. You need to identify what makes your product unique and focus on highlighting those features.
- Low-cost leadership: This strategy involves creating a product that is cheaper than the competition, but still offers good value. You need to find a way to reduce costs while still providing a valuable product.
Even the best product strategies can fail if you don't have the persistence to see them through. You need to be prepared for setbacks and have the determination to keep going until you succeed.
What Are The Keys to a Successful Product Strategy?
Now that we've covered the basics, let's dive into the essentials. What separates successful product strategies from unsuccessful ones? How can you make sure your product strategy is on track?
Let's explore a few key elements:
1. Alignment With Company Goals
Your product strategy should be aligned with the goals of your company. It should support your business objectives and help you reach your targets.
For example, if you want to grow your market share, your product strategy should focus on expanding into new markets.
If you want to increase revenue, you need a strategy that focuses on increasing sales.
And if you want to become an industry leader, you need a strategy that focuses on innovation and differentiation.
Many founders make the mistake of creating a product strategy that's in conflict with company goals. For example, if you're trying to reduce costs, launching a new product that's expensive to build will be counterproductive.
2. Clear Messaging
Your product strategy should also have clear and concise messaging that resonates with your target market. This messaging needs to be communicated throughout your company, from the top down.
It should be included in all of your marketing materials, websites, and sales pitches. It should also be echoed in your company culture.
Instead of trying to cram everything into your messaging, focus on the most important benefits of your product. Keep it simple and easy to understand.
A rule of thumb is to make your messaging “customer-centric.” In other words, focus on what the customer wants and needs, not on what you want to sell them.
Instead of “we,” use “you.”
Instead of “this is the best product,” use “here's how our product can help you.”
By shifting your focus to the customer, you'll be able to create messaging that resonates with them.
3. Measurable Goals
One of the benefits of having a product strategy is that it allows you to measure your progress and track your success. You need to set measurable goals that can be tracked and analyzed.
This will help you determine whether your product strategy is working or not. It will also help you make course corrections if necessary.
For example, you might set a goal to increase sales by 20% in the next quarter. Or you might set a goal to acquire 100 new customers in the next month.
Make sure your goals are realistic and achievable. And make sure they're aligned with your company's goals.
The SMART approach to goal-setting can be helpful for this:
- Specific: What do you want to achieve? More users? Better positioning? Less overhead?
- Measurable: How will you know if you've succeeded?
- Achievable: Are the goals realistic and achievable?
- Relevant: Do the goals support your company's overall objectives?
- Time-bound: When do you want to achieve the goal?
Charles Darwin once said that “it's not the strongest or most intelligent of the species that survives but the one that's most adaptable to change.”
This is just as true for businesses as it is for animals. The ability to adapt quickly to change is one of the key factors that separate successful businesses from unsuccessful ones.
Your product strategy should be adaptable so that it can respond to changes in the market and the needs of the customer.
This is especially true in today's world. The internet has made it possible for companies to launch new products and services at a rapid pace. The market is constantly changing, and you need to be able to adapt quickly to stay ahead of the competition.
Your product strategy should be a “living document” that can be updated and revised as needed.
No one person can come up with a good product strategy on their own. It takes a team effort.
Your team should include people from all parts of the company, including marketing, sales, engineering, and product management.
Everyone on the team should be able to contribute and share their ideas.
The team should also be willing to experiment and try new things.
The best product strategies are the ones that are constantly evolving and improving.
6. Testing and Feedback
Once you've put your product strategy in place, it's important to test it and get feedback from the people who matter most: Your customers.
You should constantly be testing new ideas and gathering feedback from your target market. This will help you determine whether your product strategy is working or not.
It's also important to get feedback from your team. They're the ones who are most closely involved with the product and should be able to provide valuable insights.
The best way to get feedback is through surveys, interviews, and focus groups. You can also use tools like A/B testing to measure the effectiveness of your product strategy.
What Are the Most Common Pitfalls That Companies Fall Into?
There are a few common pitfalls that companies often fall into regarding product strategy:
1. Focusing on the Wrong Things
When you're developing a product strategy, it's important to focus on the things that matter most to your customers.
You need to understand what your customers want and need, and then focus on delivering that value.
If you focus on the wrong things, you'll end up wasting time and money on products and features that your customers don't want or need.
Many products have failed because the company focused on features that the customer didn't care about.
Take BlackBerry, for example.
They focused on the physical keyboard and corporate email, but completely ignored apps and touchscreen displays, which ended up being the key features that consumers wanted.
This resulted in a sharp decline in market share, leading to the company's eventual bankruptcy.
2. Copying What Others Are Doing
There's nothing wrong with analyzing your competitors' strategy, but you need to make sure that you're doing your own thing.
Don't just copy what others are doing. Come up with your own unique strategy that sets you apart from the competition.
This is especially important in the SaaS industry, where it's easy to replicate what others are doing.
The “free trial boom” is a great example. Back in the day, a lot of companies started offering free trials in an attempt to compete with the increasing number of SaaS companies.
But, eventually, this became the norm and it stopped being a differentiator.
Now, companies need to find new and innovative ways to offer value to their customers.
3. Having a One-Size-Fits-All Strategy
When you're developing a product strategy, it's important to remember that not all products are the same.
You need to tailor your strategy to match the needs of your target market and the unique features of your product.
A one-size-fits-all strategy won't cut it. You need to be flexible and adapt your strategy as needed.
For instance, if you're selling a complex product that requires training and support, you'll need a different type of strategy than if you're selling a simple product that doesn't require any training or support.
4. Being Inflexible
As mentioned earlier, it's important to be flexible and adapt your strategy as needed.
Your product strategy should be fluid and ever-changing, based on feedback from your team and customers.
Don't be afraid to make changes to your strategy, as long as they're in the best interest of your customers.
5. Not Taking Risks
To be successful, you need to take risks.
It's important to experiment with new ideas and see what works and what doesn't.
This applies to your product strategy as well. You need to be willing to try new things and experiment with different approaches.
Not everything will work, but that's okay. You can learn from your mistakes and improve your strategy based on that feedback.
Remember; the key to success is experimentation.
You Now Know How to Build a Killer Product Strategy
So, how do you go about creating a market-winning product strategy? It all starts with understanding your customers and what they want and need.
You also need to be flexible and adapt your strategy as needed, based on feedback from your team and customers.
Finally, you need to be willing to take risks and experiment with new ideas.
If you can do these things, you'll be well on your way to creating a successful product strategy.