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Practitioner’s Guide to Product Strategy

Building products that help customers achieve the outcomes that they desire over the long term is hard. Jeff Bezos has a great quote on basing your strategy on things that do not change. This quote captures the essence of strategy and long term planning.

Here are few elements that product teams should consider while building products:

Product_Strategy - Pandith Jantakahalli

What to build? is determined by three critical elements — outcomes that customers want to achieve, other alternatives that help customers achieve the same outcome, and your point of view.

Customer outcomes: It is best to define customer outcomes using a vocabulary that a customer would use. While it is typical to place emphasis on functional outcomes, it is crucial to identify emotional, and social outcomes. Functional outcomes can be defined by understanding the customer’s context, situation and constraints. Emotional and social outcomes can be defined by understanding motivations, where and how much energy the customer is expending to achieve the desired outcomes today, and “skill” level of the customer. Ask what will make the customer successful, before asking what will make your business successful. (Note: It is important to ask the latter question as well)

Alternatives for achieving the same outcome: In order to understand what to focus on while building your product, it helps to understand how the customer is achieving the outcome today. Pay attention to what they are dissatisfied with, and if the dissatisfaction is on an important attribute. You may observe that the customer is using multiple products to achieve the desired outcome, or that the alternative is not in the same “product category”.

Point of view: is crucial to the success of your product as it determines the scope of your product and your approach to helping the customer reach an outcome. For example, you may decide that project management is all about enabling better communication among all stakeholders. Thus focusing your efforts on enabling frequent and timely communication, rather than including support for Gantt charts.

It is useful to define every interaction with your product as “the product”. User guides, support interactions, blog posts, interaction on community forums constitute the product. Prioritizing each of these interactions for focus and attention will immensely impact success of your product.

Building what you decide: is especially hard with a steady stream of distractions that are typical in any business. A really “big” customer will sign-up if we build this feature now, lets build this really small/cool feature — it will take only a few hours. Product principles and sequencing decisions help rein in these distractions.

Product principles: While goals and metrics help communicate what to focus on and measure progress, they are weak in communicating what actions need to be taken at an operational level. This is where product principles are helpful. They help with alignment and cohesion of activities across different stakeholders by providing guidelines for action. Product principles must be anchored around customer outcomes and your point of view. Good principles includes how the user should feel before/while/after using the product. They enable faster decision making while ensuring alignment. Instagram has very clear principles — make every picture beautiful, make it super fast to upload a photo, and make it super easy to share photo across different platforms.

Sequencing: When to build a functionality/feature is as important as what to build, as it critically impacts the pace at which business outcomes are achieved. Good sequencing decisions take into account —limiters/enablers, impact, effort required, and any compounding benefits. Evaluating trade-offs in sequencing decisions is crucial — what is the impact of doing multiple small features vs. one large feature, should we focus on projects that drive more traffic when activation rates are low?

While customer acquisition is usually considered to be part of market strategy, I’m including this to highlight how product strategy informs customer acquisition and how feedback from customer acquisition informs product strategy.

Acquiring customers is greatly dependent on positioning, power of emotion in the customer’s decision making process, and your company’s strategy in tackling objections against using/buying your product.

Positioning: Position based on your point of view, and attributes that are important to customer (but poorly served by alternatives) for maximum impact. Good positioning evokes strong emotions and motivates the customer to take action. Positioning greatly impact pricing of your product. iPad’s positioning and anchoring around netbooks is a great example of effective positioning.

Power of emotion in decision making: A rational approach (based on utility and logic) to selling your product has a limited appeal among prospective customers. People find it extremely difficult to take action in the absence of emotion. Tapping into the motivations and true emotions of the customer are crucial for acquiring new customers.

Tackling objections: Customers do not just buy your product, but they switch to it from an alternative. Hence, it is important to make this switch as easy and painless as possible. For example, if you are building a ticketing system, make it is easy to import tickets from their current system. Leverage existing behaviors instead of asking prospective customers to create new ones. For example, Google Sheets retained formulas on Microsoft Excel and focused on improving the collaboration features. It is also important to focus on eliminating/reducing negative emotions like anxiety. Free 30-day trial, no questions asked returns policy can help reduce such emotions.

Measuring if customer outcomes are being delivered: Feature usage is a key indicator in determining if customer outcomes are being met. Feature usage consists of two important parts — reach (how many users are using a feature) and frequency (how often a feature is being used by a user).

It is important to establish baseline metrics for reach and frequency (for each feature), and run projects to improve these metrics on a continuous basis. If a feature does meet the expected metric or is not being adopted, the 5-whys technique is helpful for understanding the reasons and taking corrective action.

Reach/Adoption: Feature adoption can be improved by measures like building awareness, educating users on how it can help them, and suggesting the feature at an appropriate time. If feature adoption continues to remain low and is not helping customers achieve the outcomes that they desire, it is best to kill the feature. Killing features, simplifies the product and provides a great deal of flexibility in making decisions in the future.

Frequency: Frequency of feature usage can be increased either by resolving issues that prevent usage or by extending/modifying the scope of the feature. Nir Eyal’s hook canvas is a great framework for improving frequency of feature usage.

Staying relevant: A product can stay relevant by helping users become successful at what they are trying to accomplish and tracking any changes to customer outcomes and important attributes over time.

Badass users: Enable users to become experts at what they are trying to accomplish by growing their skills, and providing the necessary motivation. Design your product so that cognitive resources of the user is expended on what they are trying to accomplish, and not in using your product.

Tracking changes to important attributes and customer outcomes: As time passes it becomes increasingly important to track any changes to customer outcomes, and any changes to attributes that are important to the customer (It is possible that entirely new attributes become important to the customer). As building these enhancements are crucial, it is important to say no to items like “short term wins” (or distractions), establishing parity with a competitor’s feature set.

Summary: Product strategy should be guided by the goal of helping users become successful by achieving the outcomes that they desire, and focusing on important attributes that do not change.

Essay has been posted on www.jpppandith.in

 

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How to “Know” What Your Customers Really Want?

Focus on understanding the situation that the customer wants to resolve, not the customer

Product managers are constantly told that they must “know” or understand what customers really “want” or “need”. Did they tell you how? Did they say — understand what problems customers are trying to overcome? Should you focus on understanding the problem, the customer or both?

You will be better served if they told you to truly understand what jobs customers are trying to get done.

A “job” is a fundamental problem a customer needs to resolve in a given situation.
Focus on understanding the situation not the customer. Customers find themselves in a situation, with constraints and emotions. This situation forces a customer to take a decision to hire a product to get a job done. This helps a product manager understand what causes a customer to hire a product and why. Understand their constraints while they are in that situation (like time, capability to handle complexity) and the emotions they feel as they encounter a situation (like fear, anxiety, anger, frustration). Understanding the constraints helps in shaping the solution, understanding the emotions helps in pitching the product.

Customers rarely hire a product as soon as they find themselves in a specific situation. Repeated exposure to a specific situation causes the customer to take various steps to resolve the situation. Only if the steps taken fail to resolve the situation to their satisfaction, do they decide to hire a product (or seek a new solution). Understand the various steps taken and how their situation has changed over time. What outcomes were they dissatisfied with? This helps a product manager to understand key attributes or dimensions that are important to the customer. Each attribute or dimension is a potential differentiator. Understanding these attributes helps in differentiating and positioning the product. Which dimensions are important to the customer, but poorly served by other alternatives and competition? Understanding expected outcomes helps in creating delightful experiences. How can we provide outcomes that exceed the user’s expectation?

As the situation changes, the customer experiences various “pull” and “push” forces before they hire a new product. The pull forces are various hurdles that they have to overcome — an existing habit, will the solution work for my situation, will the change make things worse? The push forces are things that lead the customer to make a decision — the current solution sucks, that product seems interesting. Understanding these forces helps in designing systems around the product. A great product takes a systems approach to resolving a situation, the “product” is just one part of it.

What are the other benefits of this approach or methodology?

Helps you focus on alternatives available to get the same job done, hence pricing risk (under pricing or over pricing) is lower. You may realize that folks, who occasionally want to work on a document across devices, may hire email to do the job for them, not your file sharing application. Customers do not think in terms of product categories while seeking a solution. You may realize that a customer uses multiple products to get a single job done

Helps you understand the key trigger points in the decision making process (or key triggers in making the “switch” from an existing solution to your solution). You may discover that folks who use email for sharing documents across devices, begin to seek out a better solution on forgetting to email the document after working on it. It helps you understand what actions a customer takes as the situation changes, like research which product to hire, seek feedback on a particular product, or actually decide on which product to hire.

Helps you keep the product simple, road map is more aligned with what customers want. You can stop adding features because the competition does. Why move to a higher pixel resolution if customers are not printing photos taken on your cameras? Trade-offs decisions are easier. You may also discover other product categories you could compete in.

Helps you market the product better. Take a look at the Amazon Dash video. Notice the number of “personas” in the video?

Summary: Using “jobs” as the unit of analysis for all product decisions will lead to building of better products and delighted customers.

If you are interested in the methodology, you can go over the excellent research and content developed by Clayton Christensen (milkshake video) and the Re-Wired Group. The Re-Wired group has a course on Udemy on Mastering Jobs-to-be-Done Interviews to help understand the real reasons why customers buy a product.

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Role of a Product Manager

Ensure that the right things gets done in the right sequence

A product manager helps a company to achieve its goals by helping customers get their jobs done in an unique and delightful way, and getting customers to payin some form (money, attention, information).

Let me elaborate on the key responsibilities encapsulated in the above definition.

Getting jobs done: A parent purchases your app to keep her six year old daughter entertained over a three hour train ride. The parent did not purchase the app because it uses the latest technology or she liked how your app is designed/looks. A product manager must understand what “jobs” or outcomes a prospective customer is trying to accomplish. This can also be seen from the lens of solving problems. But I prefer the “jobs approach” as it provides a richer understanding of the context in which a product/feature will be used, why are they using it, what outcomes they are hoping to achieve, and what they need to stop using to begin using your product. A product manager must ensure that the team builds something compelling enough for customers to switch away from an existing solution that they are currently using. This framework is especially helpful in understanding your real competitors or alternatives that the prospective customer has to get a job done.

Lens of solving problems -“real problems”: A product manager must ensure she focuses the team’s effort on solving real problems that will help the company achieve its goals. “Problems” that are ignored are usually not worth working on. The pain killer vs vitamin framework is a useful for assessing the intensity of the pain/problem. Des Traynor’s perspective on“Making things people want”

Making things people want involves understanding a long standing human or business need and then using technology to:

take out steps

make it possible for more people

make it possible in more situations

Flawless execution cannot save a company/product/feature that chooses to focus on jobs/problems that nobody cares about.

Unique: Prospective customers will have an array of options to get their jobs done. The product manager must pick a customer segment and a dimension (like Amazon’s delivery of ordered items within 30 minutes) that is aligned with the most important outcomes/jobs that the customer wishes to accomplish. This decision is critical in ensuring prospective customers consider your product when they want to hire a product in a specific situation.

Trying to be everything for everyone or “unique” for the sake of uniqueness is usually a recipe for disaster. Choosing a dimension that is important the customer and has very little competition helps build a defensible business.

Delightful: While thorough and thoughtful attention to detail helps, Kathy Sierra’s talk on Minimum Badass User provides sage advice. Focus on improving the user’s life and/or skills. What “badass” powers does the user get by using your product?

“People don’t use your app because they like the app or they like you, they are using it because they like themselves, and they tell their friends because they like their friends!” – Kathy Sierra

Establishing reference customers is critical for scaling any business, and you will have reference-able customers only if you have delighted them while getting their jobs done, using your product.

Pay: In a business context, the product must generate enough revenues to grow and sustain the business over the long term. The product manager must be adept at picking a business model that captures enough value for the business to thrive and remain viable.

Another critical responsibility of a product manager is validating that the solution (product) that is built is actually helping the customer get their jobs done and delighting them in the process. Some product management frameworks mandate that the product manager must focus only the “problem space”. I strongly disagree with this specific recommendation. Validation of the solution/product that has been built is as important as specifying what to build. I am not advocating the product manager specifies how to build. Does that mean the product manager does not validate other critical decisions like validating intensity of a problem? No. I am specifically calling out this aspect as a product manager plays a crucial role in deciding whether to ship a product/feature based on this validation.

Summary: Prioritizing which jobs/problems to work on, which customer segments to target, which dimensions to compete and excel on, how to access customers, how to capture value, determining what will delight users, how to scale the business, and validating what is built are key responsibilities of a product manager.

Two other perspectives on the role of product management that I like are one by Marty Cagan

Discovering a product/feature that is valuable, usable, and feasible

and the other by Satya Patel

“Product management isn’t a role or a function, it’s a set of skills. Those skills help remove obstacles and grease the wheels so that the functional experts can do their jobs best. Product management also balances the needs of users, the business and the team and makes the difficult tradeoffs needed to keep pressing ahead. In that way, Product Managers are very similar to CEOs. Very few would argue that a company doesn’t need a CEO. Product managers are simply CEOs of their products. No organization should be without someone who has ‘product management skills’ and works to make everyone else’s lives easier.”

Note: Every interaction that a prospective customer or customer has with a company is viewed as the “product”. It is not just the physical product or the service that is provided. Examples: looking for information about the product on the website, reading the user manual to understand different options/modes supported by a specific feature, sending an email query to the support address.

Next Post: Based on this role definition I will cover skills that a product manager needs to posses to be successful.

Guest Post Contributed by Pandith Jantakahalli, Sr. Product Manager at Impelsys