What is a product strategy? (and how to create yours)

A goal-first approach is your best chance at creating a successful product. Before you dive into the detailed work of building your products and developing new features, you want to do some strategic planning for your product. 

That’s what a product strategy is all about. 

If done well, you’ll be able to tie every feature back to a larger goal to add real value to customers and your business. 

This guide will answer:

• What is a product strategy?
• Why do I need a product strategy?
• How do I create my own strategy?
• What are the different types of product strategies?

A product strategy is a process of defining what you want to achieve with your products and how you plan to get there. 

In addition, a product strategy helps you understand the market you operate in better and guides your work to allow you to accomplish your goals. 

When you have a product strategy, you’ll be better positioned to deliver your best work. A strategy helps you determine how different parts of your product contribute to taking your business where you want it to go. 

This way, you avoid getting caught among all the details and losing sight of the overarching purpose behind your work. You’ll also be better equipped to provide high-quality support for your customers. 

For marketing and sales purposes, you will be able to articulate the product’s benefits and unique selling point (USP). On the flip side, generating anticipation and sales becomes more difficult without a product strategy.

When creating products and bringing them to market, things will likely change along the way and force you to adjust your plan. 

For example, a competitor might beat you to market with a similar product. Or perhaps you can’t find the right supplier for the materials you need. As a business owner, you need to be prepared to deal with these changes. 

You can make smarter strategic decisions about adjusting your plans if you have a clear strategy as a reference point. This is especially helpful if you lose resources or need to change your estimated timetables.

Now that you know why you need one, let’s run through the steps of creating one for your products. Simply follow the steps below. 

First, you want to map out what your vision is for your business and how your product fits into it. 

You can use a mindmap to add bullets about your:

• Competitors
• Marketspace
• Company strengths
• Company weaknesses
• Plan for going to market

You should see a picture emerge that demonstrates the problem your product will solve for your market and businesses and individuals you will help.

See also: Four business mind map ideas to inspire you.

Next, you want to add your goals for the product. Decide on a quantifiable way to track its success and set a deadline for when you need to hit your goal. 

Here’s what that might look like in practice:

• Product goal – Increase revenue
• Quantifiable goal – Increase by 30%
• Deadline – By the end of Q3 this year

See also: How to achieve your business goals.

Once you have a vision and clear, quantifiable goals to work towards, it’s time to set your product initiatives. These are the big themes of work you need to implement to achieve your goals. 

Think beyond the numbers and determine what your product aims to accomplish in the long haul. 

Let’s say you want to make changes to your mobile app. In that case, your product initiative might look something like this:

• Product initiative – Optimise app experience for new users
• Deadline – By the end of Q3 this year

Depending on your business type, you’ll also want to choose a focus that will help you achieve your goals easier. We’ve gathered information about the different ones, so you don’t have to. 

This one focuses on creating the best products for the lowest price. As such, a cost strategy assesses the resources used and determines where you can save money during production.

Cost strategies are particularly useful for low-effort purchases like household cleaning items. Low-effort purchases are ones where consumers don’t think too much about which brand they choose. 

So to attract more customers, you can create a product that achieves the same result as your competitors’ but for a lower price. 

For most products and services, price is only one factor in decision-making. There are many other ways you can make your product stand out to potential customers.

For example, you might sell a luxury product that only uses the best materials on the market. Or maybe your product has revolutionary features that no other similar product has. 

Whatever it is, a differentiation strategy focuses on giving your product the unique aspect that makes it delightful and memorable to customers. 

If you cater to many different customers, a focus strategy helps you create a product that appeals to a specific group of customers (buyer persona). 

You can target the needs of a select group of people and create a personalised solution for them. This way, you can gain brand loyalty when acquiring new customers. 

Many customers decide whether or not to buy a product based on the customer service they received from the company selling it. Providing excellent customer service helps you build a valuable reputation as a trusted provider. 

A service strategy helps you determine how you can complement your product with the best customer service you can offer. It allows you to define the best approach to inspire brand loyalty by giving customers what they need.

If you need advice about improving your customer service, check out:

• How to improve customer service
• Four factors that make good customer service
• Customer service tools for small businesses

As you incorporate your product strategy into your small business and draw in more sales, it’s important to organise your finances well. Modern accounting software like Countingup can help you keep up with it all. 

Countingup is the business current account and accounting software in one app. It automates time-consuming bookkeeping tasks for thousands of self-employed people across the UK. 

Save yourself hours of accounting admin so you can focus on growing your business. 

Start your three-month free trial today.