It is amazing to see how easy it is to dive straight into product development without first figuring out the product strategy or how often it feels like you’re just drifting without a clear sense of direction on a product. Companies like people need to know where they’re going and that’s where product strategy comes in. Let’s start by exploring the concept of product strategy.

What is product strategy

A product strategy is a high-level plan describing what a business hopes to accomplish with its product and how it plans to do so. The strategy should answer key questions such as who the product will serve, how it will benefit them, and the company’s goals for the product throughout its life cycle.

Why is Product Strategy Important?

Plenty of companies act mostly in a reactive fashion. They respond to a never-ending cycle of events, put out fires, reacting to competitors. 

Also, it’s very common to see product teams that function as order takers. They take orders from salespeople who may understand what customers want, but represent limited perspectives, typically driven by short-term motivations, like quarterly / yearly revenue. 

Some product teams may take orders from senior leadership, who may have invaluable vision to share, but tend to shift their focus frequently, as they get excited about new ideas and possibilities

Companies float around and change course so frequently that nothing ever gets done all the way. 

Therefore developing a winning strategy is critical to the success of your product. Building out a product strategy before you begin development is necessary because it serves three valuable business purposes.

1. A product strategy provides clarity for your company and your team.

2. It helps you prioritize your product roadmap.

3. A product strategy improves your team’s tactical decisions.

Fortunately, there is a simple and effective tool that can help you develop a clear and concise strategy: the Elevator Pitch Framework. 

Elevator Pitch framework

If you boil down your strategy to its essence, you should be able to sum it up in one or two sentences. If you can’t do that, it probably means you still haven’t figured out some important points or that you’re avoiding making some key choices.

If you can fill up the below sentence properly it means you have worked out your product strategy. If not, then more work is still to be done.

For (target customer), who (customer needs), (product name) is a (market category), that (one key benefit). Unlike (competitor), the product (unique differentiator).

Here are a few examples of elevator pitch statement of a few popular products in the market:

SalesForce

For small businesses without a CRM solution who need to control their costs, the Salesforce is a CRM solution that is financially flexible. Unlike Siebel or managing customer relations manually, Salesforce is quick to set up and easy to use.

BMW

For educated affluent males ages 35 to 55 who seek excitement and luxury, [the] BMW Series 3 is a family luxury sedan that provides a great driving experience. Unlike Audi or Mercedes, [our product] BMW is fanatical about engineering quality. 

Determine Target customers

To ensure product success, it’s crucial to determine a specific target audience. Even products with broad appeal often start with a narrow focus, like Facebook, which initially targeted college students in the US before expanding. Limited resources are better invested in creating value for a distinct audience, rather than spreading thin and failing to satisfy multiple groups. Identifying the target customers helps in optimizing product development efforts effectively.

Fill in customer need

To create a successful product, it’s essential to address a genuine customer need. Avoid pursuing solutions based solely on technology capabilities or hypothetical implementations. Instead, focus on identifying real problems or needs that exist for your target customers. A customer-centric approach ensures that your product provides meaningful solutions and delivers value to your users.

Choose market category

Choosing the right market category for your product is crucial for customer understanding and decision-making. Customers naturally categorize products to compare them to familiar alternatives. Identifying the category requires talking to customers to learn how they perceive your product. While your product may seem unique, it’s usually best to embrace an existing category to help customers relate. Designing and positioning your product within a specific category sends a clear message to your target customers, guiding their perceptions.

Fill in the key benefit

Key customer benefit is different from product features. Features describe the product’s capabilities, while benefits represent the value it brings to users and what it helps them achieve. Customers are driven to adopt products for their benefits, not just features. Its important to determine the one most crucial benefit that influences the customer’s decision to choose the product.

Add competitors and alternatives

Identifying relevant competitors is crucial for understanding the customer adoption decision and building a compelling product that competes effectively. To avoid missing important alternatives, it’s essential to approach this from the customer’s perspective, not your own biases. Understanding the available options from the customer’s viewpoint is vital for crafting a successful product strategy, even if some alternatives might not be traditional competing products or companies.

Determine the product differentiation

Its important to identify product’s single most important differentiator, the unique aspect that sets it apart from competitors. While multiple products may offer a similar key benefit, differentiation helps the customer decide between them. The differentiator is not necessarily the most crucial feature or benefit but something that stands out and gives the product a competitive edge. It can be identified by analyzing competitors, seeking customer feedback, and leveraging core competencies. Differentiation can  also be achieved through factors such as price, service level, design, brand, or business model.

Conclusion

The Elevator Pitch Framework is an effective tool for creating a concise and compelling product strategy. I had some idea with my work in Product development teams but learned it formally from Teg Grenager and Eldad Persky on LinkedIn Learning, and it has helped me understand the tenets of a  successful product strategy and its importance.