Product strategy is a high-level plan that helps a company achieve its overall vision. An extraordinary vision needs a clear strategy to build great products.
It’s a high-level plan that helps you realise your vision or overarching goal. More specifically, the product strategy should describe who the product is for and why people would want to buy and to use it; what the product is and why it stands out; and what the business goals are and why it is worthwhile for your company to invest in it.
Product Strategy definition from the book Strategise by Roman Pichler
When a strategy is laid out, It is crucial to communicate it to influence engineers buy-in, gain traction from customers and investors. To communicate effectively, a strategy needs to be concise to explain in 30 seconds or less. This is where the elevator pitch framework comes handy for a product manager.
Elevator pitch, as its name suggests, is a short pitch given to a potential investors that takes no longer than 30 seconds similar to a short elevator ride. It helps the listener understand the key information about the product in 1 or 2 sentences.
Elevator pitch framework:
Elevator pitch framework provides you with the template which can be used to construct your strategy.
FOR [target customer], WHO [customer need], [product name] IS A [market category] THAT [one key benefit]. UNLIKE [competition], THE PRODUCT [unique differentiator].
Replace the words in brackets with what is relevant for your product and keep refining until it gets solid.
Here’s an example that could be a pitch for Instapaper app.
For online readers, who want to save articles for future reading, Instapaper is an app that saves web pages instantly to read it later on any device. Unlike Pocket, Instapaper is much simpler to use and makes the reading easier.
Core elements of elevator pitch framework.
- Target Customers
- Customer need
- Product name
- Market category
- One key benefit
- Competitor
- Unique differentiator
Let’s see what individual elements with a brief explanation and an example.
Disclaimer: Please note that the examples used in this blog may or may not be accurate in-terms of facts and current product positioning, so please use this only as fictional reference to get an idea of how to create or refine a product strategy.
Target Customers
Who the product is for is first element to focus on. Customer segmentation is crucial for product success. It is important to choose only one customer segment to focus. Customers can be categorised based on demographics such as Age, Location, Gender etc. If the product is meant for enterprises, then the target customer segment can be categorised based on the Industry and Company size such as Small, Medium, Large etc.
Target Customer examples
Tesla Roadster that was released back in 2008 targeted wealthy sports car enthusiasts as their cars are expensive for a middle class consumer.
Zoho corporation that created Zoho CRM suite initially targeted SMBs (Small Medium businesses).
Customer Need
It is the single need of the customer that is not met. A product becomes more valuable when it solves one real problem that exists with customers.
Customer Need examples
- Apple iPod creates the benefit of carrying 1000 songs in a portable music player that fits in a pocket.
- Tesla solved an important customers need that an electric vehicle need not comprise on the speed or range.
- Zoho CRM solves SMBs problem by providing a CRM suite that is affordable.
Product Name
Use your product name and not the jargons that defines it.
Product name examples
Based on our previous reference, the product name for Tesla would be its name of the car Roadster and for Zoho, it is Zoho CRM.
Market Category
Customers puts your product in one of their known categories hence, it is important to choose the correct one and start to promote and educate the target audience. It can be identified by observing and learning from customers. Avoid creating a new category unless if it is obsoletely necessary.
Category examples
- Zoho CRM is a CRM solutions
- Tesla Roadster is a electric vehicle
- iPod is a portable music player.
Key benefit
Customer benefit is the value that your product offers to the customers. Tip: Focus on the benefits that your product creates instead of listing the feature.
Key benefit examples
- Tesla roadsters is the fastest electric car.
- Tesla Roadster generation 1 offered the fastest car with the longest range. By stating speed and range, I have mentioned 2 benefits but we have to pick only one. I’m going to choose speed over range as the range factor would be very compelling in the competition segment.
- Zoho CRM is financially flexible.
- It is affordable for the new SMBs to get started with varying pricing plans offered by the product.
Competitor
Here you’ll need to identify the competitors by doing market research or by asking customers.
Competitor examples
- Tesla Roadsters competitor back in 2008 was Electric Vehicles that were previously released but failed to make a mark in the electric vehicle segment. Tesla also benchmarked the Roadsters with gasoline sports cars 🏎 that existed back then. However, for this example I’m going to compare it against the previous electric vehicles for simplicity.
- Zoho CRM competitor is Salesforce
Unique differentiator
Once the competitor is identified, you can state the unique difference compared to your competitor. Customer will compare several products against yours and it is important to identify your product stand out from the crowd.
Unique Differentiator example
1. Tesla Roadster offers the longest range.
2. Zoho CRM is quick and easy to onboard.
Let’s bring it all together;
For wealthy sports car enthusiasts, who seek innovation and excitement, Tesla Roadster is an electric car that goes from 0 to 60 mph in less than 4 seconds. Unlike existing EV vehicles, Tesla Roadster has longer range.
For small businesses, who need to engage with their customers, Zoho CRM is an CRM suite that is financially flexible. Unlike Salesforce, Zoho CRM is quick and easy to onboard customers.
Hurray! We have created a product strategy that takes 30 seconds or less to communicate using elevator pitch framework. Creating a simple product strategy is not easier and require to take hard decisions to eliminate the clutter and focus on the one that is vital for the customers.
Please feel free to share your comments on how the strategy can be refined further to make it more effective. Thank you for reading.
Thinking Alley 