The relationship between consumers and products has a long and dynamic but calculated history. While consumer trends come and go, consumer favoritism is a powerful weapon. Companies looking to release new products face hurdles while navigating the marketplace. While a staggering 30,000 new products are released yearly to the public, the Harvard Business School found that nearly 95% failed. These are horrible odds for businesses and even worse for companies looking to release new products in the brave name of innovation. Protecting the integrity of their brand is a common struggle companies face when exploring a product release. 88% of consumers think authenticity is critical when determining what brands they like and support. A well-developed and comprehensive product strategy following an agile framework is essential for companies looking to release products and remain innovative. The strategy ensures the company is outperforming competitors, winning the loyalty, and trust of consumers, and avoiding business failure.
Back in the 1980s, the toothpaste company Colgate attempted to release a line of TV dinners to the public, and it was not well received. While most would agree they wouldn’t want to purchase their dinner from the same source as their toothpaste, it was a brave ploy for an innovation. While this misstep on Colgate’s brand wasn’t fatal, it was an expensive mistake. Lab42 found 63% of consumers sway to buy products with an established history of being in the market. Of the products on the market, 21% were consistently bought by consumers. While consumer needs evolve, favoritism and familiarity are reigning factors of success. This belief poses a massive challenge for companies looking to be innovative and evolve their service offers. Utilizing the impact of a product strategy allows companies to navigate these tricky waters.
The Harvard Business School found that lack of preparation was the most cited flaw in introducing a new product. A product strategy protects companies from under-preparation by keeping them on a specific guide, similar to a business model. A product strategy is a structured framework that outlines how a product or service will be developed, marketed, commercialized, and distributed. It is designed to capture the minutiae, the grand scheme, and everything in between. The product strategy is a catalog of information that prevents escalating risks that lead to a drain on operational budgets.
A company’s business lifecycle is dependent on how innovative they are. Remaining stagnant and failing to evolve with current technology and trends translates into regression. Innovation means long-term sustainability for a company. Without innovation, a company is tittering on the hairy edge of demise. Innovation is a critical business imperative, and an agile product strategy aids the process and development. 93% of business executives believe that organic growth with the help of innovation will contribute to more substantial revenue growth.
Achieving innovative products is a fluid process requiring constant maintenance and improvement. An uninterrupted flow of testing, monitoring, and improving the product and its strategy as necessary to adapt to market changes and customer needs. The dynamic nature of the market makes it a breeding ground for waxing and waning behaviors. Staying ahead of these shifting trends and creating ways to interpret, predict, and adapt to them is critical. Implementing an agile product strategy facilitates innovative product creation extensively. The high level of flexibility in an agile methodology provides a process that fosters and creates a place for those changes to happen.
Agile and waterfall are two different methodologies used to complete a process. An agile workflow takes a nontraditional approach and challenges the linearity of a waterfall framework. It separates processes into chunks that are reviewed and achieved by cross-collaboration of the team. Agile methodologies encapsulate high flexibility and an emphasis on continuous improvements. The workflow isn’t done in steps but in an iterative manner. Waterfall methodology is a breakdown of the process through a linear approach. The process allows for collaborative steps, but its structure may impede progress.
Regarding the best methodology, most companies prefer agile simply because it has a higher threshold for adaptability. It’s more receptive to innovative products because its framework is more fluid. Collaboration is a massive hallmark of innovation, which works best in an agile framework. With how many areas are susceptible to changes, such as market or consumer trends, agile frameworks respond best. Zippia found projects that follow an agile workflow are 1.5x more successful and had a completion rate of 64% versus projects completed with a waterfall method were only prosperous 49% of the time. Increased productivity, accountability, collaboration, prioritization, and feedback are all benefits of an agile approach.
The success of a product strategy heavily depends on how informative it is. When releasing innovative products, companies must conduct and incorporate research and insights around all elements that affect the product and its release.
Market research is a vital asset to a product strategy, it provides companies with an understanding of the landscape. Going back to Colgate’s massive marketing faux pas, key insights could have predicted the backlash they received. An extensive exploration of market research involves analyzing the target market, studying competitors in the same industry, assessing the current state of the global economy, and understanding how the research aligns with the company's goals. The research leads to a fuller understanding of how the product will be positioned in the market for ultimate impact.
Without a strong following of consumers, a product is just an expensive mistake. Consumer trends and demand reveal critical information regarding purchasing habits and inclination towards products or services. This data helps construct and shape the structure of the strategy. By understanding the audience entirely, a company knows how to create and market a product that will attract consumers, leading to gross revenue. The strategy should be able to identify and answer questions about a consumer's lifetime. A well-constructed product strategy allows companies to walk a day in the consumer's shoes and then figure out how to sell them better shoes. Hubspot reports 66% of customers expect companies to understand their needs. These customers are willing to spend more if it means an increased positive experience. This is essential to turn a consumer into a customer, encouraging them to return and ultimately become a lifelong customer.
In tandem with the extensive analysis of customers and consumer trends, a key aspect of a product strategy is the research of competitors. For a company to remain innovative, it must explore its competition to differentiate. The Information Age found nearly half of all CEOs harbor doubts about the fierce competition and the disruptive forces it can unleash. Companies that allocate time to investigate their competitors and identify their strengths and weaknesses thoroughly will gain a comprehensive understanding of the market landscape.
A business operates like a machine with many parts that work together to generate revenue, pay salaries, and deliver ROI to stakeholders. The product strategy explores the relationship between the product and the company that creates it. How will this product generate revenue? Will it be the next cash cow or just tip over in a field? Determining this protects a company from funding a product that fails. It explores the best time to release the product to pack the biggest fiscal punch or consumers' purchasing patterns. Examining these questions prior to releasing a product allows for a sensible and calculated product release.
The state of the macro environment is essential to note in a product strategy when exploring a new product release. It reveals consumers' willingness and capability to spend. The Federal Reserve reported that consumer spending contributed to 54% of U.S. GDP in the second quarter of 2021 and is one of the most valuable macro performance indicators. Consumer spending trends fluctuate significantly and affect the timeline and probability of a company's new product development and release decisions. Monitoring the macro environment is especially important for big-ticket goods because they’re highly impacted. How a company spends and invests is dictated by consumer trends and macroeconomics. It’s essential to include tracking and analysis into a product strategy to understand the economy's landscape and its impact on consumer behavior.
Using the product vision is a guardrail for companies to ensure their goals are aligned. The vision generates a stronger understanding between the team and stakeholders. Product production from start to finish involves a gamut of team members, steps, and stages. A notable bottleneck for companies is having a collective understanding of goals throughout the team. The product vision is a tool to combat potential disconnects or process obscurity.
ProductPlan explores the main results of a product vision and why it's essential for companies.
The product strategy and product roadmap are closely connected. The product strategy provides a thorough overview of the product launch, while the product roadmap puts the strategy into action. The product roadmap's effectiveness depends on the product strategy's quality. The two remain aligned by incorporating the product strategy elements into the product roadmap.
A product roadmap is the secret behind every successful product, shielding a company from miscalculating mistakes. The main objective of a product roadmap is to strategically communicate to all parties the course of action, ensuring the team is on the same page. Product roadmaps have a sense of flexibility and are subject to change, an ability reinforced by agile principles.
The roadmap is broken into segments, such as weeks or quarters, keeping timeline expectations aligned. Sprints or short periods of time where specific tasks are completed are often associated with product roadmaps. A fundamental aspect of sprints is cross-functional teamwork to achieve the goal. Before the sprint, the team prioritizes the features or requirements to focus on. Sprints allow changes and adjustments to be made along the way based on feedback and learning. The product roadmap acts as a blueprint during the design and development of a product. It is helpful as a gauge of where a product is in development. The product roadmap visually represents dates, timelines, deliverables, milestones, and metrics.
A strategy without quantifiable metrics to determine its strengths and weaknesses is like a recipe without measurements: it might look good, but you'll never know if it's a success or a failure. Success metrics identify areas of achievement and improvement, facilitating optimal results from data-driven decisions. Metrics communicate progress to the team and instill a strong sense of trust and confidence in the strategy.
In today's fast-paced business environment, investment in innovation is critical to a company’s success. With rapid technological advancements and stiff competition, companies that prioritize innovative practices stay ahead. Companies embracing and fostering innovation through an agile product strategy are better equipped to adapt to changing circumstances and outpace their rivals. This approach optimizes efficiency, minimizes waste, and improves team communication. By implementing a product strategy, companies align their objectives and concentrate on the most vital features of their products. This enables them to respond rapidly to changes in the market, customer needs, and emerging trends. By adopting these practices, companies remain relevant, competitive, and profitable in the long run.