How do you know if your product strategy is successful?
Success metrics and voice of the customer. Ideally, at the time of defining a product strategy, you’ve also invested time in thinking about specific Goals that are important to measure progress against it. The goals should be time bound and specific and may include product usage, customer satisfaction, and financial performance. Several product organizations (including HubSpot, Google, Spotify, Twitter, LinkedIn, and Airbnb) like using the Objectives and Key Results (OKR) framework.
Metrics are important, but at the end of the day, the best true north is the voice of your customer. If your customer is happy, the rest will follow.
Our mission as a team is to clarify & accelerate the product roadmap. For us, clarification means a couple things:
- Do we know what we aspire to invest in over the next quarter, half year, or FY?
- Have we clarified our decision / prioritization framework of what causes an initiative to be above or below the line for what we will commit to?
- Do we have a shared understanding of the tradeoffs that will occur as a result of our decisions, and are we ok with the outcomes of the tradeoffs?
On the acceleration front, one helpful lens we've found has been:
- What are organic ways we can accelerate the roadmap?
- What are inorganic ways we can accelerate the roadmap?
Product & investment prioritization stems from company strategic prioritization, so it's critical to have a clear understanding of what the company is focused on and why, first and foremost. Organic levers to accelerate the roadmap could include things like streamlined internal process, quicker feedback & iteration cycles, strategic investment in particular product surface areas now to unblock / enable future developments down the road, and more. Inorganic levers to accelerate the roadmap could include product partnerships, technology partnerships, or M&A.
In all, we measure success based on the degree to which these efforts clarify the direction of the product.
Evaluating the success of our product strategy is a multi-faceted process that involves tracking various indicators and metrics. We closely monitor key performance indicators (KPIs) aligned with our strategic objectives, such as user engagement, customer satisfaction, revenue growth, and market share. The trickiest part of evaluating your product strategy is separating the value of the strategy from the quality of the execution. It's easier said than done. I've encountered numerous instances where a strategy was deemed unsuccessful, only to discover that it was the poorly executed tactics that actually led to the failure. If I had a nickel for every time I've come across this scenario, I'd have quite a collection of nickels.
Research and consistent data analysis helps us gauge the impact of our strategy over time as well as mitigate the disproportionate influence the execution has on the perception of the strategy. Validating the integrity of the strategy by conducting research on the concepts the strategy elicits is a great way to make sure you’re heading in a positive direction. Then conducting periodic reviews to assess whether we're achieving the desired outcomes outlined in our strategy, such as reaching target milestones or capturing new market segments (via the tactical executions) further solidifies the success of the strategy. Before you throw the whole strategy away, always try several executions and A/B test your way into it if you can.
Furthermore, ongoing feedback loops from customers, stakeholders, and internal teams provide valuable insights into the effectiveness of our strategy. Adjustments and refinements are made based on this feedback to ensure we stay on course.
Ultimately, the success of our product strategy hinges on its ability to drive positive outcomes for both our customers and the business, reflecting a harmonious blend of innovation, customer value, and market impact.
Determining the success of a product strategy can be assessed through various metrics. Here are some common ways to evaluate your product strategy:
Business Goals: Measure the extent to which your product strategy aligns with and helps achieve your overall business objectives. Key performance indicators such as revenue growth, market share, profitability, and customer acquisition can reflect the success of your product strategy.
Customer Satisfaction: Evaluate customer feedback and satisfaction metrics, such as Net Promoter Score customer surveys, ratings, and reviews. Positive feedback, repeat purchases, and increased customer loyalty are indicators that your product strategy is resonating with your audience.
Market Share: A growing market share indicates that your product strategy is effective.
User Engagement and Adoption: Assess user engagement metrics like active users, time spent on the product, and user retention rates. High levels of user engagement and increasing adoption rates suggest that your product strategy is resonating with users.
Return on Investment (ROI): Analyze the financial performance by measuring the ROI. Evaluate the cost of developing, marketing, and maintaining the product against the revenue generated.