Product Development Strategy

If your core business is developing (supporting, maintaining) a product (or service), then your corporate strategy is usually focused on marketing/sales-oriented measurable goals such as unit sales or licensing revenue (or chargeability ratio), market share (or growth), or ROI for projects.

Essentially, these relate to SMART goals because the outcomes are measurable, but often what contributes to these goals are less measurable strategies - or are not seen as strategies at a corporate level. Essentially, the various approaches for achieving these outcomes should be quantifiable & comparable & relate to the goal.

Let's work through some examples. If your goal is to increase licence revenue by 10%, then you have several possibilities:

• sell more licences in the current markets
• expand into new markets
• increase the licence fee

If these are the possible goals, then what tactics could support them?

• sell more licences with existing relationships (cross-sell, in-sell)
• find more customers (raise brand awareness)
• justify a price increase (added value, price restructure/passing on costs)

There are obviously more avenues for achieving the same goal. but this will do for now. Suffice to say that, for each of these, a supporting strategy that is internally focused will both support the effort & contribute to the measurability & effectiveness.

To take each of these in turn; if you want to sell more licences to an existing customer, then the product must be structured in such a way that this is feasible - that is, there are feature modules, or else the licensing is seat or transaction based. Without a product strategy that delivers these capabilities, you cannot use this strategy.

To raise brand awareness, you can market the product to new targets, but this can only be effective with good brand reputation - an infrastructure around product support & product supportability that ensures that field issues are dealt with in product planning, & that the product (or service) is identifiable (& differentiable) within the market. This can only come about in the way in which the product is developed - both in terms of its feature set, & its deployment & use (or customer engagement model).

Thirdly, to increase the perceived value of the product, you have to have a product strategy that aims to provide something beyond new features - a step up in a product's applicability or usefulness. Even if intending to pass on the costs behind providing the product (for SasS), you have to build a product that can measure its own costs & report on them. This may sound obvious, but without a strategy in place, you have no way of aligning product development to the corporate goals.

Essentially, a product is only as good as what you build it to be, but a product strategy should be good enough to support the whole of the business' expectations. If your business is wholly dependent on the product, then product development strategy becomes a board-level concern.