To build a successful SaaS company today, you need an amazing product. There are more SaaS products being built than ever before, so to build a products that stands out, you need a strong product strategy. But what exactly is a product strategy and how do you develop yours? In this post, we’ll cover a step-by-step product strategy framework that any SaaS company can use to ensure that they’re building a product that solves a specific need, is positioned to win in the market and has an effective plan to attract and retain customers.

What is a product strategy?

Your product strategy is the bridge between your product vision (more below) and your product roadmap. It’s how you move from a high level concept to bringing your product to life and getting it in the hands of real users. Your product strategy can be used to align and rally the various teams and resources that you need to build a successful product. 

Your product strategy also serves as a north star to ensure that you continue moving in the right direction when the inevitable twists and turns of building a SaaS business present themselves. Without a strong product strategy, you risk losing the big picture as you encounter the latest fire that needs to be put out, resulting in a failure to deliver real value to your customers and ultimately, a failure of your business.

So how do you build a winning product strategy? Our product strategy framework will guide you through building that winning product strategy. 

 

11 Key Elements of a Winning Product Strategy Framework

The product strategy framework below will get you well on your way to building a winning product strategy. While each of these could be a post of their own, this overview should get you pointed in the right direction.

 

1. Define your product vision

Your product vision is a high-level, aspirational statement that explains the why of your product. The distinction between what and why is important. Your product vision shouldn’t be a statement of what your product is, it’s a statement of why your product matters. How will your product improve your target persona’s life? How will it impact their business? Your product vision should be bold and ambitious, because it will serve as your north star to keep you moving in the right direction as you encounter the inevitable twists and turns of building a SaaS business. Your vision shouldn’t be something easily achievable. If it’s too easy, won’t make a big enough impact on your customers and won’t differentiate you from your competitors.

 

2: Understand your customer’s problem/ needs

Once you understand the high-level vision for your product, you need to develop a deep understanding of your target customers. A persona exercise is an effective approach to developing this understanding of your target customers. Start by defining specifically who your customer is. What are their goals? How do they define success? What are the pain points and challenges that they face every day? And are they willing to pay for solutions that could solve these pain points and challenges?

Answering these questions will help you understand much more clearly how your product fits in, the value that it provides and how it will improve your customers’ lives. After all, if your product won’t have a major impact on your target customer, and make their day-to-day easier, they probably won’t find it valuable enough to keep using, and paying, for it.

While you can begin your persona definition through research and reading, there’s absolutely no substitute for speaking directly to your target customers. So once you’ve built an initial understanding of them, set up user interviews to dig in deeper. These conversations can also be a great way to establish relationships that you can use to win early customers as your product comes to market.

 

3: Work on a clear product positioning statement

With an understanding of your vision and your customers, you’re now ready to use those learnings to develop a clear, concise positioning statement. There are a number of different positioning frameworks that you can use to help develop your positioning statement. But ultimately an effective positioning statement describes who your solution is for, how it helps and how your solution is differentiated from your competition. This exercise isn’t supposed to be easy, but if you’re really struggling to fill in any of those key components, it’s probably a good idea to stop there and ask yourself why you’re having trouble positioning your product. You may need to revisit one of the first couple of steps in the product strategy framework to resolve any gaps in your positioning.

 

4: Set clear product goals and objectives 

As you develop a better understanding of how your product will impact your customers, you need to measure how successfully you’re delivering on that value. Clearly stating your product’s goals will help you evaluate whether you’re successfully executing on your product strategy over time. And some of your goals may shift over time. For example, in earlier days, you may be focused on logo growth and engagement. As you mature, goals like revenue per account, cost of acquisition or customer lifetime value may become more important.

 

5: Establish your KPIs

Once you’ve outlined your goals and objectives, you should map specific metrics or key performance indicators to those goals. This is what will help you measure whether you’re successfully executing on your product strategy. These KPIs may include things like usage metrics, adoption metrics, growth goals and possibly roadmap velocity. It’s important to develop these metrics at this stage, so that you don’t change your definition of success as you execute on your strategy. These KPIs should help give you an honest assessment of how successfully you’re executing on your strategy.

6: Research and understand your competitors

You shouldn’t let your competition guide your roadmap, but understanding the competitive landscape is important to figuring out where you fit in. Do you have competitors who are solving the same problem that you solve in a similar way? If so, you’ll need to find ways to differentiate yourself. Perhaps your solution will target smaller companies, while your main competitor targets the enterprise. Or maybe your competitors have robust, but complex solutions, and your approach is simpler. You need to find the opportunity space in the market and craft your product strategy to capture it.

 

7: Analyze your market

“Market” in this context means the external environment that your product exists in. And competition is just one aspect of this external environment. In addition to competition, look at things like the regulatory environment and how changes might impact your strategy. What changes are happening in your customers’ industries that might impact their solution needs? What other non-competitive or complementary products are used by your target persona? Are there ways that you can leverage integrations or partnerships with these other products? And what other early stage players that might not be competitors now have the potential to come in and disrupt the market. How does the broader economic environment impact your prospects for growth?

There are a lot of market factors that may impact your strategy. In earlier days, when you’re more resource-constrained, you may only focus on a few key factors. As your business grows, market analysis will become a more important factor in the long term growth of your business, and you’ll likely invest more resources.

 

8: Build your product roadmap

The steps that you’ve now completed form the basis for your initial product roadmap. Of course, you can’t build everything at once. So with an understanding of your vision and how it maps to your target customers’ needs, you should focus on a minimum viable product (MVP) that will most quickly deliver value to your customers. Your MVP is the best way to validate the assumptions that went into your product strategy and roadmap. Make sure that the items in your roadmap align to your product strategy.

 

9: Validate your roadmap

Once you’ve established your initial product roadmap, you should leverage your target customers to validate whether you’re focused on the right initial features and whether your approach resonates with those target customers. As your customer base grows, you’ll be able to conduct roadmap validation by sharing feature previews with your customers, conducting customer surveys and user interviews.

Parlor Preview

In the early stages of growth however, you should use the same audience of potential customers that you used to develop your personas. You can reach out to these folks who helped you in the earlier stages and arrange additional interviews to validate your roadmap. You can share things like example screens and wireframes to bring your early roadmap to life. Use the feedback that you receive during these sessions to make important revisions to your roadmap.

10: Execute on your roadmap (in stages)

With your validated roadmap, you’re now ready to start building. Following MVP principals, execute on your roadmap in an agile approach so that you can get early features into the hands of customers as quickly as possible. Only with real customers really using your product will you gain the critical insights to understand what features and solutions resonate, and which ones miss the mark and need to be rethought.

11: Collect user feedback (and iterate)

Building on the point above, user feedback is the most valuable input to building a great product. At Parlor, we’re focused on optimizing the user feedback lifecycle. It’s a big topic that we’ve written about extensively, so there’s more than we can cover in this post. But there are a number of ways that you can collect user feedback. We find that collecting feedback right in your app provides some of the best engagement and most valuable feedback. But wherever your feedback comes from, you’ll need to establish an efficient process for managing the feedback, so that you can quickly understand what feedback is most impactful and iterate on your roadmap accordingly.

Let you product strategy guide your growth

A clear and well-defined product strategy is a pillar of a successful SaaS product and business. While developing an effective product strategy is a challenging exercise, the product strategy framework outlined above provide an actionable roadmap to get you started. Like your product itself, your product strategy is a living thing that will necessarily evolve as your business grows, as your product and customer base evolves and as the market landscape changes around you.