Product management plays a pivotal role in driving the success of a company by driving the success of their products. To achieve product success, a Product Manager must conduct a regular Product Planning exercise to identify how the product is performing, where there are gaps in performance, and understand the root cause of those performance gaps. Based upon this analysis, the Product Manager can take corrective actions on the strategy and tactics to reach the desired Business Outcomes.
A regular Product Planning exercise follows this process:
All elements of this planning process are critical, but the root to success is defining the Product Growth Strategy and leveraging that strategy to align company resources toward achieving that goal.
The Product Growth Strategy
In creating the Product Growth Strategy, we must define two key elements. Growth Opportunities and the Strategy to Win within each Growth Opportunity.
In the rest of this post, I am going to focus on identifying Growth Opportunities.
There are five primary ways to grow within a market:
- Increase current customer spend: This strategy focuses on expansion of spend from your current customer base. Product managers achieve growth by enhancing customer engagement, increasign usage, and upselling additional features or products. This strategy is useful through all phases of the Product Lifecycle.
- Serve unmet needs: This strategy is focused on acquiring new customers in your current market segments that still have not fulfilled the need that your product serves. When your product is in the growth phase of the product lifecycle, there is significant white space of target customers with unmet needs. As your markets reach the end of growth and begin transitioning into maturity, this type of white space will be much smaller.
- Enter new markets: This strategy is focused on leveraging your current products to expand geographically or into new segments with unmet demand. Once you have entered your beachhead market as part of the introduction phase, you are constantly looking for new market segments, which might include new vertical markets or new regions of the world. This strategy, along with Serve Unmet Needs, are the key driver of the growth phase in the Product Lifecycle. To support these new markets, you may need to make changes to your current products to align to specific needs of the market segment or region, but you will typically not create a new value proposition.
- Win competitors’ customers: This strategy is focused on your current target market segments with the goal of taking customers away from competitors based upon the competitor’s weaknesses and your strengths. While you can attempt this strategy during the introduction and early growth phases, serving unmet needs and new markets are much more attractive white space and the competitive takeaway becomes more of a focus as market growth slows down and you move into maturity.
- Deliver new value: This strategy is focused on growing in your current market segments by creating significant new value, by making major enhancements to your current products or introducing new products. This strategy leverages the established relationship you have with your current market segments and customers and enables you to bring new value propositions to them at a lower cost of sales & marketing based upon the strength of your brand in those markets.
Conclusion
By understanding these growth opportunities, supported by market analysis to understand the attractiveness, size and growth of each market opportunity, as a Product Manager, you can prioritize and select the growth opportunities that will best contribute to your organization’s strategy and business outcomes.
By explicitly identifying the market segments and growth opportunities, and communicating these across your organization, you will ensure alignment between your product, marketing, and sales teams, and through a focus on a defined strategy and measurable outcomes, companies can maximize their product’s market potential and drive sustainable growth.
If this article and the webinar has you interested in learning more about driving your businesses success through product growth strategies why not learn from our expert team through one of our product management training courses and become a AIPMM certified product manager.
