Accelerating Growth Through Data Science
Pattern89 CEO R. J. Talyor shares how the High Alpha data science team informed their product and marketing strategy.
Product Development Strategy
It used to be that product-led businesses relied on outstanding salespeople to show off their products and close the deal with a customer. They took responsibility for giving clients what they needed and shaping their perception of a company.
The dawn of the digital age shifted the power from people to technology. A recent Forrester report showed that 75 percent of B2B clients prefer buying products through a website or app versus a salesperson. What does that mean for software companies looking to establish themselves in a marketplace?
It means the importance of product strategy has never been higher. It is not enough to build a great software product. A lot of IT shops around the world come up with ideas every hour, promising to make things easier for businesses.
What is a Product Delivery Strategy?
A product delivery strategy is a method you use to put your software product into the hands of your target audience. You come up with goals for your product and the tactics you will employ to achieve them. It should align with the vision of your organization and deliver on key business objectives. Your product strategy should provide clear guidelines to everyone in your company, including sales and marketing, when it comes to the value it will deliver.
The Importance of Execution
How you go about your product development strategy is the key to turning your product into the next must-have for businesses, or another abandoned technology product that failed to make an impact. You should be packaging your product in such a way that it essentially sells itself. The product should be the main attraction, not the bells and whistles of an elaborate marketing campaign.
The Telemetry platform helps you showcase and deliver your software product to business customers. It also gives you the ability to give each business client the kind of personalized user experience that keeps them loyal to your company.
Modern Product Development Process
Your product development process should outline the strategies you will use in achieving your overall vision when it comes to creating a successful software product. It bridges the gap between the high-level goals of executives and the execution of the day-to-day details by employees.
Establishing a product development process minimizes the risk that you might overlook viable business opportunities. Let’s do a breakdown of different stages of the product development cycle to get a better understanding of how to manage the product development process.
4 Stages of Product Development
- Coming Up With Ideas — You press your teams to come up with new ideas for products that meet the needs of a targeted customer base.
- Creating a Concept — Here, you research the associated costs that go into bringing the product to fruition, along with potential profits and revenue. It is also important to conduct a SWOT (strengths, weaknesses, opportunities, and threats) analysis on the software market niche you are targeting.
- Developing Your Product — You put your employees to work designing and building the product. They come up with a working prototype to use for market testing.
- Marketing and Rollout — Here, your software company goes forward with making the market aware of your product by launching various promotional campaigns. You allow the software to go through the product life cycle, which includes watching it ebb and flow in pricing and maturity.
Keep track of what you want to accomplish in each phase by mapping out a software product development process flowchart.
Product Development Strategy Template
One way you can keep yourself on track when it comes to the product development process is to come up with a product development strategy template. Your research efforts will turn up a variety of different formats you could employ. However, instead of merely copying what others have done, take the time to modify your product development plan template in a way that suits your company culture.
Conduct research to find product development examples of successful companies. Taking the time to go over a successful product development example of other companies in your niche can help inform how you want to proceed.
One clear market leader you could use to make part of your list of product development strategy examples is Coca Cola. While they are not involved in software development, the way they continually roll out new products and bottle designs to meet the needs of consumers shows how you keep your own company viable five to ten years down the road.
Try to figure out ways of integrating their successful product development plan template into your list of product strategies for your software product. It is better to use businesses with a proven track record of success for reference instead of blindly depending on random online information.
Elements Of Product Strategy
We talked about looking at successful product development strategies in the last section. Let’s focus on the elements of product strategy involved in delivering a software product. It can be the difference-maker in your product triumphantly entering the market versus flopping in the development stage.
You must have a solid understanding of why you are building the product. What story can you tell your customers about how your new software will help their business? Get this done early in the development process.
Having a solid brand narrative driving the development keeps you going in the right direction when it comes to satisfying the needs of future clients. It is one of the main product development strategy advantages.
Your software product development strategy should focus on solving the biggest issues for potential customers. It is easy to get lost in the weeds trying to resolve a complex problem that may not be high on the list of priorities for your target audience. Your product strategy framework should cover the reason for developing the product, who it is for, and when it needs to make it to the market.
One good idea you can employ to help with future projects is building a product development strategy wiki specific to your company. Some other types of product development strategies to employ include coming up with base models of your product to introduce to customers at a lower price point and establishing an exit strategy if the product does not perform up to expectations.
New Product Development Strategy
The next thing we want to look at is new product development strategy formulation and implementation. Yes, that’s a mouthful. What we are talking about is making sure your business accounts for how the organization can use the new product development as an opportunity to expand the current reach of your business into new markets.
It means you are not just continually refining and repackaging your old products. You are breaking ground on new ideas, which could mean shaking up some of your teams to get them out of their old thought processes.
New Product Development Theory
Using the following new product development theory ideas throughout your company departments can help your business come up with opportunities for new product development.
- Product-service system — Come up with business models focused on a cohesive delivery process for your product.
- Kano model — While this concept dates to the 180s, it still has a place in today’s product development cycle. The Kano model involves classifying attributes of your software product based on your client’s perceptions and how they affect satisfaction.
- Conjoint Analysis — This technique relies on using market research, conducted in the form of questionnaires, to examine the value assigned to different attributes of your software product.
- Product Value Matrix — Using one of these helps you prioritize the value of different business objects you wish to achieve with your product.
The success of your new product development strategy depends on getting the right people, processes, and tools in place.
New Product Development Process Examples
We already touched on Coca Cola as an example of one company that continues to refine its product development process. One reason for their continued success is their ability to expand beyond their base cola products. The company branched into the bottled water market with its Dasani product. They also sell products through subsidiaries like Energy Brands, which sells Glaceau Vitaminwater products, teas, coffee drinks, and other beverages.
One way that software companies can emulate Coca Cola is by developing and refining a core new product development process. It closely resembles the standard product development process, with a few additional stages.
7 Stages of New Product Development Process
- Idea Generation — What kind of software product are your target customers looking for. What can you do to address their largest business needs?
- Screen Ideas — Narrow your list down to a pool of concepts worth pursuing. Create checklists for each one to see how well it meets the criteria needed for a successful product launch.
- Develop the Concept — Come up with more concrete details of your product in consumer terms.
- Lay Out Your Marketing Strategy — Figure out how you can promote the product to the target market, come up with pricing and a distribution strategy, then do a business analysis of the entire proposal.
- Build the Product — Have your development team get to work on a prototype.
- Test the Product — Put the product through the paces to assess how well it could potentially perform in the market.
- Introduce the Product — Set up the marketing campaign and deliver your product to the market.
One of the benefits of developing new products for a business is that you don’t get caught flat-footed by the advancement of competing products. Continuously engaging in a new product development process keeps your company sharp and viable.
Ansoff Matrix Theory
The Ansoff matrix theory is a term coined for the mathematical model developed by engineer Igor Ansoff. His framework for helping companies expand in a growing market relied on the idea that long-term planning was a necessity for decision making if a firm was at the point where the pace of change in the market exceeded a company’s capacity to respond quickly.
Ansoff believed that effectively managing growth required making sure new products fit into a company’s strengths and overall mission while complementing their existing products. Product development strategy with the Ansoff theory relied on choosing from four different paths:
- Market Penetration — Selling existing products to your current customers using established markets. You may keep promoting new features now available on your new cloud platform, or a capability added to a website plug-in.
- Market Development — Promote your current products to a new customer base. You might begin pushing your CMS developed for educational institutions to healthcare firms.
- Product Development — Here, you focus on creating new products for your existing customers.
- Diversification — You begin bringing new products to untapped markets.
Turning the Ansoff Matrix into a visualization helps you see your current strategic position and make the best decision for your software company.
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