8 Steps to Acing a Customer-Centric Product Strategy
There's nothing worse than sinking time, money, and resources into a product that flops, but that's precisely what you risk doing if you're not using a customer-centric product strategy.
A customer-centric product strategy puts the customers at the core of every product decision and focuses on providing solutions that satisfy user needs. It creates a better understanding of your users’ needs and leads to more efficient use of resources because you're more focused on creating a product that customers will actually want. A customer-centric product strategy can also increase customer satisfaction and retention and create more revenue for future products.
Whether you're creating a product strategy from scratch or revisiting an existing one, follow these steps to ensure you build a user experience that satisfies customers and helps your brand grow.
1. Identify Your Target Audience
The first step is the most critical: define your audience. Clearly identifying and researching your target audience will ensure you have a product that adds value to their lives—and adds revenue to your bottom line.
Collect feedback from your target customers through quantitative surveys and/or qualitative interviews. When developing your survey, consider questions that relate to the respondents' backgrounds and goals. The questions you asked should be designed to draw out actionable feedback and uncover the daily challenges they face. This gives you valuable insight into your users' pain points and how your product can solve them.
Based on the responses you receive, create user personas representing your product's key customers. Each user persona should include unique:
- Demographics (e.g., gender, age range, location, job title)
- Goals and needs
For example, let's say you develop a project management app that helps project managers track time, measure their team's progress, and collaborate on projects within the organization. One of your user personas might look something like this:
Name: John Small
Occupation: Senior Project Manager at a B2B SaaS company with 80 employees.
Demographic: 42 years old, is married with two kids, and lives in San Francisco. Has a high-income level.
Behaviors: Strong attention to detail, uses the internet constantly for work and leisure, prefers remote/hybrid work model.
- Because John supervises multiple projects that involve different roles and responsibilities, staying on top of all of them can sometimes be difficult
- John is usually overloaded with lots of crucial information that he has to share with the team members as per their roles.
- To maintain transparency and visibility, he has to constantly follow up with stakeholders and stay involved in every stage of project development
2. Define Your Product Vision
The product vision describes the overarching goal you are aiming for and the reason why you're creating the product in the first place. The product vision should emphasize your customers' problems and how your product will solve those problems.
Think of the product vision as the north star that will guide you and your team as you develop your product strategy and keep you focused until you reach your desired destination.
Use these three steps to either create or revamp your product vision:
- Identify your Unique Value Proposition (UVP): A UVP is a clear statement of your product's benefits and how it stands out from the competition. Your UVP should be compelling enough to attract new customers and retain current users.
- Listen to what customers say about your product: Inspiration can be drawn from user feedback and listening to what users have to say about your company. What positive feedback do customers often give about your product? Identify the most celebrated attributes and use them as the foundation of your vision and overarching strategy.
- Keep your product vision short: A product vision must be easy to communicate, so keep it brief.
Here are some of our favorite product visions:
"We're in business to save our home planet." - Patagonia
"We're on a mission to make work life simpler, more pleasant and more productive." - Slack
"The mission of LinkedIn is simple: connect the world's professionals to make them more productive and successful." - LinkedIn
3. Outline Your Strategic Goals
Next, you'll need to identify business goals that align with your product vision and audience needs. Creating specific goals and then working backward to achieve them creates a more efficient and focused product development process.
Strategic product goals should be specific and measurable. An example might look like:
- Drive 30% more signups within the next six months.
- Generate 50% more revenue within two years and hire more people for your product team.
- Reduce churn by 35% by the end of the year.
4. Run a Competitive Analysis
After you've nailed down or adjusted your vision and goals, you'll need to find out how you stack up against your competition. Monitor your competition closely to understand what they're doing to attract and serve their customers and then identify ways to beat them.
To ace your competitive analysis, here are a few things to keep in mind:
- Overall revenue: What is the current financial state of your competitors? How has their revenue increased or decreased throughout the years?
- Product features: Does your product have unique features that make it appealing to users? Or what features do your competitors have that you don't?
- Marketing and advertising strategy: How do your competitors promote their products? Which marketing channels do they primarily invest in to reach their target audience? Where do their users interact with them the most?
- Strengths: In what areas does your competition stand out? How do you compare to them in these aspects?
- Weaknesses: Conversely, in what areas are your competitors falling behind, and why? Are there any areas where you're outshining them?
- Pricing strategy: Does your competition offer more competitive pricing to their customers?
- Online reviews from customers: What are your competitors' customers saying online about their products? What frequent complaints from users often come up?
Besides doing your own independent research, it's helpful to ask your customers and prospects for their thoughts on your competitors. Ask what they know about different brands, if they've used them before, and what they liked or disliked about their products.
The competitive analysis phase is also a smart time to circle back with prospects that ultimately went with your competitor's product instead of yours (your closed-lost deals). If they're willing to connect, ask them to compare your product with competitors. You may uncover ways to strengthen your existing product—or to even win those people back on your side.
5.Validate Your Product With User Feedback
Product validation involves using customer feedback to steer your team directly toward what your users need. It also lets you test whether your assumptions about your product hold true in the real world.
We've found that these three methods are the best to help you validate your product using customer feedback:
- Set up customer interviews: One direct way to connect with your users is to set up customer interviews. Prepare questions in advance and actively listen to their insights.
- Run customer surveys: Keep your surveys short and sweet.The longer the survey, the more likely people are to abandon it.
- Offer usability tests: Consider offering a beta version of the new feature to your customers. This usability test helps you understand if your solutions resonate with your target audience and gives you a solid idea of how well your product will do in the market. It also lets you proactively work out the kinks in your product strategy instead of scrambling after launching your product.
After you've collected customer responses, it's time to analyze what you've gathered and use any trends that stand out to inform your product strategy process. For example, you might find that some proposed features are more popular, but others may have a higher potential for adoption. Or you might discover that certain product or feature updates could have a huge impact on your revenue.
6. Prioritize Product Features Based on Consumer Input
Knowing which features your customers care about most is vital to building a customer-centric product strategy. Otherwise, you risk sinking time and money into a product that doesn't resonate with them.
We've found that these frameworks are the best for prioritizing key roadmap initiatives:
The prioritization model MoSCoW means Must have, Should have, Could have, Will not have. It's a great way of assessing what features need to be included or excluded based on your customers' needs. For example, let's say you're developing a customer service platform that allows representatives to respond faster to customer queries and requests across different channels. Using the MoSCoW method, your strategy might look something like this:
- A clear system for tracking tickets
- Live chat and messaging
- A fast website
- A user-friendly design
- A reporting dashboard
- A knowledge base
- A blog
- A community forum
Will Not Have:
- Gated content
RICE Scoring Method
The RICE scoring method is a feature prioritization formula that stands for Reach, Impact, Confidence, and Effort.
Reach: How many people will the new product functionality reach in a given timeframe?
- For example, if you think it will drive 100 new users, then your reach score is 100.
Impact: What impact will the new feature have on your company? For example, will it be an increase in conversions?
- Here are the criteria to measure this: 3 for "massive impact," 2 for "high impact," 1 for "medium impact," 0.5 for "low impact," and 0.25 for "minimal impact."
Confidence: How confident is your team about the feature's potential impact? Do you have data to back up the decision?
- To rate this, you use 100% for "high confidence," 80% for "medium confidence," and 50% for "low confidence."
Effort: Do you have the resources to complete the new feature?
- For example, if five people will be working on the latest product, your effort score will be 5.
Based on the numbers you collect for each category, you then calculate your total RICE score: (Reach × Impact × Confidence) / Effort
Once you've made your calculations, sort the projects by their total score in descending order—the greater the score is, the better you're optimizing resources. Thus, you can focus on the most significant tasks, understanding whom you will impact, why, how, and how soon.
The Kano method prioritizes features based on which are most likely to satisfy customers and the investment needed to build them. It divides features into three different groups:
Basic: These features don’t necessarily drive your customers crazy but are needed for your product to work.
- Example: seamless call functionality on your cell phone
Performance: These features make a significant difference in your product and make them choose you over the competition.
- Example: Longer cell phone battery life
Excitement: These features are any upgrades that boost customer satisfaction during their product experience.
- Example: A camera resolution upgrade on a cell phone
7. Identify Your Key KPIs
To maximize your time and deliver the most value to your users, you must have a clear idea of which customer experience metrics to focus on. If not, you'll have no way of knowing whether your product strategy is producing the results you want.
We recommend keeping an eye on these four customer experience metrics:
- Product-market fit: The use of metrics like customer retention rate and profit margin to determine whether your product features meet customers' needs. Measuring product-market fit before developing a new feature also allows you to check your assumptions about your value proposition against real feedback before you devote bandwidth to development.
- Churn rate: The number of users that leave your platform within a specific timeframe. While churn is inevitable, you can minimize it by analyzing data from lost customers. For example, with UserVoice, you can segment your data by users and see which features were popular amongst your recently churned accounts. You can then use this information to inform which features to focus on to help you retain your current customers.
- Customer renewal rate: The rate at which a company's customers actively renew their subscriptions. Renewal rate indicates a company's ability to deliver long-term value to its
- Net Promoter Score (NPS): The measurement of customer loyalty and satisfaction. Users submit scores through surveys that measure how likely customers are to spread the word about your products to other customers and generate revenue. Companies with high renewal rates can more efficiently generate a regular, predictable recurring revenue stream.
8. Get Input From Other Internal Teams
As you're working on your product strategy, make sure that other departments get to have their say. It's not only vital for keeping all team members aligned, but customer feedback from your colleagues can help you tweak your product strategy to better your customers' needs.
For example, your engineers can provide unique insights on how to build features that can alleviate your users' challenges.
On the other hand, your customer-facing teams like sales and customer success have a great understanding of what is trending in the product space and what will resonate with prospects and customers alike.
Keep everyone on the same page by sharing an always-up-to-date roadmap across your organization.
Build a Customer-Centric Product With UserVoice
A product strategy helps you define your priorities and serves as a game plan for how you'll meet customer needs, but it's not the be-all and end-all. After you get your product or feature out into the world, you'll need to periodically gauge how your users feel about it. This will influence innovations and changes to your product and overall strategy.
UserVoice lets you collect, organize, share, and follow up on customer feedback for your product. We help you manage the customer feedback process from start to finish so that requests and problems get the attention they deserve. And with customer feedback, product analytics, and sales data synced, you get a comprehensive view of the feedback you receive.
Sign up today for a free trial of UserVoice to help you make thoughtful decisions that drive greater product success and customer satisfaction.