16 Product Strategies for Growth

As a product leader, you have the responsibility to plan strategically for your company to grow its customer base and revenue. Thanks to years of other people growing companies, there are standard playbooks for how to accelerate your company’s trajectory. Simply because they are standard doesn’t mean that you can’t execute them in your own special snowflake way, but it’s relatively hard to reinvent the wheel.

The list below is designed for leaders who are thinking about what the next phase of their company should be so that you can make sure you’ve entertained all the options. It’s very easy to think of one path and fall in love with it without exploring alternative routes. You may have a little Robert Frost in you, and it’s worth exploring the roads less traveled, it might just make all the difference.

Each of the 16 options, can be used to accomplish at least one of the three primary business objectives:

• Increase Revenue. (growing your total addressable market or serviceable one)

• Protect Revenue (improving retention, increasing lifetime value or money per logo)

• Reduce or Avoid Costs (reducing customer acquisition cost or operating expenses)

It’s important to note that for each goal, there are many strategies which can assist in accomplishing it. Unfortunately, not all strategies are correct for each company. Therefore, please see the attached powerpoint deck which outlines tips for how to make that strategy successful and the conditions when it is a favorable option. The primary business objectives are a more summarized than the detailed chart above for ease of understanding. If you manage a portfolio of products, different options will be applicable to each one depending on the current situation it is facing.

Tech Business Acronyms Every Leader Should Know

Business Acronyms

A vs. E = Actual vs. Estimate

CAC = Customer Acquisition Cost

CTA = Call to Action

EOD = End of Day

FIFO/LIFO = First/Last In, First Out

IRR = Internal Rate of Return

KLO = Keep the Lights on (costs)

KPI = Key Performance Indicator

LOI = Letter of Intent

LTV = Life Time Value

MT = Multi-Tenant

OKR = Objective Key Result

OPEX = Operating Expenses

P & L = Profit and Losses (balance sheet)

P/E (ratio) = Price to earnings

POC = Proof of Concept

RIF (acronym) = Reduction in Force

ROE = Return on Equity

ROI = Return on Investment

SMB: Small to medium business

SWOT: Strengths, weaknesses, opportunities, threats

TCO = Total Cost of Ownership

TTM = Trailing Twelve Months

Geographic Acronyms

EMEA = Europe / Middle East / Africa

ANZ = Australia / New Zealand

APAC = Asia Pacific

DACH = Germany, Austria and Switzerland (German-speaking Europe)

NA = North America

SA = South America

LA = Latin America (Mexico/Miami on down)

I’ll continue to add more as I find them.

What Product Leaders Should be Focused on during COVID19 Crisis

As CPO in Residence at Insight Partners, I have access to career operators who have managed many companies through crises. The managing directors and operating partners at Insight each have decades of experience helping tech companies thrive, and that doesn’t include the excellent leadership across the portfolio that I get to interact with daily. The items I outline below are a combination of the advice I have heard from the experts at Insight and others in the tech community who I have been lucky enough to learn from.

1) Cash is King

Your first priority needs to be making sure you have enough cash in the bank to survive this crisis. Many companies will go out of business, try your best not to be one of them. Practically every company’s sales are going to slump to near non-existent status in the next few months and many customers will churn, both will greatly impact your runway predictions. If you cannot pay your employees, you are bankrupt, don’t get to that point. Raising money will be very difficult in the coming months. Therefore, it is critical that as an executive, you make hard choices about cuts right now (staff, salaries, bonuses, tools, expenses, etc.) to maximize your runway even without new income. One thing to note here is that the cuts should be thoughtful should be balanced with investing in making your product and teams better (HBR Roaring Out of Recession study). It’s pretty much the corporate equivalent of flattening the curve. You have to survive before you can thrive.

It’s a general rule that it’s easier (or at least cheaper) to keep a customer than to find a new one. If new sales aren’t going to happen, you need to maniacally focus on retention efforts. It’s OK TO BE THINKING IN THE SHORT TERM, if you don’t you may not get to the long term. The primary thing you can do as a product leader which impacts churn is rolling out features that will quickly impact your customer’s value realization of your product. Generally if your product can save them even more money or time, you’ve got a shot at improving your retention.

Hopefully, your roadmap prioritization process tagged all the feature ideas in a way that you can easily identify those which will impact retention. Clear away the current initiatives that are supposed to help with generating new logos and make room for those items. This is where your leadership will be key. Your role will be to help your product team understand that the grand ideas they have for innovation will come later, but that this is the right decision right now. You’ll also have to help them realize that the more agile and nimble they can be through the “change is the only constant” period, the better the results will be. By reducing their ambition to expand your product feature set, and instead improving what you have, they may just help save your company.

The second thing the product organization can do to help reduce churn is provide offer mechanisms within the product to keep customers who are attempting to cancel. Ever tried to cancel Audible or SiriusFM or quit the gym? They are all experts at this sort of thing. Before you can actually stop paying for your subscription, you must go through a gauntlet of enticing offers to stay. Find a way to give premium add-ons for free and other bundling options which might keep more of your customers. Don’t worry about capping your LTV with unlimited plans or other discounts and promotions, try to get anyone to close that you can. Your goal should be to get to 50%+ of retained customers who were attempting to cancel. Though you can’t control for involuntary churn if your clients go out of business, you can fight your hardest to keep everyone that isn’t.

Finally, even though minimizing churn should be your primary concern, look for opportunities to take your product into new markets that have surfaced which require minimal investment. Also, keep an eye out for easy acquisition targets like smaller competitors that aren’t managing their cash well. Setting yourself up for success after the crisis is over will set you apart.

3) Time is of the Essence

Cliché as that maybe, the longer you wait to make the changes above, the worse your condition will be. No decision is the worst decision you can make. Help your team learn to choose direction quickly and confidently. Ensure that the priorities they are setting forth have impact in a matter of days or weeks, not months.

You will have to shift resources to make that happen, so mentally prepare the R+D team now that current team structure is going to shift to help with quick execution of the most critical initiatives. This is what Ben Foster calls Wartime Product Management. Also, if it’s cost effective, there are a lot of talented people that are about to be out of work. You can hire top tier freelancers to assist you with getting the job done. If you can reduce the time it takes to get a return on investing in something, it may be worth it.

Finally, this is not the time for analysis paralysis. Pull back on your optimization experimentation efforts. The current time period is a spike of fear and uncertainty, especially if your customers are in highly affected industries (tourism, restaurants, entertainment, or retail). Your researchers won’t learn about normal customer or user behavior from experimenting right now. Focus on improvements to your primary user flows that you have good confidence will improve things and roll back only if you’re very wrong.

4) Transparency builds trust

If there was ever a time to over-communicate, this is it. Your employees and customers need to hear from you. The more clear you are with your team about what is going on and why, the more they will have faith in your leadership. Be transparent with them about how change is the only constant. Block off more time so they can reach you if they are stressed or have questions, they can’t stop by your office right now and knock on the door. When you model strong communication, they will follow suit with their teams. In the case that something is very wrong (i.e. someone on your executive team contracts COVID-19) have direct communication with your employees about it and the actions you are taking; don’t let them find out in the Washington Post.

The same goes with your customers. Be clear with them about the actions you are taking to serve them during these uncertain times. Empathy will go along way. Pause and update all of your automated marketing to make sure the messaging and positioning is appropriate for the current situation. You want your customers to feel that you are with them through this crisis, not tone deaf to what’s going on. This may also mean delaying a product launch if you think it might be disruptive to your clients’ efforts to survive right now. If you do change release dates, explain why and offer beta access to anyone who needs the feature sooner. Your customers will understand that you are in this with them and remember that when it’s all over.

5) This too shall pass

This maybe your first crisis to navigate as an executive, but it will not be your last. Consider it training for the next time something unexpected happens that impacts your customer base. Here’s a little preview into the next year or so…

• There will be a few more months of the current everything is crashing and burning phase. It will get worse before it gets better.

• Then there will be a period of a new normal of the recession.

• Finally, the recession will end and economic prosperity will return.

Your #1 focus (after the obvious staying safe) is on survival and getting through the first two phases above with as many customers and as much cash as possible. If you accomplish that, you will be part of the few companies left to serve the post-recession economy.

Good luck and God speed!

This question will let you own your product roadmap again

Many product teams struggle with a deluge of requests from customer support and product teams. Figuring out which of the items to have your engineering team build is the reason you have a job as is disappointing your coworkers when their requests don’t make the cut.

Often someone will say “this is really frustrating to ALL customers” or “ALL of my prospects are asking for this” or “the customer will leave if we don’t build it”. Rarely is something the sole reason for churn or win rate. But how can you tell which issues are those with highest value?

With a proper Product Operations data setup, you may have the tools to quantify the impact of each option, but with dozens or hundreds of suggestions that could take up all of your time. The process needs to be streamlined so that there are less requests coming at you to evaluate.

There is one question you can ask your teammates which will very quickly make it clear whether their idea is worthy of the effort to develop.

“What amount of revenue will your request generate?”

It’s that simple. It’s all about the money.

When you start asking this question over and over again, you will communicate to your coworkers what is most important to you is aligned with what is most important to the company… generating more revenue to grow. They will not only learn to respect your objectivity, but also start focusing on overall revenue for the company as well, which is a good perspective for everyone to have. You’ll see that over time, they will only bring you product feature requests with that information included, which will save you the time of evaluating each of them and also make it easier to compare ideas.

Are you asking this question? If not, why not?

(Note: if you are not a B2B company, ask the same question but substitute revenue for whatever your northstar metric is)

Hi! I’m Tami, the founder of The Product Leader Coach where I work with product leaders and teams to realize their potential by focusing on their strengths.

If you enjoyed this post, I am available for product leadership coaching or team training. Learn more about my services and upcoming children’s book.

Put the Fries Down: What do SaaS and Fast Food Chains Have in Common?

This piece was coauthored with Kevin Broom who will be publishing this on LinkedIn and we will both be attributed authors when it is posted on the Insight Partners blog, but Medium doesn’t allow that.

The promise of SaaS is that by paying for a subscription, customers are investing in future innovation of the product which they will get to use with no additional cost. The goal of SaaS companies is to increase valuation through revenue growth, which is often includes cross-selling additional products. This is because there has been an evolution of SaaS metrics for valuation that has shifted from revenue to profitability, then to LTV/CAC ratio, and now heavily biases Net Retention. This emphasis on “land and expand” sets SaaS Providers at odds with their original promise to their customers customers.

As a CPO, you have to find a balance between these two competing priorities. How can you satisfy the need to get net retention above 100% while also not creating friction with existing customers who think they are already paying for new functionality through their subscription?

A simple, real world way to think about this is packaging and positioning at your favorite fast food restaurant, like Burger King. The hamburger is your core product and the fries represent the cross-sold one. We can take the analogy a little further and say that upgrading to a double burger is akin to upselling. You may also offer milkshakes, drinks, and desserts… more cross-sell opportunities.

The potential for friction occurs when a SaaS customer feels every few months they are being offered a new menu item to purchase alongside their burger. They may begin to feel nickel and dimed and may start looking for alternatives where the full services are available at a consistent price. This is frequently the case with the new entrants to your category who will frequently over promise how full-suite they are to steal your customers. This situation increases risk of churn, which has a cascading impact on revenue growth and company valuation in very negative ways.

So how do you minimize churn and improve Net Retention?

Option 1: Increase the price

Keep advancing your product and charge everyone a little bit more each year. This is NOT a good idea. There is no segmentation or levels in this approach. Your price will average towards a mean that will price you out of the conversation with some prospects who will conclude your product is out of their budget and / or too robust for their needs. Others will say it’s not enough. And a third group will think it’s a bargain, which means you are leaving money on the table. None of those situations sets you up for a good metrics that lead to good company valuation.

Option 2: Ala Carte menu

Offer fries and milkshake as separate items if there is a (stand alone) market for that. This can also open doors to customers who like someone else’s burger to start coming to you for fries and eventually shift because you now have a relationship.

Be careful though as for each ala carte option you have to decide where you want to be in the market (leader, low cost etc) and that you’ll have to invest in maintaining that position for every item you add on the menu!

As a warning, if the item doesn’t always fit nicely on the menu, it often distracts from the position of the core product. Therefore, you should pick ancillary items that are directly adjacent to your core product. Ones that you are comfortable maintaining or increasing investment based on customer demand. Think of this as Burger King or similar burger-centric restaurants offering the Chicken sandwiches instead of starting to sell tacos, which is too far from their specialty.

Option 3: The Combo

What do fast food chains do so that when you order they don’t ask five questions about what additional items you’d like to order? They put them all together as a meal. By combining a burger, fries, and drink into a package targeted at a specific customer they sell all three together. They offer the ability to ‘Super Size’ which is similar to adding users and storage. They also bundle milkshakes, pies and double burgers for other target customers. Just want a basic burger? It’s available, but relatively hard to find on the menu.

If you’re a smart product leader, you’ll create similar bundles designed for targeted segments. They are purchasing a solution at that point, not a product. If a prospect chooses to only subscribe to your core offering, they know the rest of the package is available as their needs grow, and that they’ll need to pay for it. Your Customer Success team can always follow-up to make sure they are satisfied or hungry for more.

The impact of bundling is first that it increases your Average Selling Price (ASP) and therefore each booking increases total revenue more than selling a single product. Beyond that, if a customer has bought into using your product to fulfill multiple jobs, it is harder to leave because they will need to find two competing products. This means your products become stickier, and your LTV generally increases at a faster rate than your CAC. Win-Win for everyone.

How to do create the best combos?

First, think about your segments. What additional needs do they have which you are qualified to address? Build additional products for those segments. Cross-sell them like you would fries or a milkshake, and target the existing customers that are most interested in the add-ons. Bundle them for new prospects who fit the profile. Soon you’ll have a significant group of customers who are paying you for more than one product.

Over time, you must continue to advance your core product and these ancillary ones (those expectations about paying upfront for SaaS tools apply to fries and milkshakes as well).

If in the future so many of your prospects are selecting that additional product (and you have a newer thing to cross-sell, aka dessert), consider making the older add-on part of the core as default. There first hamburger probably didn’t have ketchup and mustard.

As you are creating your combo, be sure to look out for opportunities for M+A and partnership to get you best in breed and best in suite capabilities faster than building yourself. Think about how Burger King now sells the Impossible Burger; they didn’t develop a plant-based protein on their own, but they are capturing the market trend away from animal meats and new customers.

Finally, it’s imperative to stay on top of trends in packaging and to keep innovating on your pricing and packaging as much as your products. You must be consistently focused and committed to updating your menus, pricing and packaging. They are never “done”. Your competitors are also constantly trying to find the right balance. They have the same challenges. They are adding menu items and bundles that will attract new customers and your customers. And remember, just because one of them randomly adds taco’s to their menu, doesn’t mean you have to follow their lead.

Hi! I’m Tami, the founder of The Product Leader Coach where I work with product leaders and teams to realize their potential by focusing on their strengths.

If you enjoyed this post, I am available for product leadership coaching or team training. Learn more about my services and upcoming children’s book.

How to Broadcast Your Roadmap

Last week we covered two options for building your roadmap. Now that it’s compiled, it’s time to share it out. A roadmap is a marketing tool for your plans for the coming quarter and year, so investing time in ensuring your intents are crystal clear is worth it. You also need to remember that different audiences will require different views of your roadmap.

Some good things to think about no matter who you are preparing your roadmap are:

Color Coding Is Your Friend

Differentiate groups of items on your roadmap with consistent colors. It will help those who are looking at it understand the balance of what your plans are. Some common options for color coding include:

• Different products within your portfolio

• Target Customer Size

• Target Customer Geography

• Strategic Intent (New Revenue, Retention, or Cost Savings)

• Different software teams

(ooooh…. aaaaaah… colors)

Quarterly Themes Help Tell Your Story

Separating the roadmap into quarterly themes has two purposes. The first is external. Themes allow sales and marketing teams to understand how all of the items are related and apply to a particular customer segment. The second is internal. By having cohesive focus, developers can feel accomplished with whatever they’ve completed in that three month period.

Get Buy-in Before Sharing

Nothing is worse that presenting your roadmap to the whole company only to have one of the bigwigs publicly criticize it. If you’ve followed the steps in the previous weeks, you have justification for everything that’s included (and NOT included). You’ve talked to countless stakeholders internally to inform what you’ve prioritized, and it’s worth going one more round with them to discuss your final selections and ensure that they are onboard. Any stakeholder objections can be responded to in private. You can even mention your rebuttals when presenting your plans to preemptively cutoff others with similar concerns.

Sharing Is Caring

Put your roadmap in a place where people can find it, and make that place consistent so that they always know where to locate it. Depending on your organization, that maybe an online location like a corporate wiki, Confluence, Sharepoint, Trello board, or something similar. Recently, there has been an onslaught of specialized SaaS tools to share roadmaps as well, like Aha, Monday, Product Board, Product Plan and others. We don’t have a big preference for any of these options, only that everyone in the company uses the same one. We’d also like to encourage you to think about creating a physical printout of the roadmap to hang in the office somewhere (especially if everyone is colocated) so that there are visual reminders to what the company is working towards as people go from meeting to meeting.

From https://www.slideshare.net/vatemu/effective-product-roadmap-management (This one is a little messy, and probably too detailed, but look at the color coding and the themes! Note that this is different than a KanBan board)

Cater To Your Audience

Depending on who will be reading your roadmap, you should change the level of detail available. As mentioned last week, for the sales/marketing team and customers it’s important to only show when features will be available for public consumption. The internal sales groups will figure out when they’ll be able to start demoing / selling the feature later, but the important date to drill in is when prospects will be able to utilize them. In contrast, the engineering teams need to know when initiatives will be worked on and what time will be dedicated to discovery/design vs. development. Finally, if you are a product leader that is presenting to the exec team or board, it’s important to keep things high-level and ALSO to include any R+D costs (expressed in $$, not by # of sprints) or percentage investments you can predict so that they understand where the money is going.

(This is what a board presentation slide might look like. Note the color coding by product, the quarterly themes, the high level strategic goals, and the R+D headcount allocation… a real home run on a single slide!)

*Note that it’s Flexible

Often people believe that roadmaps are etched in stone and cannot change. When in fact, that isn’t true and would be a bad idea if it was. Hopefully, as the year progresses you’ll learn things about your customers and the market that warrant shifts in your plans. Manage expectations with those who are reviewing the roadmap that similar to side view mirrors, items may be different than they appear. This is especially true for initiatives that are slated for quarters much later in the year. Find a way to communicate this verbally and in writing so that when things change (as they should) that your colleagues don’t fall into the Build Trap again.

Our six week annual planning strategy series is coming to a close, and we’d like to leave you with this final thought…

Revisit your roadmap quarterly to ensure that the right things are still included. You should be monitoring your metrics to see if the outcomes you we targeting are coming to fruition. Ask yourself these questions:

1. Are you accomplishing what you wanted to?

2. Have you discovered more valuable pressing needs?

3. Are the next items still the most important things to do?

4. What needs to be adjusted?

If you joined the party late, here are the links to the first 5 weeks of the series:

Intro to the Series

Week 1: Planning Starts with Setting a Vision

Week 2: Smart Product Bets Start With Data

Week 3: Generating the Best Ideas

Week 4: Choosing a Path Forward

Week 5: Setting the Roadmap