In this week’s post, I’m going to discuss the nuts and bolts of the PRD (Product Requirements Document). Next week I’ll complete this discussion by covering some of the specifics that will be part of a good PRD.

What is a Product Requirements Document?

A PRD is a document that serves the development team. It provides details about features, functionality, and capabilities required to build the product. Obviously, if the product is a new one, the level of detail will be much greater than what’s needed for an enhancement to an existing product.

A well-crafted PRD clearly defines both the breadth and depth of the product. Done right, the PRD will move the development team beyond considering what to build to how to build. Supporting groups (packaging, creators of user manuals etc.) should understand what needs to be delivered with the product. All should understand what the customer experience should be when using the new capabilities. Finally, product requirements must be aligned with your company’s business objectives.

Four Questions Your PRD Should Answer

1. Who will use the product?

In answering this question, you should address the need the product will meet. Also cover the characteristics of the end user and how end users will actually use the product.

      2.   What will the end users do with the product?

This question covers the functional requirements the product must meet. This could be something simple like buttons to press or as complicated as a computer display. In some cases, you may need to provide a process flow for the various activities an end user will need to perform. Flow diagrams, data diagrams, sets of use cases, or content, and entity relationship diagrams can also be part of the functional requirements explanation.

      3.   What are the product’s performance requirements and design constraints?

Often called the non-functional requirements, these items define how well or how much the product needs to perform against measureable criteria. Product constraints can take many forms. They are often industry-specific. Typical considerations are environmental legal, physical, support of other products, etc.

      4.     What must accompany or support the product?

Support items are not related to the specific operation of the product. However, they are vital to supporting a smooth end-to-end user experience. Supports include such items as documentation, accessories, shipping, packaging, installation, replacement parts, and maintenance. The answer to this question can extend to cover how customer service will handle calls about the product.

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What Is a Launch Strategy?

Your product launch strategy delineates the approach you plan to take in getting your product to market. You can start ruminating over what to include in your launch strategy as early as the conception phase. However, what you initially plan must evolve as a more details emerge in the later stages of product development.

Ultimately, your strategy needs to cover all assumptions about sales and marketing for the product launch. It should lead to creation of a solid estimate of the scope, resources needed, and budget required to give the product a strong start. When a new product is involved, launch costs can occasionally exceed the cost of product development.

When your strategy is complete, you should have a clear idea of all activities to pursue in launching the product, their costs, and the initial timeline for deployment.

Four Key Points to Include

1 – Who are your top priority audiences for the product?

2 – What are the main ways you will try to reach these priority audiences?

3 – What are the key messages you need to communicate?

4 – What are your objectives? What do you plan to achieve?

What Are the Specifics to Include in Your Launch Strategy?

• Targeted sales channels – Will you use TV, radio, word-of-mouth, demonstrations, Internet or something else?

• Marketing Collateral – What support materials will be needed?

• Sales tools, demos, and training requirements – How will you equip your sales force to clearly communicate your product’s value and uses?

• Advertising and demand generation activities – What will you use to create a desire to buy?

• Sales promotions – What initiatives will you launch to get the word out?

• Public relations, industry, and social media initiatives – What can you do to build buzz through press releases, industry buzz, and social media posts?

You’ll also want to consider tradeshow and event needs; your field testing strategy; your sales forecast by the various channels; your measurable launch objectives; and high-level timeline, milestones, and budget.

The Completed Launch Strategy

Please remember: your initial ideas aren’t cast in stone. Your assumptions and plans will morph through various stages. When you finally get to the point of crafting a solid launch strategy your document should have eight characteristics:

1 – It must identify the audience(s) and competitive targets

2 – Your messaging must be solidly developed

3 – Your launch plans must align with the overall product strategy and development plan

4 – You must prioritize go-to-market activities to focus on the most important

5 – Develop measureable short and long-term criteria for assessing the success of the launch

6 – Earmark any emerging activities or capabilities that must be sourced or developed

7 – Align your plan with your company’s marketing and distributions strengths

8 – Make sure the plan provides for input and support from targeted channels

A lot goes into creating a launch strategy that really delivers. Follow these ideas and you’ll be ready to make a strong start.

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Defining a Product Vision Document

The Product Vision document looks into the future. It presents a 30,000-foot view of what you plan for the product to be in the future and its anticipated value.

The Role of the Product Strategy Document

Your Product Strategy document explains what high-level actions will need to take place in order for your product to live up to the anticipated deliverables in the Product Vision document. Just as important, the Product Strategy document sets boundaries for activities that should not be pursued.

It’s easy to understand why these two vital documents are often presented together.

Three Things Product Vision and Strategy Should Provide

A well conceived Product Vision and Strategy will:

• Present a statement about what you envision the product will be in the future and how it will benefit its market.
• Cover high-level actions that must be taken in order to fulfill the promise presented in your document.
• Outline measurable objectives that include both short and long-term goals as they relate to the product.

Characteristics Specific to a Well Developed Product Vision

• Present a clear view of where you see the product in one year or perhaps many years, depending on the product lifecycle.
• Define your target customers and how the product will help them solve challenges. Clarify the value to be derived from the product.
• Set a high bar that pushes product team innovation.
• Make sure that the level you set is high enough that it won’t change every time there’s a shift in market dynamics.

Characteristics of an Excellent Product Strategy

A well thought out product strategy can set the stage for your product roadmap. Your Product Strategy needs to offer clearly defined phases that lead up to meeting the Product Vision. It should include the key activities your product team will undertake toward meeting the Product Vision. Your Product Vision acts as your north star guiding your decisions. However, your Product Strategy will evolve over time in response to changing market conditions.

Your Product Strategy should also be centered on objective time lines associated to business metrics related to customers, the competition, the market, or financials. You also need to include shorter-term milestones with specific deliverables. Make it clear all along the way what the next steps should be.

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Before we drill down into Storyboarding and Flow Diagrams, let’s take a moment to think about the purpose of the problem scenario.

Purpose of the Problem Scenario in Product Concept Investigation

All problem scenarios must illustrate challenges faced by users while attempting to reach a specific goal. This includes exposing the limitations of current solutions in the marketplace.

An effective problem scenario promotes:

• Clear understanding of the situation a user faces in trying to reach a goal
• An accurate definition of the goal the user is seeking to achieve
• A strong understanding of how consumers are currently reaching this goal
• The frustrations felt by customers using current solutions
• A revelation of the opportunity you have to flush out new ideas to reduce or eliminate frustrations with current solutions
• A wide open path for the presentation of bold, fresh ideas that could dramatically improve the customer’s experience

Storyboarding as a Method of Product Concept Investigation

One of the great strengths of Storyboarding is its ability to make an idea instantly understandable to your team. In contrast, the simple story method of product concept investigation requires the audience to read through the whole written description. Only when the reading is complete will the team understand where you are going and what you are suggesting.

Storyboarding combines illustrations (ala comic books or cartoons) with individual written steps to deliver your concept. Your audience can quickly grasp where you are taking them with the storyboarding methodology. The one danger is that you can over simplify your ideas and therefore leave out critical details that would be clear in a fully written out concept (simple story).

Now, let’s consider another approach to the Problem Scenario, Flow Diagramming.

Flow Diagramming

If collaboration between individuals or departments is vital, the Flow Diagram is an excellent tool for sharing your ideas.

The Flow Diagram essentially shows how a solution would flow through your company’s various departments on its way to completion. Each handoff point and step will be clearly shown on the diagram so everyone can see exactly where their department fits into the overall sequence.

Looking Forward

Next week we’ll move away from the Problem Scenario approach to product concept investigation. We will take a close look at the Competitive Analysis Matrix and its uses, advantages, and disadvantages in the product development process.

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What Is a Persona?

A Persona is a representation of a group of customers with similar characteristics. Personas help your team make decisions about the product during development. You gather data to create the Personas through primary research and also through Voice-of-the-Customer activities.

Personas can be minimal or fully blown out, giving an elaborate description of behaviors, activities, and motivations. They vary based on whether they are for a business-to-consumer or a business-to-business product or service.

What’s Included in a Persona?

Personas include information such as:

• A fabricated descriptive name and optional photo or caricature
• Demographic information such as age, gender, marital status, location
• Level of education, work, income
• Lifestyle or work factors and goals
• Experience with the product category
• A quote or slogan that captures personality or personal drivers
• Activities that may influence the use of the product, particularly pain points
• Other related products or solutions currently used
• Values, attitudes, and motivators that influence the decision process
• Other collaborators related to reaching goals
• Frequency of activity toward goals

Buyer Personas

A Buyer Persona hones in on a specific type of buyer targeted by the sales channels. An end user or a purchasing manager is an example. The Buyer Persona informs the development of the components, functionality, and benefits of the value proposition.  They can also impact sales messages.

User Personas

A User Persona represents a specific type of buyer who will have a very specific use for your product or service. A good example is a manager who will set up a computer program for a team. This person is not an end user, but has interests and goals for the product that are different from the end user who is the employee who will actually use the product.

The main goal of developing Personas is to understand typical customers for your product. Personas that achieve the results intended share three characteristics:

1. They provide information that gives insight into the customer’s world including their challenges and goals as related to the new product.
2. They hone in on the primary buyers, something that is accomplished with only a few Personas.
3. Persona development is driven by market research or Voice-of-the-Customer activities. A large enough number of customers are included to be able to spot trends and common tendencies.

Not a License for Creative Writing

It is unfortunately fairly common for a product team to build elaborate Personas out of thin air, with no research to back them up. This is not valid nor is it appropriate for a vital business document. Take the time and make the effort to actually do the background work.

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Problem scenarios are a good way to take a high level look at what an ordinary customer might encounter, the problems they need to solve, and the challenges they face in doing so.

A mother may need to provide a nutritious but easy to prepare meal for her busy family.  They need a quick meal, but not just any fast-food pickup. It needs to be healthy, quick to prepare within tight time constraints, and tasty.

Problem Scenarios – Different Types

A problem scenario can take different forms depending on the product concept under consideration and the level of detail you want captured in the scenario.

The first type of problem scenario is the Simple Story. This can include a few paragraphs or a few key bullets. Key elements to include in a Simple Story are:

• Who is the primary persona in the scenario? Usually there is one, but sometimes there can be several, depending on the product.
• What are the location and timeframe for the scenario? Does it occur at home, in the office, or somewhere else?
• What is the goal of the persona? What is the high-level objective the persona is trying to achieve. For example: Provide a quick to prepare, tasty, and healthy meal, hear music on a patio, etc.
• What are the common steps taken to achieve the goal? What are the most basic tasks a person will need to undertake to reach the goal? These should illustrate the challenges and frustrations the persona encounters in the quest. These also should encompass how the persona would proceed using current solutions and products available in the market. The result of this step will be a complete start-to-finish set of activities. It will give a bird’s eye view of the situation.
• What major decisions must the persona make during the workflow? If the product is complex, such as software or services, there may be several paths that can be taken depending on decisions made. For example, let’s consider a product team attempting to create an online order form. Decisions the persona would need to make might include which credit card to use, do they want gift wrap, where will the item be sent, how much does the persona need to purchase in order to get free shipping, and that’s just the start of the possible decisions.

Looking Ahead

Next week we’ll take a look at another type of problem scenario you can use in your product concept investigation: Story Boarding.

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Questions Your Product Concept Must Answer

There are 11 questions your product concept document must answer:

1. What is the market problem you are addressing?
2. How big is the opportunity?
3. Who are the potential buyers and users? Who needs this product?
4. How does the product benefit the customer? How does it benefit your organization?
5. Do we have evidence that we understand the problem and that the prospect will buy our solution?
6. What is the window of opportunity in the market?
7. Which competitors will our product face?
8. What are the main features of the product and the key success factors?
9. How is our product different from the competition?
10. How would we market our creation?
11. What metrics should be considered in determining the product’s success?

The real objective of developing a product concept is to provide enough information about the market needs to justify pursuing further investigation at a deeper level.

5 Things a Good Product Concept Includes

1. Enough research into the market to document the current situation and actual need for the product
2. An understanding of the competition in the market and why the need for your product exists
3. A conceptual solution that aligns with your company’s capabilities and objectives
4. An explanation of how the new product will be an advancement and added value over what competitors offer
5. An indication of the financial and long-term benefits your company can anticipate from the product

Looking Ahead

In my next post, we’ll take a look at the Idea Prioritization Matrix, a popular tool to use when evaluating different product concepts.

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In case you didn’t immediately see it, TOWS stands for Threats, Opportunities, Weaknesses, and Strengths. To show how the SWOT and TOWS matrices complement each other, I’ve included both below.

Consider Possible Strategies

The left column of the TOWS chart identifies possible strategies you can leverage to take advantage of opportunities and avert threats identified in SWOT. For example, if your organization is particularly strong in its development processes, you should consider how you could use this strength to make the most of newly opened opportunities.

Strategic Options

The right column in the TOWS matrix reveals strategic options your team can take to neutralize threats and maximize your opportunities. For example, if you can seize a growth opportunity by utilizing your product line, you may offset a weakness in a declining market.

Your product team has a full set of options for addressing threats and opportunities.  The ones you pursue first should make the most of your strengths and reduce weaknesses.

Four Things A Good TOWS Analysis Has

1. A full view of your external environment, major factors that impact your business, and projected threats and opportunities.
2. A realistic assessment of your internal strengths and weakness in relation to the threats and opportunities identified.
3. Strategy options that leverage strengths and diminish weaknesses for each identified threat and opportunity.
4. A prioritized roll-up of the strategy options into initiatives. These will drive project selection going forward.

When all this has been done, you need to be prepared to defend what you’ve developed. Be aware that some people may be not align to your thoughts and plans. You can back up your plans by gathering relevant data and customer quotes to ensure you are on the right course and prepared to address any concerns.

Looking Ahead

Next week, we’ll consider the development of the Product Concept.

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The GE-McKinsey Matrix

The GE-McKinsey Matrix simply gives your organization more nuanced options for how products are categorized. Instead of just four boxes, the grid now includes nine. By replacing Market Growth (used on the BCG Growth-Share Matrix) with Industry Attractiveness, you have the option of weighting your decision based on such factors as:

• Size of the Market
  • Intensity of the Competition
  • Market Growth

The result often is a clearer view at your product mix and opportunities.

The GE-McKinsey Matrix Horizontal Axis

As with the vertical axis, the relabeling of the horizontal axis from Market Share to Competitive Position opens up new ways to examine your market. Now, you can factor in other corporate strengths such as:

• Brand Equity
• Your Company’s Core Competencies
• Distribution Strength

Nine Boxes Vs Four

With the GE-McKinsey grid, you have nine possible options of how to view products. Your alternatives now range from clear winners to invest and grow to products you need to phase out and cut loose.

Elements of a Good Product Portfolio Management Process

No matter which analysis method you choose, you need to be sure it includes the following:

• Allocation of resources that aligns with your corporate goals across multiple product activities
• A balance of product activities with diversity across products you currently have and what you’ll need to develop as tomorrow’s winners; current and future markets; and short-term versus long-term revenue sources

Upcoming Post

Next week my post will take a look at the SWOT Analysis and how it will help you gain a clearer view of your product’s current and prospective standing.

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Managing the Product Portfolio

Your product portfolio links your specific product strategy to the overall company strategy. Within the product portfolio you should find the complete suite of products, including those that currently exist and those that are planned for the future. By actively managing the product portfolio, you help ensure that your company meets its goals.

The product portfolio management process links your company’s high-level resource/budget allocation to the strategic initiatives or the product roadmap(s). The process of managing the product portfolio is also linked to what is a more tactical project portfolio management regimen. This discipline manages the approval and tracking of specific projects tagged as being supportive of the overall product portfolio initiatives.

Analyzing the Product Suite

Successful product leaders know not only where to invest, but just as important, where not to put their resources.

Boston Consulting Group (BCG) devised a simple way to communicate how to handle market analysis. It revolves around a dog, a cow, a star, and a question mark.

BCG’s Growth-Share Matrix

Using this approach, market growth rate is shown on the vertical axis and relative market share on the horizontal. Products that fall in the lower right box are those with low growth potential and low market share in your company. In other words, these are the dogs. Anything that falls in this quadrant is definitely on its way out. By pulling investment from the dogs, you free up resources to use in more productive quadrants.

The upper right quadrant displays a question mark. This represents products that usually will require your company to invest in order to improve your share of the market. However, since the prospect for market growth is high, the products represented here have high potential for the future.

Now let’s move to the upper left quadrant where you find the star products. These are the products where your company has a high share of the market and there is high potential for growth.

Finally, in the lower left quadrant are the cows – the CASH Cows. These are successful mature products. Your company has a high share of the market, but growth potential is pretty low. These are the products that produce profit you can invest in your stars and question marks hopefully to turn them into stars.

Looking at the Matrix Over Time

As time passes, things change. You will see your cash cows gradually morph into dogs as new and better products come into the market. You’ll also see today’s question marks evolve into tomorrow’s stars as the current stars replace the cash cows or rotate out of the 2-by-2 matrix entirely.

This visual clearly shows the importance of keeping a pipeline full of emerging products you can grow into robust winners for your company.

Next Week

Through my next post we’ll take a look at other product management tools starting with the GE-McKinsey Matrix, another tool that can be very helpful in your product portfolio management.

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