Recently we’ve discussed the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Today, we’re going to consider a tool that drills down to the product feature level and allows the product team to compare competitors’ products to your solution. This tool is the Competitive Analysis Matrix. A Competitive Analysis Matrix is usually presented in a spreadsheet format. However, many such charts include 8 or more features. Complex products can include twice that many feature comparisons.

How the Competitive Analysis Matrix Works

The purpose of the Competitive Analysis Matrix is to identify gaps in your competitors’ offerings. Your matrix should include a row for each feature to be considered. It should also include a column for each competitor with qualitative rankings of each feature in the competitors’ products. This means a ‘Yes’ or ‘No’ ranking won’t cut it. Your team needs to become as familiar with the competitive products as possible so you’ll feel comfortable evaluating each.

Market Importance

The market importance column is particularly significant. It is likely that your competitors have added some features to their products to meet the needs of a particularly important customer. These will not necessarily have overall appeal in the marketplace. By assigning a high, medium, or low ranking to each feature, you will be able to identify those features which you can probably cut from your product. This can help you save valuable resources and money. Every feature adds cost. The Competitive Analysis Matrix will help you hone in on the features that are most important. Once these are covered in your budget, you can start adding on other items that will appeal to the market as resources permit. Features should be added according to their ability to help your customers meet their goals.

Four Things a Basic Competitive Analysis Matrix Will Include:

1 – High-level Feature Sets – Group the features that are related together to simplify the matrix. It is easy for your team to get bogged down if huge individual features are considered separately.

2 – End-to-End Customer View – Don’t get off track by including just characteristics of the physical product. Include attributes that impact the entire user experience. This can cover such things as how the product is purchase, delivered, installed, supported, and maintained. By evaluating these items you may open avenues for product differentiation.

3 – Measure How Well Features Perform – Don’t allow yes or no answers. Remember this is a qualitative comparison.

4 – Measure of the Market’s Importance – Most likely your competitors have included features that are not highly valued by most customers. There is no need to match competitors feature for feature. Build the product the market wants no matter what you see competitors doing.

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Choosing the Best Product Ideas and Features to Advance

Today, we’re going to look at a tool many organizations find useful in helping them determine how to proceed. This tool, the Prioritization Matrix helps product teams score the various product concept ideas under consideration so they can make well-reasoned decisions.

When myriad product ideas are floating around, this systematic matrix approach will help ideas with the most potential rise to the top so they can receive further study.

You can use this same Matrix approach to consider various features you may want to add to a product. The Prioritization Matrix pulls the cream of the ideas to the top and lets the sludge sink to the bottom and ultimately disappear.

Choosing Matrix Criteria

Your Prioritization Matrix can include any criteria that align with your organization’s goals and objectives. Some commonly used criteria are:

• Is the market attractive?
• Can you be competitive?
• Is it a good time to enter the market?
• What’s the market’s potential value?
• Can you differentiate your product from others out there?
• Is there a strong projected return on investment within a set period?
• Does the proposed product align with your company’s goals and objectives?
• How does the estimated cost of development compare to the size of the
  opportunity?

Here’s a virtual example of what a Prioritization Matrix might look like:

Using the scoring scale, each of the criteria earns a score of 1,2,or 3. For clarity and to avoid individual subjectivity, it’s smart to specifically define each measure. For example for Market Attractiveness high would equal market growth of greater than 5% along with a market size of over 2M potential customers. Once you’ve defined your ranking scale numbers, your team should rate each criteria and total up the scores for each idea under consideration.

Naturally, at this point the scoring will be fairly subjective. That’s ok because you are not at the point of constructing a financial forecast. You are simply considering which ideas are the most deserving of additional consideration.

Building in Automatic Stops

You need to build some automatic stops into your Matrix. For instance, if an idea does not strategically align with your company’s strategy or objectives, it must be dropped from further consideration. Additionally, at the outset you should agree that products that do not garner a predetermined minimum total points will be discarded.

The systematic Prioritization Matrix approach is an excellent way to increase effective use of your resources. Don’t become discouraged if a majority of ideas don’t measure up on the Matrix. This is a common occurrence that can often lead to a positive: your valuable resources not being wasted on lackluster ideas.

Looking Forward

Next week will take a look closer look at Product Concept Investigations, beginning with Personas.

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Two Objectives

A successful product launch should accomplish two primary objectives:

• Clearly show what your product stands for
• Reveal why customers should buy the product

If the product launch is mishandled, it is nearly impossible to pull a product back. The consequences of such a move are costly. For this reason, you need to plan every facet of the launch down to the smallest detail. Then make sure each detail is executed perfectly.

Two Types of Market

There are essentially two types of market for any product:

• An existing market that already has a number of competitors in the same space
• A new market – one that didn’t previously exist

Three Approaches to Product Launch

The most common approach to a product launch requires you to release your product into an existing market. To successfully do this, you must have a distinctive value proposition that sets you apart from your competitors. This is how you take as much market share from competitors as possible. Your approach must be single-minded in its dedication to acquiring new customers and developing demand for your product. Your company must take an “all-in” attitude toward the launch to be successful. This approach is typically quite expensive.

The second launch approach is oriented toward seeking out markets that don’t currently exist. Your goal is to ramp up awareness and ultimately compel customers to buy. It is a long-term focus. Your company needs to target early adopters to gain momentum and generate interest among an unengaged mass market. Education features prominently in this approach. It’s wise to take it slowly and not invest the high dollars required for a launch into an existing market.

The Third Approach: Into a Re-segmented Market

You create a re-segmented market by slicing off a piece of an existing market by offering a product priced lower than the competition. Or, you can achieve a re-segmented market by targeting those who will be especially attracted to certain product strengths.

The re-segmented approach requires you to redefine market conditions so you can peel off a winnable segment. You need to both educate your audience and capture customers. Decide if you are targeting people who will be ready to buy. If so, you’ll want to go “all in” as described in the existing market approach. However, if you don’t feel the segment is ready to buy, focus on attracting a few early adopters and work the launch like you would one into a new market.

In my next post I’ll explore the use and development of the launch product brief.

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Advisory Council Charter Defined

The Advisory Council Charter is a concise, one-page document that presents the product manager’s expectations for council members. It’s a way for you to set expectations for members before the council’s work begins. It’s also a way to keep control of internal company expectations. Within your company you should share the Charter with senior management, engineering, sales, and marketing.

The Advisory Council Charter needs to cover these key topics:

• Group objective
• Meeting frequency
• Length of meetings
• Meeting location
• Council participants
• Timeframe
• Planned meeting dates and topics
• Other expectations
• Expenses
• Point person

Everything in the Charter must be spelled out clearly and succinctly. Remember the whole charter is only one page long. Typically advisory councils meet only once or twice a year, but consider your objectives before setting frequency.

It’s also important to allow enough time for each meeting. Many set aside an entire day for the Advisory Council meeting. If you can arrange it, have members come in the night before your meeting. This will allow you to take the team to dinner and begin building camaraderie among the group.

Outlining Roles Included on the Council

The Charter should also clearly outline the role or roles of Customer Advisory Council members. Are you involving end users, economic decision makers, or maybe people who are some of both? Being on an Advisory Council is often considered a prestigious accomplishment. By including those whom participants consider peers, you enhance the attractiveness of joining the Council.

Beware of the Evergreen Assumption

Participants joining the Council need to know up front that there are term limits on participation. It’s not a lifetime or “evergreen” term.  One year is usually too little time for members to form a strong chemistry and begin sharing ideas that have a positive impact. Remember, the Council is probably only going to meet one or two times per year. For many organizations, a two-year Council term works well. This approach allows you to continually bring fresh thinking into the group. It also keeps the council aligned with your company’s evolving focus, leadership, and direction.

Get on the Schedule Early

Those you choose for the Advisory Council are typically busy people. You need to publish the dates of your meetings early and then circulate the meeting topics before members arrive. This will allow them to begin formulating ideas and questions before they get there.

Handling Expenses

How will travel expenses be handled? How will travel arrangements be made? Who within your organization will help the participants and answer their questions? All this needs to be laid out clearly in the Charter. You also need to clearly cover policies concerning travel. Handling these issues up front will avoid misunderstandings later.

In my next post, I’ll discuss how best to support your company’s product launch.

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Who Should Be On the Customer Advisory Council?

Usually a Customer Advisory Council is comprised of seven to nine clients, each possessing keen insight into your market and how your product will be used.

Two Key Things a Customer Advisory Council Can Accomplish

First and foremost, you’ll want the Council to weigh in on specific strategic and tactical decisions that help you advance your objectives. This is the primary function of the Council. An added benefit of this is that you also gain a form of market validation. This validation from the field can buoy you up inside the company when you are faced with making unpopular decisions.

A second purpose of assembling a Customer Advisory Council is to attract new customers. Council members will likely engage in peer-to-peer conversations with others in the market. These conversations often hold more weight with potential customers than do company sales pitches, which are often disregarded.

Product Managers Beware

It behooves you to approach the selection of your Advisory Council carefully. If you stack your Council with individuals whose business is absolutely vital to your organization, you run a risk. These customers could potentially dictate the course of your products along a path that does not meet the needs of the majority of your customers. Proceed with eyes wide open.

Three Considerations When Selecting Council Members

#1 – What roles do you want represented on the Council? Are you seeking a group comprised of hands-on users, economic buyers, or individuals who are both?

#2 – Choose members who represent all regions your company serves. If you are a national company, select members from each region where you have a presence. If you’re an international organization, include members from countries where you do business.

#3 – Choose members based on their ability to contribute. You don’t want members who are too introverted to make valuable contributions. Likewise, you don’t want to populate your Council with those with such high self-interest that collaboration is difficult.

Forming a team that is balanced, knowledgeable, and collaborative sets your Council up for success both now and into the future.

In my next post we’ll consider what should go into an Advisory Council Charter.

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Enormous effort goes into the creation of this work. In fact, you wouldn’t be human if you didn’t feel a bit proprietary about your shared efforts. That being said, it’s vital that you remember, and remind your team, that your work is not cast in stone.

Set the Stage for Change

As a product manager, one of the smartest moves you can make at the outset of any major undertaking is to set the stage for change. You may or may not want change. The people on your team may feel similarly, but the fact is that change inevitably happens.

Good Advice 

Before anyone gets moving on the project, insert a footer at the bottom of your product roadmaps. This footer should simply state that your plans are subject to change based on market conditions.

Naturally, nobody wants change. Change means more work, shifting priorities, and potentially loss of momentum. But, if you don’t lay the groundwork for potential changes, you set yourself up for resistance from multiple directions.

Also, make it clear at the team meetings that you are not operating in static conditions. If the competitive environment changes, if there are acquisitions or mergers, if markets move or competitors develop new capabilities, you must make adjustments. It’s not what you envisioned at the outset, but it is clearly beyond your control.

Start Right. Stay Cohesive.

A simple disclaimer on a document and a brief announcement at initial meetings can help you manage unforeseen change. Set the stage for potential change as early in the process as possible and you’ll have the team behind you when an unexpected challenge suddenly blocks your path.

Coming Next

With my next post, we’ll take a look at the best ways to involve customers in your product development process.

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Congratulations Product Manager – You’ve Set the Stage

When you were developing your product strategy slide, you had to capture the concepts in as few words as possible. Each time you shared the vision, you were probably asked to for more detail. Along the way, your ability to explain your concepts became sharper and more focused.

Now, on the heels of these presentations is the time to further define your concepts.

Blow Out the Product Vision Concepts in Paragraphs

Further defining your product strategy concepts involves writing several short paragraphs that detail the substance behind each idea. This process takes time, but it’s time well spent.

Soon you’ll be sharing your vision with an ever-broadening circle of individuals at various levels in the organization and outside it. Regardless of their background, you want to be sure these constituents can fully grasp your vision’s finer points. The work you do now will allow everyone to understand your message and help you manage client expectations. If you fail to drill down on these milestones and fully explain them, you risk misinterpretation of your ideas. It’s easy when this happens for the strategy to take on a life of its own with goals that are completely unattainable and off track.

What the One-Page Vision Paragraphs Should Cover

The one-page of vision paragraphs should deliver a fuller description of the concept. It should also communicate the value of the concept to the customers and also any operational considerations inherent in each milestone.

You’ll want to devote one slide to each milestone (aka bullet point) and include the following five elements for each:

• Milestone Title
• Milestone Description
• Customer Value Proposition
• Operational Considerations
• Date of Slide’s Creation

Template for Milestone Breakout

Each slide should have a header that consists of the name of the milestone. Following this should be a brief paragraph defining the essence of the milestone. Keep these crisp and short.

Next, briefly put forth the value proposition: why the customer should care about this development. What’s in it for them.

Following the value proposition, discuss any operational considerations that need to be understood at the outset. For example, is there a need for a wrap-around service offer? Will new equipment need to be purchased? Will additional staff be required?

Last, make sure to date the slide so you can maintain control of the versions. Later on, you may need to revise these initial milestone slides. Dating makes that easier to manage.

By completing this phase of your product strategy development, you’re moving beyond the strategic vision and beginning to execute your grand plan.

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Wayne Gretzky, one of the world’s great hockey players, once said, “Skate to where the puck is going to be, not where it has been.” The statement also applies to product management. To develop a clear vision for where you product should go, you need to anticipate shifts in the marketplace.

In recent posts, I’ve discussed how and where to find mission-critical information. Armed with this information, you now have what you need to begin formulating your vision.

The Product Manager’s Draft Product Strategy

In my last post I discussed creating a slide that roughs out your product vision. It should look something like this:

Copyright Greg Geracie, Take Charge Product Management 2010 – 2016

As you look at this chart, you’ll see it lays out your envisioned accomplishments in time and value to the customer. In the bottom left corner is where this product manager envisions his or her company being at year’s end. This is the starting point.

Creating Your Own Product Strategy

You can use the chart above as a model for creating your own strategy diagram. Once you’ve developed bullets to describe each stage in your product strategy, you’ll want to title each circle. Ultimately you’ll need to create a title for the whole process. Your own chart may have more phases, but typically a 3-5 year timeframe seems to work best.

A Word of Caution for Product Managers

It is critical that you be accurate in describing your starting point in the strategy draft. If reviewers don’t think the current situation is accurately reflected, they’ll question all your assumptions. Their faith in your vision will be undermined.

Fine-tune Your Strategy

Once you complete your draft product strategy review it carefully. Your draft will look different than the example because your product’s values are different. Capturing your company’s unique positioning and future is the essence of a well-constructed product strategy.

In my next post we’ll explore the step of successfully sharing your product vision with stakeholders.

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Gather Your Organization’s Thought Leaders

Think about whom in your organization is a forward-focused, big picture thinker. These should be people with strong knowledge of the business who interact frequently with customers. These thought leaders may hold a range of roles in your company. You may find them in marketing, among the founders, in professional services, sales leadership or research. When you’ve identified the sharpest minds in your company, schedule a two-three hour meeting. A few days before the meeting, distribute your vision draft and any support materials so thought leaders can come to the meeting prepared. Be sure your product vision is marked “DRAFT” – it is a work in progress.

The Product Manager Shares the Strategy Draft

You’ll use your product vision draft as a springboard for discussion in your meeting. At the beginning, set out the meeting objectives and answer any questions. Begin the discussion by focusing on the current situation. This is the easiest to see and starting here will give your discussion momentum.

Brainstorm Ideas

The goal of your brainstorming session is to generate ideas and spark creative thinking. As your thought leaders react to your vision draft, capture their ideas as bullets in the margin of your diagram. Certain more vocal participants may begin to dominate your conversation. It is your job as discussion leader to draw in the more reluctant participants. Make sure everyone has a chance to contribute.

Once the current situation has been captured, move on to the end point of your diagram. Where does the group see the product being in three-five years? This portion of your meeting can lead to some interesting and creative discussions. If one of your participants seems to have a real grasp of one of the points, make a note of it. You’ll want to follow up later.

Once you’ve written all the ideas down on your diagram edges, have the group prioritize them. Make sure the ones selected support your vision’s overall theme. Typically, your group will put forth more ideas than you can incorporate.

Filling in the Product Strategy’s Middle Section

The center circle – the midpoint of your vision diagram is decidedly more difficult to envision than either end point. It requires your group to link the current situation to the desired future in plausible, attainable ways. Frequently, ideas that were included in the future or current situation will migrate to the midpoint.

When the process is complete, participants may want copies of the diagram. Let the group know that you need to refine the work and may need to circle back with some members. Also let them know you’ll need to contact a few key clients to get their input before the vision is finalized.

Your next step is to finalize your draft and make sure you fully understand all concepts. When complete, you can enjoy the satisfaction of having developed a three to five year product vision. You will be far more knowledgeable about your product, competitors, and the market than you’ve ever been.

Final Cautionary Note

Be sure you keep your product strategy out of the public domain. If your competitors would happen to see this document, they may be able to beat you to some of your goals. Warn each thought leader to keep the product strategy under wraps. It is not for public consumption.

In my next post, I’ll discuss the importance of testing the product strategy on thought-leading customers and prospects.

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In recent posts I’ve discussed ways to gather information that will put you on firm footing as a product manager. These included:

• Market research
• Customer list
• Presentation materials currently in use
• Company collateral
• Win/loss analysis data
• Customer proposal template and signed contracts
• Competitive information
• Customer data sources within your organization
• Defect reports
• Product Cost Information or a product P&L
• Existing product-related materials
• Analyst reports
• Competitor social media, websites etc.
• Internal survey of constituents

This is a lot of information! Now it’s time to dig in and chart your course.

Step Away to Make Your Plan

My advice is to go off-site to a place where you won’t be interrupted. You goal now is to rough out a plan for where you want to take your product. Your outcome should be based on information you’ve gathered and any preliminary conclusions you’ve drawn. The plan you come up with isn’t the final plan. It will give you something you can take back to the office and bounce off company thought leaders.

Where’s a Product Manager to Start?

Begin by drawing on your own knowledge – the know-how that you brought to your job, your experience. Also consider what you learned from reviewing your organization’s business plan. Methodically, layer on the information you’ve gathered through meetings with customers, reviewing competitors’ annual reports, and your internal surveys. Slowly consider each information source you’ve tapped.

Considered as a whole, the findings will help you get a strong sense of where your product’s market is heading. It will also give a good idea of how your organization is positioned. At this point you should be prepared to think strategically and rough out a draft of your strategy.

The Preliminary Product Strategy

Think in terms of developing a plan that can fit on one presentation slide. Begin by choosing a point in time as your end focus, perhaps three years out. Now choose a starting point, like the end of the year. Your vision slide needs to denote certain strategic milestones. These will indicate where you want to your product to be in six months, at the end of the year, and at various stages along the way. Bear in mind that these milestones aren’t requirements but a record of your progress.

Mapping Out Deliverables

Often the easiest approach to developing this vision is to map out the deliverables along your timeline. Start at the end of the current year, because it is easiest to envision. What will the situation realistically look like? Next write down what you want your product to look like in three years. This is your outcome – the endpoint of the process. It should be based on what you’ve learned through your information gathering. Now consider what activities need to happen along the way for you to meet the three-year goal? These are the milestones that populate the various time points along your timeline.

Product Manager  – Don’t Overcomplicate Things!

Creating this single presentation slide is tougher than you may think. In fact, it would be easier to present reams of information in a complex format. With every page you add to your document, you diminish its value.

It can take you a day to work out your draft or maybe a week to come up with your vision. If your thinking stalls, reach out to a thought leader in your organization and brainstorm ideas.  The vision will be richer when it reflects both of your thinking.

Taking the Next Step

In my next post I’ll discuss how to formulate a winning approach to your market. It’s the exciting step that starts to put your ideas in motion.

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