Product Strategy Spectrum
Micro Strategy
The best product managers understand both micro and macro product strategies can make a sizable impact. Knowing how to dial in or out with your strategy is equally as key as knowing when to do it.
Some of the smallest functionality enhancements can boost conversion, reduce cart abandonment, or streamline operations. The example below illustrates how a seemingly minor functional improvement can make a sizable impact. Chipotle recently made it possible for a customer to seamlessly switch from delivery to pick up very late in the checkout experience.
It would be easy to understate the value of this functionality. Still, considering the inevitable abandonment resulting from having to restart the order process, the key conversion metrics would have likely seen an immediate boost. Typically a great candidate for A/B testing, I would argue functionality like this should go straight to production. Indeed, you could initially test a more nuanced variation of this specific feature, but I would contend that the test should be focused more on what could happen next for the user.
- Compare conversion rates for both paths (delivery > pickup vs. pickup > delivery).
- Discover what information you can display to ensure the customer feels secure in the fact that none of their order has been lost and changed.
- Do conversion rates improve with in-store coupons like 10% off for choosing in-store pickup.
Macro Strategy
Consider that you recognized that a critical piece of your product requires extensive, often frequent, data maintenance. You also realize that a potential solution provides an opportunity to generate revenue and further establish your product as best-in-class.
Story: Your customer’s administrative users rely on manufacturer product catalogs to build digital quotes, sales, purchase orders, etc. Your customers do this by entering data directly into the product or by pre-formatting the data for import.
Problem: Both methods can become very time-consuming and tedious when catalogs and product data change as often as monthly.
Opportunity: The manufacturers have agreed to pay to have the product digitized, boosting customer retention for the manufacturers.
Strategy A: Identify a manufacturer that is excited to partner with you and is willing to spend $20–25k upfront for catalog digitization. Downside — you and the client are starting from scratch.
Strategy B: Identify a manufacturer that has the most mature digital product catalog offering. Downside — the mature manufacturer has less motivation to commit resources to facilitate a full on partnership.
Strategy A generates up-front revenue, but when two partners engage in joint efforts that involve integrations, APIs, or proprietary data, starting from scratch on both sides invites failure before you even begin.
Strategy B doesn’t generate immediate revenue, but it will likely prevent many of the mistakes and drastically reduce the learning curve for your development team. The ROI will materialize when you get to market quicker with a maintenance-free product catalog for existing clients ready to pay annually to flip that switch in their system.
The bonus from choosing Strategy B is that now your product team is prepared not just to partner with the client from Strategy A, but provide subject matter expertise while establishing control over protocols and best practices.
When product managers are considering a potential new revenue stream or enhancing key functionality, generating the idea is only the first step. Your execution strategy will ultimately determine whether it's a success or a failure.
