Digital product strategy

A digital product strategy is the written choice of who one digital product serves, what it charges for, and what it will build next. It governs a single product. The whole company version is a digital business strategy, and that is a different document.

Three decisions carry the weight — the user you are for, the price model, and the sequence of bets on the roadmap. Everything else in the document supports one of those three.

It is also not a marketing plan. The strategy decides what the product should be; demand generation decides how people hear about it. And a digital operating model sets who owns the product, not what the product should become.

Key takeaways

• A digital product strategy sets the target user, the price model and the roadmap for one product.
• One product, not the firm; the business strategy decides where the company competes.
• Durable product teams beat temporary project teams when the product has a long life.
• Pick the pricing model before the roadmap, because price decides which features matter.

How it works

Start with the user and the job you are paid to do for them, then pick a price model that matches how they get value. The roadmap comes third, and it only lists work that serves those two choices.

Funding shape matters as much as the plan itself. A strategy that assumes a standing team, written for a firm that funds temporary projects, will be overtaken by the budget round long before the roadmap runs out.

Writing on Martin Fowler’s site in February 2018, Thoughtworks consultant Sriram Narayan argued that durable teams that ideate, build and run beat temporary project teams on cycle time and knowledge retention.

Write the user down properly. A buyer persona template keeps the segment concrete, so the roadmap argument becomes about evidence rather than taste.

Then test the segment with real buying behaviour, not stated preference. People say they want every feature and pay for roughly three — the gap between the two is where most roadmaps go wrong.

Pricing is a strategy decision, not a finance detail. Consumption pricing suits products with uneven usage, while value based pricing suits products whose benefit the buyer can quantify.

Write down what you will not build, and be specific. Non goals are the only part of the document that survives contact with a loud customer, because they give the team a sentence to point at.

Review the strategy on a fixed date, rather than when someone complains. A quarterly check against the two chosen measures keeps the document honest without turning every bad week into a rewrite.

Examples

Three product patterns show the strategy doing real work. Each one makes a different trade between reach and margin, and each one picks a measure that tells you quickly whether the choice was right or merely popular.

Government services take a different route to commercial ones. The GOV.UK Service Manual tells teams to prioritise user needs over those of senior stakeholders, which removes the usual argument about whose feature goes first.

Software firms selling into regulated industries often cap the roadmap at three bets a year, then track Net Promoter Score (NPS) by segment. A rising score in the wrong segment is a warning, not a win.

Startups that build the first release through product outsourcing keep the strategy in house and hand over the build. The rule that holds is simple — outsource the construction, never the choice of what to construct.

Marketplaces face the sharpest version of the same choice. Every roadmap bet has to pick a side, buyer or seller, and a strategy that claims to serve both equally usually ends up serving the louder one.

Related terms

These five sit close enough to be mistaken for the strategy itself. Each one is an input or a measure, and the strategy is the choice they inform. Read the distinction before you borrow a template from any of them.

• Conjoint analysis: a research method that tests which features buyers will actually pay for.
• Revenue per user: the measure that tells you whether the price model is working.
• Consumption pricing: a model that charges by usage, suited to products with uneven demand.
• Buyer persona template: a format for writing the target user down so roadmap arguments stay evidence led.
• Product outsourcing: handing product construction to a partner while the strategy stays in house.

FAQ

Is a digital product strategy the same as a digital business strategy?

No. The product version covers one product’s users, pricing and roadmap, while the business version decides where the whole firm competes and how it earns. Confusing the two produces a product plan nobody above the product owner has agreed to fund.

How long should the document be?

Short enough that the team can recite it. Two pages covering target user, price model, three bets and the things you will not build is usually plenty. If it needs an appendix, the real strategy is hiding somewhere in that appendix.

How do you know the strategy is working?

Pick two measures before you start — usually one about adoption and one about money. If both move the wrong way for two quarters, the strategy is wrong, not the execution.

Can you outsource product strategy?

You can buy help with the research and the pricing analysis. The choice itself should stay with whoever is accountable for the product’s result. Partners can run the analysis, but the accountable owner signs the choice.

When should the strategy be rewritten?

Rewrite it when the target user changes, the price model changes, or a bet fails badly enough to free a year of capacity. Small roadmap edits do not need a new strategy.

Shortlist vetted product engineering partners in the Outsource Accelerator provider directory before you commit a roadmap.