How do you know if your product strategy is successful?

Our mission as a team is to clarify & accelerate the product roadmap. For us, clarification means a couple things:

1. Do we know what we aspire to invest in over the next quarter, half year, or FY?
2. Have we clarified our decision / prioritization framework of what causes an initiative to be above or below the line for what we will commit to?
3. Do we have a shared understanding of the tradeoffs that will occur as a result of our decisions, and are we ok with the outcomes of the tradeoffs?

On the acceleration front, one helpful lens we've found has been:

1. What are organic ways we can accelerate the roadmap?
2. What are inorganic ways we can accelerate the roadmap?

Product & investment prioritization stems from company strategic prioritization, so it's critical to have a clear understanding of what the company is focused on and why, first and foremost. Organic levers to accelerate the roadmap could include things like streamlined internal process, quicker feedback & iteration cycles, strategic investment in particular product surface areas now to unblock / enable future developments down the road, and more. Inorganic levers to accelerate the roadmap could include product partnerships, technology partnerships, or M&A. 

In all, we measure success based on the degree to which these efforts clarify the direction of the product.

Success metrics and voice of the customer. Ideally, at the time of defining a product strategy, you’ve also invested time in thinking about specific Goals that are important to measure progress against it. The goals should be time bound and specific and may include product usage, customer satisfaction, and financial performance. Several product organizations (including HubSpot, Google, Spotify, Twitter, LinkedIn, and Airbnb) like using the Objectives and Key Results (OKR) framework.

Metrics are important, but at the end of the day, the best true north is the voice of your customer. If your customer is happy, the rest will follow.

Evaluating the success of our product strategy is a multi-faceted process that involves tracking various indicators and metrics. We closely monitor key performance indicators (KPIs) aligned with our strategic objectives, such as user engagement, customer satisfaction, revenue growth, and market share. The trickiest part of evaluating your product strategy is separating the value of the strategy from the quality of the execution. It's easier said than done. I've encountered numerous instances where a strategy was deemed unsuccessful, only to discover that it was the poorly executed tactics that actually led to the failure. If I had a nickel for every time I've come across this scenario, I'd have quite a collection of nickels.

Research and consistent data analysis helps us gauge the impact of our strategy over time as well as mitigate the disproportionate influence the execution has on the perception of the strategy. Validating the integrity of the strategy by conducting research on the concepts the strategy elicits is a great way to make sure you’re heading in a positive direction. Then conducting periodic reviews to assess whether we're achieving the desired outcomes outlined in our strategy, such as reaching target milestones or capturing new market segments (via the tactical executions) further solidifies the success of the strategy. Before you throw the whole strategy away, always try several executions and A/B test your way into it if you can. 

Furthermore, ongoing feedback loops from customers, stakeholders, and internal teams provide valuable insights into the effectiveness of our strategy. Adjustments and refinements are made based on this feedback to ensure we stay on course.

Ultimately, the success of our product strategy hinges on its ability to drive positive outcomes for both our customers and the business, reflecting a harmonious blend of innovation, customer value, and market impact.

PMs should define the success conditions in the strategy (e.g. 20% market share, or $20M attributable revenue in H1 etc). Those success conditions should:

• Ladder clearly up to the needs of the org or company

• Define a realistic stretch goal, ideally validated through customer discussions or other qualitative or quantitative research -- including timelines

• Cover direct and indirect effects as needed

• Include countermetrics or contraindications that define changes to be avoided

This is the 10 million dollar question, isn't it? Maybe quite literally. The answer to this depends a bit on what market you are in and how large your total addressable market is. It is also going to depend on how established you are or how mature your product offering is. An ongoing successful strategy for a mature, established product involves more than just tracking feature releases.

This question is very similar to the question about validating that your strategy is the right strategy, but I’m going to look at them through two different lenses. For this question, I’m going to assume that you have a product that has already been introduced, you believe that your strategy is the right one, you are executing on it, and you are now wanting validation that it has been successful.

• Usage trends: Measuring usage trends is always a good thing to monitor. Who doesn't want usage numbers constantly going up and to the right? But, retention is a huge thing to track as well. If your overall usage is growing, but 80% of the new users churn the next month, something is likely wrong with your strategy. Look at metrics like Daily Active Users (DAU), Monthly Active Users (MAU), and feature-specific engagement rates. These numbers can tell you a lot about how well your product is being received and used over time.

• Retention rates: Retention rates are critical. It's not just about getting users to try your product but ensuring they continue to use it and see ongoing value. High churn rates can signal that while people are interested enough to sign up, the product isn’t delivering sustained value. Investigate why users are leaving—the feedback they give is invaluable for refining your strategy.

• Roadmap execution: Your strategy needs to take into account more than just what features you are going to deliver. You need to know your ability to execute on the roadmap, when you are going to market your product, and how you are going to get feedback. Regularly review your progress against the roadmap. Are you hitting your milestones? Are the features being delivered on time and as expected? Execution efficiency can be a strong indicator of strategic success, when combined with other metrics on this list.

• Market and customer feedback: Gather continuous feedback from your market and customers. Are your users excited about what you’re building? Regular surveys, interviews, and usability studies can provide insights into customer satisfaction and pain points. Make sure to act on this feedback—showing customers that you listen and respond to their needs builds trust and loyalty.

• Market trends and competitive analysis: Keep an eye on market trends and what your competitors are doing. If your strategy keeps you competitive and you’re able to differentiate your product in a meaningful way, that’s a good sign you’re on the right path. Regularly analyze how your product stands out in the marketplace and where it fits within industry trends.

• Net Promoter Score (NPS): Tools like NPS are valuable for gauging customer sentiment. A high NPS indicates that your users are not only satisfied but also willing to recommend your product to others. This is a strong endorsement of your strategy. Use NPS data to identify promoters and detractors and delve deeper into the reasons behind their scores, but don’t just dismiss detractors' comments without understanding why they don’t like what they see.

• Financial metrics: Financial metrics like Annual Recurring Revenue (ARR) growth, customer lifetime value (LTV), and customer acquisition costs (CAC) are crucial indicators. Positive trends in these areas suggest that your strategy is driving business success. Regularly review these metrics to ensure your strategy is delivering the financial results needed to sustain and grow the business.

• Customer engagement: I see this as similar, but different, than direct customer feedback to you. Are customers recommending your product to others? Are they expressing satisfaction through reviews? Are they engaging with your product regularly? These indicators can give you a clear picture of whether your strategy is hitting the mark. Regularly engage with your customers through different channels to understand their level of satisfaction and gather actionable insights.

• Alignment with business goals: This is the same answer I give for a new product with no users. Ensure that your product strategy aligns with your broader business goals. This involves regular check-ins with stakeholders to confirm that your product direction supports overall business objectives. Misalignment can lead to strategic drift, where your product might be developing well, but not in a way that supports the company’s long-term goals.

• Iteration and adaptation: Finally, remember that no strategy is static. Continuously iterate and adapt based on the feedback and data you collect. Be prepared to pivot when necessary. Flexibility and responsiveness are key to maintaining a successful strategy in a dynamic market.

Ultimately, a successful product strategy is reflected in happy, loyal customers who find real value in what you offer and are excited about your product’s future. If they are excited about what you have done, what you are doing, and what you will do—and they are buying your product because of it—then your strategy is successful. Keep your finger on the pulse of customer satisfaction, engagement, and financial performance to ensure your strategy stays on the right track.

Determining the success of a product strategy can be assessed through various metrics. Here are some common ways to evaluate your product strategy:

1. Business Goals: Measure the extent to which your product strategy aligns with and helps achieve your overall business objectives. Key performance indicators such as revenue growth, market share, profitability, and customer acquisition can reflect the success of your product strategy.

2. Customer Satisfaction: Evaluate customer feedback and satisfaction metrics, such as Net Promoter Score customer surveys, ratings, and reviews. Positive feedback, repeat purchases, and increased customer loyalty are indicators that your product strategy is resonating with your audience.

3. Market Share: A growing market share indicates that your product strategy is effective.

4. User Engagement and Adoption: Assess user engagement metrics like active users, time spent on the product, and user retention rates. High levels of user engagement and increasing adoption rates suggest that your product strategy is resonating with users.

5. Return on Investment (ROI): Analyze the financial performance by measuring the ROI. Evaluate the cost of developing, marketing, and maintaining the product against the revenue generated.