Category Archives: Your Product Plan

Your Product Plan

“Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.”

– Peter Drucker

boxes and shippingI call it product plan here for simplicity, but I refer to the tactical plan for delivering the business offering, whether that’s product, service, or both. You already did the essential planning for your business offering in your lean plan strategy and tactics. Product tactics include regular monitoring of product or service quality, launch dates, packaging, feature sets, technology, bundles, design, prototypes if required, configuration, and sourcing. The lean plan collects the specific tactics to execute. It has no more description than what is needed to execute.

This chapter provides more background for developing those tactics; and it covers the need for additional explanation and description when your business requires a more formal plan or pitch, for outsiders.

It includes:

Align Business Offering with Target Market

Always review the critical alignment between your product and your marketing strategy. Your product or service tactics should be interactive and interdependent with your marketing tactics. Setting target markets and working with personas should be extremely important input for your product or service development. Don’t do this in a vacuum. One of the most common mistakes caused by lack of planning is developing product or service features for their own sake, or because the team wants them, without regard to the target market, why people buy, and what they want and need. Peter Drucker wrote:

The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.

– Peter Drucker

One big mistake I made along those lines was a product without a strong enough packaging design, going to retail markets. On the other hand, I had a big win by being very early in the business of offering software downloadable online. Both were examples of the crossover between product and marketing, reflecting target market, segmentation, and distribution portions of the marketing plan.

Make sure everything you have in a pitch or formal plan matches what you have already in strategy, tactics and specific milestones.

If you’re running an existing business, review your business offering. How well does it match your strategy? Can you do it better than you do now? How? What will that take? What does your market want from you that you aren’t doing? What might be the strategic growth opportunities? Are there new developments in the competition that might affect your business offering? Should you be changing formats, packaging, pricing, shipping logistics, or something else? Should you be doing something about sourcing?

Startups normally need to include more information on design, prototypes if required, configuration, sourcing, and technology. Are you registering patents? Licensing from somebody? Make sure that you’re connecting dots to deliver what you must. And make sure what you deliver matches your identity and target market.

And take the opportunity to review your team functions and responsibilities. You should have somebody responsible — a single person, not a group — for every important task. And your plan should identify that person. Your tactics need responsible managers.

What to Include in a Product Plan

Here is a list of common information components for the business who is offering information in a business pitch or formal plan:

  1. To the level of detail required by the business plan event, list products and services and relate them to sales projections and (if you have it) past sales. Be sensitive to what your audience wants. Bankers want to see history that validates financial performance, and investors want to see future growth. Too much detail gets in the way. For big lists, consider including a summary in the pitch or formal plan, and leaving the details for appendices.
  2. Include product road maps showing growth and development plans for the future. List new product launches, or new versions of existing products, on a timeline showing when they are scheduled.
  3. Describe technology and sourcing. Of course the details here depend on the context, but technology platforms and development are critical for most high-tech products, apps, and websites; and sourcing is often important for physical products.
  4. Show your business’ intellectual property. Patents are sometimes the best guarantor of defensibility, but only good patents written well enough to ward off imitations, along with a legal fund to defend them. Existing market position, trade secrets, and relationships can sometimes work like a secret sauce.
  5. Unit economics and scalability. The unit economics show what it costs to deliver your product or service to a customer, what you charge for it, and margins through channels of delivery or affiliate sites and sales structure. Investors prefer product businesses that are scalable. In a classic professional service business, for example, doubling sales requires doubling headcount and fixed costs. This goes for consultants, accountants, attorneys, and many other professional services. And some service businesses, such as web tools, are easily scalable. Achieving scale means you can add sales volume that’s disproportional to overhead and fixed costs.
  6. Bankers will want to see sales history, steady growth, clear distribution channels, stability, and easy sourcing. Existing companies will have distribution agreements, vendor contracts, and other evidence of stability.
  7. Startups seeking investment need to offer validation any way possible. Show sales if you have them. Sales made through a or similar crowd funding site are excellent early validation. Contracts with buyers, or even signed letters from potential buyers or distributors, can help immensely.