☠️ The 10 Common Product Prioritization Challenges! [3/5]
This post is part of a series. This is part 3.
In the previous article, we listed 15 proven product prioritization frameworks to help you easily get inspired and pick one! In this article, I’ll share with you 10 common deadly monsters you need to avoid as you build your product prioritization framework.
I’ve been researching, implementing, and teaching about product prioritization for some time and have been mindful of the key deadly monsters that you’ll need to avoid or fight as you go lool
Don’t freak out. The obstacles to establishing the right framework are not that serious but I’m sure you watched the gif till the end😅
So let’s get to these common challenges (aka monsters), one at a time!
1) Without a strategy, you’re prioritizing for nowhere.
As mentioned above, the main objective of any prioritization framework is to guide you to make the “right” decision. Without having a clear strategy, you won’t know the “right” decision.
To prioritize a differentiated unique offering, you need to be crystal clear about your unique offering, your target audience, your market, and your company’s or product’s mission/vision.
If you don’t know where you’re going, you can’t prioritize effectively. You’ll trade off short-term needs against each other and chase your competitors.
In the “why prioritize anyway” post, we’ve discussed that one of the main reasons for prioritization is to make the right decision, not just a decision. I can’t emphasize this, but I personally feel that it’s a waste of time to drive a car not knowing where you want to go. All the turns you make will lead somewhere!
2) Don’t prioritize based on what your competitors are doing.
Any product need to have a competitive advantage. It’s common for a team to feel the pull of prioritizing the feature a key competitor already offers. I’ve been a victim of this many times at ClickUp during my time as a PM. If your team has clear evidence that adding that “me-too” feature will add to your bottom line, then it can earn a slot on your roadmap.
Your product development should be based on research, customer feedback, and innovative ideas that you and your team compile. Differentiated solutions create above-average value. Offering similar to competitors won’t create or capture more value than them. A differentiated offering requires concentrated effort over a long period of time and a deep understanding of your customer’s needs
That’s what should be prioritized!
3) Avoid saying yes to everything
I see this often. Product teams often still struggle to say no to requests from salespeople, C-level executives, and customers, which defeats the whole purpose of any prioritization framework.
The key reason for having a prioritization framework in the first place is to prevent this type of development overload.
This is why it’s essential to communicate and align with everyone you know about the product prioritization framework you’re using directing the conversation around a set of objective criteria of prioritization rather than a subjective gut feeling of a C-level executive. Then, once you’ve started using the framework, practice saying no to requests that don’t meet the success criteria of your framework.
4) Don’t only prioritize what’s easy
The phrases “quick win” and “low-hanging fruit” have been abused in the PM world. It’s an ongoing temptation product teams and leaders face to rack up a series of “quick wins” by cranking out as many features as possible.
Now, whenever I hear those phrases, it’s either the backlog is dry or the prioritization framework only favors those easy-to-do product initiatives.
Remember, your product strategy should be focused only on building solutions that move the needle for your company (that delight customers, grow your market share, and add revenue) not on what you can develop and release quickly. Yes, items that can be developed faster are always better but that’s not the only determining factor.
I like to think of “quick wins” as supplements. You don’t become dependent on your supplements to bulk up when hitting the gym. You take them to get to your calorie intake goal. Same thing with “quick wins, you first define your product’s vision, establish a strategy for realizing that vision, prioritize major metric movers, then if there’s room in terms of sprint capacity, you start adding quick wins.
The moment you realize that a couple of quick wins won’t create any differentiating offering since they’re too easy for competitors to copy, the more you’ll start understanding how they might not be that impactful after all!
5) Be aware of factors that are hard to estimate
Revenue, for example!
It’s nearly impossible and unpredictable to prioritize features on how much they’ll end up contributing to a pump in revenue. There’s also no way you can find a clear causation effect.
This becomes even harder for new features and products. Anything new comes with a lot of uncertainties. I’ve seen companies where sales reps help in the prioritization by saying whether “feature A” will potentially make more money than “feature B”.
Don’t get me wrong. Potential revenue can be a great factor but only if you can accurately estimate it (at least to some degree that is reasonable) but, in most times, that usually becomes far from the actual reality.
6) Don’t lose sight of segmentation
I’m sure you’ve heard “I’ve found that 30% of our customers want feature A”.
30% sounds reasonably high to prioritize something. But once you ask “how much of this 30% contribute to monthly recurring revenue”, the story completely changes.
You may find that the 30% segment only contributes to less than 2% of the total average monthly recurring revenue.
Is it worth the build, now?
It’s essential to prioritize based on segmented groups, those are your ICPs, personas, engaged user segments, etc. Different groups of your customers have a different set of needs. Your prioritization framework should put segments into the mix to figure out which problem is essential to solve, for who, and how much would that impact the overall business KPIs.
Avoiding thinking about segments usually leads to a bloated and incoherent product as you try to satisfy everyone, ending up satisfying none!
7) Figure out your effort ratio
Ensure that among your prioritization criteria is anything that puts “effort” into the equation.
A great PM is also a great businessman! At the end of the day, all you should care about is a product that yields a high ROI. In digital products, the highest product investment is usually in engineering resources you spend developing each feature or initiative.
But it’s not enough to rank each feature by how many resources or “effort” it will require. It’s also highly recommended to first plan your spending of these resources, and plan to spend resources by buckets:
- Strategic initiatives (for example; we’ll spend 30% on this quarter)
- Features (we’ll spend 40% on this quarter)
- Maintenance and tech debt (and so on..)
- Moonshots and innovation
This factor changes with time which affects how much you put into each bucket. The focus on each bucket also changes with time making prioritization a dynamic framework!
8) Always prioritize customer value
Another factor that needs to be in your mix no matter what is “customer value”.
I’ve seen companies that only focus on GMV (gross margin value) and chase monetary outcomes not realizing that if you just focus on serving and solving your customer needs, that will eventually impact GMV.
Remember this…as you get bigger you’ll feel a huge pull towards business outcomes, like revenue and market share but that’s not what got your first customers or got you to product/market fit, at first.
Your customers did!
A huge customer value is directly related to revenue and eventually leads to it, so always focus on prioritizing initiatives based on this.
9) Avoid scores that are hard to justify
I’ve been in these calls where we hear “this feature is P1” and then when you ask “what does P1 means”, you get an obvious answer of “Priority 1”.
But how can you define what a low or high priority is?
That’s when you get into an endless debate among stakeholders…
It’s ok to have abbreviations to bucket feature upon but it’s essential to have a clear, communicated, and justified definition of what it really means.
So, instead, translate P1 to a numerical or justified meaning, like P1 = MRR more than $100, or impact >500 customers, or has a justified answer like P3 = few users, nice-to-have, etc.
Similarly for t-shirt sizing, XS, or S in agile should always equate to a standard defined effort, a benchmark that you can compare with.
10) Focus narrowly but also bet widely
It’s not about betting on “moonshots” only, as it’s not about focusing on “quick wins”, either.
Some companies usually default to betting widely chasing any new initiative that has the siren song of a possible “great success”, often by underestimating their competitor, saying something along the lines of ”they won’t see us coming”. Others also focus narrowly on chasing the “less risky” approach and then wake up one day without a market share.
For the short-term impact, a narrow focus is always better but you also need to bet on crazy ideas for your long-term strategy (mission & vision) to make sense.
In my experience, I’ve found that “focus” is incredibly hard to understand. For me, focus boils down to your willingness to get “C” grades (aka not pursuing features) in all areas except those you want to compete with. In those areas, you should get “A” grades prioritizing related initiatives. In areas that are necessary but not critical, you need to be willing to just be good enough, and get a “B” grade.
Focus is key since as a PM you need to always stress efficiently managing engineering resources, putting more resources on impactful initiatives. But, at the same time, you won’t increase market share if you don’t bet on untested crazy ideas. It’s risky and will probably be a failed bet, but if it works, it will set you apart.
Wrapping up…
In the end, no matter what your prioritization factors are, you will have a successful framework if you eventually look at your roadmap and see it full of different types of features: essential key competitive differentiators and risky crazy bets.
In the coming post of this series, I’m going to share a step-by-step framework to guide you to build an effective product prioritization framework.
Check it out here.
