What is Product Strategy and Why is it so Important?
The real-time payments use case
Every growing company needs a strategy team to help navigate the ship, point it in the best direction, and assist in both business and product-related decision-making.
At Melio, we have a team of payments experts who work closely with different stakeholders in the company, leading initiatives meant to optimize Melio’s product offerings, user experience, revenue, and growth.
In the past year, I was lucky enough to join Melio and become a part of the company’s strategy team. In this article, I’ll share my story at Melio, explain what product strategy is, why it’s important, and how it works, at least for us at Melio. I’ll also examine it through the lens of our recently launched real-time payments feature.
First, who am I?
A bit of background before we jump in. I am Or, which may be a strange name to non-Israeli ears, however, it is shared by nine people here at Melio! I am 31 years old and a mother of one cute 2-year-old, and one curvy cat.
Throughout my career, I gained experience in conducting market research, analyzing trends, identifying opportunities, and providing recommendations to decision-makers. I also have experience in project and partnership management.
For the past 18 months, I have been a member of Melio’s Product Strategy team.
What does the Product Strategy team do?
Our team’s day-to-day is spent answering business and product-related questions such as (but not limited to):
- What would be Melio’s next knockout feature?
- What is the next product we should invest in?
- How can we best answer the needs of our users?
- How can we optimize our SLAs?
These questions may come from senior management, product managers, customer support teams, or from our own research and initiative.
We answer these questions by gathering information in various ways, from conducting market and competitive research and tracking payments and fintech-related trends, to exploring our internal data and speaking to SMBs across the U.S. to get their feedback and point of view.
Once we have a balanced view based on different data sources, we come up with a clear conclusion as well as recommendations for the next steps. In some cases, we’re also involved in the execution of these next steps. Exciting stuff!
How product strategy affected the RTP product
Now, let’s try to bring this long job description to life by using a real example I was involved with at Melio: our recently launched feature, allowing vendors to get paid instantly using RTP.
Wait, what’s RTP?
Standing for real-time payments, RTP is an increasingly popular method of sending money electronically between bank accounts in the U.S. The emphasis is on speed as RTP transactions are completed instantly.
RTP is available all year round, allowing both businesses and consumers to send and receive money even on bank holidays, weekends, and after business hours. RTP is already available to about 65% of U.S. bank accounts, and with coverage growing every week, it comes right on time for vendors and contractors getting paid via Melio.
How product strategy fits in
So, what was my part in this feature launch? It all started with research. Before getting into product planning, we wanted to create a business case for adding RTP to Melio’s offering to make sure there’s a real opportunity here.
We asked questions like:
- Is instant payment a valuable offering for vendors getting paid through Melio?
- If so, how many of them would use this offering?
- Would they be willing to pay a fee for receiving their funds faster? If so, how much?
I started digging in. The best way to assess the opportunity was by conducting interviews with vendors receiving money through Melio who have already expressed interest in receiving faster or instant payments. In a joint effort with Product and UX teams, we conducted a series of interviews leading to a very clear conclusion: This feature is needed. And ASAP.
Next, I wanted to know what RTP experiences feel and look like. I examined some bank experiences, sending money from one bank account to another and receiving it instantly. These experiences helped our Product and UX teams plan how Melio’s future RTP product would work, look, and feel.
Finally, we had to think of the right pricing model for this new feature. How do you put a price tag on the value you provide to your users? This question was at the heart of a long thought process, which included modeling and calculating potential profits, costs, and risks taken by Melio, as well as market benchmarks.
The launch
In August 2023, Melio started offering eligible vendors the ability to accept their incoming payments instantly, for a 1% fee.
This is not only a valuable offering for any business, but also a relatively unique one in the B2B Payments ecosystem.
After all the research conducted and predictions made, the results actually exceeded our expectations. Since its launch, vendor RTP has become one of the most adopted features on Melio’s platform.
This means we managed to correctly identify a real need for our customers and make it happen.
Strategize, execute, repeat
Contributing to the RTP project was a truly fascinating experience. Witnessing the long research and planning stage turning into real-life value for our users, was the cherry on top for me.
A strategy team is an important component in every company, especially in a competitive environment like fintech, where focus, as well as fast and accurate actions, are crucial.
Got feedback? Want to share your own views on how to create and implement a product strategy? Leave your mark in the comments section, I’d be happy to continue discussing this subject further.
