Strategic Direction

Overview

Creating a winning strategy is not easy. It involves considering many different inputs before selecting the ones with the highest impact, the opposite of brainstorming a strategy. This work can be time-consuming, but ultimately, the better job you do setting your Strategic Direction, the less waste you will have. The SaaS commercial strategy helps you shape your overall direction taking into account pricing.

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Creating strategic options

The product vision and mission statements, defined in the product positioning stage, anchor your strategy. After this, conducting research, such as customer pain point analysis, should help you identify strategic area options.

Customer pain points

A common strategy is adding more features or depth to a product to satisfy customers and increase sales. Kano analysis (see diagram) offers caution to this approach. Referring to the grid, basic needs translate to features in the core product. The curved line represents the customer's opinion based on how well they are implemented. In other words, your product must do the basics well, or customers will be disgusted at your product. Applied to software, this translates to various factors, such as usability and security. Disgust will translate to low sales, low customer satisfaction and subscription churn.

To give a simple example, imagine you have booked a hotel room. There is champagne waiting for you and a sea view. When you take a shower, you realise there's no soap in the dispenser. This causes disgust, and the joy of the champagne is quickly forgotten. 

In summary, it is crucial to prioritise addressing customer pain points, especially in the core product. This is not just a recommendation but a necessity for the success of your product. 

Kano Analysis

Competitors

Competitor profiling is especially important when considering strategy. A common mistake is to take every feature a competitor has and compare them with your own. You need to differentiate between features in a competitor’s product and those that customers care about.

  • Market position

  • Market differentiation

  • Product quality

  • Product direction

  • Customer's views

The competitor threat analyser focuses on SaaS

  • Win, loss and churn analysis

  • Competitor pricing analysis

UX vision

Before creating a UX vision, you should have some strategic options generated from the earlier outputs, such as the customer pain points.

The UX vision shows potential high-level system flows. It allows us to provide a good product experience by considering the customer experience as a whole. For example, you may change how customers navigate and interact with your product and would like to visualise this journey. It needs sufficient functional depth for people to understand the strategic options. You are very unlikely to build everything that the vision has within it.

This output is used when prioritising your Strategic Areas. It will allow the leadership team to synchronise on what their options really mean and is a great starting point for discussion.

The UX concept in the Minimum Valuable Increment is a more detailed visual output created to guide development. The UX vision can guide the UX concept as a starting point.

Threats & opportunities

There are many opportunities and threats that can impact an organisation. This overview shows you the large number of factors that should be taken into account before deciding on your Strategic Areas.

  • Product pain points

  • Competitor threats

  • Innovation opportunities

  • Pivot to new market

  • Technology opportunities

  • Internal process efficiency

Following the assessment of opportunities organisational structure should be considered for optimisation.

SaaS commercial strategy

The SaaS commercial strategy focuses on maximising revenue. It allows you to bring together many Strategic Areas into an overall pricing strategy.

  • Features and pricing

  • Tier Pricing

  • Usage allowance within tiers

  • UX improvements

  • Product customisation

  • Product quality/cost reduction improvements

  • Service Level

Prioritisation and team assignment

Prioritisation is the final stage when deciding which Strategic Areas to take forward. Below is a simple prioritisation system you can use. If you have weaknesses in specific KPIs, such as Customer Acquisition Costs (CAC rate), you may wish to add additional weight to these.

After you have a shortlist of potential Strategic Areas you should consider team assignment.

Teams may be working on other Strategic Areas. Therefore these should be reviewed as you may not wish to interrupt them. Use OKRs results to measure their progress.