Essential Ingredients to Reach your Product Goals: Here's How to Accelerate Company Growth
The position of product manager can often be difficult to define. The job is not simply about covering tactical activities like managing backlogs, releases and user testing. It’s also about being strategic in delivering the true customer value, creating revenue at low cost and then getting your team to buy-in.
So then how can you, as a product manager, accelerate a company’s growth and reach product goals? It is important to note that product management goes hand in hand with product innovation. Innovation is a key ingredient to creating and fueling growth for a company. If a customer finds value in what a company has to offer, they will wish to pay for that value, which then inevitably leads to growth as more and more customers jump on board. Therefore, creating monetized customer value means creating value for the business.
Monetizing Customer Value
This then leads us into one of the necessary ingredients to reaching product goals and success: managing and growing the customer value monetization process through the use of 2 simple equations. These equations implement an innovative monetization process that can continually open up new opportunities to create customer value and business growth.
The Value Equation: Create enough value to generate profit from the transaction.
The Monetization Equation: The profit created from the transaction must cost less than your ability to capture it.
These two equations involve customers needing to believe they are getting more value than they pay for or else they won’t keep coming back to use the product or service. Enough value must be created in order for customers to be willing to spend money. And, furthermore, in order to make a profit, delivering the value should cost less than capturing it.
Objectives and Key Results
Having the ability to manage and grow the customer value monetization process is a key ingredient, however reaching this product goal and accelerating a company’s success is not possible unless everyone from all teams, including engineers, marketers, designers etc. have goals moving in the same direction. Command their attention. You are the communication glue, which is why you must ensure that everyone within each team is on the same page. Therefore, OKRs (Objectives and Key Results) are essential, and common goals throughout each department must be set towards achieving the key results.
Objectives and key results can unite teams together behind a single focus and strategy. Objectives are time-bound qualitative goals while key results are quantitative, letting you know whether the objectives have been met at the end of the set time frame. Objectives are meant to be inspirational, a great example would be: Launch an awesome MVP. On the other hand, key results exist to quantify that inspirational goal. These can be metrics based on growth, engagement, performance and revenue, for example, having a 15% conversion rate or 40% of users returning 3 times in one week.
Objectives and key results are meant to help you and your team push toward bigger and better accomplishments in order to move a business forward. As I mentioned earlier on, each team (engineering, marketing, design etc.), should determine how their OKRs lead to the success of the company’s overall OKR. This cross-functional buy-in is a key ingredient to reaching product goals and obtaining that monetization model.
As you can see, ingredients such as managing customer value, profits/costs and setting objectives and key results are all a part of helping product managers reach product goals. If no one is on the same page, and each team has an OKR going in a different direction, they will never succeed in monetizing customer value nor accelerate company growth. Everyone must work in unison behind a single focus and strategy.
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