What COVID Has Taught Us About (Product) Focus

When it’s all said and done, the COVID pandemic will prove to be one of the most devastating events in modern history. It’s been difficult for so many people, on so many fronts and we’re still not out of the woods. It’s been bad, period. But, in trying to consider the flip side, the good that has come out of it, I think many would agree that it’s caused us to re-evaluate our focus.

On a personal level, for my entire family, this period has forced us to slow down from the organized chaos and pure busyness that ensued previously and allowed us to refocus on the things that really matter. Things like living as a family unit, our kids, our faith, our health, having a job, having toilet paper! The ambitions of life can start to take over at the expense of the most important things, and before you realize it, you’re not doing or appreciating the important things nearly enough. The things that matter most are taking a back seat to doing more, and instead of being awesome in a few areas you’re treading water across the board.

As challenging as it’s been recently, after we get through this and have the benefit of perspective years down the road, I’m certain that this time period will have revealed a huge impact in my life in terms of getting back to basics and focusing on what matters most. I’ve already experienced some of the fruit of that, and frankly I hope that those pre-pandemic days of destructive busyness and chaos never enter my life again. I’m certain that there are more than a few out there that have a similar perspective.

So, what does this mean for software product companies and product strategy in general? Well, in the same way that COVID has forced a refocus of personal lives, it’s also forced businesses to re-evaluate their most important areas and refocus on what they do best. In many cases, especially with a tighter watch on expenses, businesses are reallocating resources from growth in new areas (broader footprint) to growth within core areas (deeper footprint). Much like the personal example shared above, these are likely areas that were neglected to a degree and deserved more focus in the first place.

If you find yourself in the midst of this situation with your product or company, here are three tactics to consider that will help you regain your strategic focus.

1. Get Hyper Focused On Your Target Customer

We’ve worked with more than a few companies that thought they had clarity on their target customer and market, but after going through the exercise of trying to put it on paper, realized that it was both vague and varied depending on who you asked at the company. Having this clarity is essential for focused product strategy, but it’s equally essential for the rest of the organization. Selling and supporting the wrong customers takes precious bandwidth away from delighting the right customers. This is especially debilitating for smaller companies that can least afford the opportunity cost.

So, if you don’t have your target customer dialed in to a tee, get on it, get it written down and over-communicate it with the entire company. At the end of the day, your target customer profile should be as focused as possible while still rendering an attractive market opportunity.

In my experience, the process for defining the target customer profile is a combination of art (qualitative) and science (quantitative). Here are some tips:

Look at insights on customer engagement & happiness

If you have the data on hand, start by looking at the customers and users who are most engaged with your product. Similarly, if you have a current NPS or CSAT program running, take a look at the clients with the highest ratings. Is there a common thread that runs through them? Are there distinguishing characteristics between the customers who are most happy and engaged versus the ones who are not? Is there a certain pain point that these customers have that’s being solved particularly well?

Look at churn & close rates

Again, if you have the data (and hopefully you do), look at sales close rates and client churn over the past year. Is there a particular value proposition that is resonating exceptionally well with a certain market segment leading to higher close rates? Churn rates will give you better insight into the types of customers to stay away from, but if you have good data on renewals, you’ve got more insights into the types of customers to potentially target.

Talk to people inside your company

Don’t underestimate the value of talking to your customer facing teams. Simply asking them to describe the “perfect” customer (and the ones to stay away from) based on their experience supporting customers, will give you some amazing insights. If you still have active founders / co-founders at your company, they can also be great resources for describing the types of customers that have been more or less successful over the years. These insights will be particularly useful to the Product team and often full of information on the most important use cases and pain points to solve for different customer types. These qualitative descriptions will be a huge help in formulating your target customer profile.

Identify a few target profile attributes that don’t require inside knowledge

When defining the target profile, for the sake of efficient sales prospecting and marketing, make sure you have at least a few attributes that can be assessed without needing input from the prospect. For instance, geography, company size, company industry, B2B vs. B2C, etc. can all be estimated with different online tools (without requiring inside knowledge from the prospect) to help focus outbound lead generation and marketing efforts.

Orient all top KPIs around your target customer

Once you have your target customer profile well defined, use this lens for all your top KPIs. In fact, create new KPIs that are meant to drive success around acquiring and retaining a higher percentage of target customers. These goals will force great critical thinking across your different departmental strategies.

2. Double Down on What You Do Best

Focus is about doing less things better. If you don’t already have a clear and concise (and short) list of your core competencies, get one together and share it. Try not to make it longer than 3 areas to force the thought process of most important. Use this list for your ongoing product strategy in determining where to invest and not to invest. This will help you play to your strengths and deepen your differentiation within the market.

On the flip side, start saying ‘no’ to investments that are outside your core areas of competency. Or, at least get aggressive on target bandwidth (e.g., 80%) spent on core competency areas. In other words, think long and hard about broadening your feature set before deepening what you already have. This includes not chasing the competition on “me too” features when they fall outside of your wheelhouse.

Don’t forget to put measures in place to assess and optimize your progress at improving your core competencies. Establish at least one KPI for each core competency and try to orient each one around customer value; an indication that customers are deriving more or less value from a core product area. Use leading indicators vs. lagging indicators as much as possible. If possible, review on a weekly basis to drive feedback and input on short-term decisions.

3. Formalize Your Focus in a Strategic Plan

When you’re talking about a refocus, it’s a great time to revisit (or create) your company-level strategic plan. In addition to the two areas mentioned above, it’s an invaluable framework for capturing other focus components such as mission, vision, top obstacles to overcome, overarching strategy and success measures. It sets the focus for the entire company and feeds into the strategies of all other departments, including Product. Formalize it, communicate it, refer back to it often, iterate on it every quarter. You’ll be amazed how it can bring collective focus to your company.

If you’re interested in more details, check out this post on our strategic plan framework.