It’s an exciting time to be working in product management. The demand for digital offerings — many of which require a strong product management practice — has increased rapidly. Product managers have access to more data than ever, and the ability to evolve and improve digital offerings based on customer response is easier than ever before. But the challenges have compounded as well, with customers now expecting that even the most complex offerings will be simple to use, provide value quickly, have highly effective onboarding and support, and improve rapidly based on customers’ feedback.
In the near future, product teams will be facing these opportunities and challenges in the backdrop of a possible recession. Product leaders can help ensure that teams and their offerings remain highly competitive by focusing on the most efficient approaches for growth — leveraging available data, potential partners, and the product itself to drive customer acquisition, retention, and overall business health.
This year, Forrester has created a series of planning guides to ensure that our clients make the best decisions regarding investments in 2023. Following are some of the recommendations we’re making for product leaders as they begin planning for the year ahead.
- Where to invest: To better support growth of offerings, product management leaders must provide the tools necessary for product teams to understand how customers are using their offerings and ensure that those teams know how to analyze data and leverage the findings to guide investment decisions. For example, now is the time to invest in product engagement and experience platforms. These platforms — tools and solutions used to onboard customers and collect and centralize feedback — provide the data needed to weigh the investment trade-offs for features to add or change and insights on how to make offerings easier to use. Yet Forrester’s Budget Pulse Survey, 2022, indicates that only 12% of B2B product management decision-makers plan to increase investment in this type of technology by more than 10%.
- Where to show restraint: Product managers, owners, and development teams are often laser-focused on introducing new features and functions without assessing the value that they may bring. Limit spending to features that create the most value, and ensure that offering improvements are not counteracting your efforts to create a simple, easy-to-use product.
- Where to experiment: Consumption-based pricing has been highly popular over the past few years. A 2021 report by OpenView shows that 45% of SaaS companies have a usage-based component in their pricing model — a twofold increase in adoption compared to just four years prior. Try adding elements of consumption pricing to your model, as the flexibility will be attractive to some buyers during a downturn. Be careful, however, not to overinvest in more transactional customers if your cost structure assumes recurring revenue business. You will quickly find that the transactional revenue is a mismatch with the investments you have made to create a customer-obsessed experience.
To learn more about where you should invest, where to hold back, and which areas are ripe for experimentation, Forrester clients can access Planning Guide 2023: Product Management.