5 Reasons Why Product Management Is Important

Product management covers the entire lifespan of a product. This includes its ideation, development, marketing, and end-use. With the help of this user-centric approach, product teams consistently deliver better-designed and higher-performing products. It doesn’t matter if a company hires the best software engineers, telesales agents, and user support associates. Even with top-notch developers and growth hackers on their teams, startups can fail if the product isn’t right.

The reason is simple. If you don’t develop a useful product that users are willing to buy and use, you’ll drive your company’s finances into the ground sooner than later. So must focus on developing a good product. This article will cover five reasons product management plays a crucial role in developing a user-centric product and why it’s essential for a business to thrive.

1. Developing product vision and strategy

While managing a product’s life cycle, product managers ensure that a product fulfills the users’ needs, stays relevant, and generates financial returns. They build an agile product roadmap that outlines a product’s vision, direction, priorities, and progress over time.

In a digital era, where the users’ expectations for quality service and fair pricing continue to rise, some products may become redundant or need to be pivoted to meet changing demands. That’s why product managers must be adept at keeping the roadmap current, outcome-driven, and user-focused, all at the same time.

For a young entrant in the field, joining a product management bootcamp is a surefire way to develop the two key strengths that the job requires: creativity and adaptability. On the other hand, for experienced professionals, bootcamps provide an excellent opportunity to upskill or re-skill themselves in conducting a market opportunity analysis, developing product launch strategies, and working with cross-functional teams.

2. Identifying opportunities and creating a user-centric business model

The fast-growing nature of technology usage calls for a deep understanding of the users and the ability to create tailored solutions for them. That’s where product management comes into play.

Product managers spend a chunk of their workday researching and gathering actionable insights on the company’s market share, user personas, and competitors. They interact with existing and prospective customer regularly, decipher their complaints, identify a high-value pain point, quantify the opportunity, and research solutions. After all this, they are able to devise a viable solution with a good return on investments throughout the product’s lifecycle.

3. Improving efficiency for product development

NIKE shoe

Product development starts with defining technical specifications, making prototypes, and designing mockups. While the UX team is responsible for carrying out most of these tasks, a product manager can be involved in the following:

  • Conducting focus groups and personal interviews with potential customers
  • Drafting product-related documents, for example, a Product Requirement Document (PRD) and Functional Specifications Document (FSD)
  • Communicating this information to the engineering team
  • Breaking down approved product features by feasibility, desirability, and viability.
  • Listing them in the order they need to be developed
  • Setting a timeline for each release

Product managers also negotiate with stakeholders and try to meet them halfway. With the product development process streamlined down to the last detail, and striking a balance between what users want and what’s possible technically and operationally, product teams help build efficiency across all functions and maximize returns.

4. Ensuring constant product improvement

Once the development process is complete, product managers test it thoroughly to iron out any bugs and glitches in the code. This is usually done by running multiple iterations. Sometimes, they launch the minimum viable product (MVP) version in beta to determine whether the end-users find it a good solution to their problem or not.

It’s understandable for the company’s CEO to get complacent when the product is a hit. However, effective product management entails development doesn’t come to a halt at all. Even if there’s a steep upward trend in sales and profits, product managers ensure teams are constantly working on improving the user experience of the existing product by conducting A/B tests and removing anomalies.

After the MVP is released, a product manager is responsible for measuring its success in terms of KPIs like monetization, user engagement, and the levels of user satisfaction. For that, they set up a feedback collection mechanism, collect and record users’ reactions and feedback during testing, and suggest changes to product requirements based on user input.

5. Improving sales & marketing strategies

Woman in black coat

Product marketing is one of the many factors contributing to product success. Therefore, examining the effectiveness of a marketing plan and sales strategy is crucial to ensure that how users experience a product is totally in sync with their relationship with the brand. Smaller companies, which follow the lean startup methodology, hire for only a few required positions and hence, do not have a managerial role in product marketing, can get their product teams involved in the following sales and marketing processes.

  • Writing business use cases
  • Creating a product launch plan that aligns stakeholders around KPIs, promotional messaging, and more
  • Defining the target market
  • Determining the pricing strategy
  • Setting up sales support and tools required for a successful product launch

After product release, a product manager leverages market research, current industry trends, and user feedback to optimize the marketing strategy.

This may include such as:

  • Active users – the number of users who regularly open and interact with a product
  • Retention rate, or “stickiness” – the number of users who still have a product downloaded and installed on their device after a given period
  • Session length – the amount of time between the first and last action taken by a user on a product
  • Session frequency – the number of times users return to a product after using it once
  • Conversion rate – the percentage of users who turn into paid customers
  • Lifetime value – the cost of acquiring a user subtracted from the revenue earned from them
  • User churn – the number of users who quit using a product or downgrade from a paid subscription over time

Besides this, product managers also use several data analytics tools to analyze the data collected on user behaviors, demands, and purchase patterns. The sales team can use the insights from this analysis to improve and fine-tune their sales pitch to make it land right.

Conclusion

From the time it is introduced to users until it is removed from the market to open space for new solutions, a product goes through different stages. A structured product management function in your company is crucial in identifying those exact points in the cycle and creating a strategy that elongates the product’s market life in each one. The result of good product management is not only a desirable product but also a sustainable business.

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