How to build a Product Success Scorecard

 In Product Development, Product Management, Product Measurement

At MIDIOR we believe that judging a product or idea on the merit of an emotional affinity is dangerous. Instead, we encourage our clients to regularly evaluate their products on a relative basis – both in the context of their product portfolio and with respect to how well it solves customer problems (aka “the market”). While there are many approaches to measuring relative success, we have defined an approach to evaluating products that also prescribes actions. The Product Success Scorecard assesses individual products or entire product lines by measuring competitiveness and market penetration for each target market segment.

SET UP A PRODUCT SUCCESS SCORECARD

For any given product (or product line), choose two “angles” of market segmentation (i.e., two criteria that define a target market segment).  Basic examples for a business-to-business product would be company size and geography. Then, set up a grid in Excel with the various company sizes as row headings (e.g. revenue bands) and the geographies as column headings {e.g. country or continent or sales territory).

PUT YOUR PRODUCT SUCCESS SCORECARD INTO ACTION

For each cell that represents an intersection of company size and geography, ask these questions:

  • Is this product with its current capabilities and features competitive in this segment?
  • Has this product achieved its market penetration goals (as measured by market share or other criteria)?

The answers to these two questions will yield one of four scenarios:

  1. The product is COMPETITIVE (in terms of features and functions) and it has ACHIEVED its target MARKET SHARE.
  2. The product is NOT COMPETITIVE but it has ACHIEVED its target MARKET SHARE.
  3. The product is COMPETITIVE but it has NOT ACHIEVED its target MARKET SHARE.
  4. The product is NOT COMPETITIVE and it has NOT ACHIEVED its target MARKET SHARE.

Do this for each cell represented in the grid (intersection of size and geography) and log the answer in that cell.  At MIDIOR, we like to color code these but numbers will work just as well.  Once this task is complete – which can be tedious depending on how granular your segments are – you have succeeded in creating a SCORECARD for your product in its target segments.

 

INTERPRET THE RESULTS OF YOUR PRODUCT SUCCESS SCORECARD

Assuming you can prioritize the segments (and that you do not want to go through this exercise again with two different angles of market segmentation), you have created a recipe for key focus areas in the near to medium term:

Scenario 1 MARKET LEADER You are in good shape and the likely prescription is “steady as she goes.” Invest incrementally in the product and stay the course in terms of marketing programs and selling tactics.
Scenario 2 PRODUCT RISK Your product needs to be tuned up or revamped although you can continue with your marketing programs and selling tactics because they seem to be working. Sometimes, we see this scenario with a mature product that has sustained success since significant development has not been necessary based on financial performance. However, if your product is not competitive today it will surely affect your market share tomorrow. Consider some Voice of the Customer work to assess current capabilities and define new requirements and adapt your product development roadmap accordingly.
Scenario 3 MARKET RISK Sounds like you need to step up – or shore up – your marketing programs for this product, reassess your messaging and take a hard look at your sales tactics and capabilities. Scenario 3 is often the situation with a new product since marketing and sales may not yet be ramped up.
Scenario 4 GAP You have a lot of work to do on both the product and your programs to market and sell it. There may even be a “go, no go” decision to consider for this product.

Run through this exercise for every product in your portfolio as part of your regular product evaluation and planning process (annually-at a minimum).  Based on what your Product Success Scorecards tell you, the next step is to look at your product organization and adjust as needed to bolster capabilities and tune the focus and resource allocation.

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