Product managers are crucial in prioritizing backlogs and driving innovation within companies. They must balance existing and potential customers’ needs and the company’s overall growth and profitability. This article will explore four central themes that product managers should consider when prioritizing their backlogs: customer retention, customer acquisition, efficiency, and innovation.

Customer Retention and Product Prioritization

Listening to customers at risk of leaving due to missing features or competitors offering better alternatives is essential for customer retention. Product managers should regularly engage with customers, gather feedback, and analyze customer data to identify pain points and areas for improvement. The Kano Model is a useful framework for understanding customer satisfaction and prioritizing features based on their impact on customer delight.

Kano Model

The Kano Model, developed by Dr. Noriaki Kano in the 1980s, is a framework for understanding and prioritizing customer requirements based on their impact on customer satisfaction. Dr. Kano, a Tokyo University of Science professor, created this model to help companies better understand the relationship between product functionality and customer satisfaction. The Kano Model has since become a widely used tool in product Development, helping product managers Prioritize Features and make informed decisions based on customer needs and expectations.

The Kano Model categorizes product features into three main groups:

1. Basic (Must-have) Features: Basic features are the essential functionalities that customers expect from a product. These features are a must-have, and their absence would lead to extreme dissatisfaction. However, these features do not necessarily increase customer satisfaction, as they are taken for granted. When prioritizing basic features, product managers should ensure that these features are given the highest priority, as they form the foundation of the product. Without these features, the product may be considered incomplete or dysfunctional, leading to customer dissatisfaction and potential loss of market share. Examples of basic features could include:
   • A car having brakes and headlights
   • A smartphone being able to make and receive calls
   • An e-commerce website allowing users to browse and purchase products
2. Performance (Satisfier) Features: Performance features positively impact customer satisfaction as their performance improves. These features are not essential for the product to function, but they enhance the user experience and contribute to overall satisfaction. The better these features perform, the more satisfied customers tend to be. When prioritizing performance features, product managers should consider the relative importance of each feature to the target audience and allocate resources accordingly. Improving the performance of these features can lead to increased customer satisfaction and loyalty, but the impact on satisfaction may diminish beyond a certain level of performance. Examples of performance features could include:
   • The speed and responsiveness of a website or application
   • The battery life of a mobile device
   • The accuracy of search results in a search engine
3. Excitement (Delighter) Features: Excitement features are innovative and unexpected functionalities that surpass customer expectations. Customers do not explicitly demand these features, but they can greatly increase their satisfaction and delight when present. However, the absence of these features does not lead to dissatisfaction, as customers do not expect them in the first place. Product managers should consider the potential impact on customer delight and differentiation from competitors when prioritizing excitement features. These features can help create a unique selling proposition and generate positive word-of-mouth. However, excitement features should not come at the expense of basic or performance features, as those are still essential for customer satisfaction. Examples of excitement features could include:
   • A smartphone with a foldable screen
   • A car with autonomous driving capabilities
   • An e-commerce website offering personalized product recommendations based on user behavior

Kano Prioritization Strategy

• Prioritize basic features critical for the product’s core functionality and customer satisfaction.
• Allocate resources to optimize performance features based on their relative importance to the target audience and their impact on customer satisfaction.
• Identify and prioritize excitement features that align with the company’s strategy, differentiate the product from competitors, and have the potential to delight customers.
• Evaluate whether time spent on new features would generate more revenue for acquiring customers than current customers.
• Alternatively, assess if a poor reputation due to unfulfilled roadmaps will hurt your reputation and cost the company revenue.
• Continuously gather customer feedback and monitor market trends to refine the prioritization of features over time.

By understanding and applying the Kano Model, product managers can make informed decisions about feature prioritization. They can balance the need to meet basic expectations, optimize performance, and introduce innovative elements that delight customers. This approach helps ensure that the product remains competitive, satisfies customer needs, and drives long-term success.

Product managers should prioritize features that address the most critical customer needs and expectations to retain customers. They should also consider the feasibility and cost of implementing these features and the potential impact on customer loyalty and lifetime value. Companies can reduce churn and maintain a strong customer base by proactively addressing customer concerns and continuously improving the product.

Customer Acquisition and Product Prioritization

Attracting new customers is crucial for growth, and product managers must be attentive to the needs and requirements of potential customers. When prospects choose not to sign up due to missing features, it is important to evaluate whether those features were truly the deciding factor and quantify the lost revenue versus the cost of developing and implementing them. Product managers should conduct market research, analyze competitor offerings, and engage with prospects to understand their needs and preferences.

MoSCoW Method

The MoSCoW method can help prioritize features based on their importance to potential customers and the company’s goals.

1. Must-have (M): Must-have features are the essential requirements that must be included in the product for it to be considered complete and viable. These features are non-negotiable and are critical to the product’s success. Failing to deliver these features would result in the product being a failure. When prioritizing must-have features, product managers should allocate the necessary resources to ensure their development and testing are given the highest priority. These features should be the development team’s primary focus, and their completion should be non-negotiable within the given timeframe. Examples of must-have features could include:
   • Login functionality for a secure application
   • Payment processing for an e-commerce platform
   • Core messaging capabilities for a communication app.
2. Should-have (S): Should-have features are important requirements that add significant value to the product but are not essential for its initial release. These features are highly desirable and should be included if time and resources permit. However, if necessary, they can be postponed to a later release without severely impacting the product’s viability. When prioritizing should-have features, product managers should assess their impact on user experience, competitiveness, and alignment with business goals. These features should be prioritized based on their relative importance and the available resources after the must-have features are addressed. Examples of should-have features could include:
   • Advanced search filters for an e-commerce website
   • Integration with third-party services for a project management tool
   • Customizable user profiles for a social media platform
3. Could-have (C): Features are desirable but unnecessary for the product’s success. These features would be nice to include if excess time and resources are available, but they can be easily omitted without materially affecting the product’s functionality or user experience. Product managers should consider their potential impact on user delight and differentiation from competitors when prioritizing could-have features. However, these features should have a lower priority than must-have and should-have features, and their inclusion should not compromise the timely delivery of higher-priority items. Examples of could-have features could include:
   • Additional themes or customization options for a website
   • Easter eggs or hidden features in a game
   • Minor enhancements to a reporting module in a software application
4. Won’t-have (W) or Would-like: Won’t-have or would-like features are the lowest priority items that are either not feasible within the current scope or have been deliberately excluded from the current release. These features may be considered for future iterations but are not actively pursued in the present development cycle. When prioritizing won’t-have or would-like features, product managers should keep them recorded for future consideration but not allocate resources to their development in the current iteration. Examples of won’t-have or would-like features could include:
   • Features that are technologically challenging or require significant research and development
   • Low-impact enhancements that do not align with the product’s core value proposition
   • Ideas that have been generated but do not fit within the current product roadmap

MoSCoW Prioritization Strategy

• Identify and prioritize must-have features as the top priority, ensuring they are delivered within the given timeframe.
• Prioritize should-have features based on their impact and feasibility, and allocate resources to their development after must-have features are addressed.
• Assess whether customers are willing to pay for those features or if they should be included at no additional cost.
• Alternatively, assess if a poor reputation due to unfulfilled roadmaps will hurt your reputation and cost the company revenue.
• Consider could-have features if excess resources are available, but do not compromise the delivery of higher-priority items.
• Keep won’t have or would-like features recorded for future consideration but do not actively pursue them in the current development cycle.

By applying the MoSCoW method, product managers can prioritize features based on their importance and feasibility, ensuring that the product development team focuses on delivering the most critical requirements first. This approach helps manage stakeholder expectations, allocate resources efficiently, and ensure the product’s market success.

Corporate Efficiency and Product Prioritization

Analyzing a company’s hardware, software, infrastructure, and personnel costs is crucial for identifying opportunities to improve efficiency and profitability. Product managers should collaborate with cross-functional teams to identify areas where features or updates can significantly impact performance and cost-effectiveness. The Lean methodology, which focuses on eliminating waste and optimizing processes, can be applied to product development.

Lean Methodology

The Lean methodology is a systematic approach to identifying and eliminating waste in processes while maximizing value creation. Lean principles can help prioritize features and optimize the development process when applied to product development. Here’s how to prioritize features using Lean principles:

1. Identify Value: The first step in Lean is identifying what creates value for the customer. In product development, this means understanding the features and functionalities that customers consider most important and valuable. Features directly contributing to customer value should be prioritized in the development process. To identify value, product managers should:
   • Conduct customer research and gather feedback to understand their needs, preferences, and pain points
   • Analyze market trends and competitor offerings to identify opportunities for differentiation
   • Define clear user stories or job-to-be-done statements that articulate each feature’s value to the customer.
2. Map the Value Stream: Once the value has been identified, the next step is to map the value stream. This involves visualizing the end-to-end process of delivering value to the customer, from concept to launch. Features delivered with minimal waste and maximum efficiency should be prioritized. When mapping the value stream, product managers should:
   • Break down the development process into discrete steps or stages
   • Identify the activities, resources, and dependencies involved in each step
   • Look for opportunities to streamline the process and eliminate waste (e.g., unnecessary meetings, delays, or rework)
3. Create Flow: The goal of Lean is to create a smooth and continuous flow of value to the customer. This means ensuring that features are developed and delivered promptly and efficiently in product development. Features that can be developed and delivered quickly without disrupting the overall flow should be prioritized. To create flow, product managers should:
   • Break down features into small, manageable increments that can be developed and tested independently
   • Prioritize features based on their dependencies and the overall flow of the development process
   • Use techniques like continuous integration and continuous delivery to enable frequent and iterative releases
   • Foster cross-functional collaboration and communication to minimize handoffs and delays
4. Establish Pull: In Lean, pull refers to the idea that work should be initiated based on customer demand rather than pushed through the system based on forecasts or assumptions. Features pulled by customer demand and have a proven impact on value should be given higher priority. To establish pull in product development, product managers should:
   • Prioritize features based on actual customer needs and feedback, rather than internal assumptions or biases
   • Use data and metrics to validate the impact and value of each feature
   • Continuously gather and incorporate customer feedback throughout the development process
   • Adapt the product roadmap and priorities based on changing customer needs and market conditions
5. Pursue Perfection: Lean is a continuous improvement (CI) methodology, and pursuing perfection is a key principle. In product development, this means continuously refining and optimizing the development process and the product itself. Features that contribute to the continuous improvement and optimization of the product should be prioritized. To pursue perfection, product managers should:
   • Regularly review and retrospect on the development process to identify areas for improvement
   • Gather and analyze data on feature usage, customer satisfaction, and business impact
   • Continuously iterate and refine features based on user feedback and data insights
   • Foster a culture of experimentation and learning, embracing failure as an opportunity to improve.

By applying Lean principles to product development, product managers can prioritize features that create the most value for customers, minimize waste, and optimize the development process. This approach helps deliver high-quality products that meet customer needs and drive business growth.

Companies can reduce costs and improve efficiency by streamlining workflows, automating repetitive tasks, and leveraging technology. Product managers should prioritize features that can potentially deliver significant efficiency gains, such as process automation, data integration, or performance optimization. They should also consider these features’ long-term scalability and maintainability to ensure sustainable benefits.

Innovation and Product Prioritization

Bringing innovative features to the market can differentiate a company from its competitors and drive industry transformation. Product managers should stay updated on industry trends, emerging technologies, and customer needs to identify opportunities for innovation. The Jobs-to-be-Done (JTBD) framework can help product managers understand customers’ underlying motivations and desired outcomes, enabling them to develop innovative solutions that address unmet needs.

Jobs-to-be-Done (JTBD) Framework

The JTBD framework is a customer-centric approach to innovation and product development that focuses on understanding customers’ underlying motivations and desired outcomes. By prioritizing features based on the jobs customers are trying to accomplish, product managers can create products that effectively solve customer problems and create value. Here’s how to prioritize features using the JTBD framework:

1. Identify Customer Jobs: The first step in the JTBD framework is identifying the jobs customers are trying to complete. A job is not a specific task but a higher-level goal or outcome that customers seek to achieve. Features that directly address important customer jobs should be given higher priority. To identify customer jobs, product managers should:
   • Conduct customer interviews and observe customer behavior to uncover their underlying motivations and goals
   • Look beyond the functional tasks and focus on the emotional and social dimensions of the jobs
   • Consider the entire customer journey and the different contexts in which the jobs occur
   • Identify both functional jobs (practical tasks) and emotional jobs (desired feelings or states)
2. Understand Job Drivers: Once the customer jobs have been identified, the next step is to understand the drivers behind those jobs. Job drivers are the specific circumstances, preferences, and constraints that influence how customers prioritize and evaluate solutions. To understand job drivers, product managers should:
   • Dig deeper into the context and circumstances surrounding each job
   • Identify the pain points, obstacles, and trade-offs that customers face when trying to accomplish the job
   • Look for opportunities to differentiate and create value by addressing underserved or unsatisfied job drivers
   • Consider the relative importance and prioritization of different job drivers for different customer segments Features that address the most critical and underserved job drivers should be prioritized.
3. Map Jobs to Product Features: With a clear understanding of customer jobs and their drivers, product managers can map those jobs to specific product features and functionalities. Features with the strongest mapping to important customer jobs and drivers should be prioritized. To map jobs to features, product managers should:
   • Brainstorm and generate ideas for features that could help customers accomplish their jobs more effectively
   • Evaluate each feature idea based on its potential impact on the customer job and its alignment with the job drivers
   • Prioritize features that have the greatest potential to create value and differentiate the product in the market
   • Consider the feasibility and viability of each feature, taking into account technical constraints, resource availability, and business objectives
4. Validate and Iterate: The JTBD framework is an iterative process that requires continuous validation and refinement based on customer feedback and market insights. Features that have been validated and proven to create value for customers should be prioritized for further development and optimization. To validate and iterate, product managers should:
   • Test and prototype features with customers to gather feedback and validate their impact on the customer jobs
   • Measure and track the success of features in terms of customer adoption, satisfaction, and business outcomes
   • Continuously gather and analyze data to refine the understanding of customer jobs and drivers
   • Adapt and pivot the product roadmap based on new insights and changing market conditions

By applying the JTBD framework to product development, product managers can prioritize features that directly address the most important customer jobs and create meaningful value. This approach helps create products that resonate with customers, solve their problems, and drive long-term market success. The JTBD framework encourages a deep understanding of customer needs and motivations, enabling product managers to make customer-centric decisions and prioritize features that have the greatest impact on customer outcomes.

By focusing on the jobs that customers are trying to accomplish, rather than just their stated requirements, product managers can uncover new areas for innovation. When prioritizing innovative features, product managers should consider the potential impact on the market, the company’s competitive advantage, and the alignment with the company’s long-term vision. They should also assess the risks and uncertainties associated with introducing new and untested features, and plan for iterative development and continuous improvement based on customer feedback.

Product managers must take a holistic approach to prioritizing backlogs and driving innovation. By considering customer retention, customer acquisition, efficiency, and innovation, they can make informed decisions that balance customers’ needs, the company’s growth objectives, and the product’s long-term success. Frameworks like the Kano Model, MoSCoW method, Lean methodology, and Jobs-to-be-Done can provide structure and guidance in prioritization.

Product Feature Prioritization Exercise

Here’s an exercise that can be conducted to analyze a feature using the Kano Model, MoSCoW method, Lean principles, and Jobs-to-be-Done framework. This exercise will help evaluate the feature’s impact on lost sales opportunities, lost customers, efficiency, and innovation.

• Exercise: Feature Analysis and Prioritization
• Objective: To analyze a specific feature using various prioritization frameworks and assess its impact on lost sales opportunities, lost customers, efficiency, and innovation.
• Participants: Product Manager, Sales and Marketing Representatives, Customer Success/Support Representatives, Development Team Representatives.
• Duration: 60-90 minutes

Steps:

• Introduction (5 minutes): The Product Manager introduces the feature to be analyzed and provides any necessary background information.
• Kano Model Analysis (15 minutes)
  • Discuss and categorize the feature as a basic, performance, or excitement feature.
  • Evaluate how the absence or presence of this feature affects customer satisfaction and dissatisfaction.
  • Consider the potential impact on lost customers and lost sales opportunities if the feature is not implemented.
• MoSCoW Method Analysis (15 minutes)
  • Determine whether the feature is a must-have, should-have, could-have, or won’t-have based on its importance and feasibility.
  • Discuss the consequences of not including the feature in the product, such as lost sales, customer churn, or competitive disadvantage.
  • Assess the feature’s priority in relation to other features and the available resources.
• Lean Principles Analysis (15 minutes)
  • Identify how the feature contributes to creating value for the customer and aligns with their needs.
  • Map the value stream and discuss how the feature fits into the overall development process.
  • Look for opportunities to streamline the feature development and minimize waste.
  • Consider how the feature enables a smooth flow of value to the customer and responds to their pull.
• Jobs-to-be-Done Analysis (15 minutes)
  • Identify the specific customer jobs and desired outcomes that the feature addresses.
  • Discuss how the feature helps customers accomplish their jobs more effectively and efficiently.
  • Evaluate the feature’s potential to create value and differentiate the product.
  • Consider the impact on innovation and the ability to satisfy unmet customer needs.
• Impact Assessment (15 minutes) – Discuss the potential impact of the feature on the following areas:
  • Lost Sales Opportunities: Estimate the revenue potential and the cost of not implementing the feature.
  • Lost Customers: Assess the risk of customer churn and the lifetime value of customers who may be lost due to the absence of the feature.
  • Efficiency: Evaluate how the feature contributes to streamlining processes, reducing costs, and improving overall efficiency.
  • Innovation: Consider how the feature enables the company to stay ahead of the curve, differentiate from competitors, and drive industry transformation.
• Prioritization and Action Items (10 minutes)
  • Based on the analysis and impact assessment, determine the overall priority of the feature.
  • Identify any action items, such as further research, customer validation, or resource allocation.
  • Assign responsibilities and set timelines for the next steps.
• Wrap-up and Next Steps (5 minutes)
  • Summarize the key insights and decisions from the exercise.
  • Discuss how the feature aligns with the overall product strategy and roadmap.
  • Communicate the next steps and any follow-up actions to relevant stakeholders.

By conducting this exercise, the team can analyze the feature from multiple perspectives, considering its impact on customer satisfaction, sales, efficiency, and innovation. This holistic approach helps in making informed prioritization decisions and ensuring that the feature aligns with the company’s goals and delivers value to the customers.

Effective prioritization requires a deep understanding of customer needs, market dynamics, and the company’s strategic goals, as well as the ability to make data-driven decisions and adapt to changing circumstances.

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Originally Published on Martech Zone: The Four Pillars of Product Success: How Product Managers Prioritize Features for Maximum Impact