Creating and managing a profitable product portfolio is no easy feat. Here’s how you can get on the right track in 2024 and beyond with Ignition.
Only 20% of companies feel good after launching a new addition to their product portfolio. Here's a wake-up call — over 80% of new feature releases are never adopted by customers.
This no win situation stems from a fractured development cycle — product teams are disconnected from what customers want and need. What these brands need is a unified product management (PM) solution with automation that lets them focus on core PM work.
In this blog post, you’ll learn the ins and outs of product portfolios, why so many PM teams struggle with them, and how Ignition’s unified platform transforms product roadmaps into a roster of revenue-generating products.
Understanding your product portfolio
A product portfolio collects a range of products and services your company sells to customers.
The makeup of your product portfolio is also highly dependent on your industry, niche, financial makeup, and business strategy. Some companies have a portfolio of just a few products, and limited cash flow, while others might offer a product line with dozens — even hundreds — of distinct offerings.
Just like an investment portfolio can include a few select stocks or an entire index, the same applies to your portfolio of products. There are upsides and risks to diversifying (Sorry, the finance bro analogies are just getting started).
Diversified vs focused
A diversified product portfolio opens the door to multiple market segments and reduces dependence on a single product. At the same time, it means spending more money on R&D, distribution, marketing, and sales.
With a focused product portfolio, you go all in on a few market segments and hope at least one of the products will be a cash cow for your company.
For example, a startup beverage brand might go all-in on a few flavors — that’s a focused product portfolio. On the other hand, a major brand like Olipop has diversified with over a dozen options, as well as variety packs and merch. Which is the cash cow?
A product portfolio can also be characterized by whether it has one specific line of products or clusters with a related product performance.
Product lines vs product families
A product line refers to a group of related products under a single brand targeted at a particular market segment.
A product family is a collection of various product lines that cater to different needs or target markets, offering broader diversity in the company's offerings.
You see the product line versus family dynamic at play with clothing brands that offer different types of apparel. Still, it’s also applied widely across other industries, from CPG to software. Here’s an example of the latter.
Datadog started more than a decade ago as a company focused on real-time data unification. In other words, its product portfolio was focused on a single service. Fast forward to today, and its product portfolio is heavily diversified, with over 30 products spread across several product families.
Image trying to manage all the roadmaps, development cycles, and launches for 30 products — yikes.
Now imagine trying to determine which ones are high priority for feature updates, which ones to sunset or merge, and which are most valuable to customers — all while keeping other departments and stakeholders on the same page.
Now you see why companies invest in solutions like Ignition. It helps unify the fractured product management process and align product teams with marketing, sales, and other stakeholders who know which products will have the biggest impact on revenue.
For larger companies, this also requires a dedicated product portfolio manager (PPM) who oversees the production cycle from a higher level.
Product portfolio management
Just like you have a PM overseeing each new product or feature, you need someone who oversees the progression of your entire product portfolio.
Product portfolio managers (PPMs), sometimes called project portfolio managers, work to reduce the risk of your product line and maximize profitability. They do this in the same way a Wall Street firm approaches and manages its investment portfolio:
- Track performance across several metrics
- Identify the top performers and underachievers
- Improve performance by adding and removing products
On Wall Street, making portfolio changes is as simple as making a phone call. In the world of products, things take longer. PPMs are in constant contact with PMs, Marketing and Sales, and other stakeholders to refine the portfolio strategy.
Product portfolio strategy and analysis
A product portfolio strategy outlines how you position your range of products and services in market position. PM leads and other stakeholders (ideally) analyze this strategy on the regular to determine how their product portfolio can generate more revenue.
The optimal product portfolio strategy should help your company in three key ways:
1. Increase market share
2. Create up-and-cross-sell opportunities
3. Reach new customer bases
Product portfolio analysis not only looks at the profitability of your collection of products and services, but gives a solid baseline of a company’s health and future growth potential as a mature company.
The tech model of development — move fast and break things — is now being adopted by product teams across industries. Leadership wants new products made faster and as cost-efficiently as possible.
Achieving this balanced approach to product portfolio management, takes a lot of work. That’s why Ignition provides a single platform for product teams to manage the product pipeline, collaborate with other teams before launch, and analyze each product to determine the revenue impact of launches across the entire pipeline.
Challenges with (and solutions for) revenue-driven product portfolio management
The ideal product portfolio provides max. value to customers while maximizing revenue for the company. Not easy!
Plus, disjointed product teams, marketers, and key stakeholders often seem to be speaking different languages — it's a major roadblock. It's hard enough to get one product right let alone trying to orchestrate an entire portfolio. Using Ignition, everyone’s on the same page, and making the whole process smoother.
From ideation and development to project management and launch, here are some of the top challenges impacting the ability of product portfolio managers to generate revenue and how Ignition helps you navigate these challenges.
From the initial idea to final launch, product portfolio management is filled with challenges that can affect your revenue. We'll outline what we mean and show you how Ignition provides clear, practical solutions to help you overcome your challenges.
1. Creating the right products
Clayton Christensen broke the internet (and the souls of PMs everywhere) when he revealed that 95% of the over 30,000 new products rolled out every year fail.
In response to this system-wide product portfolio crisis, many PM leads and even executives turn to the inefficiencies or need for more talent in the product development and go-to-market spaces. But they look past a simple root cause of this poor performance — lack of customer feedback.
According to Productplan’s 2023 State of the Industry Report, only 26% of surveyed PMs report that customer feedback is a primary development driver.
Shocking, right? It turns out that asking customers what they want to buy can help you create profitable products and features.
Unfortunately, identifying the issues is just the start of the trouble. Surveying and interviewing customers to derive insights is costly, time-consuming, and difficult (and likely a reason why many companies underinvest in it).
With Ignition product management, product, and feature recommendations are automatically extracted from your CRM to create an ideas backlog you know will have traction with customers.
You can even roll up a series of related feature ideas to see the cumulative revenue impact they will have in the form of unblocked deals.
2. Roadmap visibility
Maintaining cross-project visibility and communication is difficult for companies with diversified portfolios and multiple product families, like tech. PPMs need to ensure development is on track internally while keeping tabs on updates from sales, marketing, and customers.
Now, try doing that across a dozen different products and features, all while connecting your roadmaps to revenue opportunities. Good luck.
The problem here is that product teams often rely on a mishmash of tools for ideation, development, roadmapping, and project management — not to mention accessing info from HubSpot or Gong. So, in addition to organizational silos, throw tech burnout into the mix.
And go figure, the biggest growing pains cited by product teams are:
- Lack of consistent road mapping across teams (44%)
- Avoiding information and communication silos (25%).
Ignition helps you break down silos and promote cross-team visibility by centralizing all product roadmaps in a single platform and sharing context through connections. PMs, PMMs, sales, and other internal stakeholders can easily collaborate as products move from idea backlog to development to GTM.
Our productroadmap.ai feature set is particularly helpful for PMs and PPMs that struggle to collaborate with sales on revenue-focused roadmaps.
3. Product lifecycle management
Each product and feature your company offers goes through roughly the same lifecycle — development, launch, growth rate, maturity, and retirement.
You launch a product, update and refine it based on demand, and eventually decommission it once it’s run the course. The timeline of this cycle is variable — a software feature may last only a few quarters before sunsetting, while others last for a decade.
From a portfolio management view, most companies struggle in two key areas of the cycle: GTM planning and product retirement.
The GTM struggles aren’t surprising, considering that only 33% of surveyed PMMs report using a defined process at their companies. Without a structured process driving cross-department alignment, GTM planning becomes a mess of docs, slide decks, and comms across platforms.
Figuring out when to pull a product from the market is also challenging. Maybe your once effective loss leader is no longer sustainable, or a breakthrough technology has made your biggest upsell opportunity obsolete.
Ignition’s automation- and AI-powered workflows frees up PMs and PPMs from the day-to-day tasks of managing product lines. It also gives you the access to data, analytics and measurement tools so you can more easily identify when to pull products from the market.
4. Measurement and impact reporting
A financial asset manager looks at alphas, betas, and Sharpe ratios to determine the success of a portfolio. To create and maintain a successful product portfolio, you need to measure performance with the same rigor.
Product teams have their own set of key performance indicators to measure everything from product pricing success to development costs.
However, determining the ROI (return on investment) of your product portfolio gets a little trickier when you consider how hard it is for PMs and PPMs to track and measure key aspects of the development process.
Here are the most challenging activities to track and quantify according to a recent state of the industry report:
- Product strategy and roadmap development (33%)
- Collecting customer feedback (26%)
- Go-to-market launch (21%)
- New product development (18%)
That’s a big problem, considering product teams are under the microscope as companies prioritize an efficient growth rate.
Ignition launch measurements help product and product marketing teams quantify the revenue impact of new product launches by aggregate metrics for easy reporting and OKR tracking.
Ignition also gives you the data and analytics functions you need to justify your product development processes or identify areas of improvement.
5. Balancing risk, innovation, and quality
Adding new products to your portfolio means balancing risk, innovation, and speed. Move too fast, and you risk damaging your brand (and future revenue) with an inferior product that doesn’t meet consumer needs. Move too slow, and you risk losing customers to competitors.
And the stakes are getting higher: over 40% of new products fail to meet targets, and 80% of new features are never adopted by customers
Basically, you need to build the right product, build it right, and do it as fast as possible without compromising quality. Your product team knows how to accomplish the second — Ignition helps you with the former and latter.
Ignition takes insights from tools like Gong, Intercom, and Zendesk, as well as your CRM, to create a backlog of revenue-generating ideas easily. So, your product is great but you have no idea the market growth rate from building it. What better way to reduce risk than by building a product customers have told you they want?
Then comes the question of speed.
Ignition closes the gap between product, sales, and marketing teams. It offers a unified platform with time-saving tools and AI, allowing teams to focus more on creating customer-focused products and building a portfolio with a profitable market share.
6. Reacting to dynamic markets
Businesses need to keep updating their products to stay on top of new tech and what customers want. Budget changes and events like the COVID-19 pandemic add to the challenge, pushing leaders to constantly rethink and adjust their product strategies.
Making the right call on when to change your product lineup or stick with it can be a nightmare, not to mention costly. And through all this, keeping an eye on how much money each product is making gets trickier.
Ignition makes it easier to reach business goals by automating your market research. With up-to-date info on competitors and customers, easy-to-understand user research, and AI insights, you're set to make smart, with a proactive business strategy.
Invest in a revenue-driven product portfolio
Elevating your product portfolio is the result of a unified process — breaking down barriers between your product team and cross-functional counterparts in marketing and sales.
Whether you’re at the helm of a major CPG brand or steering a startup, our approach is straightforward:
- Identify blocked revenue opportunities.
- Create products and features that fill those gaps.
- Bring them to market with customer-centric messaging.
Ignition’s AI-powered platform ensures your product's success from conception to market. Sign up for a Demo today and start shaping a more profitable product portfolio.