5 Product Management Best Practices All PMs Should Master (With Bonus Tips!)
Product management has been a dream job for me since the moment I opened the Jira backlog for the first time in my life. While being so popular, it’s also a profession full of misconceptions.
Every company has its understanding of what a great product manager looks like and their roles and responsibilities. Despite this, many well-established best practices in product management are universal and can apply to any product or company.
Let's take a closer look at these product management best practices with some tips for applying them to your day-to-day work.
Understanding the Role of a Product Manager
So, what is product management? Depending who you ask, is either a fancy new position in the company with little value or something that no successful business can thrive without. Of course, I think that the latter is true. But let me explain in more detail why I think the product manager role is important.
The Importance of Product Management in Business Success
A sustainable business is built upon the success of its product. Yes, you can earn money by offering bad services or products, but your success will only last for a while. At some point, a competitor will appear with a good product and take all of your clients away.
So, businesses rely on the skills and expertise of product managers to build products that can easily attract their target audience and turn them into loyal customers.
Key Skills and Qualities of an Effective Product Manager
Great product managers (PMs) are the evangelists of the product in their company. They strongly believe in the success of their product and actively inspire everyone else with their energy and enthusiasm.
Apart from that, they are also expert communicators who can connect everyone’s work in the company and focus their efforts on building something great.
Those were the qualities of effective PMs. Now, let’s look at the skills, too. Generally, product managers should have the following:
- In-depth knowledge of their industry.
- A solid grasp of main product management software.
- Ability to tackle uncertainty and build clear plans for their teams.
- Analytics skills and the ability to extract useful insights from data.
- Problem-solving skills to find solutions for user pains.
- UX skills to build amazing experiences for their users.
Finally, successful product managers should have basic tech skills to understand how their products work.
5 Product Management Best Practices
It’s quite easy to be a mediocre product manager and hard to become an effective one. Mastering your craft may take years, but there are only a few areas to concentrate on. Generally, effective product managers are the ones who have managed to become great in these areas.
1. Market Research and Analysis
A product manager who lacks an understanding of the market is making wild guesses and handing them over to the development team in the form of user stories. Of course, you can forget about the concept of “customer-centric” product requirement documents at this point.
Every product manager’s job for a new product almost always starts with understanding the market and the users in it.
In order to get this knowledge, you will need to do the following:
- Measure the size of the market (TAM, SAM, SOM). You can obtain this data from public market research documents.
- Conduct competitor research, check their features, pricing, user experience, product marketing (especially messaging) as well as the niches they operate in.
- Conduct a series of customer interviews for your target audience and get customer feedback on your idea.
- List the user pain points that the competitors can’t cover. You can do this based on competitor research and customer insights.
You will then document all of your findings and use them as the basis for your further decision-making as a product manager. The format of the document here is not important. It is the findings that matter.
2. Developing a Product Strategy
Product strategy is the list of actions that you and your team will take to build your product, grow it, and achieve your business objectives. It is yet another crucial skill for product managers as they are people with enough insights about the market, business goals, and the capabilities of their team to be able to build such a plan.
A successful product strategy will include fundamentals such as your product roadmap, initiatives, key milestones, the scope of your MVPs, key metrics for measuring performance, the methodologies to use during the product development process (e.g. scrum), pricing strategy, and more.
3. Cross-functional Collaboration and Communication
One of the most popular and effective ways of organizing the work of a software company is creating cross-functional teams and breaking the silos between company departments. It is usually the product manager’s job to ensure that the information flows seamlessly both within the team and across the different departments in the firm.
For this, PMs need to be excellent communicators and be able to “translate” the information from one team to another. For instance, the development team’s message “cookie processing code is broken” should be translated to “our analytics is not working” before relaying it to the marketing team.
4. Prioritizing and Managing Product Backlog
Probably the second most important task (after user interviews) that a PM will do on a daily basis is prioritizing the development of features in the product backlog. You will almost always end up with feature requests from all over the place (CEO, developers, sales team, users, etc.).
Your team will most certainly not be able to handle all of these requests simultaneously. So, you will need to prioritize them and say “no” or “later” to some of your stakeholders. Usually, PMs prioritize tasks based on their user value, strategic alignment, reach, and implementation complexity.
5. Agile Product Development and Iterative Improvement
Unless you are in B2G or enterprise, you will most likely work in a company that has adopted agile as their main development philosophy. Even if they have not developed it yet, you are likely to see a need to introduce this fascinating mindset to your company to increase the effectiveness of your team.
No matter the case, you will need to know what agile is about and what are the most common frameworks within it. Specifically, you will need to learn about Kanban as well as Scrum with its core elements - roles (product owner, scrum team members, etc.), iterations (sprints), events (demo, retrospective, etc.), and others.
What are some of the most common mistakes to avoid when implementing these best practices?
We have all made mistakes, both small and large. Our profession is full of areas that are easy to misunderstand and misuse. The result of this is making mistakes that are so common, they are bordering with cliche.
Luckily, their prevalence also means that we know about them very well and have already identified effective ways of avoiding them. So, let’s go over the most common ones and explain how to keep them away.
Lacking complete comprehension of the customer's needs and desires
It’s really easy to fall into this trap. Yes, you might have already conducted a couple of interviews in the beginning. Yes, you might have done the initial market research. But both the market and the user needs in it change constantly.
So, to avoid this trap, make sure that you constantly review your knowledge of the market and users and continuously conduct interviews and research.
Not paying attention to data and analytics
There’s a reason data-driven product management has become so popular recently. Modern technologies let us collect an insane amount of data about the way users behave in the product and their demographics and devices.
You can use this data to understand the effectiveness of your product decisions, marketing strategies, as well as UX design. You can also check your core metrics, such as retention, activation, and conversion. Finally, analytics is one of the key ways of measuring product success, and specifically - product-market fit.
By ignoring your data, you are substantially decreasing the quality of your decisions as you end up relying only on your intuition and qualitative data.
Features and tasks being prioritized incorrectly
There are several ways you can screw up here.
Firstly, you can blindly follow the requests of your users and end up building a Frankenstein product that is bloated with features that cater to the needs of specific individuals.
You can also prioritize features that are not aligned with your strategy. In this case, you will build a great product but fail at building a profitable business.
Stakeholders are not being effectively contacted
There’s a reason these people are called stakeholders. They have the power to either positively or negatively affect your product and it is crucial to keep all of them happy.
For instance, if your founders are not aware of the rationale behind your decisions, they might think that both you and the product are not effective for their business and shut it down.
The second reason stakeholder management is important is the valuable insights that you can get from your stakeholders. For example, your chief architect can stop you from building a feature that is negatively affecting the stability of the product you are working on and help you avoid user backlash.
Failure to gather and incorporate feedback
No matter how many user interviews you conduct and how well you study the market, your knowledge will still be limited. You cannot feel the pain of your users, you can simply hear about it. Also, just like any human out there, we are biased as well. Our understanding of user pain will always be seasoned with our own biases. So, you must consider their feedback.
Yes, not all feedback is created equal, you will need to filter it. A famous quote by Henry Ford says:
However, ignoring feedback overall will lead to you building something that they don’t need.
Managing resources incorrectly
In all of the companies I have worked in (there were 7 of them), more than 80% of company expenses accounted for salaries. This is very common for software teams, especially when they are in their early stages.
By letting your software development team work on new features that aren’t valuable or do product discovery with your usability researchers with bad-quality prototypes, you end up wasting the single most expensive resource of your company–time.
Although project management is a different profession than yours, you still need to have basic knowledge of how they manage people’s time and practice it in your day-to-day work.
Failing to adjust to changes in the marketplace or industry
We’re not in the Middle Ages when a new product was being introduced every century or so. It took us 6,000 years of civilization to build an airplane and only another 60 years to fly to the moon. Things are even faster now. We live in the age of technology and things change so fast we are barely able to keep up with them.
This rule also applies to digital products.
You have to evolve quickly and keep up with the changing user needs. For instance, 5 years ago, having no AI automation in your product was not a big deal. Today, however, you will see that most of your competition uses AI and not having one has become a competitive disadvantage.
Managing risks improperly
There are two ways of mismanaging risk in the world of software.
Firstly, it is about ignoring risks. If you build a noise cancellation software, then see that nearly all videoconferencing apps and operating systems have added that as a feature and choose to ignore that fact, you will end up losing all of your customers to these apps.
The second one is about taking small risks too seriously. For instance, you’re hosting your product in a server with 99.5% uptime and there’s a small risk of servers going down for a couple of seconds a day. If it’s not a big deal for you but you switch to a service with nearly 100% uptime and pay 10x more, then you are wasting your company’s money.
4 Tips for Driving Impactful Results
Now that we have covered both the best practices and common mistakes in our profession, let’s focus on the tools and concepts that will help you significantly increase the impact of your decisions on the success of your product.
1. Measuring and Analyzing Key Performance Indicators (KPIs)
Core product metrics are one of the best ways of knowing if your product is in a healthy state or not. There are three main groups of metrics that I would suggest you measure for your products:
Activation: It shows the percentage of users who have successfully used your main features at least once and experienced the core value of your product.
Retention: It is the number of users who have been continuously using your product over a period of time (e.g. 28 days, 90 days, etc.)
Conversion: This is the percentage of users who have transformed from a free user to a paid one.
Apart from this, you can also track the number of new users you get each day/week (acquisition) as well as the amount of recurring revenue you get each month (MRR) or year (ARR).
2. User Feedback and Iterative Product Improvement
Based on my experience, a great process should look like this:
- Get new insight from user feedback, interviews, analytics, or elsewhere.
- Turn this insight into a product idea and form a hypothesis that the release of that feature will improve a given KPI.
- Build the minimal version of that product and test it on your users.
- Take the learnings and feedback from the MVP test, add insights from your analytics, and improve the feature or add something to it.
- Rinse and repeat.
I know, this looks easy on paper and hard in real life. But, believe me, after trying this a couple of times, you will get the hang of it.
3. Product Launch Strategies and Tactics
Whether it's about launching a new product or a feature in an existing one, there are several key steps that you need to follow:
- Communicate your launch date and details with all of your stakeholders.
- Prepare the marketing campaign for promoting it.
- Have a backup communication plan with your users and stakeholders if something goes wrong with the launch date.
- Have your engineering team ready for post-launch support of the product. I guarantee you, there will be a huge influx of bugs and errors coming your way after the launch.
- Prepare a gradual rollout strategy. You don’t always want to make something fully public, considering the many errors you can get. Usually, you would launch on a small group of beta testers, fix the issues, and then launch on a larger audience.
In case you’re rolling out a feature to your existing users, you can also consider first launching it for free users, making sure that there are no problems before opening it to paid users. This way, you can avoid churning revenue if something goes sideways.
4. Managing Product Life Cycle and End-of-Life Strategies
The last stage in the product lifecycle management process is usually the one getting the least attention. Yes, you can have products you want to stop. It’s perfectly normal. But, before doing that, you will need to:
- Prepare a message and proper communication strategy with your user base.
- Allow your users to export their data in a format that can be used elsewhere.
- Retrain your staff on the new initiative that they will be working on.
- Have the finances ready for handing out returns to paid users.
Finally, if you’re working with a desktop/mobile application, you should plan a certain amount of time for servicing the product before it is officially closed.
Elevating Your Product Management Skills
Another key characteristic of great product managers is their ability to constantly improve their skills and grow as professionals. If your mission is constant improvement, I recommend focusing on these four key areas.
Continuous Learning and Professional Development
As I already mentioned, software development is one of the fastest-changing industries in which you can find yourself. That means that keeping up with the market demands a certain caliber of competitive streak. In other words, you'll need to adopt a mindset of continuous learning.
Luckily, the internet is full of free and paid resources to learn about the latest and greatest innovations in our profession. My favorite places to learn something new about product management are Udemy, Coursera, and (of course) the one you're reading right now.
Building and Leading High-Performing Product Teams
From my experience, high-performing teams are not the ones that have perfect processes that work like a Swiss watch. Instead, it’s the ones where the team has developed a strong sense of trust and safety towards each other, you, and your leadership.
It was not only me who came to that conclusion. Google conducted an entire study in this area called “Project Aristotle.” The study showed that healthy teams with little to no processes in place significantly outperformed those with well-established processes but low morale and psychological safety.
So, keep your focus on getting to know your team better and building trust-based relationships with them. After you’re done with it, you can start adding processes to the team.
Effective Stakeholder Management and Influence
I want to give you a single, powerful piece of advice here. Always remember that each of your stakeholders has their own priorities and problems that are related to your product. If you want to create an environment of trust and collaboration with your stakeholders, you should do the following:
- Ask what’s important to them. Your head of security, for instance, will say that she’s ok with any feature implementation that does not make the product non-compliant with GDPR.
- Offer them solutions that are aligned with your product vision but also consider their needs. In the previous case, you can offer to modify your feature idea in a way that asks for the user’s permission to collect their data before performing the task it is supposed to.
- Always communicate with them. The more you let your stakeholders know about your ideas and plans, the more they feel heard and valued.
Finally, don’t forget about building non-formal relationships with your stakeholders too. You don’t want them to perceive you as the faceless “robot” that launches products.
Adapting to Industry Trends and Technological Advancements
This part is relatively easy. You will need to subscribe to newsletters and blogs that are related to your industry, your competition, as well as your profession - product management.
Apart from our website, my favorite product blogs include Reforge, Dr. Bart Jaworski’s posts, and Product School. For more, you can check out our list of product blogs too.
Final Thoughts
Overall, successful product managers can dive into the chaos of the market and user needs. They can also find rational solutions that can cover user pains, and help the product grow and the company thrive.
Don't forget to subscribe to our newsletter for more product management resources and guides, plus the latest podcasts, interviews, and other insights from industry leaders and experts.
