Interviewer: How Do You Set Priorities for Product Features and Ideas?"

My Answer:

As a Senior Product Manager, I follow a structured and objective approach to feature prioritization that starts with aligning features with both the organization's goals and the product’s vision. Here’s a breakdown of the process:

Step 1: Align Features with Organizational and Product Goals

The foundation of my prioritization process starts with a clear understanding of the organization's goals and how the product aligns with them. Every feature or idea must serve a purpose that contributes to the overall vision of the company. For instance, if the company is focused on increasing customer retention, then any feature aimed at improving user engagement or satisfaction would take precedence.

This alignment ensures that we aren’t just working on "cool ideas" but features that have a direct impact on the product's strategic direction. By filtering features through this lens, I can narrow down a list of potential features that are directly tied to achieving both organizational and product success

Step 2: Building a Prioritization Matrix

Once I have a list of features aligned with our goals, the next step is to use a prioritization matrix. The matrix helps evaluate each feature objectively based on multiple criteria, ensuring that we’re making data-driven decisions. The matrix includes a list of all the features being considered, and each feature is then assessed against a set of predefined criteria.

Each criterion is assigned a weight, and features are scored on a scale from 0 to 5, with 5 being the highest. The sum of the weights for all criteria is 100%, allowing us to create a clear prioritization ranking.

Step 3: Criteria for Prioritization

The criteria used in the matrix vary depending on the product and the goals at hand, but I generally follow 10 key criteria to assess each feature:

1. User Impact/Pain for User: How much will this feature improve the overall user experience? Features that offer significant benefits to the majority of users receive higher scores.

2. Percentage of Customers Impacted: The number of customers or users affected by the feature is crucial. The higher the percentage, the higher the score.

3. Upsell Revenue for Existing Customers: Does this feature present opportunities to upsell additional services or products to current customers? Features that drive upselling naturally get prioritized.

4. Revenue from New Customers: Will this feature attract new customers or open up new market segments? New revenue opportunities are always a strong priority.

5. Key Product Differentiator: Is this feature something that sets our product apart from the competition? Differentiating features are key for gaining a competitive edge.

6. Competitive Necessity: In contrast to differentiation, this criterion asks whether this feature is something that our competitors already offer. If it’s a “must-have” to stay relevant in the market, it gets a higher score.

7. Engineering Effort: How much time and resources are required to develop this feature? Features that can be delivered with minimal effort but high value will naturally rise to the top.

8. Value to the Business: What is the overall value this feature brings to the business in terms of meeting strategic goals or solving critical pain points?

9. Time to Market: How quickly can we get this feature live? In some cases, speed is crucial, especially in fast-moving industries.

10. Risk Mitigation: Does this feature help mitigate potential business risks, such as regulatory compliance or system vulnerabilities?

Step 4: Scoring and Final Decision-Making

Once all features are scored based on the above criteria, the next step is to calculate a weighted score for each one. Features that score higher across critical criteria are prioritized, while those with lower scores may be pushed to later in the product roadmap or removed altogether.

This structured and quantifiable approach helps to ensure that we are making informed decisions about where to invest our resources. It also allows for transparency in decision-making, as each feature can be objectively compared against others based on its contribution to the overall product and business goals.

Step 5: Revisiting the Prioritization Regularly

One important aspect of this approach is its flexibility. As business needs change, so too do the priorities. That's why it's essential to revisit the prioritization matrix regularly and adjust the scores and criteria as needed. This ensures that we remain agile and adaptable to new market conditions, customer feedback, or technological advancements.

Below is the prioritization matrix that I use, which may help you evaluate

It appears to be designed to evaluate different features or services based on weighted criteria such as:

Pain for User (weighted at 25%)

% of Customers Impacted (20%)

Upsell Revenue from Existing Customers (15%)

Revenue from New Customers (15%)

Key Product Differentiator (10%)

Competitive Necessity (10%)

Two other customizable criteria (set to 0 for now)

Each criterion is rated on a scale from 0 (low) to 5 (high), and a weighted score is calculated to prioritize features or services.