Strategic Direction Guidance

Guidance overview

Before we start considering what to build, we should prioritise a strategic direction. This helps us avoid wasted effort. For example, if I have very high levels of customer churn, it will be unwise to look for new product opportunities. A process in the Strategic Direction stage of the framework contains instructions on how to do this.

Strategic direction in detail

Strategic direction consists of the following options. You may pick a mix of these or focus on one if it is important enough. Strategy items can then be created that map to one of the following categories.

Mandatory work

This can include work that your own organisation needs and that of your clients need. For example, your customers need to show they are GDPR compliant.

  • Keep the lights on - Essential change to ensure business continuity.

  • Legal and compliance - Adherence to regulatory requirements.

Reduce costs

  • Remain competitive - Prevent lower prices from competitors from impacting business viability.

  • Increase profitability - Increase profit margin from improved efficiencies.

Protect market position

In this strategy, we are specifically focused on reducing sales loss and churn. This also applies when we have high-future risks. For example, a competitor is about to release a new version of their product that is significantly improved.

  • Churn - Minimise the loss of existing customers due to dissatisfaction with a product or service.

    • Loss of these customers to competitors to no solution.

    • Loss of these customers to competitors.

  • Sales loss - Address factors that cause you to lose.

  • This strategy includes the risk of churn and sales loss. For example, if you have strong competition and a very poor Net Promoter Score (NPS), it is likely that you will see these trend poorly.

Increase market share

Increase your market share with your current product and Ideal Customer Persona (ICP).

  • Low-risk improvements - This includes aspects like experience innovation, where you improve the User Interface (UI) and User Experience (UX). For example, simplifying the number of process steps required to complete a task.

  • New differentiators - Developing features to stand out.

  • Remove barriers to expansion, such as capacity limitations with internal team processes.

New markets/products

There are three options, as shown below on the Ansoff Matrix:

Market development - You will change your Ideal Customer Profile (ICP). Reduce risk by finding new customers that are the same or very similar to existing ones. For example, being in a different country. This strategy can be significantly lower risk than expanding a product.

Product development:

  • New product - Reduce risk by releasing similar products to those you know. For example, if you have a product that monitors and improves data quality for universities, perhaps you could create another product for schools.

  • New product type - If you are responding to a new type of product, you can utilise your existing customer relationships to gain a competitive advantage. For example, if your industry is being disrupted by AI, you could create a similar product and directly sell it to your existing customers.

  • Extending your product - You may be extending your product to create a more end-to-end solution for customers. Here is an example using a university customer journey. You extend to cater for Alumni services, perhaps convincing ex-students to come back and study more.

  • Chargeable features - In this case, we have evaluated a university customer journey stage and determined that we can gain a competitive advantage by offering a comparison tool. Perhaps we could charge universities a small finder’s fee for successful recommendations.

Diversification - This can be a high-risk strategy. Use the market development and product development risk reduction strategies together.