Prioritization of Product Features

I have been thinking of doing a post on the topic of prioritizing product features for quite sometime as most product managers do this activity regularly. Product Managers in many companies do the prioritization exercise differently, but I’ve attempted an approach which I believe is comprehensive.

Here’s an approach I’ve followed in my experience — I call it the “Business Value Model”. The prioritization activity involves assigning “weights” (in the form of unit-less points) for each feature in the backlog against a variety of parameters such as the following:

  1. Value: the value of the feature will be a function of Benefits and the associated Effort Estimate.
    • Value = f (benefit, effort estimate)
    • Benefits: assign a number (from 1-10) for each of the benefits the feature provides. The benefits must be from customer requests.
    • Effort Estimate: assign a number (from 1-10) depending on the effort estimate from a look-up table. Something like 1 for 3 days, 2 for a week’s effort, 3 for 2 weeks effort, and so on.
  2. Benefiting Customer Size: a number (from 1-10) depending on what percentage of existing customers would benefit from the feature.
  3. Benefiting Market Size: a number (from 1-10) depending on what percentage of prospects in the open market (i.e. potential customers in the pipeline, general market, etc.) would benefit from the feature.
  4. Competitive Necessity: have just a handful of numbers to choose from depending on what the feature will do to the product with respect to the competition. For example:  2 for closer-to-competition, 5 for competitive-parity, 10 for beats-competition.
  5. Strategic Requirement: assign a number (from 1-10) depending on the alignment of the feature with business strategy, product vision, etc.

The framework is available for download here: PrioritizationTemplate

Remember: Every new feature will need to be looked upon from the angle of tapping new markets. Here’s an excerpt from one of my earlier posts, related to Win-Loss Analysis: Some customers might have unique needs which we might not even be aware already. In such a case, it is essential to profile the customer and research the need in the market place — may be we will end up discovering completely new market segments which we can go after once we have built the required product capabilities.

Would love to hear your thoughts!!!