Like adjusting training plans for different stages of an athlete’s career, your goal-setting process needs to evolve with your product. We’ll explore how to adapt your approach.
Goals Through Growth: Tailoring OKRs and KPIs to the Product Lifecycle
Every product embarks on a journey, moving through distinct phases from its inception to its eventual retirement. This journey is often described by the Product Lifecycle Framework (PLC), which outlines that every product experiences four stages: Introduction, Growth, Maturity, and Decline. Each stage presents unique challenges and requires different strategic considerations. Consequently, the goals and metrics you use to guide your product must also adapt to the specific phase it’s in. Could focusing on different types of goals at different stages lead to more successful outcomes? Absolutely.
Foundational Goal Setting: OKRs and KPIs
Before diving into lifecycle stages, let’s briefly touch upon the core tools for goal setting and measurement in product management: OKRs and KPIs.
Objectives and Key Results (OKRs) are a framework that helps organizations define ambitious objectives and track their achievement through measurable key results. Objectives articulate what you want to achieve, while key results are specific, measurable, achievable, relevant, and time-bound (SMART) metrics that indicate progress towards the objective.
Key Performance Indicators (KPIs) are quantifiable metrics used to track and measure performance against specific goals or targets. Effective KPIs are aligned with strategic goals and provide insights into the health and progress of the business and product. Using SMART Goals provides a set of criteria for setting effective and well-defined goals that are more likely to be achieved.
These frameworks are powerful, but their application needs tailoring as your product matures.
Tailoring Goals by Product Lifecycle Stage
The strategic focus shifts dramatically across the product lifecycle stages, and your OKRs and KPIs must reflect these changes.
Introduction Stage: Building Awareness and Finding Footing
In the Introduction stage, the focus is on building awareness and establishing the product in the market. You’re validating your core offering and trying to acquire early customers.
- Goals: Your primary objectives are likely centered around launching successfully, generating initial awareness, driving initial adoption, and gathering feedback to validate your core hypotheses.
- OKRs: An objective might be “Successfully launch the MVP and gain initial user traction.” Key Results could include achieving a certain number of downloads or sign-ups within the first month, reaching a specific amount of website traffic, or having a percentage of early users try a core feature.
- KPIs: Relevant KPIs include website visits, downloads/sign-ups, initial user engagement metrics (like time spent in the app or key action completion), and metrics related to early feedback collection. Feature Adoption Metrics, such as the adoption rate for key features, are crucial here to understand what resonates with early users.
- Analogy/Example: Think of a new restaurant opening its doors. Their initial goals aren’t about massive profits, but about getting people in, ensuring they have a positive experience, and learning what dishes are popular. Goals focus on buzz, trial, and initial satisfaction.
- My two cents: Could focusing heavily on just one or two key metrics (a temporary “North Star”) in this stage, perhaps related to core value delivery or initial user satisfaction, be more effective than tracking a broad set? This intense focus could help validate the core product hypothesis faster.
Growth Stage: Scaling and Expanding Reach
The Growth stage is characterized by rapid sales growth and increasing competition. The emphasis shifts to scaling operations, expanding market share, and differentiating from competitors.
- Goals: Objectives become focused on significant user growth, revenue acceleration, market share expansion, and building customer retention.
- OKRs: An objective might be “Achieve substantial user and revenue growth while increasing market share.” Key Results could include doubling Monthly Active Users (MAU), achieving a specific revenue growth rate, capturing a target percentage of the market share, or reducing the Customer Acquisition Cost (CAC).
- KPIs: User Metrics such as retention rate, engagement frequency, and Lifetime Value (LTV) become critical indicators of long-term sustainability. Conversion Metrics and analyzing user progression through funnels are key to identifying drop-off points and optimizing acquisition and activation efforts. Metrics related to Demand Generation and Customer Acquisition Cost (CAC) are important in this stage, reflecting efforts to acquire users efficiently (aligned with Digital Transformation Levers and Growth Marketing Frameworks). The North Star Metric, representing the core value delivered to customers, is often solidified and becomes the focal point for the team in this stage.
Here’s an analogy: An athlete who has found their stride and is entering their prime. They focus on winning major competitions, breaking records, and expanding their influence. Goals are about speed, endurance, strategic moves against opponents, and building a loyal fanbase. Another reference here could be: Companies like Spotify use continuous experimentation (reflecting agile principles) to refine their growth strategies.
Maturity Stage: Maintaining Share and Optimizing Profitability
During the Maturity stage, sales growth slows, and the emphasis shifts to maintaining market share and maximizing profitability. The product is established, and competition is intense.
- Goals: Objectives focus on maximizing profitability, retaining existing customers, improving operational efficiency, and potentially finding ways to extend the product’s life through feature improvements or targeting new segments.
- OKRs: An objective might be “Maximize profitability and customer loyalty in a competitive market.” Key Results could include achieving a specific profit margin, reducing the churn rate below a certain threshold, improving Customer Satisfaction Scores (CSAT), optimizing operational costs per user, or maintaining high operational uptime. The Balanced Scorecard framework, which considers Financial, Customer, Internal Processes, and Learning and Growth perspectives, becomes highly relevant for a holistic view of performance in this stage.
- KPIs: Key metrics include churn rate, LTV, and various profitability metrics. Operational Metrics like uptime, performance (speed and responsiveness), and reliability (stability) are crucial for ensuring a positive user experience and preventing churn. Feature Adoption Metrics might focus on the usage of features designed specifically to retain users, increase engagement among the existing base, or improve efficiency.
A seasoned, top-ranking athlete who is maintaining their position. They focus on consistent, efficient performance, maximizing their earnings, and ensuring they stay in peak condition. Goals are about longevity, consistency, efficiency, and profitability.
Decline Stage: Managing the Exit or Reinvention
Finally, in the Decline stage, sales and profits decrease. Decisions must be made about whether to discontinue the product, invest in innovation to revive it, or manage its decline gracefully.
- Goals: Objectives in this stage might focus on minimizing losses, extracting remaining value from the user base, or successfully transitioning users to a new product or alternative solution. If pursuing innovation, goals might resemble those in the Introduction or Growth stages for the new offering.
- OKRs: An objective might be “Minimize operational costs and extract maximum remaining value before discontinuation.” Key Results could include reducing operational costs by a certain percentage, achieving a specific revenue target from the remaining user base, or migrating a percentage of users to a new product. If innovating, an objective might be “Successfully launch and validate the new product offering.”
- KPIs: Relevant metrics include the rate of revenue decline, cost reduction metrics, engagement metrics focused on the remaining critical functions used by users, and metrics related to the success of migration efforts or any alternative solutions being explored.
An athlete nearing the end of their competitive career. Their goals might shift from winning major championships to completing events gracefully, mentoring newer athletes, or transitioning into a coaching or commentary role. Goals are about graceful exit, maximizing remaining impact, or finding new avenues.
My two cents:
Could viewing the Decline stage not merely as an ending, but as an opportunity for radical reinvention or a strategic reallocation of resources, fundamentally change the goal-setting approach? It could shift the focus from winding down to building something entirely new based on learnings from the previous lifecycle.
The Right Goals for the Right Stage
As the analogy of an athlete’s training plan suggests, your product’s needs and priorities change over time, and so too must your goals and the metrics you track. Focusing on different types of goals at different stages truly can lead to more successful outcomes. Goals and metrics are not static documents or targets; they must evolve based on feedback, market changes, and the product’s position in its lifecycle. Crucially, your product goals should always align with the broader business strategy and objectives.
Conclusion
Understanding the Product Lifecycle Framework (PLC) is essential for effective product management, particularly when it comes to setting meaningful and actionable goals. By tailoring your OKRs and KPIs to the specific stage your product is in—whether it’s the initial push for awareness in the Introduction stage, the rapid scaling of the Growth stage, the focus on efficiency and retention in Maturity, or the strategic decisions of the Decline stage—you ensure that your team is focused on what truly matters at that moment.
Like an athlete adjusting their training to peak at the right time, aligning your product goals with its lifecycle stage maximizes its potential for success.