Comparing Apples and Oranges: A New Prioritization Framework for Product Managers
This article outlines a framework for prioritizing product features at Gusto, using the analogy of comparing apples to apples and apples to oranges. The framework revolves around the "Product Prioritization Matrix," which plots features along two axes: customer impact and customer expectations. This results in four quadrants: WOW!, Neat, Must-Have, and Who Cares?.
WOW! features are high-impact and unexpected, exceeding customer expectations, while Neat features are pleasant surprises but not essential. Must-Have features are expected and necessary for basic functionality, while Who Cares? features are expected but have minimal impact. By plotting features in this matrix, companies can prioritize their development efforts by focusing on a desired quadrant mix, based on their stage and goals. For example, startups should initially focus on building a strong WOW! feature to differentiate themselves, while established companies may prioritize Must-Have features to address customer needs and reduce churn. Once features are categorized, a comparison of apples to apples within each quadrant allows for further prioritization based on specific goals and metrics. The article concludes by emphasizing the dynamic nature of product development, highlighting how WOW! features can evolve into Must-Have features over time, prompting companies to continuously innovate and strive for the next breakthrough.
“We don’t get a chance to do that many things, and every one should be really excellent. Because this is our life.”
Steve Jobs
That is one of my favorite Steve Jobs quotes because it truly encapsulates how we view product at Gusto. While we don’t do everything, we believe the things that we do are truly excellent. But how do we decide which features to work on?
It all starts with your product vision. Your vision is a clear articulation of how the future looks for your customers 20 years from now. Believing in your vision means that you truly know that it is inevitable. Then in order to build this future, it’s all a matter of prioritizing those features.
Prioritization makes all the difference between a successful product and a failed one. It’s also honestly really hard. This is why we built a framework to help prioritize our product features at Gusto.
Apples to apples
Some product features fall into the category of Apples to Apples. In product prioritization, an Apples to Apples comparison means both features have the same goal. Take, for example, our customer onboarding flow.
At Gusto, we thought carefully about making the onboarding process simple and painless. Getting your company set up on payroll can be a difficult ordeal. Rather than overwhelming our customers with lots of questions, we break each step down into manageable pieces. Each step took a great deal of creative, engineering, and product management resources. How did we decide which step to focus first?
A popular framework for Apples to Apples comparisons is to build a chart laying out the requirements, the inputs and the outputs of each feature. You can apply different weights to different metrics to arrive at a single metric. For our onboarding example, we probably created a similar chart to the one below:
In our example, making it easier to onboard your employees narrowly won. We prioritized each of our onboarding steps in the same framework because the goals were identical–to help our customers onboard. This is Apples to Apples.
However, that perspective is very limiting. What happens when you compare features with vastly different goals? In that situation, you want to step back and look beyond a single axis.
Apples to oranges
It turns out, most product feature prioritizations are not Apples to Apples, but Apples to Oranges. One way to think about that is by plotting those features across two axes in what I call a Product Prioritization Matrix.
Customer impact vs. customer expectations
One axis focuses on the customer impact. This axis helps the product manager prioritize based on how impactful the feature will be on a customer’s life. The second axis is based on a customer’s expectations. Does it just meet them or truly exceed them? Every product feature falls into one of the quadrants.
Steve Jobs has another great quote on products:
“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”
Steve Jobs
When you build something that a customer doesn’t expect, then it truly delights. It’s something that makes a customer stand up and say: “I didn’t even know this was possible!” But if you plot it along the axis of customer impact, there is Neat and then there’s WOW!
Neat
When a feature is Neat, it’s a pleasant surprise but not really necessary. Our “employee notes” feature is Neat. Our customers love it but they don’t need it to run their business. Sometimes, something Neat is actually a WOW! feature that falls short.
WOW!
On the other hand, when you hit on something that’s high-impact but also entirely unexpected, it’s WOW! In my opinion, there isn’t another expression that does this feeling justice. For example, when we introduced payroll’s first AutoPilot feature, the feedback from our customers was incredible. They had never seen something like this before!
Must-Haves
What about the features that your customers expect? You can call those features Must-Haves. Unlike a Neat feature, a Must-Have is a necessity. That’s why Must-Haves are such powerful product drivers. When your customer cannot use your product because it’s missing a popular feature, you are missing a critical Must-Have.
For most customers, they have some basic expectations on what a product does: a car has to run, a phone has to make calls. What about a payroll system? For Gusto, direct deposit can be considered a Must-Have. Many customers rely on direct deposit to seamlessly pay their bills and it has a major impact on their lives. But this is also expected; after all, you expect a payroll system to have direct deposit.
Who Cares?
Sometimes you have features that are “expected” by the customer but have very little impact. For example, our customers expect the ability to set up a payroll schedule for their business. Some providers require you to approve this every week, or even select the dates each pay period. Those are the features that you want to remove from your customer experience.
In our example, we make it easy to set your payroll schedule one time based on your requirements (every other week, twice a month, etc.). Once you set it, you’ll never have to worry about it again. By removing those “Who Cares? features” but keeping its functionality, your customer has a much more delightful experience.
How to prioritize within the matrix
1. Plot your existing features along the quadrants
The first step to building a product prioritization framework is to plot every feature along the four quadrants so you know if you’re comparing Apples or Oranges. At Gusto, we do this on a quarterly basis, but that may increase or decrease in frequency at your company.
2. Determine your desired quadrant mix
How you determine your desired quadrant mix depends on where you are as a company. For example, a great startup has to start with a strong WOW! before doing anything else. This WOW! is your differentiator and the engine for your company’s success. Many startups fail because they think they’re building WOW! features but they’re really just Neat.
After you nail down your WOW!, you’ll want to start looking closely at the other quadrants as well. There’s value in each quadrant for different reasons. For example, it’s important to address all the Must-Haves in your market. If your product has high churn because customers need a feature you don’t support, you’ll want to focus on building out your Must-Haves.
What about the other two quadrants? Does it makes sense for your company to focus on Neat and Who Cares? features? Absolutely! Neat features are not high priority but they can be important because they delight your most passionate customers.
But Who Cares? What’s the thought process behind focusing on a feature no one wants? That’s actually the hard part. It turns out, removing a feature while keeping its functionality is incredibly difficult. Removing a Who Cares? feature can sometimes even be a WOW!
3. Compare apples to apples in each quadrant
Now that you’ve plotted the features into a quadrant, and determined your quadrant mix, it’s important to revisit the earlier section and compare Apples to Apples. Remember, it’s important not to mix Apples with Oranges. Not all features in the same quadrant have the same goal. But you can only compare Apples to Apples if they are in the same quadrant.
Plotting every feature into a quadrant is an important forcing function. Your team can’t do everything!
Your product is a living thing
The beautiful thing about building a product is that it’s constantly improving. As your product strategy takes shape, you may notice that the features you previously plotted in the WOW! quadrant slowly creep into the Must-Have quadrant.
That’s an important sign of progress. Remember, when the first iPhone came out with a touchscreen? That was WOW! Now, every smartphone has a touchscreen; it’s become a Must-Have feature. As more WOW!s become Must-Haves, all companies should continue to innovate and make their users happier in ways they never thought possible.
At Gusto, we’re constantly trying to find the next WOW! feature to bring to market. We’re proud to lead the charge on innovative features like AutoPilot and Employee Self-Onboarding. And there’s more coming down our roadmap. Are you interested to find out?
Gusto is looking for product managers who are as excited as I am about building the next WOW! feature. I can’t wait to share with you what’s coming.