A ten-year product expert from a large company teaches you: three steps to achieve your annual goals

When your boss suddenly gives you a KPI, how should you "resolve" it? How can you better set product goals? The author of this article analyzes the formulation of product goals from three steps: clarifying the main indicators - breaking them down to individuals - finding the path. Let's take a look.

Hello, friends. The Spring Festival has passed in a blink of an eye. Now we have to do the tasks that we planned to do after the Spring Festival. I believe most of you have been setting goals and making plans recently. Regarding the latter, I have written an article about annual planning before. There is a template in it, which you can use quickly. So today, let’s talk about how to set product goals .

The boss made an appointment and suddenly gave you a KPI , such as "double DAU", "30% year-on-year increase in order volume", "maintain double-digit revenue growth". Are you familiar with such scenes? I believe you are wondering at this moment: it is easy to get excited, but is the goal set reasonable? If you simply regard KPI as a product goal table, it is of course unscientific (of course, the boss is always right, please don't argue with the boss at the meeting, thank you~). Nowadays, domestic and foreign Internet giants, such as Amazon, ByteDance, etc., are using a more scientific way to set goals such as OKR, because:

• KPI is just a number, a bit "empty"
• OKR can help you break down the path to achieve your goals while setting them, making it more "pragmatic"
• If you find that the originally envisioned path does not achieve the expected results, you can adjust it immediately.

Of course, whether a company or department uses OKR also depends on the leadership, and it is not something that a few small employees like us can promote. So today, I will teach you how to "resolve" a KPI when your leader gives you one. There are three steps: clarify the main indicators → break it down into individuals → find the path.

Step 1: Identify key indicators

Sometimes, we are often misled by the phrase "we want both" and come up with a lot of indicators, such as user volume, transaction volume, and revenue... Such goal setting often leads to problems in our product strategy. We need to clarify 1-2 main indicators . In other words, when the boss gives you the KPI, you need to figure out the priorities. Some of you may ask, why can't we adults "have it all"? Because many indicators are often in conflict with each other, I will give you two examples around me.

Let's first look at how Pinduoduo carved out a niche among so many e-commerce platforms. At the time, Alibaba was doing "consumption upgrades" and traffic was tilted towards Tmall, because Tmall's customer unit price was high, so the transaction volume could increase rapidly. Pinduoduo aimed at this point and sacrificed the customer unit price by selling free shipping products for a few yuan, grabbing a wave of users. Now Pinduoduo's annual number of transaction users is higher than Alibaba's~ Therefore, the transaction volume and the number of transaction users are often easy to increase and decrease. To give another example, Meituan started to make profits three years ago, but after entering new tracks such as community group buying, it began to lose money again. This is also because Meituan gave up the profit indicator in order to increase the number of transaction users .

Therefore, before we set product goals, we must figure out what the most important indicators of our business/department are. Because the Internet industry has a strong scale effect, in the early stages of business development, we generally expand the volume first , such as the number of users, the number of customers, the number of supplies, the number of orders, the transaction amount , etc., and when the scale is up, we will consider revenue and profit . Therefore, everyone must figure out what stage their business is in and what the most important indicators are at this stage.

Step 2: Break it down into individual

After we figure out the main indicators (also known as KPIs) of the entire business/department, what can we (or our team) contribute to it? At this time, we need to disassemble the indicators.

1. First break down the process indicators

The KPI of the entire department is generally the result of everyone's cooperation. For example, if the main indicator of your department is transaction amount , if you are responsible for the product of the transaction process, then you can optimize the order conversion rate as much as possible. If you are a merchant operator, then you can find ways to increase the number of cooperating merchants . Although these two indicators are not transaction amounts, they are process indicators . That is to say, if these two indicators are improved, the transaction amount as a result indicator will naturally increase. Similarly, if you can increase the user's average order value and the transaction amount of a single merchant, that will also be OK.

Therefore, we need to find our own position and clarify which process indicators are relevant to us, rather than blindly setting goals for a KPI. If you are making C-end products on an e-commerce platform, then the number of cooperating merchants of commercial products will not be so important to you. You should focus more on a good C-end user experience and improve conversion rates. How to disassemble process indicators is introduced in the article "Ten Years of Data Analysis of Large Manufacturers' Products (Part 1): Four Steps to Easily Get Indicators". Those who are interested can go and read it.

2. Determine the value

After we have some process indicators, we need to set specific values. If the value is set too low, the boss will be dissatisfied, and if it is set too high, it will easily dig a hole for yourself. What should we do? Here is a trick from a senior sister~

We can take out these process indicators, the year-on-year growth of last year, and make a curve to look at the year-on-year values ​​and trends . If the trend is rising, we can add more to the existing year-on-year growth rate to make it grow faster; if the trend is stable, then our goal is to have a slight year-on-year increase; if the trend is falling, then we will stop the decline first. For example, if we find that the year-on-year growth of this product was 10% at the beginning of last year, and it became 15% at the end of the year, an increase of 1.5 times, then at the end of this year, we can refer to last year's growth, because 15%*1.5=22.5%, we can strive to increase the year-on-year growth to about 30% by the end of this year. Of course, if the overall environment of the entire industry changes, the value can be increased or decreased. For how to analyze the overall environment at a macro level, you can refer to this article by my senior sister about the PEST methodology.

If it is a relatively new product and you cannot see the year-on-year comparison, you can look at the month-on-month comparison. You can refer to the method just mentioned to set a reasonable month-on-month comparison target. However, when looking at the month-on-month comparison, you must consider the impact of seasons. For example, for businesses such as shared bicycles, if they encounter hot summers or cold winters, the data will definitely decline. If these process indicators do not even have a month-on-month comparison, then we can refer to industry standards or competitor data. For how to obtain this type of data, you can read "Experts from large manufacturers: How to solve the two major problems of competitive product analysis."

Step 3: Find the path

After having the numerical values, many people think that the product goals have been set, but I think that the most important thing is to find out which paths to use to achieve these indicators. When setting goals, we must list the key paths to achieve these goals, that is, what are the key product projects . For example, which C-end page optimizations can we use to improve conversion rates, which B-end system optimizations can we use to improve efficiency, and whether we can create new commercial products to generate additional income.

Why should we list the implementation path when setting goals? Because product projects often require the cooperation of various departments such as technology, operations, sales, and marketing (of course, your boss 's support is also needed), so if you can set the general direction at the beginning of the year and communicate with everyone in advance, the subsequent work will be smoother.

Some people may ask, should we only focus on indicators? That is too "utilitarian", isn't it? Didn't we say "user-centric"? What about the original dream? I think that when looking for a path, we can follow the " 721 principle ":

• Put 70% of your resources into areas that can directly improve your metrics in the short term , such as improving conversion rates by optimizing transaction processes as mentioned earlier.
• Put 20% of resources into projects that cannot directly improve indicators in the short term, but can improve user satisfaction in the long term, such as some experience optimization projects. At this time, we can also use user satisfaction and NPS to measure the effectiveness of the project; or invest in infrastructure projects, such as AB testing systems, data products, etc.
• Use the remaining 10% of resources to explore some products/businesses that are still uncertain but may have potential, perhaps at the beginning, that is, some exploratory projects. These projects are often small in size when they are just started, but may have potential in the future. You still have to have dreams, maybe one day such products will thrive!

After we have the path, we need to set the weight according to the priority, that is, the degree of contribution to the indicator. For example, the weight of project 1 is 30%, project 2 is 20%, project 3 is 10%... Finally, as long as the total is 100%, it will be a complete product goal table. In this way, during the final assessment, we (or HR, boss) can evaluate the performance of the goals at the beginning of the year based on the completion of each project. Similarly, the same table can be used to track goals when writing weekly and monthly reports .

Finally, I kindly attached a simple case for your reference:

Author: Haibei Senior Sister, Public Account: Haibei Senior Sister