30/30/30 Rule in Product Management
What is the 30/30/30 rule in product management?
30/30/30 rule in product management definition
The 30/30/30 rule is a strategy for investing your engineering, product management, and design (EPD) resources across three segments evenly. The ratio is: 30% on your current customers 30% on growing your business 30% on paying debts.
The aim is to consistently facilitate growth, keep customers satisfied, and manage your debts responsibly, all at the same time.
Components of the 30/30/30 rule in product management
Each component of the 30/30/30 rule requires careful consideration and investment to manage it effectively.
Current customers
Existing customers will continue to come back if you provide the products they need at a competitive price. However, no company can afford to be complacent with retaining loyal customers, so focusing on retention is vital to keep existing customers interested in your product portfolio.
Your customers will likely request or suggest new features or updates for a specific product over time. Implementing changes can be costly and time-intensive, but updating products to align with customer needs is usually a worthy investment. At the very least, it can reduce the risk of customers switching to a competitor.
Growth
Growing your company may involve branching out into new markets and targeting different audiences to expand your customer base. For example, you may intend to expand beyond buyers in the United States and sell to those in Europe or Asia too.
However, comprehensive research and planning are critical, so ensure you invest the 30% dedicated to growth wisely. That may mean assessing your product team’s capabilities and potentially hiring more people to accommodate an increased or diversified workload.
Debt
Investing 30% of your EPD resources into current customers and another 30% into growth will lead to debt, alongside any you have already accumulated. It’s dangerously easy to overlook debt for as long as possible, but that can only make the issue worse. Distributing resources evenly can help you stay on top of debts while focusing on satisfying customers and growing.
30/30/30 rule tips and best practices
Companies concerned about following the 30/30/30 rule may question how concrete the 30% allocation has to be. Fortunately, this “rule” is more of a philosophical outlook.
As a result, you don’t need to split resources as evenly as dictated by the 30/30/30 rule in product management. Instead, you can adjust the ratio as necessary to suit the needs of your company or product. You can use the 30/30/30 rule for the following applications:
However way you use it, implementing the 30/30/30 rule can open the door to exciting new possibilities.
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