Prioritizing your product backlog can seem overwhelming as the list of features grows and grows. Fortunately, there is a market driven way to help provide clarity in selecting what features you should be working on that is based on two criteria: market evidence and problem impact.
Market evidence is simply how many times you have received that particular feature request. If you have received the same feature request six times, for example, then this feature is assigned a 6 for market evidence.
Problem impact, on the other hand, is how big of a deal it is for the market! Problem impact is classified into categories from biggest impact (5) down to least impact (1) based on the following scale typically:
5 – A feature that prospects deem critical and you are losing sales without it.
4 – A feature that prospects deem important and/or your key competitors offer it and you do not.
3 – A feature that existing clients deem important to help them achieve the primary goal of the software. A feature can also be classified a 3 if none of your competitors have it but you see an opportunity to differentiate yourself. (Note: If you are competing in a mature market and you can find a way to differentiate yourself, this becomes a 5.)
2 – A feature that existing clients require to help them achieve a non-primary goal of the software or they require another product to solve it.
1 – A feature requested from prospects or clients who are not in your core target market segment or this feature request already has a suitable workaround in your solution.
To prioritize your backlog, each feature is scored using the formula Priority = Market Evidence * Problem Impact and then sorted from highest priority to lowest. For example, if a feature has been requested six times and has a problem impact rating of 5, this feature's priority score would be 30.
(Note: I'm a big believer that you should use this priority list as a guide and not as a firm rule because intuition and other factors should be considered when going down your list of priorities to determine what is next. In addition, you might want to adjust the 5-1 problem impact scale to put more emphasis on prospect features over client features, for example, if you believe prospect-focused features have a much higher ROI based on where you are in the product life cycle.)