RICE in Action: A Framework for Prioritizing Product Features
One of the biggest challenges in Product Management is prioritization. It is crucial for product teams and the development process. Selecting the right high-priority items can be daunting, but it's essential for a successful launch.
There are various product prioritization techniques, but the one we'll focus on below is RICE — a simple yet effective method for prioritizing features.
RICE is a simple yet effective prioritization framework that stands for:
Reach: The number of people who will be impacted by the feature.
Impact: The expected positive or negative impact of the feature on the users.
Confidence: The level of certainty about the estimated reach and impact.
Effort: The estimated effort required to implement the feature.
Let's explore an example of prioritizing a design feature on the Renewal Offer screen.
Feature: Redesign the renewal offer screen to improve conversion rates.
Step 1: Estimate Reach
Target Audience: Identify the specific segment of users who will be affected by the redesign.
Number of Users: Estimate the number of users who will see the renewal offer screen each month.
Step 2: Estimate Impact
Conversion Rate Improvement: Estimate the expected increase in renewal rates due to the redesign.
Revenue Impact: Calculate the potential increase in revenue based on the conversion rate improvement and the average revenue per customer.
Step 3: Assess Confidence
Data Availability: Consider the availability of data to support the estimates.
Expert Opinion: Seek input from experts or subject matter experts to refine the estimates.
Step 4: Estimate Effort
Design Time: Estimate the time required for designers to create the new design.
Development Time: Estimate the time required for developers to implement the changes.
Testing Time: Estimate the time needed for testing and quality assurance.
Step 5: Calculate RICE Score
RICE Score = Reach * Impact * Confidence / Effort
Example Calculation:
Reach: 10,000 users per month
Impact: A 5% increase in renewal rate (current renewal rate is say 70% which means currently 7,000 users out of 10,000 coming get converted) assuming an average revenue per customer of $100, this translates to a $35,000 increase in revenue)
Confidence: 70% (based on data and expert opinions)
Effort: 10 man-days
RICE Score = 10,000 * 35,000 * 0.7 / 10 = 24,500,000
Now, rank the RICE scores of all the features to prioritize them. Start with the feature that has the highest RICE score.