How do you prioritize competing features?

I use a structured approach to prioritizing features. For each of the features, I analyze the impact, urgency, strategic goal alignment, cost vs effort.

Impact - I evaluate the number of customers or which customer segment  these features would benefit or evaluate if this feature mitigates any existing risks. I will also analyze if the features impact short term or long term goals. For Example - A feature addressing a customer pain point would take a higher precedence over a performance issue if a temporary workaround is available. Although the performance issue fix will benefit in the long term, but it can be deferred to a later sprint.

Urgency - I would evaluate to see if any of the features comes with a

Tight deadline - For ex - PCI Compliance. This would make this feature a higher priority as without a compliant software you can’t exist in the market.

Competitive advantage (Opportunity Cost) - If the feature is critical to getting a competitive edge then this feature should be prioritized higher as sometimes delaying on an opportunity cost has a higher loss.

Strategic Goal Alignment - Evaluate the tasks against the business goals in place like - Revenue growth, retention rate, CSat. If any of the features directly contribute to the goals then they would take higher precedence. There has to be a balance between short term and long term alignment here as well.

Team effort - In collaboration with cross functional teams, the effort to build a feature should be considered. A high reward feature with lower efforts should be prioritized before a low reward, high effort features.

With this approach I build my prioritized list of features for developement.

Once we have a list of features from the stakeholders, we need to stack rank them as per priority to implement them in a phased manner. This is decided by following various frameworks but not limited to MOSCOW, RICE etc. But essentially it boils down to effort or cost vs impact. How much we have to spend and what is the impact. We also need to review competition, market trend, user interview etc to see how those features suit their needs and how they are aligned to company goal, strategies and vision.

If two features compete against each other in resources I will use metrics to define the impact of both of them. Based on strategic priorities, the initiative that score a higher score in metrics and KPI´s will be prioritized first. This process will include all relevant stakeholders including the scrum team