Monthly Archives: March 2011

Guest Post: Your Customer is Only Human – 7 Emotional Pricing Tactics

NOTE: The following is a guest post from Laurie Peterson. If you want to submit your own guest post, click here for more information.

In business school they teach us to set prices by plotting the demand curve and then choosing an output level and price where your marginal costs are equal to your marginal revenue in order to achieve profit maximization. HUH?

I should have lost you at “demand curve” because in real life nobody has detailed enough data to create this sort of graph (Amazon is an exception).

So if micro-economics is letting us down, what can we turn to instead to guide our price setting?

Answer: our customers’ EMOTIONS!

Below I’ve highlighted a handful of consumer behaviors and related price setting tactics. I was lucky to learn from the best: world renown Pricing Professor Teck Ho. I am happy to pass along a few tidbits of his wisdom.

1. Your customer uses reference pricing to determine if they are getting a good deal

How your customer values your product is relative to the products they consider to be similar.

For example, tonight I was trying to book a couple of airline flights, departing from San Francisco. One flight was going to Las Vegas, and the other to Los Angeles. The trip to Vegas was going to cost me $200 more, so I didn’t book it. Why? Because it didn’t seem fair that the price was so much higher than the one to L.A.

Even though I value the trip to Vegas more, (who wouldn’t? Vegas, baby!) I can’t stomach paying more because the service provided seems about the same. My reference price is similar products currently available (other flights, like the one to L.A.) and my past experience with this product’s pricing (I’ve had lower fares on past trips).

Even though it’s perfectly rational for the airline to charge more for Vegas based on the demand, my emotions tell me, “Don’t book. You are not getting a fair deal!”

What this means for product managers is that you should identify what products/services your customers consider to be references. You can try to influence this (like generics do by placing themselves right next to the branded version in the grocery store isles), but ultimately you need to listen to your customer to determine who your references are.

Next, calculate the additional (or negative) economic value you provide to your customer compared to those references. For example, if the flight to Vegas was twice as long as the flight to L.A. I could justify paying a higher price because it’s taking me twice as far.

2. If you do too many price promotions customers will only buy when you have a sale

If you are a frequent shopper at Macy’s like I am, than you know this to be true. Macy’s has so many great sales you would have to be a moron or independently wealthy not to wait to shop during one.

This relates back to reference prices. It’s not just your competitor who is setting them. By discounting your product you may be setting a new reference price that is lower than your full list price.

If you are having a sale, be sure to present higher alternative prices alongside the actual selling price. Or, display your regular item alongside a more expensive item to create a higher frame of reference.

3. For some goods, price = quality

There are some goods that you have to experience in order to place a value on them. For example, you can’t read the ingredients on a perfume bottle and know if it is going to smell good, attract a date for Saturday night, and not result in hives.

For these “experiential” products, consumers use price as an indication of quality. The higher the price, the better the quality. If your product falls into this category you may actually hurt your sales, and reputation, by pricing too low.

4. Sometimes, $100 doesn’t equal $100

The mind is tricky. A $100 discount on an iPod touch seems like an AMAZING deal! But give me that same $100 discount on a Toyota Corolla and I will be less than impressed. When a customer evaluates markdowns it’s in relative percentage terms based on the overall ticket price, rather than absolute dollars.

This works the other way around as well, for price increases. For example, upgrades on cars are more likely when ticket price is high: “sure, throw it in!”

Similarly, if you are in the B2B world, consider how much your product or service costs relative to your customer’s overall buy. If it’s a small percentage of the overall buy the customer will be less price sensitive.

5. It’s hard to raise prices, but if you do, make sure your costs have increased as well

Customers can be influenced to believe a price increase is “fair” if it is known that your cost of goods have increased (publicize your cost increases). As an example, just recently the chocolate maker Hershey’s stated it was raising prices by about 10% across the board, due to price increases in raw materials, fuel, transportation costs etc.

6. Odd is best, unless your product is the best

$24.99 is perceived as MUCH more affordable than $25. But don’t use this tactic for high quality image products where price is an indication of quality. It will make your product look cheap. You’ll never find Louis Vuitton selling their own handbags for $749.99.

7. The middle of the road is the safest

If given a choice of 3 service options, customers will often choose the one priced in the middle. For example, if a car wash offers three service levels, most people will choose the mid priced one. The least expensive one seems like you are missing out on key washing services, and the highest one seems like you might overpay. The one in the middle feels just right…

Consider if you can increase upsells by adding something expensive to your product line, even if you never sell it.

Tweet this: @onpm Your customer is only human – 7 Emotional Pricing Tactics #prodmgmt #prodmktg #pricing #sales

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Laurie Peterson is an award winning product manager for interactive consumer products and websites. She is graduating from Haas School of Business in May of 2011. Check out Laurie’s product management tips and tricks at sfgirl.us/blog

Unsticking the stuck deal

By Alan Armstrong

Have you ever heard this story before?

The lead came in, and it looked hot. We gave it to our best rep, who called right away. Gotta strike while the iron is hot, as they say. The rep asked all the qualifying questions, and it looks like a huge opportunity. They have budget and are ready to move. She sets up a meeting, the SE does a few slides and a demo, everyone seems happy. They ask for a quote, we send it.

You know what comes next, right?

Silence.

Welcome to the stuck deal. Sales reps, sale teams, sales managers, and sales VPs see this all the time. In the midst of some win/loss analysis work, several of my clients have started to send these deals to me. “See what you can find out,” they say.

Here are a couple of the most common findings:

No access to decision maker or other key players

  1. Once the demo and presentation are done and the quote is sent, the buyer has everything they need.
  2. Unfortunately the seller doesn’t have what they need. What they need is a PO, or access to the people who can reprioritize investments to make the deal happen. Often they are stuck at a lower organizational level.
  3. Even more unfortunate, it’s hard if not impossible for the seller to reset the conversation. That’s because they’ve given everything they have to the buyer without asking for anything in return.

Unqualified Champion

  1. The person we are selling to lacks the courage, acumen, or clout to access internal company resources.
  2. While the opportunity was qualified, the champion was not. Our qualification questions need work. In fact, we should be DISqualifying rather than qualifying the champion.

Cost/Benefit is not demonstrated or not believed

  1. As much as the champion likes our product, they haven’t been able to justify it to the people who can really make the decisions internally.
  2. In some cases, we’ve given them cost/benefit numbers, but they were simply not believed internally.
  3. Like it or not, that’s our failure rather than our champion’s failure.

What happens here is that two parties end up in a stalemate. In negotiation theory, this is described as arriving at two different, or diverging, positions. It’s like they’ve walked up to the top of two mountains and are now separated by a valley in between.

In most cases, because the seller is selling, they have lost the ability, or the permission from the buyer, to move down the mountain from the divergent position to the underlying interests of the buyer. A really good seller can do this sometimes, but often the buyer simply stops responding at a certain point, and if you can’t get the conversation started, it doesn’t matter how good you are.

What’s needed in these cases is to walk down the mountain to the underlying interests. These conversations reset the discussion and re-build the relationship map from the ground up.

When I have these conversations I have an advantage over the seller: I’m not selling. So it is a little easier, perhaps, to reset the conversation. In some cases, the overlapping interests are so small that they do not justify further sales activities. We “put a fork in it”, as they say. The account may need to go back to marketing for further nurturing, or maybe it really is just dead. If so, move on! In sales, my favorite four letter word is “N-E-X-T”, because we don’t have time to waste on non-opportunities.

In many cases, however, the overlapping interests are significant, and when reexamined in this way, the buying discussion can be reset. I’ve helped a client reset, and eventually close, a $5M deal as the result of a one hour phone call. Without that call, the CEO told me, they would have lost the business.

But the secret to unsticking the stuck deal is the same, regardless of who does it:

  1. Reset the discussion entirely. The seller can, for example, withdraw an earlier quote after a certain time. This is a really invigorating thing to do for a seller because it tells the buyer that they no longer have all the power.
  2. Go back to square one and re-diagnose, re-qualify, and even try to DISqualify the opportunity. The seller missed something big in the first round of qualification and selling, so all assumptions about the account need to be thrown out the window. It can sometimes be hard for the same rep to do this work because they may need a fresh set of eyes to see the account.
  3. Look at the common pitfalls listed above. What happened the first time? How can you avoid the same thing happening again.
  4. Most importantly, rebalance the power in the buyer/seller relationship. Sellers are often so insecure that they undervalue what they have to offer, including their own time and many company resources. The attitude needs to change if you are going to unstick the deal.

I will be touching on this topic at Product Camp Silicon Valley on Saturday April 2. My talk is called “It’s never about price: The real reasons behind 250 B2B buyer interviews“, and will be held at 11am. Hope to see you there.

- Alan

Previous articles in this series:

Your price is (probably) not the problem

Thanks for the discount, I’m still not buying yet

Tweet this: New post @onpm: “Unsticking the stuck deal” http://bit.ly/unstick by @AWArmstrong #sales #marketing #prodmgmt #prodmktg #negotiation

Uncovering the Social Animal in Product Management

Over the years, I’ve watched the social interaction of individuals and teams and how they succeed and where they struggle. Whether you’re a product manager, product marketing manager or you lead a team, there’s a definite social element to the role and each persons contribution and ultimate success. While you might associate sales, marketing, sales engineering and other outward facing roles as social, should product leaders become the ultimate social animal?.

To answer this question and uncover the attributes required in product leaders, I’d like to offer David Brooks recent TED talk on The Social Animal.

As an acclaimed New York Times columnist and author,  David delivers humor and insights into human nature from the cognitive sciences, with a massive dose of economics and politics that product management should understand. As you listen to and view the talk, listen to the several areas David shares and that I outline below. Each applies to product management and product marketing and how you may better influence and lead  your products, services and teams as a social animal.

  1. Mindsight – is learning about others, their models and how to relate. Product leaders must have or acquire mind-sight to be used in discover problems, formulating solutions or staging conversations with others. Often, we dive into an activity when we lack an understanding of roles, past experiences, models for learning or action, etc.
  2. Equipoise is a state of balance, equilibrium or a counterbalance. If you consider product leadership, isn’t it a state of balance? Think about it. We balance strategic and tactical, vision and backlog, as well as balancing business influence and marketing execution. Each requires a balance and balancing rationale and purposeful views into the areas where we learn and apply what we hear, see and understand. This balance support decision-making.
  3. Metis – is an ordinary Greek word for a quality that combines wisdom and cunning. “It’s a sensitivity to environment” and in modern terms, we’d say street smarts or street savvy. While there’s a non-ending debate in the product management community on domain expertise product leaders must obtain wisdom from market exposure, customer experiences and build attributes of street smarts that may be a higher level of gut instinct. As a product leader, do you have Metis?
  4. Sympathy – while you make not equate sympathy as a gift or talent of social animals, the “ability to work in groups and this is tremendously handy because groups are smarter than individuals, and groups that communicate electronically ” are key for conversations and communications share David. To build the foundation found in gifts 1 and 2, product leaders should have the ability to work in fluid groups, especially face-to-face. Considering that most intelligent assumptions or ideas are validate in customer facing conversations, product leaders should carry a level of sympathy or perhaps acquire an understanding of customer problems and “walk a mile in their shoes” before telling them your a shoemaker their to build a new pair of shoes.
  5. Blending – is “the source of innovation.” As a product leader do you know how to blend market trends, personal insights, artifacts, ideas and teams to innovate or drive vision? As David states, “blending isn’r easy.” I believe we have to unlearn in certain areas and open our minds-eye to those things that limit our abilities to progress.
  6. Limerence is the final talent or gift. It’s drive and motivation. To me, these are the glue that holds product leaders together. How often do we give in or give up when we should push forward giving more and working to overcome politics, opinions and those who lack the evidence or insight you hold.

How do we uncover the social animal in product management? Here’s a few things I believe we can do.

  • Schedule less meetings and initiate more conversations. Remember to apply the gift that we have two ears and one mouth.
  • Review the balance in your product leadership. (Yes, a personal assessment) Are you unbalanced in one way or another? Identify three areas and work on one in the next 30 days. Need help, connect with a peer in the Product Management community (#prodmgmt or #prodmktg work well on Twitter), or a mentor. If you need a mentor, email me and I”ll find one that’s compatible for you.
  • Get outside yourself and the office. It’s amazing what you’ll see, hear and experience when you listen to those who love, hate or are ambivalent to your products or service. Who knows, you may become more sympathetic and come home with a renewed sense  and determination to be a source of innovation and new growth for your organization.
  • Take time to re-listen to David’s talk or read the book. I just ordered it and hope to uncover more.

As always, I welcome your thoughts and insights. In no way am I an authority on cognitive sciences. As always, I welcome your comments to the post and sharing my post and ideas through the social web, where all types of animals can be found.

Tweet this: @jim_holland “Uncovering  the Social Animal in Product Management” http://wp.me/pXBON-2kq #prodmgmt #prodmktg


5 tips for acing the job interview

by Prabhakar Gopalan

Tweet this: @PGopalan 5 tips for acing the job interview  http://wp.me/pXBON-2gI #prodmgmt #jobadvice #jobsearch #careers

Last week I talked about searching for a job.  Now that you landed that job interview, I’ll share 5 uncommon tips about acing the interview.  I am not going to spend time on the obvious ones.  These  are my five uncommon tips for interview success:

1) Research the company

How often have you attended an interview without knowing much about the company’s  leadership team, annual revenues (segmented) or overall strategy?  The first step in interview preparation is researching the company.  By research I mean a comprehensive research, not just reading what was in the newspaper (if you still read one) or the company website.  If it is a publicly listed company, read the investor section of the website.  Understand what areas the company plans to invest, grow and where the executive team is planning to take the company.  Figure out what products bring the moolah and what trends have shaped the company’s portfolio over the past few years.

The primary benefit of this research is you fully understand if the job you are interviewing for is going to be interesting for you given where the company is heading or plans to invest.  One secondary benefit of doing this homework is so you can intelligently talk during the interview on how you see the company strategy being relevant to the products you might end up managing.  You’ll get a clear idea of where your products are, in which portion of the company’s investment mix – cash cow, growth, divest or sunset, they belong.  You will not have buyer’s remorse if you enter the contract with full knowledge.

2) Research the culture

All start ups aren’t the same.  All large companies aren’t the same.  Culture is that one thing you don’t want to take lightly and be unhappy later.   Take the time to understand the company culture.  When you get a chance to ask questions in the interview process, make sure you ask questions about culture.

What are the values of the organization, the hiring manager and company?  This is not the culture the company claims through full page Wall Street Journal ads or airport terminal billboards of being smart or innovative or inserting other such over used words.  It is about the reality that exists within the company, not through a paid advertisement.  Watch out for those that give out multimillion ad agency contracts for rebranding and advertising, and spend very little on actual employee  or customer well being.

3) Research the interviewers

Chances are high you have been googled extensively by your interviewers.  Reciprocate the favor by doing it yourself about the interview team.  Practically everyone has a LinkedIn profile these days.  That’s a good place to start.

There are two simple reasons for this – a) Learn more about your interviewer before hand so you can predict to fairly reasonable extent what kind of questions you can expect (people usually ask questions from their own background, experiences they are most comfortable with) b) Look for any commonality between the interviewer and you, and break the ice in discussing a shared experience.  It is human to look for a shared sense of belonging.  Use it to develop a rapport.  After all, you might work with this very person.

4) Practice story telling from your resume

You are likely to get questions of this nature pretty much every time – ‘Walk me through your resume’, ‘Tell me something you did at your previous job at Company X that was remarkable’, ‘Can you give me an example when you worked with a team without authority but successfully influenced the outcome?’.  Instead of trying to answer the questions on the spot, it may actually be a good idea to prepare a document listing all the frequently asked interview questions about your resume, write answers to them and practice your delivery.  Assemble these answers in a story format so it is easy to tell and receive.  State the business situation, complication, the action you performed, and the outcome crisply.

Expand each resume bullet in the story format and practice delivery by yourself, with a friend or a colleague. With good story telling and delivery, you’ll make it memorable for the interviewer.  Here’s an example – “When I walked in to Company X in August 200x, the product revenues were $4M.  I put together a marketing plan that targeted SMB segment, which at that time was unattended, and increased our revenues by $2M in just one year.  Selling to the SMB segment was a high touch activity before.  But I put together an innovative web based inbound marketing program that was low on cost and high on return.  Net result was we rocked the SMB segment”.   Pick up a good screen play writing book to get good at story telling.  I’m serious!

5) Pick up a white board marker or a sketch book

When you are posed with a question that requires a lot of explanation, don’t hesitate to ask for drawing out the answer on a white board.  You are literally taking up the challenge with your own hands.  When I interview candidates, I try to see how comfortable the candidate is  in going up to the white board or even using a sheet of paper and a pen, and explain to me the problem and subsequent analysis.  Visualization on a large scale (like a white board) is a powerful tool for envisioning solutions, especially in team settings.  Employ it at every opportunity you get.

…And then the regular stuff

This is the placeholder for all the regular stuff you’d do  e.g. learn about the product, process, tools, technology, competitors, send thank you notes etc.

Good luck on your interview!  I will cover best practices for the interviewer next week.

Prabhakar

Tweet this: @PGopalan 5 tips for acing the job interview  http://wp.me/pXBON-2gI #prodmgmt #jobadvice #jobsearch #careers

New Download – Lean Communications – Aligning Diverse Teams and Accelerating Revenue in High Tech Companies

Back in late 2007 & early 2008 I wrote a 6-part series of articles entitled Product Manager vs. Product Management.  The intent was to try to elevate discussion around the role of Product Management as opposed to simply what a lone Product Manager should do.

To be honest, that series meandered a bit, but it had it’s good points. Over the last few years, a couple of those parts have seen a lot of traffic. At the beginning of Part 4, I mention that I had received a number of requests for a “20-page document” that I’d mentioned in Part 3. That document defined what I called a “Product Management Deliverables Grid”.

Fundamentally, that document tried to put a structure and definition around the cross-team deliverables (and some activities) that were performed by Product Management over the course of a release cycle. The grid looked something like this:

(click image to enlarge)

The aim was to find a standard, scalable, product and release independent means for the PM team to function. Not too ambitious eh?

I did mention in Part 4, that I didn’t want to release the document (at that time) and so, metaphorically, instead of giving people fish, I’d teach them to fish. :-)

Over the years I’ve updated the grid, generalized the document and created a structure around it which I call Lean Communications.  I’ve embedded a slide deck below that goes through the background on the Lean Communication model. And right after that I’ve included a PDF of the “20-page document” (now about 28 pages) for your convenience. Yes, here’s the fish!

But, can I ask a favour?

Can you let others know about it? Via Twitter etc?

If you use Twitter, here’s a suggested message. :-)

I just downloaded “Lean Communications” PDF article from On Product Management http://wp.me/pXBON-2k4 #prodmgmt (@onpm)

The short link points back to this blog post. We’ll track the tweets, and who knows, maybe one or two random tweeters may get rewarded. ;-)

Oh yeah…A reward goes to Jock Busuttil for tweeting that he downloaded my Building a Better Beta PDF. Jock, please get in touch with us to claim your prize. Tell us your shipping address and choice of mug.

So here’s the presentation.

And here is the PDF. Click on the image to download. Don’t forget to Tweet!


Thanks. And once you’ve read it, let me know your thoughts. I’d love to hear from you.

Saeed

Guest Post: A Product Manager’s Authority is Earned, Not Granted

NOTE: The following is a guest post from Ilya Bagrak. If you want to submit your own guest post, click here for more information.

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When was the last time you had to soothe your product manager’s ego with thoughts like these:

  1. I raised it to senior management, but couldn’t get them to commit to the project. My job is to identify opportunities and to point them out to the powers that be. I can’t do the impossible. There is only so much I can do.
  2. I’ve let Engineering know that they need to scrap three months worth of work and start on something completely different. This decision came down from my bosses, and I had no say. I’m totally clear of any wrongdoing, and that’s what I’m telling engineering.
  3. I know the website for my product sucks. I brought it to the attention of our web admins but they won’t even consider my suggestions. They don’t want to implement the changes. I’ve done my best, but that part of the organization is totally impervious to my requests.

Sounds familiar? The uncomfortable truth is that a product manager’s job is a carefully disguised exercise in the most excruciating kind of professional impotence. An authority over no one, we are tasked with performing  feats of coordination among insubordinate, obstinate groups, often at odds with each other.

Welcome to the darkest moments of product management, and here is a piece of advice:

Stop being everyone’s whipping boy (or girl)!

Yeah, that’s harsh, but the key thing to keep in mind is that there are two types of authority:

  • authority granted
  • authority earned (or asserted).

Due to the nature of product management’s function, namely that of being the connective tissue between the flailing arms of the org chart, the second kind of authority is what you should be after. It’s rarely the case that product managers possess any a priori, granted authority over anyone they deal with on the daily basis.

Persevere, try again

It may be tempting to give up too easily. This is the trap created by the very loose coupling between the performance of a specific product manager  and a specific product. The most discerning of managers would be challenged to trace a particular product manager’s actions to any product metric that matters, which not only harms the Product Management’s credibility in general, but also permits individual inaction.

Illustrate your value by example

If you’ve done your homework, you already know how to do this. The key here is to leverage the cross functional perspective of the product manager. Remember, no one else will see things from this angle. Effective product managers are often uniquely positioned to bring out the things that no one else can see.

If all else fails, apply your unique perspective in retrospect to show how some program gone awry could have turned out if you had your chance. Nothing helps to grab everyone’s attention as much as a possible failure averted. An example of failure that you could have averted if you were given a chance is a powerful thing.

Win allies and convert the skeptics.

Are you continuously tossed around? Are you failing to gain meaningful traction in areas where your responsibility connects you with other corners of the organization? Are you finding yourself on the wrong side of someone’s whim, someone who neither reports to you nor you report to?

There is always going to be someone who trusts you, who believes in your ideas and shares your opinions. Work that connection to try to get personal leverage across the organization. A personal connection is an effective kick starter to professional influence, clout, and eventually leadership.  Getting someone to listen to you is difficult enough. Use any means at your disposal to make as many stakeholders as possible aware of your existence.

Ilya

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Tweet this: @onpm Guest Post – A Product Manager’s Authority is Earned, Not Granted http://wp.me/pXBON-2jE #prodmgmt #leadership #innovation

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Ilya Bagrak (@ibagrak) is a product manager and a budding internet entrepreneur who shares his time between Moscow, Russia and Silicon Valley, California. He also blogs about product management, entrepreneurship, and technology at codercofounder.wordpress.com.

Your price is (probably) not the problem

By Alan Armstrong

A true story: The date was June 23, 7 days before quarter-end. Terri came to the sales meeting and said she could close another deal, this one for $75k, but she needed a 50% discount to make it happen. Discount granted, and $150k of software was sold for $75k.

A few months later, Michael, our fearless product manager was looking at pricing trends, and he wanted to understand why discounting had become so rampant. Before interviewing this buyer, Michael looked back at the customer record. Strangely, just 6 months before this end of year close-out sale, the buyer had purchased an initial deployment of $40k at full price. Then, just before Terri went to bat for the discount, the buyer had emailed Terri saying that they had some end of quarter budget and wanted to buy all the licenses they needed for the following fiscal year.

Somewhat suspicious of the situation, Michael requested an interview with the buyer. He started out at a high level, not hitting directly at price right away. Michael dug into the reasons for purchase, the business value of the software, and the impact of not purchasing, and the alternatives available if the discount had not been offered. By the end of the call, Michael had demonstrated such an understanding of the business issues that he came right out and asked: “What if we had said ‘no’ to your request for discount? The response would make the CFO cry:

“We would have eaten the apple one bite at a time. We needed that product, I’ve already told you that, but we were purchasing more licenses than we needed at the time. We probably would have taken half the licenses and looked for more money the following quarter.”

You can’t make this stuff up. While the rest of the Product Marketing team was working on a new pricing model, Michael had uncovered a huge hole in the underlying logic. No one had thought to understand the customer value. They had heard that the price was too high, so many times, from so many sales people, that they stopped questioning it.

This story is one of many that I am collecting and presenting on the topic of sales, selling, buying, and value. I have studied 250 B2B purchases in the past 2 years and am summarizing the themes. I will be presenting on this topic at Product Camp Silicon Valley on April 2. If you like this story and want to hear more, please vote for my talk:

Vote here: It’s never about price: The real reasons behind 250 B2B buyer interviews

Tweet this: New post @onpm – “Your price is (probably) not the problem” http://bit.ly/gvWrdE #prodmktg #marketing #sales #prodmgmt #svpcamp

Some Thoughts on Roles and Responsibilities

By Jim Holland
 

Last week Saeed wrote a great post on The Importance of Differentiated Product Management Roles. As I read the post, Saeed’s comment, “Understand the needs of these different internal (and external) groups and create differentiated roles WITHIN the Product Management organization and STAFF THEM appropriately” struck a painful chord. At the end of his post, Saeed added, “It’s also clear that the cross functional nature of Product Management poses a challenge for many organizations. What is the best way to build value in responsibilities and roles?”

To be honest, I’ve struggled with roles, responsibilities and differentiation. I often think we fixate on titles and ownership versus roles and action. In The Strategic Role of Product Management, Steve Johnson states; “Titles are meaningless; actions are meaningful.”

Back to the question… What’s the best way for Product Management and Product Marketing to approach roles and responsibilities to build and add value?

For me, it all starts with who’s Responsible and Accountable. Whether you’re a product management contributor in a small technology company, or work in a large enterprise with many product marketing and product management counterparts or lead a group or either, you have to understand what you are responsible and accountable for and who relies on your skills, talents and who supports and contributes to the goal of product success.

To determine the level of responsibility and accountability you or your team has, I’ve used a modified version of the RACI (or RASIC) model or DACI. RACI is an acronym for Responsible, Accountable, Consulted, and Informed (also Supportive). The RACI Matrix enables you to identify who is responsible, accountable, consulted, or informed, for every task or action performed.The simplicity of the matrix can add clarity to product management and product marketing success.

Recently, I worked with a large team to define their roles and actions with development and marketing. In this example, we knew product management was responsible and accountable for product vision, voice of the customer activities, market requirements, positioning and strategic fit. (These will vary by organization.)

In the figure below, you’ll see we defined the major tasks the team was responsible and accountable for in yellow. These are major tasks or actions and should be defined for key roles such as product manager, product marketing, etc.

Next, you define the Roles where product management collaborates, supports, consults with or informs on a consistent basis. Depending on your organization, you may expand these categories as required.

With Tasks and Roles defined, you should define, beginning with Product Management, if you are Responsible, Accountable, Consulted, Informed or Supporting the task.

Remember, one person is accountable. As they say in the Agile world, “there’s one throat to choke or one neck to wring” and that is the person who is responsible and accountable. Yes, product management and product marketing, that’s you depending on the role and organization.

Next, socialize this with other stakeholders and areas you interact with most. Discuss the “action” portion of the matrix and where you and or your team are responsible and accountable.

Once you’ve refined this (and their will be refinements), discuss this with the executive team. You’ll find the results bring clarity and surface the value of your role.

Please provide any comments or feedback as I recognize this is an exercise to build value. If you have experiences or artifacts to share, please do. If you like the post, please Tweet this:

New post and “Some Thoughts on Roles and Responsibilities” for #prodmgmt #prodmktg #leadership http://bit.ly/hWPUcP

Searching for a job?

by Prabhakar Gopalan

Tweet this: @PGopalan Searching for a job?  http://wp.me/pXBON-2gK #prodmgmt #jobadvice #jobsearch #careers

Are you in the market looking for a  job?  Is there a systematic approach to searching for a mid career job?  I have been fortunate in my career to have multiple job offers each time I looked for one and have been on both sides of the interview desk for PM and PMM positions in large and small organizations.  I’ll share my experiences and tips in three posts.  This is the first one.    In my next post I’ll cover interview skills.  In my third post on this topic I’ll cover how to interview candidates for a PM position (or how not to be a jerk).

Six things to consider when searching for a PM job (or for that matter any job):

1) Take time to reflect on your career and where you want to be next

Often times, especially if you are in between jobs or anxious to leave one, the tendency (and financial pressure) is to quickly find another job and then regret later on missed opportunities or an unhappy outcome.  A better approach is to actually take the time and reflect on what worked in your career so far, what you have learned from failures, and where you’d like to work on what next.  Once you spend the time to understand yourself better (imagine doing a SWOT analysis of your skills and experience) you’ll get a better idea on what will make you happy.  Take a self assessment test like StrengthsFinder.  You’ll be surprised at what you can actually be doing!  If you’ve been in that one company since you graduated from college and stuck in a career plateau, it is time to step out and make a difference.  Chances of making an impact in a 400,000 employee company  is a number very close to zero on the number line, more likely to the left. :)

2)  Make an employer target list

Instead of applying to every product management position advertised on Indeed or LinkedIn, spend time on what drives your success and which kind of company and organization culture would work for you. The Top 50 employers ranked by Forbes may not necessarily be your Top 50.  Write your criteria in one column, weights in another column, compare those with your potential employer target list.  Make your trade offs and realize why you are applying for a position in those companies.  It is so much better when you know why you are applying there versus just pressing the “upload resume” + “submit” buttons.

3) Let your network know that you are looking

If you are looking, don’t forget your network.  That is the best place to start.  Bonus points if you can communicate your target list in 2) or reach out to your friends/former colleagues who are already working in the companies you want to work for.  Take the time to explain what sort of a place and position you are looking for and why.  If you communicate your requirements adequately, your product is more likely to turn up like you wanted (isn’t that how product management works? j/k).

4) Build a search friendly presence on the web

This one bullet can take up many pages of elaboration.  The idea here is, if you have done things noteworthy, that you are proud of, post it on the web so it can be found.  Of course if it is a trade secret or a confidential piece of work, you don’t have much choice to display it, but you could at least talk about how your contribution changed a situation for better.

5) Invest in a resume writing service

Not many understand the importance of taking professional help in resume writing.  For a few hundred dollars you get invaluable professional help.  Make your resume stand out without the top 10 overused phrases if you can.

6) Keep your LinkedIn profile up to date

Make sure your LinkedIn profile is 100% complete (yes, LinkedIn actually tells by how much percentage your profile is complete).

I’ll end this post with a 2×2 that can help you decide about your current job.  I vaguely remember seeing a matrix like this in a blog post by Chip Conley, the CEO of Joie de Vivre, but I’m not sure.  Which quadrant are you in?

Prabhakar

Tweet this: @PGopalan Searching for a job?  http://wp.me/pXBON-2gK #prodmgmt #jobadvice #jobsearch #careers

The Importance of Differentiated Product Management Roles

by Saeed Khan

Last week I wrote a post entitled How to Create an Effective Product Management Organization. I mentioned that, like other departments such as sales,  differentiated roles are needed to support the goals of Product Management, and that I’d cover it in a future post. This is that post. :-)

Tell me, have you ever seen a job description for a Product Manager that had a long list of duties like this:

  1. Track and prioritize software feature requests
  2. Define the business case for complex feature requirements
  3. Research user needs and expectations for large, complex feature requirements
  4. Write or oversee the writing of use cases, functional specifications, and test plans for specific feature requirements
  5. Perform acceptance and ad-hoc functional testing of new features
  6. Conduct or coordinate usability testing and focus groups
  7. Monitor and review the progress of software engineering, QA, and documentation
  8. Coach and mentor junior-level product managers on process or specific requirements
  9. Help define and influence the long-term product roadmap
  10. Serve as product expert and resource for sales, marketing, and service teams

I bet you have. Yet another job requiring technical, business, project management, UX, sales, marketing and management skills.

Would the same company ever consider job descriptions for Salespeople that included giving demos, conducting POCs or competitive bake-offs, handling lead generation and nurturing, and post sales support?

Or how about software developers who also could be architects, conduct full QA tests, and write documentation?

Of course not.   So why do they think that Product Managers should be responsible for several different roles all wrapped into one?

Personally, I hate these kinds of job descriptions because it’s really clear that the hiring company hasn’t clearly defined the goals of Product Management and thinks that Product Managers are simply Jacks (or Jills) or all trades.

Goals of Product Management

The goals of Product Management are pretty clear – if people think about it.

In short – and I’ll use Don Vendetti’s definition from this post – the goals of Product Management are:

To deliver measurable business results through product solutions that meet both market needs and company goals.

Of course, there are other ways to define this, but this is not a bad definition at all.

Note the focus on business results that align with market needs and company goals. Also note that there is no mention of Agile (or Waterfall or Lean or Extreme etc.) or features or requirements or demos or many of the other things that typically get mentioned when people think about Product Management.

When looking at Don’s definition, the first question that comes to mind is “How?” How is Product Management going to deliver those results?

Take a look at the following diagram. I’m sure you’ve seen diagrams like it before. It’s the hold “hub of the wheel” diagram showing the key internal touchpoints for Product Management.

One of the key activities for any Product Management team is to work with these internal stakeholders to ensure product success. And of course, in cases like the example above, companies expect a single individual to actively and effectively communicate and work with all of these distinct groups while also getting out of the office, working with customers, partners and other parties.


Create Differentiated Roles for Overall Success

And while there are certainly individuals who can do all this, the fact is, it is an impossible task for most people, and leads to both individual and organizational failure. So here’s a simple solution. Understand the needs of these different internal (and external) groups and create differentiated roles WITHIN the Product Management organization and STAFF THEM appropriately. This will help create a scalable effective, and focused Product Management organization.

The following are a few key roles I’ve seen implemented in successful Product Management organizations.

Technical Product Manager

Engineering and Technical Support need more technically focused interaction with Product Management. So define the role of Technical Product Manager (TPM) to work closely with these teams and the issues they raise.

A TPM can act as a Product Owner in an Agile environment, working with a Project Manager (not necessarily part of the PM team) and the Development leads to ensure requirements (user stories etc.) are clear and iterations move forward efficiently.  Or, a separate Product Owner role can be defined (whether in the PM org or not) and that role can work with the TPM in an effective manner.

Software Developers or QA staff who want to move into Product Management are great candidates for the TPM role.

Product Marketing Manager

Product Marketing is often a completely separate team from Product Management, reporting into a different executive. e.g. up into the Marketing organization. Everyone says they should work with Product Managers, but they have their own goals and objectives and thus often remain quite separate.

Fundamentally, Product Marketing is strategic marketing for products and is a core component of overall Product Management. Product  Marketing should be the primary Product Management interface into the Sales and Marketing organizations. Much of the work remains the same, but it can be done more effectively as part of the Product Management organization.

A good market focused Sales Consultant or Field Marketing person could transition easily into a Product Marketing role.

Solution Architect

For particularly technical or complex products, the role of a solution architect or solution specialist within the Product Management team can be very effective.  Product Management is viewed as the “product expert” by external departments, and called upon when thorny issues or new usage scenarios are encountered. But to be effective, even a good TPM needs to have time to focus and understand problems before identifying solutions in sales situations.

Solution Architects are deep product experts with a sales/customer mindset. While this may sound a bit like a Sales Consultant or Sales Engineer (and there is overlap), the goal of these SAs is to work as overlays across prospects and customers, and help the SEs and Technical Support with thorny problems.

The SAs insight can help identify real world product limitations that Product Management should address in the future, or provide clever workarounds to problems that a field SC or Support Engineer couldn’t create.

Technical Sales Consultants, and customer-focused Technical Support Engineers can make great Solution architects.

Product Manager, Director/VP Product Management

And of course, there need to be clear leaders on the team. They can be either people with the title or Product Manager (Senior, Principal etc.) or those at the Director or VP level. Regardless, they must be seasoned veterans, who’ve been down in the trenches and understand the details, but now focus on managing and developing the team, strategy, and cross-organizational and external alignment.  And while much of the interaction between Product Management and the Executive team will here, these leaders need to ensure the individual contributors they manage get executive face time when needed.

Other roles

Depending on the company, it’s structure and needs, other roles such as Interaction Designer, Business Analyst and even Project Manager could be part of the Product Management organization. These are less common in my experience and thus not addressed in this post.

Organizing for Efficiency, Scalability and Success

Once the various roles have been defined, their objectives and responsibilities set, a diagram showing how they interact across internal teams could look like:

This is clearly a simplified diagram. I know some people may take it more literally than intended or object to how the roles are laid out or connected.

So just to be clear, the lines connecting the different roles show the PRIMARY areas of focus for the roles. e.g. The Product Manager/Director/VP doesn’t ignore Engineering, Technical Support or Presales, but is more focused on the BUSINESS aspects of the product and thus engages more actively with Senior Management, Sales and Marketing, though not in the same way as the Product Marketing Manager. Each has their own objectives and goals, but work across similar teams.

It’s also clear that the cross functional nature of Product Management poses a challenge for many organizations. What is the best way to set up responsibilities and roles? How should they be staffed? When should the new roles be created in an organization.

All good questions. There is no clear answer, and that’s why it’s incredibly important to have experienced leadership running the organization.

Saeed

Tweet this: @onpm  New post – The Importance of Differentiated #prodmgmt Roles http://wp.me/pXBON-2hF #prodmktg #leadership