Month: April 2011

“We try harder” ain’t enough: How to differentiate based on customer experience

BY ALAN ARMSTRONG

In the early 60s, AVIS coined the famous tagline: “We’re only #2 in rental cars, so why go with us? We try harder.”

Lately AVIS has re-adopted part of that tagline, but only part of it. They’ve dropped the important pre-cursor and kept the memorable ending, “We Try Harder”.

The trouble is, “We try harder” is only believable if your market perceives that you really do try harder. In order to believe that, they have to see you as an underdog. It is very difficult to convince the customer that AVIS, now about the same size as Hertz, will really try harder.

In the enterprise market, a similar dynamic plays itself out. I interview buyers every day as part of my win/loss analysis practice, and I commonly hear them talking about a smaller challenger as “trying harder”. In fact, I can point to several interviews in the past few months where the interviewee has referred to the AVIS tagline directly.

It appears, however, that they apply this descriptor only to true challengers in the market. If you are a challenger and your staff is really gunning to take over the market, “We Try Harder” is a legitimate positioning angle. But this approach to positioning really only works if you really are #2 and gunning for #1. Furthermore, the buyer experience needs to resonate with that positioning.

AVIS isn’t believable because they’re no longer perceived as the underdog gunning for #1. You don’t really get differentiated service from AVIS any more. If you want differentiated service in car rentals, you need to try Enterprise. So AVIS’ tagline is neutralized.

I do believe it is possible to differentiate companies, large or small, based on the quality of service, however. Once you get beyond a certain size it can be hard to claim that you “try harder”, just because of the law of large numbers. You will likely have very average people touching the customer, not superior people who really do “try harder”.

But even with average people in the field, marketing and product management can create differentiation based on quality of service. This requires you to look at the buyers’ problems holistically, and look for solutions that go well beyond the physical product to solve those problems. Look to help them with manuals, automation, training, collaboration consulting, to name just a few ideas.

As you interview your buyers, look for the whole problem they are trying to solve. Ask what portion of the problem your product helps with. Look for gaps and explore ways that you can fill them. Position your company as looking at the whole problem, and using the physical product as a tool, along with other productized services, to help the buyer achieve their goal.

Bottom line: “We try harder” is good for a really energetic challenger, but it’s rarely enough for most companies. Look beyond the product and consider the buyer’s problems and goals holistically. Look for gaps and fill them with value-added services. Consider offering the productized value-added services through channel partners.

– Alan

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Do you treat customers fairly when things go wrong?

by Saeed Khan

We live in an imperfect world.  Although we strive to do things well, things go wrong, mistakes happen. But what differentiates great companies from poor ones, or what can turn a great company into a poor one, is how they treat their customers when those problems occur.

Here are a couple of recent examples I’ve experienced that illustrate the wrong way to deal with customers.

We won’t admit fault, and we’ll do the minimum possible to make you go away

We have a Honda Odyssey minivan. It has about 120,000 km on the odometer. Recently we started having problems with it when accelerating. We took it into the dealership to get it checked out. The next day we got a call from the service department telling us that there was a problem with the transmission and that it would have to be replaced.

And the cost? About $4000!

Needless to say, we went into the dealership and had a very frank conversation with them. I’d done some research on the web and apparently this is a common problem with that vehicle.  In fact, it’s such a common problem that there’s a website dedicated to this problem!

I told the dealer that this was clearly a defect from Honda and that it affected a lot of vehicles and that they had to get Honda to pay for it or I’d be looking at other recourse. A couple of days later we got a phone call from the dealer. They said they’d called Honda and that Honda would cover the cost of the new transmission. Great, what a relief, right? Wrong.

Honda will only cover the cost of the actual transmission — a remanufactured one at that! We have to cover the cost of labour and other parts (including nuts, bolts and the transmission fluid!) that were needed to replace the transmission.  So while I don’t have to pay $4000, I’m still out of pocket about $1300, most of it for really overpriced labour. And is the effort to try to recover that $1300 going to be worth the time? What are my options? Sue Honda? Small claims court? Write lots of letters? Blog about it?

I’m sure the bean counters at Honda know this well and have a very clear policy. Even though it’s a well known issue and they could authorize dealers to inspect transmissions to see if there are potential problems, they wait until the problems are reported and then foot only part of the cost, knowing that few if any people will pursue it further.

We treat new customers far better than existing customers

My Blackberry stopped working one day. It was charging overnight. When I picked it up in the morning the screen was off. I tried turning it on and it wouldn’t turn on.  I went through the usual process of removing the battery, reinstalling it etc. but nothing.

I called the wireless provider; they patched me through to RIM support, who walked me through a number of steps to try to get the device working. After about 15 minutes and no success, they told me to take it into one of the carrier’s stores to get a replacement as they determined it was non-functional.

When I got to the store, the CSR looked up my file, saw the note from RIM about the Blackberry, and said:

“Mr. Khan, as RIM has designated the device as non-functional, we can provide you with a replacement. How do you want to pay for that?”

I said, “What do you mean pay for it? It died overnight. I just want a replacement!”

“Well,” she said, “your 1 year replacement warranty expired 5 days ago, so unfortunately we have to charge you for a replacement.”

I couldn’t believe it. Seriously? Do they build these things to last exactly 1 year + a few days?

“OK,” I said. “How much is the charge?” I fully expected a nominal charge given that it was so close to the expiry date.

“Mr. Khan, it’ll be $300.” she said.

I started getting livid. “What!?! $300??? Let me understand this. I’m a customer. Have been for just over year. I pay you a hefty amount every month, and because the unit died, less than a week after the warranty,  I basically have to buy it all over again?”

“Well, unfortunately that’s the policy.” she said.

“But if I was a new customer, and walked into the store today and signed up new, I could get this same device for about half that price?” I asked, pointing at a promotional sign in the store.

She looked back and said, pointing at a cabinet of not-so-smart cell phones “I can offer you one of these other phones for much less if that helps.”

I told her no thanks, that I needed a Blackberry and that I’d take it up on the phone with their customer service department.

At least 5 phone calls and several days later, I finally got through to someone who offered me a “one time only, just for you” substantial discount on a new Blackberry. Grudgingly I accepted, and paid the money. I needed to get a working Blackberry.

OK, as my warranty had expired, they technically were simply enforcing policy. But, my monthly cell phone bill can finance a decent car loan, and they made me jump through hoops for something that costs them virtually nothing. What options did I have, as I was under contract with them.

It’s no wonder that (at least in Canada) the national mobile carriers – Rogers and Bell — rank at the bottom of customer satisfaction surveys.

How should customers react?

In both of these cases, I’m going to react the same way. With my cell phone provider, I’m going to switch out as soon as my contract is up. Without question and I’ll take the rest of my family and any friends with me.  With my vehicle — now that it has an almost new transmission — I’ll definitely use it, but when it comes time for a replacement, I’ll remember that $1300 surcharge I had to pay and look for another brand.

So the question for you is: Does your company behave this way — even remotely? And as a product leader, what impact or influence can you exert to change this.

We’ve all heard about the success of Zappos that is driven by their over-the-top customer service. How much of Zappos’ philosophy of delivering happiness can you instill in your organization?

Saeed

Tweet this: @saeedwkhan Do you treat your customers fairly when things go wrong? http://wp.me/pXBON-2pM #service #prodmgmt #leadership

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Product Management: Beware of Flying Monkeys

In 2009, while guest posting on Lead on Purpose, I recalled a story about “Flying Monkeys.” You know, the unsolicited requests that usually surface from different areas of your organization, usually on behalf of customers and prospects, or at least the loudest ones. If you’ve never experienced it, here’s what happens.

flying-monkeysImagine you’re sitting with your product team. You’re reviewing win/loss analysis, discussing priorities in your backlog or engaged in a lively discussion, when all of a sudden, Flying Monkeys (Wizard of Oz style) dive into the room via text messages, phone calls, urgent emails and team members interrupting activities in progress.

All at once, the teams shouts, “Flying Monkeys – Flying Monkeys!” The monkeys quickly grab product management, product marketing and development resources, and quicker than you could say, “There’s no place like home” your product roadmap, backlog and teams are tossed into turmoil like a Kansas barnyard in a summer twister.

Pressured with executive and sales commitments, how do you and your team manage the flying monkeys?

Product management, product marketing and its leadership have to be vigilant and plan for these unexpected diversions. While product leaders know they have all the responsibility and often none of the authority, you must focus on what matters most and be grounded in data, artifacts and evidence.

Leaders of product management and product marketing have a responsibility (yes, I said responsibility) to establish and maintain visibility with executives and stakeholders, and provide crisp communications that influence product strategy and provide business insights.

Ground the Flying Monkeys

If your executives regularly meet or visit customers and prospects, prepare them in advance. Some of the things I’ve used include:

  • Regularly socialize current trends in the market.
  • Communicate market sensing information found in win/loss analysis, customer interviews and competitive analysis.
  • Maintain a roadmap for external consumption. (Make sure it defensible and simple. – Provide a script and preview it before a presentation, visit or trip.
  • Create 3-4 crisp points that position your company and products.
  • Know your competition and articulate this to senor stakeholders and executives.

In the series, How to be a Great Product Manager, Saeed Khan shares the four C’s of Leadership that each Product Management and Product Marketing leader should embrace. The Four C’s include:

  • Credibility – leadership begins with credibility. If people aren’t willing to believe you and trust what you say, then there is no way you’ll be given authority to do anything significant.
  • Commitment – demonstrate commitment to your product’s success. In your current job as a Product Manager, have you bound yourself to the success of your product? Or are you just going through the motions and simply doing the job? People want to see that product managers truly care about product success and figuring out what is right and best for their product.
  • Communication – No amount of credibility can be retained if communication barriers exist between a leader and his/her followers. Leaders must be able to communicate their thoughts, ideas, visions and strategies clearly and succinctly, and in such a way that those listening are inspired to want to be part of the plans the leader is proposing.
  • Courage – the most challenging of the 4 Cs. The difference between a leader and a manager is the leader’s ability to take risks, blaze new trails, and have people follow him or her down those trails. Leaders can be praised when they succeed, but will be criticized roundly when they don’t.

How can Product Management and Product Marketing leaders ground the Flying Monkeys? It all starts with actively engaging throughout the organization and providing valuable content that controls the flying monkeys.

I’d be interested in hearing how you control the flying monkeys and other urgent, interrupt driven events. Please comment below and feel free to share online.

Tweet this: @onpm “Product Management: Beware of Flying Monkeys” http://wp.me/pXBON-2nY #prodmgmt #prodmktg #leadership

Guest Post: If Product Marketing is so Strategic, why do I always get stuck in the weeds?

NOTE: The following is a guest post by Jennifer Doctor. If you want to submit your own guest post, click here for more information.

As product marketing professionals, we are tasked by senior leadership with understanding the buyer persona and directing the creation of marketing materials that tout the benefits of our product to those specific personas, benefits that solve the buying problems of the market.

We are tasked with understanding the voice of the customer. We are tasked with win/loss analysis, competitor analysis, branding and sales psychology. Strategic stuff. Big picture stuff. Important stuff that makes sales more efficient and ultimately brings revenue in the door.

Completed tasks are visible — busy work — but visible

So … why do we always get stuck in the weeds? When I meet with leaders, I’m not asked about the big picture stuff, I’m asked and tasked with work on minutia, irrelevant projects, tiny details and even non-marketing or non-customer related projects.

Could it be that strategy is difficult for the organization to see, touch and feel? While the tiny projects usually produce tangible results or solve someone else’s problems? It feels good to actually finish and deliver a project – to complete something even though this is really not primary to the product marketing role.

I try to get rewarded for achieving certain metrics – such as product revenues, that are largely beyond my control. Again big picture, intangible stuff. But have you ever tried measuring strategy? So instead, I am rewarded by the amount of sales teams’ issues I put out by producing a new piece of collateral or a PowerPoint. The task work is more highly recognized within the organization.

Escaping the event horizon in the organization

Part of the problem, in my opinion, is that product marketing has become a big black hole in the organization that all too many senior leaders do not understand. Thus, the dumping ground mentality begins. Our desire to contribute and our positive, get it done attitude forces us to raise the hand and volunteer for even the grungiest projects – because they have to get done by someone.

As more and more companies eliminate admin and junior staff, organizations have become “flattened” leaving no one else to perform these smaller, less strategic projects. This leaves the product marketing manager filling in the holes. But, where should these types of projects really belong in the organization?

We need to properly position and message ourselves

As product marketing professionals, we need to take control. Stand up for our own voice and value. If we take our strategy, our personas and the lessons learned from our competitive analysis and parade it around the organization – making sure senior leaders are included, over time, the perception of product marketing will change to become more positive and be viewed as more strategic. We actually must spend some time internally marketing our findings, and getting the organization to adopt our strategy.

Looking in from the outside, some results sharing, some back patting is good, but simply building awareness of what we do will help senior leaders to see the value we bring to the organization. While sales might have the most recent customer interactions, are they asking the right questions to bring strategy into the organization?

Tweet this: Why is Product Marketing stuck in the weeds? http://wp.me/pXBON-2pd Guest post by @jidoctor #prodmktg #prodmgmt #leadership #strategy

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Jennifer Doctor, a strong advocate of ProductCamps, is an independent product marketing and management consultant, working with companies to help them understand their markets, buyers and how to better enable sales teams to deliver results. She maintains her own blog – The OutsideIn View – and can be reached at Jennifer dot doctor at gmail dot com.

A Model and Metrics for Tracking Product Success

by Saeed Khan

There’s an adage that states, you can’t manage what you can’t measure.

And if that is the case, then you have to wonder how much actual management of products, Product Management departments are doing?

Why? Because when you talk to Product Managers about product metrics, it’s usually a pretty short conversation. :-(

Unfortunately the metrics a lot of PMs are most closely following relate to bug counts or velocity in an iteration, or simple high level business metrics such as quarterly sales or average deal size (ADS).

Not that these are bad metrics, but they shouldn’t be the ones that dominate focus to the exclusion of a more holistic view of the product.

There is some discussion on this topic happening in the blogging community.

Cindy Alvarez had a post recently entitled 57 Questions About Metrics. There are a lot (57 in fact!) of good questions listed there, with categories such as:

  • Acquisition
  • Activation
  • Retention
  • Referral
  • Revenue

But that list of questions is heavily skewed towards funnel metrics for SaaS/Web applications.  It’s also not clear which of the 57 questions are more important or less important given your situation. But, it’s a good list nonetheless.

Brainmates have a document on their site entitled How do you manage the financial health of your product?

This is also a good document, but again focuses on SaaS applications with metrics like Cost per Subscriber, Monthly Disconnect Rate, Total Operating Costs etc.

It’s important for Product Managers — particularly those who are more focused on the business side of product (i.e. product MANAGERS) — to look at the state of a product more holistically, dare I say, “cross-functionally”,  to manage it effectively.

Managing Products Holistically

This topic is something that I’ve thought about quite a bit. I wrote several articles last year on the topic of Product Management Metrics. But I didn’t get into specific metrics in those posts. I’m not sure why exactly, but the fact that I didn’t — even though that was my intent — is likely an indication of the difficulty of nailing this topic. I think I’ve found a good general model that can be applied in a wide variety of cases regardless of product type, deployment type etc.

Before I continue, I’d like to thank Tom Grant, Sue Raisty-Egami, Jim Holland and Alan Armstrong for helping me find some more clarity on this subject and giving me feedback on my ideas.

To manage products holistically, there are 4 categories that Product Management needs to understand. These are:

  1. Business
  2. Go-to-Market
  3. Organization
  4. Product

Business Objectives

I’ve listed this first, because it is the most important. Product Management has to be focused on business success of the product and a clear picture of the state of the business for any product is critical.This could include many things, but metrics could include Revenue (weekly, monthly, quarterly etc.), Deal Pipeline, Win/Loss numbers, Average Deal Size, Renewal Rates, Pricing etc.

Go-to-Market Objectives

This includes major areas of go-to-market readiness such as proper positioning, competitive analysis, customer references, status (and plan) of awareness activities, collateral etc. These and other GTM activities need to be assessed to ensure objectives are clear and focus is being placed in the right areas. Note that these are not all activities that Product Management (or Product Marketing) will explicitly complete (other marketing teams will likely do much of this work), but Product Management must have a clear picture into the state and effectiveness of these activities.

Organizational Objectives

This category focuses on cross-functional readiness across the organization. While the Go-to-Market objectives cover a lot of Marketing activities, other groups including Sales, Sales Consulting, Technical Support, Professional Services, Customer Education etc. all need to be assessed to ensure they are enabled and have the knowledge and tools they need to do their jobs. Any gaps found in this assessment can be acted upon to ensure those teams get enabled and are supplied with the necessary information or tools as needed.

Product Objectives

I’ve listed this last simply because, it’s the one most people focus on (first!) and I wanted to emphasize the first 3. A great product is DOA if the rest of company cannot market, sell and support it. Product objectives include Product Strategy, Capabilities, Gaps, Quality, Performance, Stability etc. i.e. high level aspects of the product that could impact sales or customer satisfaction.

These 4 categories, and the specific metrics measured in them can provide a very clear picture of both the state of a product and any areas of strength/weakness. Weak areas should be acted up to address the underlying issues causing the weakness.


Objectives change across the Product Lifecycle

There is one other aspect to fold into this model. Depending on the stage of the Product Lifecycle a product is in, there will be a different emphasis on the specifics of the 4 categories of Objectives listed above. For example, Organizational Readiness is absolutely critical when a product is in growth stage, but far less critical towards end-of-life.  Or at a more granular level, product stability is less important in the early develop/launch stage (when there are very few customers) but critical once the product enters a growth or maturity stage.

In short, the OBJECTIVES of the stage of the Product Lifecycle a product is in, determine the focus of the objectives when measuring the product.

Back in my post Product Management Metrics (part 3), I talked about the stages of the product lifecycle and how each stage had different objectives. I’ve summarized them in the following table:

If you take the Product Lifecycle stages/objectives and tie them into the 4 categories for a holistic product picture, you get a grid that looks something like this.

This diagram shows some of the differences in Product Management FOCUS for the objectives, across the stages of the lifecycle. i.e. The focus for these categories will NOT be constant across the lifecycle. i.e Organizational Readiness is less important early on, but critical once the product reaches growth stage and beyond.

NOTE: This diagram won’t be 100% the same for all products in all companies, but I’ve created it based on my own experience managing products across the lifecycle stages. But please modify these as you see fit for your company and products.

Now, for each of these boxes, there will be a number of specific metrics to measure. These are really up to you to define. I’ve listed a number of them for each objective, earlier in this article. In some cases, you could use some of the metrics listed in Cindy Alvarez’s article, or in the Brainmates article. There is NO silver bullet here. It completely depends on your company, product strategy and goals.

But, you should be able to come up with a standard set (say 5-7 maximum) of key metrics for each objective (i.e. row) that are meaningful across all stages of the lifecycle. In some stages they won’t be as important (e.g. # of customer references) as in others, but once you come up with those metrics and define a clear way to measure them, they just become part of the overall picture that you look at when measuring product success. Keep in mind that for any given product, you only have to worry about 1 column at a time. i.e. it will only be in one stage of the lifecycle and so that’s all you have to measure.

So, there you have it, a general model to use. What do you think? Make sense? Useful? Yes? No? Have questions?  Regardless,  I’d like to hear from you.

Saeed

Additional Articles: The follow articles drill down into this topic in more detail.

  1. Business-oriented metrics for Product Success
  2. Organization and Go-to-Market Metrics for Product Success
  3. Product Metrics for Product Success

Tweet this: @saeedwkhan A Model and Metrics for Tracking Product Success http://wp.me/pXBON-2oL #prodmgmt #prodmktg #innovation