Category: Product Management

The Top 5 Benefits of Hosting a Customer Advisory Board

By Rob Jensen

council meetingAs a Product Management professional, are you confident the products or services you have planned (or already under development) will be accepted – i.e. purchased – by your market?

If so, how did you obtain this confidence? Hopefully, formally engaging with – and soliciting feedback from – your existing customers to vet your product roadmap is the answer to this question. If not, read on.

For Product Managers, customer advisory boards (CABs) can be an efficient, effective method to gather customer insight and feedback to your current and planned offerings.

For the uninitiated, customer advisory boards (also known as a customer advisory councils) are forums to review industry trends, address mutual challenges or opportunities, and offer unvarnished insights and guidance.

For vendors, these councils are ideal for validating corporate strategies, gathering input on product development, and deepening relationships with key customers. In turn, there is just as much to be gained by the participating customers. (CIO Insight recently ranked the top 10 here)

A customer advisory board is perhaps most often associated with providing feedback and desired direction on the host company’s offerings. Indeed, in querying customer advisory board practitioners, our own survey shows that product direction is the top benefit host companies derive from customer advisory boards. But this benefit is only one of many.

Other research points to the ROI of such executive customer engagements. According to a recent Gallup poll:

 “A typical B2B company has an optimal relationship with fewer than one in seven of its customers… and only 13% of B2B customers are fully engaged.”

However, such “fully engaged customers deliver a 23% premium over average customers in share of wallet, profitability, revenue, and relationship growth.”

Top 5 Benefits of CABs

Here then are the top 5 benefits product managers can get from a well-run customer advisory board program.

1. Feedback to the Product Roadmap

A customer advisory board is ideal for providing feedback and desired direction on the host company’s offerings. Your advisory council can offer an insider’s view of what your target buyer needs and wants from your products and/or services. A council also serves as a great platform for securing beta testers of your new offerings, helping you introduce your solutions and providing immediate validation – before you go to market.

Tweet this: The Top 5 Benefits to Customer Advisory Boards http://wp.me/pXBON-4pq #prodmgmt #customer #research

NextButton-small

 

4 lessons Product Managers can learn from Target’s failure in Canada

by Saeed Khan

target-no-heart-canadaTarget is a retail giant in the United States, with about $75 Billion in revenue and over 1,800 stores nationwide. In 2012, Target announced it would open stores in Canada; it’s first international expansion beyond the United States.

In March 2013 Target opened it’s first stores in Canada, quickly expanding to over 130 stores across the country within the first year.

And then, less than 2 years after opening it’s first stores in Canada, Target announced that they were closing ALL Canadians stores, and laying off all 17,000+ employees including some at their Minneapolis headquarters who were hired to oversee the Canadian operations.

The state of the failure is significant, with almost $5 billion to be written off by Target.

How did Target fail so miserably and what can we learn from this fiasco?

1. Understand and meet market expectations

 

disappointment valley  right-arrow-small

First, it’s important to understand Canadian consumers. We loved shopping in Target stores in the US. They have good prices, good merchandise selection (many items not available in Canada) and very helpful staff. When shopping at a large retail store, what else could one want?

When Target announced they were going to open stores in Canada, many Canadians expected those same attributes — price, selection, service — to be part of the Target experience in Canada. Sadly, that was not the case. Prices were mediocre, selection was poor and the service was nowhere near what it was in the US.

Great Customer Service (in the US)

For example, I was once in a Target store in Sunnyvale California. I asked one of the  staff where I could find a clothing item, and the person literally walked me across the store and pointed out exactly where that item was and made sure it was what I was looking for. He then walked back across the store, I’m assuming to resume what he was doing.

This level of service  was nowhere to be found in the Target stores in Canada. The staff were competent, but competent is not memorable, and certainly didn’t meet expectations set by their American coworkers.

Tweet this: 4 lessons Product Managers can learn from Target’s failure in Canada http://wp.me/pXBON-4jl #prodmgmt #target

NextButton-small

 

Product Management and the Consolidation Curve

by Rivi Aspler

When I saw the following image in in the latest Forrester Wave™: B2C Commerce Suites, I realized both the intensity as well as the inevitability of the consolidation phenomenon in the industry.

Consolidation

I also came across the article The Consolidation Curve,  by Graeme K. Deans, Fritz Kroeger and Stefan Zeisel, which describes the four stages of industry and market consolidation. Just like product maturity phases, markets have their own maturity cycle and phases, and it’s important for product managers to understand the dynamics of markets as they mature.

Stages of Market Maturity

Stage 1 – Opening

“The first stage generally begins with a single start-up or with a monopoly just emerging from a newly deregulated or privatized industry. But this 100% industry concentration quickly drops off. Soon, the combined market share of the three largest companies drops to between 30% and 10%, as competitors quickly arise to create the frontier of industry consolidation.”

If you are a product manager that is trying to introduce a new product to the market, you in for a tough fight. Innovation is indeed disruptive, and people don’t like disruptions. You are probably investing as much time into the definition of the new product as to the proving its advantages over the existing substitutes.

Stage 2 – Scale

“This stage is all about building scale. Major players begin to emerge, buying up competitors and forming empires. The top three players in a stage 2 industry will own 15% to 45% of their market, as the industry consolidates rapidly.”

If you are a product manager that is working in a scaling market, you face the harsh competition of the veterans and the new players that are starting to catch up.  It’s time to make sure that your competitive advantage is clear. This advantage will determine if your company will be bought or left behind as a follower after the big ones ….

Stage 3- Focus

“After the ferocious consolidation of stage 2, stage 3 companies focus on expanding their core business and continuing to aggressively outgrow the competition. The top three industry players will now control between 35% and 70%of the market. By this time, there are still generally five to 12 major players.”

If you are a product manager who is working in a market that is in the process of focusing, you are probably not working as hard as you did before :-) (compared to the opening and scaling stages). You are still required to make sure that your value proposition is well perceived by the market and that your competitive advantage is indeed stable (don’t rest!), but now, sales people are the ones that are front and center, trying to get as much as possible market share.

Stage 4 – Balance and Alliance stage

“Here the titans of industry reign, from tobacco to soft drinks to defense. The industry concentration rate plateaus and can even dip a bit as, at this stage, the top three companies claim as much as 70% to 90% of the market. Large companies may form alliances with their peers because growth is now more challenging. Companies don’t move through stage 4; they stay in it.”

If you are a product manager who is working in a stage 4 market, you are probably a bit bored… incremental additions to the product will do just fine…. Until that new start-up arrives, knocking at your door, that will open up the market once again.

Rivi

Tweet this: Product Management and the Consolidation Curve  http://wp.me/pXBON-4ne  #prodmgmt #productmanagement 

About the Author

Rivi-colorRivi is a product manager with over 15 years of product life-cycle management experience, at enterprise sized companies (SAP), as well as with small to medium-sized companies. Practicing product management for years, Rivi now feels she has amassed thoughts and experiences that are worth sharing.

Why do Startups Fail?

by Saeed Khan

success-failThere’s no shortage of reasons why startups fail.  You can find lots of articles on the web with lists of reasons. But I hadn’t seen anything analytic until now.

I saw the following graphic mentioned in a Tweet recently.

It is from a company called CB Insights and is based 101 startup postmortems.

Now the data set is small, and may not be statistically valid everywhere — e.g. are startups in India failing for the same reasons as startups in the US? — but it’s a good data set none the less. Note that the sum of the percentages is greater than 100%, so I can only assume that companies had multiple issues

The most common reason for failure, by far(!), is “No Market Need”.  And if you look further down, you see “Ignore Customers” and “Product Mis-Timed”, which in my opinion, are almost the same as “No Market Need”.

Top 20 reasons startups fail

While not completely surprised by these findings, the fact that the number one reason is so far ahead of ALL other reasons DOES surprise me. It indicates one of two things. Either that there is still a LOT of work to do to teach startups how to identify markets, or people will pursue business ideas rather blindly regardless of what the market opportunity really is.

Here are a couple of the examples cited in the article, but I encourage you to read or view some of the postmortems. They are very interesting case studies.

Product: Patient Communicator

I realized that many of the true money-making businesses in healthcare really aren’t about optimizing delivery of primary care. This is a longer discussion but I realized, essentially, that we had no customers because no one was really interested in the model we were pitching.  Doctors want more patients, not an efficient office.

See full postmortem here.

Product: VoterTide

We didn’t spend enough time talking with customers and were rolling out features that I thought were great, but we didn’t gather enough input from clients. We didn’t realize it until it was too late. It’s easy to get tricked into thinking your thing is cool. You have to pay attention to your customers and adapt to their needs.

See full postmortem here.

Saeed

Tweet this: Why do startups fail? http://wp.me/pXBON-4ma #prodmgmt #startups

About the Author

saeed-headshot-colourSaeed Khan is a founder and Managing Editor of On Product Management, and has worked for the last 20 years in high-technology companies building and managing market leading products. He also speaks regularly at events on the topic of product management and product leadership. You can contact him via Twitter @saeedwkhan or via the Contact Us page on this blog.

 

 

Is Your Website the Window to Your Product Management Soul?

by John Mansour

eyes-soulYou’re familiar with the old saying, “The eyes are the window to the soul.” I’ve put a new spin on it to say, “Your website is the window to your product management soul.”

That’s right: The way your website presents products and services is a leading indicator of your organization’s approach to product management.

One of the things I enjoy most about training and consulting is the people I meet, all of whom face a myriad of different situations. That’s what makes my job so much fun and so incredibly rewarding.

But one of the most interesting byproducts of my profession is that I also notice some fascinating trends, one in particular that’s universal and not unique to an industry, a country or a type of product or service.

Over the years, I’ve noticed a strong correlation between the manner in which products are positioned on the company’s website and the structure of their product management function.

I bring this up to get you thinking about the correlation between the structure of your product management/product marketing function and the way in which your company communicates value messages to the market. To what extent should the two mirror one another in a B2B organization?

For instance, many companies dedicate real estate on their website to position their technology, even when it’s invisible and irrelevant to the end customer.  That’s usually a sign that there is a product manager for the technology platform – a good thing in all cases. But positioning your technology should be done only when it enhances your value proposition (from the buyer’s point of view).

Know your customer

In B2B, the most basic premise of a strong product management discipline is understanding who your target customers are, what they do, why they do it, how they do it, what they’re ultimately trying to accomplish (at all levels of the organization), and where their biggest obstacles exist.

If you subscribe to that philosophy, then it would seem beneficial to structure some aspects of product management (in addition to those who own the products) to mirror the business of your target customers — whether by vertical industry, horizontal business functions or some combination of both.

Think about it. If some portion of your product management/product marketing function were structured by industry and/or business function, how much sharper would your positioning be?

You’d lead with industry issues in healthcare, banking, transportation, etc.

  • You’d articulate the resulting operational challenges in finance, HR, IT, etc.
  • Finally, you’d position your products and services in a manner that clearly articulates their value relative to those operational and/or industry issues.

Consider the following:

  • If you offer fleet management solutions, you have value to any company that has a fleet of vehicles. However, in a transportation company, the fleet is “the business” whereas in a public university, the fleet of service vehicles is more of a support function, albeit an important one.

If product management is gathering business requirements for each segment, by default, the positioning on your website would reflect how your solutions meet the unique needs of managing a fleet in a transportation company versus those in a public university.

Position for value

The moral of the story is this:

If your product management team gathers market and customer requirements on a product-by-product basis only, your value messages come out the marketing side of the organization the exact same way: as product value propositions only.

Don’t get me wrong — every product needs value propositions. But the missed opportunity is the lack of positioning for higher-value business solutions comprised of multiple products in your portfolio. If you’re not managing products in a way that’s conducive to identifying needs in that manner and building those higher-value solutions accordingly, there’s a good chance you’re not positioning them either.

I’ve heard the comment many times from marketing VPs and CEOs that, “The way we’re organized should be invisible to the market.”

The implication is that your organization is structured to best run the company, which may not be the best way to market your products and services.

I see it a bit differently. The best way to run a company is to determine key functions where it’s most advantageous to mirror the business of your target customers, and structure those functions accordingly. Is there any reason product management and product marketing wouldn’t be at the top of that list?

Read the related article – Clear Business Requirements IN, Powerful Value Propositions OUT.

Tweet this: Is Your Website the Window to Your Product Management Soul? #prodmgmt  #productmanagement #messaging

About the Author

mansour-colour-small2John Mansour is a 20-year veteran in high technology product management, marketing and sales, and the Founder of Proficientz, Inc., a training and consulting firm that specializes in B2B product management & marketing.