It helps when we all work for the same company

“There cannot be alignment deeper in the organization, even when employees want to cooperate, if the leaders at the top aren’t in lockstep with one another.”
Patrick M Lencioni, The Advantage: Why Organizational Health Trumps Everything Else In Business

In college, a fraternity brother recommended I take a ROTC class—he promised me an “A” and I’d also get to fire a rifle. (And after struggling with Cost Accounting, I really needed the grade!) One thing I remember is, during WWII, each soldier was supported by 8 non-combat soldiers. For every soldier with a rifle, there were 8 with clipboards. Just look at M*A*S*H—in this support unit, there were half a dozen doctors plus many others necessary for its effective operation.

In August 1944, Patton’s Third Army were measuring their daily achievements in quick miles. However, by September, his tanks were lucky to be counting advancements in yards. The key was logistics. At the end of August, Patton summed it up this way, “At the present time our chief difficulty is not the Germans, but gasoline. If they would give me enough gas, I could go all the way to Berlin!”

According to The Other End of the Spear: The Tooth- to-Tail Ratio (T3R) in Modern Military Operations, by John J. McGrath, by the time the USA entered Afghanistan, the ratio of soldiers was down to 1:4. That is, for each soldier in combat, there were 4 non-combat staff in logistics and headquarters.

This ratio makes sense to me in another context: how many staff positions are required to support a sales person in the field?

A VP of Sales opened a new sales office in Montreal. The VP wanted to expand his sales footprint by entering new markets. But here’s the thing: Doesn’t a new market require more than a sales guy? We’re going to need new product capabilities to comply with Canadian law. We’re going to need marketing programs targeting the new market. We’re likely to need sales training and sales support. So hiring one guy in Canada creates additional workload for development, marketing, product management, finance, support, and others.

New market decisions cannot be made in isolation because they affect staffing beyond the sales team.New market decisions cannot be made in isolation because they affect staffing beyond the sales team. [Tweet this]

In The Advantage by Patrick Lencioni, the author explains it simply enough: we all need to work for the same company. Yet I so often see rogue behavior: developers adding features that nobody wants, product managers working on secret projects without executive approval, and, as in this case, sales strategies that are disconnected from company strategy and staffing.

Holistically, the leadership should review and sync each department’s growth plans to identify areas of stress. The plans of one department are usually impacted by the plans of another department. Increasing revenue goals may mean new markets; new markets mean additional staff in marketing, product management, development, and support. We can’t just randomly hire a sales guy in a new region and expect the rest of the company to increase output without additional headcount. The decisions in one department, particularly sales, impact all those who support the sales people and the new customers.

In my view, new markets should be vetted by a product manager with market expertise. What is the revenue opportunity? What company resources will be necessary to support the market? What changes are necessary to the product and its promotion.

Are you defining markets proactively? Or struggling to catch up?

Integrated planning is a key part of your product playbook—a collection of workshops to ensure your team is systematic in their methods and consistent in their deliverables.

Are You a Trusted Advisor?

By the time the average customer reaches out to a company or is contacted by a sales rep, that customer’s purchase decision is almost over.
Matt Dixon, author, The Challenger Sale

Sales is a wonderful profession, filled with people who are brilliant. But also those who are… less so.

I have a friend in sales who is truly a “trusted advisor.” He is contacted directly by potential buyers—they don’t want a sales demo, they want advice. And because he knows the industry and the products serving that industry, he can understand their problems and recommend a solution, whether from his firm or another.

The best sales people are what I call “brother-in-law sales reps.” They understand both the client and the products well enough to explain which product can solve the client’s problem. Just like if your brother-in-law was an expert in cars, he wouldn’t say “buy this thing because I get a commission,” or “buy this because it’s what I would buy myself.” Instead he’d ask, “Tell me about how you drive. Do you pull a trailer? Do you have kids? Do you take long car trips?” In short, he’d help you clarify your requirements and help select the car that best fits your lifestyle.

A company wanting to be their industry’s “trusted advisor” must build sales teams with product, industry, and domain expertise. That’s why many firms hire one sales engineer for each sales rep—one person to build and maintain the relationship and one to represent the technology and domain. (And that’s why companies who are under-staffed in sales engineering rely too heavily on product management for expertise.)

Helping sales people isn’t product management; enabling sales teams is. Look for ways to empower your sales teams with sales enablement tools.

Sales teams who can sincerely help customers are gold.

Sales enablement is a key deliverable for product management or product marketing. Are your roles and responsibilities clear? Contact us for help defining your team roles and ideal planning process.

Teams Don’t Form Instantly

Great things in business are not done by one person, they are done by a team of people.
Steve Jobs, co-founder of Apple

One of the key ceremonies in bringing new products to market is the product team briefing. Sometimes called a development brief, this meeting is oriented around the business and market conditions driving the product direction.

Some product leaders are surprised when they learn how interested the team is in the strategic aspects of product. In my experience, almost all product team members want to know about the market and product personas, the size of the market, the pricing options, how and when the product will be launched, and how it will be sold. They want to know about the business of the product.

This level of interest is so logical when you stop thinking of product definition and development as manufacturing and start thinking of it as craft. Creating new products is more like creating art and less like manufacturing a car.

In manufacturing, employees rarely work as a team; rather they perform a series of serial, independent operations. This person puts the window in the door; that person puts the door on the car. Each is only concerned with the quality of their individual portion of the work.

In software, individuals work as a team. After all, they’re not making thousands of products from a pre-defined specification. Instead they are working on a one-time assembly of a set of features that are shared with thousands of customers. They are collectively responsible for the quality of the final result.

Instead of designing mass-produced products and their assembly lines, today we design teams. We bring together a set of skilled workers to apply their craft to a software project. Craftsmen and –women are not interchangeable. They’re not “fungible.” Each brings an area of expertise.

Here’s the key: these individuals have to learn to work as a team, not as individuals. They need to learn how to communicate clearly, how to sync up their work, how to avoid stepping on each other. And that takes time.

A product team doesn’t form overnight. Team productivity isn’t instantaneous.

Product leaders can help teams align by kicking off projects with a briefing: the personas, the problems, and the product’s business goals.

The team briefing is a key element of a product playbook described in the book Turn Ideas Into Products. Get your copy today.

Affinity Mapping: A Powerful Tool

What I need is an exact list of specific unknown problems we might encounter.—A clueless manager

Of all the techniques I’ve used, affinity mapping consistently delivers great results. By leveraging a team’s collective knowledge, you brainstorm a bunch of information to quickly find patterns and themes.

The term “affinity diagram” was devised by Jiro Kawakita in the 1960s but teams have been grouping data into groups based on natural relationships for thousands of years.

Affinity mapping can be used to create product themes and epics, and it is super-helpful when creating market positioning and messaging.

Here’s how we might use Affinity Mapping when developing software for product managers.

We described briefly the personas we were targeting: 1) Meghan, the new product manager, and 2) Alan, the head of a product management team. What problems can we solve for them? In some cases, they have the same problem but articulate them differently.

For example, Meghan needs a place to define and store her product documents so she can find them again. Alan needs a place to access all the documents composed by all the product managers. Meghan needs to know what format and fields are necessary in her organization’s method; Alan wants to ensure that all product managers are using the same templates.

To arrive at this, we used the traditional journalism questions: who, what, when, where, why, and how. Personally, I like to use questions from the persona’s point of view.

Here are some of the issues facing Meghan:

  • What’s a good persona template?
  • What format works best for stories?
  • How can I make sure my work is complete?
  • What information should I put in a business case?
  • What belongs in a public roadmap?
  • What templates are used for my team?
  • And so on…

Keep writing more and more questions (or stories, if you prefer) and then look for patterns. As we looked at questions, we saw phrases like “what information” and “good template.” From this list, it’s clear there’s a need to get the team using the same set of templates. From another set of questions, we saw our customers needed a place to store everything related to a product.

We articulated a long list of problems that became

  • Centralize—put everything in one place
  • Standardize—ensure every document is consistent
  • Guide—help new people know what information is needed.

This list of problems drives our business case, our product stories, and our positioning. Imagine sitting down with your marketing team or an agency with a positioning document grounded in personas and problems. They will hone the message and make sure it’s grounded in the key themes: Centralize, Standardize, and Guide.

Imagine also the power of a sales tool based on all the problems that you’ve articulated. I’m thinking of a two-page list of problems and a company pen: the sales rep asks clients to tick off all the problems they have, and then tailors all communication around this defined set of problems.

Product stories begin with personas and problems. Work with your development team to solve them. Positioning and promotional messaging begins with personas and problems. Work with your marketing team to communicate that you solve them and how.

Affinity mapping. Find the patterns in a big bunch of compelling ideas to distill them down to the vital few.

When to Contact Clients

You’ve heard again and again that you should listen to customers. However, you will learn entirely different things depending on when you contact them. Consider the client’s confidence in your solution over time and align your interviews with their phases from buying to production.

When they start their buying process, their confidence in the project and the vendors is likely to be low. They don’t really know what features they need or which vendors to consider. As they engage with your sales people (and your competitors), their confidence increases to the point they can make a buying decision.

Obviously you don’t want to contact a client during their buying cycle. And that’s one of the sales team’s biggest fears. They’re afraid you’ll contact a buyer during the buying cycle and screw up the deal. But when the deal is done, within a few weeks, you can contact the buyer for a win/loss interview.

What you’ll likely learn in a discussion immediately following a purchase (whether they purchased you or a competitor) will be insights on the buying process itself. Was it easy to get the information they needed from marketing vehicles and sales teams? Were you easy to do business with?

Immediately following their initial implementation is the best time to learn about installation and on-boarding issues.

Only when your client is in production will you start getting deep insights about the product and its use.

It’s never too early to start engaging with a client but when you engage determines the type of information you’ll learn.

The best product metrics

My favorite set of metrics help instrument the movement from “interested to buyer”?
Consider “Pirate Metrics” from Doug McClure.

Acquisition: Do customers find you?
Activation: Do they sign up?
Retention: Do they come back?
Revenue: Do they pay you?
Referral: Do they tell their friends?

So what becomes key is the conversion rates. Revenue by itself isn’t a very good yardstick. If you truly believe you have a good idea, these metrics will show where you need to improve.

Analyzing your Buyer’s Journey

“Consider this: most high school sports teams spend more time and money on win/loss analysis than most companies.” — Steve Johnson, Turn Ideas Into Products

About 5,000 miles or 6 months ago, I bought a new car. This week I got a personalized email from the dealership saying it was time for maintenance.

Now I usually use a mechanic right down the street but I thought. “I’ll give the dealership a chance.” So, I hit “Schedule an appointment,” and had to sign in from scratch. (What?—didn’t they know who I was after clicking a personalized link?) Made an appointment using their scheduling tool. Got two reminders, one via email, one via mobile phone. When I arrived at the dealership for my appointment, the service desk had no knowledge of me or the reservation. And no time available that day. (“You know how to take the reservation, you just don’t know how to hold the reservation.”)

So I had to reschedule. Got a nice note confirming my new appointment.

Did you notice? The email confirmation doesn’t show the appointment time, only the day.

While I was muttering on the drive home, I thought about the disconnect between marketing, sales, and service. Why doesn’t one department know what another department is doing? After all, I bought and financed the car through the dealership. They emailed me a reminder. Yet the service department doesn’t know me. How many times must I provide the same information: name, email, phone number, address?

I’d love to be interviewed by this vendor. A good product manager would examine this entire dysfunctional experience.

How will he or she know? By doing win loss analysis.

From my book Turn Ideas Into Products:

There’s one special form of research that most product teams are neglecting—and they’re missing a great tool. It’s win/loss analysis. Why do you win deals? Why do you lose deals? What patterns do you see?

Consider this: most high school sports teams spend more time and money on win/loss analysis than most companies.

You know what’s really scary? Executives don’t know why they win. They get annoyed by losses, sure, but it drives them crazy when they don’t know why their products win. After all, if you don’t know why you’re winning, how do you know what you can change? What should you do more of or stop doing?

My friend Alan of Eigenworks tells me the most common problem facing the adoption of win loss analysis is a lack of buy-in from sales leadership. Without top-down support, sales reps won’t surrender prospect lists and they feel attacked by the mere idea of someone analyzing their wins and losses. Many salespeople perceive win loss as a “witch-hunt” by product management or marketing. That’s why I strongly recommend outsourcing interviews and analysis to a third-party service like Eigenworks or The Win Loss Agency. After all, they have no political agenda.

Who better to tell you what your company does right and wrong than a customer—particularly one who has recently bought your product or service?

Have a chat soon (today?) with your sales leadership. “Don’t you want to know why we lose deals? Don’t you want to know why we win?

You can and should improve customer communication at every step of the buyer’s journey. More often than not, what should be seamless is broken.

Do your stories tell a story?

Three bears (one each in sizes small, medium, large)
Three chairs of varying sizes
Three porridge bowls of varying temperatures
Three beds of varying mattress ratings (soft to firm)
Goldilocks, a novice user, after minimal use evaluated each until one was selected.

(This list of facts don’t really tell a story, do they?)

Expertise for Effective Product Managers

When I do my job right, there’s no sign of it. Disasters just fail to occur.
Herman Wouk

I was interviewed by Chad McAllister, host of “The Everyday Innovator” podcast, on the six types of expertise in product management.

Chad writes,

Product managers and product teams have the challenge of creating market-winning products — those are products that customers love and that create value for customers and the organization. Some product managers are not as effective as they could be, or they have actually become less effective over time. According to my guest, an effective product manager has six types of expertise.

Listen in as we talk about expertise and the search for “purple squirrels.”.

 

Behavior Drives Pricing Drives Behavior

To create value for your business, you need to create value for your customer.Alex Osterwalder, author, Value Proposition Design

Many product teams approach pricing from a cost standpoint. They ask, How much can we charge to cover the costs of development, marketing, sales, and delivery?

Pricing experts agree: your buyers don’t care about your cost. Buyers care about value.

Your costs and revenue plans are irrelevant to your customers but, of course, they’re quite relevant to your business case—if customer value is less than the revenue you can charge, you have a flaw in your business model, not a flaw in your pricing.

Example: Washington Post

I’m interested to see that newspaper subscriptions are on the rise. In the world of too much information (and too much “fake news”), many readers are looking for a reliable source and are willing to pay for it. That is, they are skipping the “free” news and seeking information from sources that can be trusted.

A traditional way of thinking would be to charge only a little for the online news (where costs are less) and a lot for the printed newspapers (where costs are more). Looking at the pricing for the Washington Post, I’m intrigued to see the various pricing plans ranging from $40 to $150 per year.

Printed newspaper delivery reduces the cost of annual online subscriptions.

The “National Digital Edition”—the digital-only package—is $100 per year. Add delivery of the Sunday paper and your subscription cost is reduced by $60.

Actually, two things are happening here. the Post is getting advertisers to subsidize the Sunday paper, reducing readers’ costs in exchange for advertising. In effect the printed newspaper is a bunch of ads interspersed with articles.

The other thing is they have priced the packages in a way that the only logical choice is to buy the $40 bundle, even if you don’t want the printed paper. (I’m currently thinking I’ll just dump the paper in the trash unread but I may decide to read the comics). By encouraging me to buy the bundle, they can claim increased readership for the advertisers.

They have priced the bundles to encourage a specific behavior.

Example: Under10 Playbook

Here’s another example of how behavior drives pricing: The Pro plan for Under10 Playbook is for individuals; the team plans are for companies.

For a solo product manager, there’s value in having all product information in one place—even more so for consultants working with multiple clients. However, the value of the Under10 Playbook software increases with team use, providing sharing of common artifacts plus consistency across all products. Teams can share personas, assign product stories and market plans to other team members, and integrate roadmaps with multiple products and launches.

Our clients receive (and perceive) more value in the team plans than the plan for individuals, although our internal costs remain the same. Our pricing reflects customer perception, not our internal costs.

So should yours.

What behavior are you trying to encourage with your pricing model? Create options that align with buyer behavior.

Please share with someone who would benefit from this article. And tell them about our product management workshops.