Buzz 22 Product Planner blog

Back in the day, I used to be a product manager covering hosted email solutions for a B2B ISP in the UK. We had launched a hosted email service that was doing ok and lots of customers were asking for an email archiving service. Many of those customers used our hosted email service but there was also a subset of customers that, while they hosted their own email, wanted help with the archiving side of things. We did our research and a high level business case was built. It costed out various solutions and my recommendations were made accordingly.

A few weeks later, I found out that the CEO had made a decision that was based on the relationship with an existing supplier for a solution that didn’t work with our hosted email service – I don’t even think my business case was read!

Although frustrating, these things happen and I had to make the best out of a bad situation.

So I spent lots of time educating the sales teams on the benefits of the product and tried to ensure that the customer experience with the new service was as good as it could be. As a result, the internal impression of the launch was actually very positive.

However, over time it was clear that this product was a lemon – it just wasn’t selling. After spending some time on visits, I was happy that the sales team were talking to the right customers, the product did want the customer wanted (and much more) but when the pricing discussion happened, the customer’s jaw typically fell through the floor.

So there was something very wrong with the pricing. We had simply taken the supplier pricing and added on a margin (like we did with many products at the time) and as a result the price was just too high. Customers said they could do it themselves for less and that the archiving pricing was even more than the hosted email service we offered even thought the perceived value was much less. It just didn’t add up. We then found out our supplier had a similar pricing strategy based on the pricing from their supplier. In theory it was great, everyone got their margin but the end result was that it was too expensive and didn’t sell.

Eventually our suppliers made some changes but the prices couldn’t really come close enough to what the market was willing to pay whilst still allowing the various suppliers to get a good margin.

All of this could have been avoided if the customer’s business case for buying archiving had been understood up front. Getting this right would have saved three companies huge amounts of money in product development, training, marketing and customer good faith.

Also, if I had gathered enough evidence outlining what customers wanted from their archiving service and the price they were willing to pay, the correct supplier decision might have been made, but without it it was my opinion vs the CEO’s and we all know which way that decision will go!

Describe what you do as a product manager. Go on, think about it for a while. If you had to give an elevator pitch describing your role, what would you say?

It’s not an easy question to answer. There’s not a quick, snappy response like there would be if you were a developer “I write code” or a sales person “I lunch sell”.

I get to ask lots of people that very question; “Describe the role of product managers in your organisation” and see lots of head scratching, blank looks and strained thinking – even from product managers! You know at this stage the answer is “I have no idea”, but there usually follows some long, convoluted description littered with “product” and “management” and “erm”.

Every so often, I get a response that really surprises. Top of the list of surprising responses was from a presales guy in a UK software company. Not for him was the long winded effort. He got straight to the point “Product managers are like developers, except they wear suits”. As a strap line it’s got quite a lot going for it – brevity, clarity… If it were true it would be perfect.

But this line really got me thinking, and the more I thought, the more convinced I became that he’d captured what many people on the commercial side of a company think about product management.

Dear Garry,

I attended one of your training courses and the message about Product Managers are nothing more than another voice in the company unless we back our views with real feedback from real customers really hit home. When I returned I dutifully tried to see loads of customers but found that the sales team where blocking us.

Initially they were really keen but when it came down to it every salesperson seemed to have a good reason why it shouldn’t be their customer at that moment in time. Excuses included “We’re at a sensitive point in the negotiation”, “It’s not a product area they’re interested in” and “They’re a difficult group to work with”. How can I fix this problem without burning my bridges with the sales team?

Dear Mr Dutiful

What lies behind this? Well, it could indeed be a “sensitive point in the negotiation”, but it could equally be a degree of nervousness about letting product management into the account – we could set expectations, make commitments and generally just promise stuff that doesn’t happen, leaving the sales team to pick up the pieces. OK, I can hear the gasps – the irony isn’t lost on this product manager either!

It really comes down to risk vs reward and for this particular sales team the risk of letting some wet-behind-the-ears product manager loose on customers was much bigger than the reward ie potentially a new product in 18 months’ time. And remember, sales people don’t work on the same time axis as the rest of us. One month is an unacceptable length of time for you to deal with their request for complete new product architecture. 18 months approximates to infinity in the sales world.

So what can be done? The answer lies in trying to rebalance that risk/reward. Lowering the risk is all about building confidence…  What exactly are you going to tell customers? What if they ask about price? What if they ask about discounts? What if they ask about delivery dates?  The sales team needs to understand that you know how to handle these types of questions. Present to them, let them ask all those difficult questions, let them take your pitch apart, show your capability in dealing with the issues. And the reward side?  Think of the win/win – what does the sales team need from you? For example, the sales team might not want product managers to engage with customers on future products, but will be quite happy for product managers to demo the current offering. One win/win would be to link these two activities together “I’d love to come and demo my product next Tuesday, as long as I can have half an hour with the customer to talk about my future product plans”. Oh , and don’t forget to share your success stories – a salesperson telling the sales team how well the meeting went is worth ten product managers saying the same thing.

GARRY’S TOP TIPS FOR GETTING SALES TO OPEN THE DOOR TO CUSTOMERS

1. When you get a sales road block, work out why.

2. Build the sales team’s confidence in you – show you understand their concerns (whilst trying not to show the inconsistencies in their argument!)

3. Agree on ownership and protocol before any meeting – who will deal with pricing/dates/etc.

4. Look for the win/win.

5. Share successes.