I bought a copy of “The Phenomenal Product Manager” in 2009 or so on a lark. I was changing jobs, and had some time to read/hone my skills, and see what I could be missing.
Written by Brian Lawley, the top man at the 280Group, a consultancy, and training organization with deep product management and product marketing skills and reputations, I was at first put off by how thin the book was. I had expected there to be more “meat” to the book, judging by how much material was available publicly at their website, I was just disappointed that something that could be expected to be read in a couple hours could be helpful.
Our last post was an overview of what is a structured series of customer visits, and a high level overview. This next post in the series will dive deeper, and discuss the importance of structured customer visits being cross functional.
Even though structured customer visits are technically “marketing” research, for them to be valuable requires that many of the key groups in the organization are involved. Assuming that the program of visits is to either verify, or confirm your assumptions about a customer need that you are targeting a development program around, there are many stakeholders that have a dog in the hunt.
The lifeblood of product management is customer interaction. Getting out of the office, and sitting down with customers is a powerful aphrodisiac, and allows you to get unalloyed feedback. We do this as often as possible, hence why the typical product manager job description specifies 25 – 30% travel.
However, left to our own devices, much of this travel is less effective than it could be. Yes, it is important to go on sales calls to important accounts, and to do well customer visits, discussing roadmaps, support issues, and the state of the market. We are quite good at packing a lot into a week, but that doesn’t always translate to effective visits.
How can you make your customer visits more useful?
One topic that seems to trip up both new and experienced product managers is the process of pricing. As a recent post highlights, the most important lever we have in our bag of tricks to influence the profitability of our products and business, is the price. Yet, establishing a good price, and holding variance to a minimum is a top concern of the product management function.
Judging by the amount of shelf space taken up by books on Pricing, and how much I have personally invested in the process, I suspect that many of my peers and much of the Product Management community also shares this struggle.
While much of the literature I have read is focused around either the brass tacks of the process, and how large organizations often have a team who is 100% focused on pricing effectively, I have found that often, even when there is a Pricing organization, it falls on the shoulders of the Product Manager to define and implement the pricing strategy.
One of the most powerful levers we in product management have for profitability of products is pricing. This may not be intuitive, so an example will illuminate this concept.
First, I will posit that the profit (π) is given by:
π = Q ∗ (P - V) - F
Where Q is the quantity sold, P is the price per unit, V is the variable costs per unit, and F is the fixed cost.
Let’s assume that you have the ability to improve one thing in your operation by one percent. That is you can affect an improvement in variable cost by one percent. Or, you can reduce the fixed costs by 1 percent. Or add 1% additional units to your sales. Or hold the line on pricing by 1%. How does each of these impact the profitability of the business?
Much ink has been spilled over the years as to how poorly defined the Product Management role is, and how this ambiguity can severely impact the consistency of performance. From confusion of what the role is, and what it is not, spill over from other areas, and even the tendency of the tactical to do list crowding out the high level, high value strategic work that a well qualified product manager should be delivering to the organization.
This is the start of a series targeted at Product Management and Product Marketing leadership with a goal to help fine tune your organization
I personally can vouch for this, having seen a wide range of expectations, and a mismatch of these expectations with on the ground reality of the implementation of the role, from Semiconductor Capital Equipment to Enterprise Communications software. Each organization has its own expectations and realities of the “product manager” role, and your product manager adapts to what is expected.
One of the common tropes that you see repeatedly in the Product Management community is the analogy of the Product Manager as CEO of the product. It is an intoxicating concept, that you get all the credit (and headaches) associated with the product, but it falls short of real life experience.
While the product manager is often in the hot seat, having to weigh strategy versus tactical considerations, mediate disputes between Sales and Engineering (among others), and constantly be managing expectations in the organization, there is one area where the comparison grossly breaks down.