Product managers and other product champions spend a lot of their time driving internal processes and decisions — the daily incremental struggle for progress on pricing, packaging, release schedules, upgrade policies and other bits of the production puzzle. This relentless motivation is indispensable, the tech equivalent of keeping the trains running on time. PMs should also be spending time with customers, refreshing their sense of needs and marketplaces.
It’s easy to get stuck at headquarters, chairing meetings and shepherding action items. Being important is habit-forming. In fact, the more you drive as product champion, the easier it is to be shackled with additional internal responsibilities. Too long without a road trip, though, and you can lose that visceral sense of customer reactions. I call this problem “insider thinking:” losing touch with external success by over-focusing on the details of delivery processes.
I’m recently back from a road trip to customers and industry press — the best way to combat insider thinking. The trip called to mind some oft-seen examples (with products and markets changed to protect the guilty).
Packaging by Organization
You’re bringing out a new database product that sometimes needs a separately delivered device driver. Why is it separate? Internally, you have a very rational explanation about… divisional revenue recognition and how the Networking Drivers group needs to track shipments to justify its effort. Or uncoordinated release schedules. Or the terms of a restrictive license agreement. Or having a common set of part numbers across all divisions. Or because changing a software bill-of-materials takes months of political infighting.
Within days, Customer Support is getting calls from customers who can’t install your latest release. Most callers have ignored a README and several product bulletins explaining that updated network drivers are required, and must be ordered separately. Even worse, the sales force keeps submitting new orders without the specially discounted driver package (“DP8410-db-linux”) that they’ve been briefed on.
Insider thinking has you steamed: “What more can I do to educate customers about the need for supplemental driver packages? RTFM!” Outsiders have a simpler view, though: “How could you ship me something that doesn’t work?” Your company’s organizational problems are of no interest to paying customers, so should never be part of your packaging strategy.
Parents will be whispering obscenities next week as they try to assemble holiday gifts for their children. Including a 20-cent Allen wrench with the bicycle kit might be helpful. Or a sticker that reads “nearly-impossible-to-find batteries not included.”
Cost-Based Pricing
Prospects will compare your prices to the competition, and ask why yours is higher. (Somehow, it always is.) Good answers are about customer value: extended support, saved time, more features, ROI, customer endorsements, or product integration.
Your insider thinking is showing, though, if your prices are justified by inputs. Customers rarely care if you have more expensive engineers on the team, or headquarters is demanding profitability, or you signed an unfavorable license agreement with Microsoft. Don’t mention that you’re using outdated memory boards, or that Purchasing forgot to buy in bulk.
[For instance, Apple iPods are priced by song capacity, not at 35% above cost-of-goods. Likewise, we choose heart surgeons based on reputation and referral, not on least cost per valve replacement or their Porsche payments.]
Decide internally if you can compete, behind closed doors. Chain an MBA or two to spreadsheets until you understand break-even and ROI for each new project before launching the latest teen-targeted PDA or Wi-Fi clearinghouse. Once the decision is made, though, start pitching customer value — and hide the insider thinking.
Talking to Yourself
At a trade show, random attendees ask what your company does. Pulling out your cue card, you recite something about the “dominant OEM vendor of mid-market, cross-platform storage optimization algorithms.” After a few dumbfounded looks, you try again with “our software helps squeeze more data onto disk drives.”
What happened? You’ve dragged out a complex internal positioning statement, painfully built by a marketing-engineering committee. Motivated by the best insider thinking, PM spent months drawing competitive matrices to show Gartner Group how your start-up is slightly better positioned than your VC-backed arch-enemies
Unfortunately, most customers have never heard of you or your competitors. They don’t care if you focus on the mid-market or that your archrival only runs on Windows. There’s not a single meaningful word in this positioning mumbo. Spending some time with prospects (alongside the sales team) reduces your jargon level and refreshes your customer vocabulary.
Inside the Beltway
National politics is an extreme case of insider thinking: sometimes news and decisions from Washington DC are inexplicable to folks half a continent away. The internal complications of political decision-making and fundraising can result in odd or contradictory outcomes. We often refer to career politicians and lobbyists as “inside the Beltway” that circles Washington and its near suburbs, and their art-of-the-possible solutions as “inside the Beltway thinking.” Here’s to being an Outsider with only the market to answer to.
Fake Comparisons
We’ve all reverse-engineered competitive matrices to look good. These are the familiar checklists of features and benefits that prove we outshine the other guys. (By the way, they have a similar matrix that outscores us.) Often, we reach too far.
These fake comparisons don’t award any check marks to the competition, and include obviously silly advantages. (“Day and night operation” for flashlights comes to mind.) Choked with insider thinking, they insult the customer. Smart customers will have several versions and judge you on your helpfulness. [Even if you forget, competitors will mention that your hardware failed FCC radio testing or is suspected of causing blindness.]
Online ROI calculators suffer a similar fate. We’ve trained customers to view these very skeptically, especially when the expected savings is impossible to measure. You may be more helpful to prospects by providing the elements and assumptions needed for a custom cost justification — rather than jumping to unexplainably great results.
Hoping for naive customers is insider thinking. Providing customers with relevant, meaningful product comparisons helps them through the selling cycle. Coincidentally, this is also good marketing.
SoundBytes
Stuck at headquarters, it’s easy to forget customer realities and needs. Great PMs know that internal goals and criteria are only one part of a successful product. Frequent escapes to talk with live customers are essential to remind us of what’s important.