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How to Deliver Your Product Messages and Manage Product Perception

To generate great benefits from sales, you have to come up with something unique. Well, a high-quality and unique but poorly promoted product will likely remain unnoticed on the market. You heard the saying “advertising is the engine of commerce,” did you?

In this post, I’m going to discuss the problems of managing the customers’ perception and behavior. I do believe that the perception is the basic factor for sales increase, regardless of the services/goods you promote. The understanding of key concepts of clients’ perception will help you to advertise your brand much better, whether it’s a website that writes essays or a mobile APP.

Reflexes and Attention as the Base of Customers’ Behavior
Reflexes and attention are one of the crucial factors of managing product perception. Product Managers and Product Marketing Managers try to find a balance between unconditional and conditional reflexes and activities of product and brand. They deal with the following reflexes:

# Alimentary reflexes, which are changes of secretory and motor operation of the digestive canal in response to stimulation of mouth receptors and organs of the digestive tract by the appearance and smell of the product.

# Defensive reflexes:

# Unconditional – muscle contractions in response to tactile or painful irritations of the skin and mucous membranes.
# Conditional – muscle contractions in response to neutral stimuli that previously were accompanied by immediate irritation caused by defensive reflexes, and so turned to conditioned stimuli of these reflexes.

# Unconditional indicative reflexes – reflexes that are caused by sudden changes in the environment or within the body and are reflected in the behavior of a person.

For a potential customer, the product exposure, wherever it may be, is a set of external factors, activating its unconditional and conditional reflexes. Having encountered the product for the first time, the potential customer may see the product environment (e.g. a WEB page) as a maze, chaos of sensations, which over time takes an organized form. The potential customer begins to distinguish objects, that is, achieved a harmony with the environment.
Proceeding from the above, the ultimate task of a Product Marketing Manager is to push the potential customer to the purchase by controlling the qualitative and quantitative components of perception. The Product Marketing Manager has to avoid the exposure of negative stimuli and prevent the formation of unwanted reflections, such as defense, which usually occurs as a result of the purchase of defective goods, the obsessive behavior of sellers, an irritable user experience, etc.
The need for a product can be called not only directly but also indirectly, i.e. using components of the environment, which have nothing in common with an advertised good. That’s why modern advertising is not just the product and its properties, but also an accompaniment in the form of music, light, color, etc., which are independent stimulators and motifs that push buyers to make a purchase.

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The Distribution of Cognitive Resources in Space and in Time
Cognitive resources are the mental ability required to perform various actions on the processing of information coming from the external environment. Such resources are of great interest, especially in the development of the communication policy and specific measures aimed at attracting the attention of consumers to products and, consequently, at the creation of a corporate identity.

Market participants are fighting for customers cognitive resources as the most valuable sales stimulant. The major components of cognitive human resources are:

1. Cognitive abilities that reflect the individual psychological characteristics of a person.

2. The attention that depends on the distribution of cognitive resources on products. The products that get more cognitive resources are more likely to be sold. In marketing, attention is the direction and focus of consciousness on a particular object. It expresses the relationship between a subject and an object: on the one hand, the subject (shop visitor) directs attention to an object (product); on the other – the object (product) attracts the attention of the subject (the visitor). The attention has a number of characteristics:

# The direction of attention, which is the search and selection of a particular product. It is a state when the buyer is able to perceive the product, having a minimum of information and other stimuli.

# The focus of attention, which is a state of absorption of a buyer by a certain product. There are passive (occurs depending on the nature of the object: noise, bright light, etc. attract attention against the will of the visitor) and active (attention due to the consciously set goals, that is, when the good was chosen consciously) focus.

# The volume of attention, which is a number of objects on which the customer focuses his attention at the same time. The average attention span is not more than 7–9 objects. It means that the customer mustn’t be overloaded with a large number of homogeneous goods. The brand has to adapt its activities under this characteristic, striving to alternate the sequences of product placement and heir positioning on the trading floor.

# The stability of attention, which is the duration of attention. To maintain the attention, marketers alternate tension and relaxation by the appropriate placement of products with the different informational load.

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A Product Marketing Manager has to understand the dynamics of the passage of visitors along the real or virtual journey and rationally allocate the attention by placing the products in the best way.

Knowledge of the features of perception will help you to efficiently use the limited capacity of the visitors’ attention and to properly direct the marketing efforts in order to convert as many visitors into loyal clients as possible.

Lucy Adams is an essay writer from http://buzzessay.com/.

6 challenges Telecom Product Managers deal with

Companies that sell to Telecom companies and specifically to Mobile Operators, face a market that consists of several hundreds of potential customers (out of which a few dozens are tier-1 operators) and have distinctive characteristics. Product Managers that work in such companies have to deal with some challenges typical to the Telecom market.

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Pressure to develop features per customer

Mobile Operators are big organizations that have superior negotiation power over their vendors.  In most cases, the mobile operator will publish a bid with specific requirements that your product need to comply with in order to win the deal. Since deal sizes are usually significant for your company, as a product manager you are under pressure to develop features required by a specific potential customer.

Mobile operators are different from each other and often have different product requirements. Therefore, if you are not careful, you can find yourself with multiple silo projects instead of a product. To avoid this situation, you need to make sure your product is highly configurable, and have customization layers that enable maintaining common modules that are identical for all customers and at the same time support specific customer requirements.

Identifying common requirements

The number of potential customers is several hundred at most (the global number of mobile operators), so market data is more difficult to obtain. You need to obtain data from customer meetings, surveys and RFx documents.

In many cases, your information is based on interactions with a relatively small number of customers and potential customers. Do not assume that if, in 3 out of 5 meetings, customers requested a specific feature, it means that most operators will want it as well. Try to obtain information from many mobile operators – through more customer meetings, RFx documents (list of requirements shared by mobile operators as part of a bid) and surveys to get a picture that better represents the market.

Satisfying multiple personas

Mobile Operators are complex organizations where multiple departments are involved in the purchasing decision. Engineering, Marketing, Finance, Operations and Customer Support may all be involved. For Product Managers, this means that they need to consider multiple personas that represent all key decision makers and make sure the product provides value to each of them and does not have negative value to minimize objection (e.g. Operations object a product that is complicated to operate).

In some cases, Mobile Operators use the product to provide a service to their customers. This is a case of Business-to-Business-to-Consumers (B2B2C), in which in addition to the Mobile Operator personas, the product should provide value to a consumer persona (end-user).

Long sales cycle

Standard sales cycle in Telecom includes multiple bid phases and takes between 6 months to over a year. Upgrades of products that are installed in the operator network are usually not simple and do not happen often. This cycle affects the time-to-market and slows the introduction of new features to the market. Product managers have to take it into consideration in their roadmap and version release planning.

Budget shrinkage

This means that mobile operators invest less in value added services (VAS) and are more focused on reducing their expenses. It is more difficult to convince mobile operators to purchase, so your product must have a clear business case that shows your product can generate significant revenues or reduce cost. Mobile Operators will want to test it in their production environment before they are convinced, so it should be possible to conduct Proof-of-Concepts (PoC) with your product at minimal cost for both your company and the mobile operators.

The impact of NFV

There are prediction (e.g. by Northstream) for a breakthrough and strong growth in NFV activities in 2017. It seems that the hype is phase over and it is time for NFV to really take off. If the prediction is correct, Product Managers should analyze how it affects their product. Product Managers should ask whether it is an opportunity or a threat, whether their product should be adapted for NFV and take the required measures to benefit from this change.

To B2B or B2C Product Manager?

Both B2B (Business-to-Business) product manager and B2C (Business-to-Consumers) product manager are responsible for managing their products throughout its lifecycle.  However, their day-to-day work can be very different. So whose job is better?

Note: while there are B2B products that are sold in large volumes, and are similar in some aspects to B2C products, I refer here to B2B products that are more complex and are sold to a smaller number of very big customers at a high price.  
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Data, BIG Data

The number of customers of a B2B product is usually in dozens, hundreds or in the better case thousands, while a B2C product can have millions or even billions of customers. A B2B Product Manager who wants to get market feedback in advance can speak with friendly customers (and hope their opinions represent the market) or conduct a survey (hoping that the number of respondents is sufficient and that their answers represent reality).

A B2C Product Manager has a more direct exposure to the market. For example, a B2C Product Manager that manages a cloud-based service can use multiple versions and conduct AB testing to check which UX is more efficient, or to set different prices in order to see which price works better.

The strategic customer bear hug

In B2C, the average deal size is small. You need many deals to generate significant revenue. In B2B, one customer (or a few) can generate a significant percentage of your revenue.

The upside for a B2B Product Manager is that a few good deals can make your product profitable. However, having a small number of customers make them strategic for your product success. As a result, the B2B Product Manager is under pressure to develop custom features for the important customers, which may distract the product from its course and may make it a custom solution that meets the needs of specific customers, but is not relevant for the rest of the market.

Who buys your product?

In B2B, the product users are not usually the buyer. Furthermore, as the purchase decision has to be approved by multiple people in the buying organization, the B2B Product Manager should take into consideration (besides the user) the buyer and other influencers who are critical to the sales process.

Customer relationships

B2B Product Managers maintains close relationship with customers. It can start from presales meetings and continue in ongoing face-to-face meetings and calls throughout the product life cycle, before and after launch.

B2C Product Managers usually do not know their customer. They can hold focus groups, run surveys and interviews to learn their customers’ point of view, but they do not, usually, have ongoing relationship with them.

Your daily activities

Both B2B Product Managers and B2C Product Managers write product definitions, prioritize features and work with other teams (technical, sales, marketing) to bring the product to the market.

If you are a B2C Product Manager, you usually start your day checking the latest analytics to see what works well and what should be improved and you continuously plan AB tests to optimize the user experience. If you are a B2B Product Manager, you invest more time in customers meeting/calls and work closely with the sales team to obtain market info.

So, which job is better?

At the end of the day, it is a personal preference. If you prefer longer cycles, like to develop relationships with your customers and work closely with the sales team, you may enjoy more managing a B2B product. If you like analyzing statistical data and are focused on user experience, you may enjoy more managing a B2C product.

As a Product Manager, you do not have to select either B2B or B2C. In order to be able to manage both B2B and B2C products, consider where you are on the B2B-B2C spectrum, and work on the skills required for the area you are less experienced in.

The Product Manager and the Art of Pricing: Moving from “best guess” to data-driven practices – Part 2

Part II – Qualitative Tools

In Part I of “The Product Manager and the Art of Pricing” I described the importance of exercising data-driven practices associated with Product Pricing decisions and also introduced the Magnet Affect through an example of Sale Price Distribution analysis.
In this article, I will present the use of 2 qualitative tools and methodologies for price setting and price execution.

Price Setting – Fixed Price or Variable Price?

Sometimes it is difficult to adjust the price model for different segments of customers, each with different needs and price preferences. One of the most significant decisions is whether to charge customers with a fixed fee or a per-use fee.
The model presented below allows us to make an initial adjustment of the price structure for different segments of customers and helps us to answer the above question.

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The most profitable models usually combine elements of fixed and variable price.

Price Execution – Using a Price System

A connection between the worlds of pricing and sales is done using the method of Price System which enables different selling approaches to different segments.

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This method outlines list price, target price, minimum price and floor price where each has a role in maximizing the sale price for each segment:

Small Businesses – Similar to each other so often set a fixed price for them, i.e. list price = target price = minimum price for a given segment.

Medium Size Businesses – Different from each other, but you can group them into groups according to characteristics that affect the profitability of the organization. These characteristics are called Counter Performance Elements. For example, Quantity consumed can affect our target price within a specific segment.

Note: In many cases a dedicated simulator is required to calculate the target price depending on characteristics of the customer.

Large Businesses – Very different from each other, have special needs and require non-standard solutions. A specific price should be set for them through a full economic model – Contribution Model.

In Summary:

Product Managers are operating in a very complex environment of both internal and external information and need to integrate the collection of the truths of the organization in order to recommend the right price structure.

Often, your product is sold in a number of segments, which requires multi-pricing depending on customer needs.

In order to maximize the potential of your product, you sometimes need to affect other areas of the organization. For example, the sale model of the product to different segments (which is basically under the responsibility of the Sales organization).

Your way to affect the price of your product is to be the most professional person and drive organizational decisions based on data, facts and principles of the world of pricing.

This is a guest post by Sagy Gulinka, Owner at TMsight

Striving for Product Excellence?  See our next Product Management Course.

3 Main Steps for Managing UX

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#1 Identify a Need in Strong User Experience

Today products are focused on User Experience.  Customers evolved and expect products to fit their needs in a simpler and more intuitive way.

We have no patience for long loading pages or complicated installation processes. Even new hardware products such as our TV remote are better designed for easy use.  The apps we use every day such as Waze, Movit, Google search – all contain just a simple input line. We are used to multitasking and even if we miss-press a button on our mobile, while starting the car and talking to a colleague, we get impatient.  User Experience (UX) plays a major role in our perception regarding a product and even became a norm we expect.

There are also products that are less UX oriented, such as back office softwares like ERP or Billing. There are also examples to hardware products that are less User Experience focused such as car tires, electric wires, smoke detectors…

We have to know whether our product is UX oriented.  If UX is a major concern in our product’s success, as Product Managers, we have to be ready to make an effort for great UX.

#2 Gain a Deeper Understanding of UX Process and Collaterals

UX expert’s place in an organization varies, UX expert can be part of R&D or under the Product Manager. It can be an in-house task or an outsource. Generally the collaterals that are provided in the process are the same. A deeper understanding of the UX process by the Product Manager would define  better ways to generate and use these outputs.

The Product Manager is dominant in the Product Strategy and Product Definition dimensions.  Product Definition is when the UX expert should be able to get input from the Product Manager. The UX expert should be able to give feedback, validate or modify the Product Definition.  Even if we are developing a software for a specific client’s need, we still have to take UX issues into account. The Product Definition process should involve a multidisciplinary team, and in this case a User Stories document is the right choice.

A User Experience expert is more dominant in the Product Achievement dimension, this is when the UX expert should present output to the Product Manager after refining Product Definition. Product Managers should  understand the process and provide feedback. In addition, there is much value in UX expert’s output in terms of Product Marketing.   Wireframes, can be used for better sales engagements and product launch.  If our product is a mobile application, for example, and we are able to demonstrate some screens for the buyer before development is done, the buyer can visualize our software’s functionality and can provide feedback and even commit to buying the product (before it is fully developed).

Think how your User Experience expert can help you in the process of defining and developing a product, and how can you leverage UX output for achieving product excellence.

#3 Establish a Fluent Two Way Communication Channel

UX expert and the Product Manager need to work together, with two way communication, both have to be able to convey feedback each to other for a better product creation process.

Another way to look at this, is that in some situations, the UX expert can be a mediator between the Product Manager and the Development team. It can be by translating customer and user needs to a detailed product UX specifications that makes the communication between the Product Manager and R&D more detailed and clear.

Value your UX expert, use their expertise for a better managed process, and for better multidisciplinary communication in Product Achievement dimension.

Interested in UX management for Product Managers? Join our workshop in 9,10,15 of May 2016. Click here to read more.

4 Assumptions that Product Managers Must Challenge when Setting Price

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One of the most challenging tasks of product mangers is to set the target price for their products. This task is even more challenging as there are certain convictions that are“public-knowledge” and often raised by the rest of the stakeholders in the organization.

These assumptions may create misalignment between product management and sales management on the target price as well as ending up with a price that is too low.

#1: “We cannot charge more than our competition”

When penetrating the market with a new product, it is a common assumption that price must be lower than the incumbent market leader in order to put a foot in the door.

Well, this isn’t necessarily true. If you have a product that has unique features that are not offered by alternatives or competition, you can certainly apply a segmentation approach where you target a subset of the market that is looking for your product uniqueness. The segmentation can be geographical, demographical or any other parameter of choice. The higher the value customers place on your product or service, the higher the price they’re likely to pay. It’s a natural law and a fact of human behavior.

EVE model will help to position and communicate your price

Key take away for the product manager:

 Segment the market

 Define your ideal customer

 Tune your product accordingly

 Apply value modeling to set the right price

Supporting Tools & Related Conventions:

 EVE price model

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#2 “Customers care only about price”

This is a common belief – which is far away from the truth. Of course they care about price, but this is only part of the big picture. A basic marketing concept refers to customer’s “persona” which reflects your target customers’ behavior, likes, dislikes preferences, tastes, lifestyle, income levels etc. By learning these attributes, you will gain a lot of insight that will help you to set the right value for your products or services and from there – the right price.

Key take away for the product manager:

 Study your customers’ needs

 Tailor your solution around it

 Set the right Price

Supporting Tools & Related Conventions:

 Persona Analysis tools

o Price-sensitive customers

o Convenience-centered consumers

o Quality/Status-conscious customers 

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#3 “Let’s penetrate low. We will increase the price later”

Many entrepreneurs set a price that looks attractive in order to trigger market traction, without first checking if the price covers their costs and cerates profitability. The notion that customers will be willing to pay you more for the same product as they become addicted to it, is delusional. If you set a price that favors your customers, but is bad for your business, it will only be a matter of time before you won’t have a business anymore. Conjoint analysis can help in prioritizing between the features and set a profitable roadmap

Key take away for the product manager:

 Understand what your costs structure

 Set the right Price (low enough to attract customers but high enough to be profitable)

Supporting Tools & Related Conventions:

 Cost Structure Analysis

o Direct costs

o Indirect costs (or “Overhead” costs)

 Conjoint price model

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#4 “Product cost structure must remain product manager’s property”

Many product managers believe that their product’s cost structure must be kept hidden from the rest of the organization due to possible risks:

1. Sales pressure to reduce price

2. Information leakage to customers

3. Information leakage to competition.

To explain a price to your sales team, you need to discuss your margins, and explain why it is important to detach the target price from the product cost. This means that you may defend low price for a high cost component (merely because it is not a differentiator) and a high price for a low cost product (i.e SW) because it is a differentiator. EVE model analysis will help you stand in front of your sales team and explain your price and target margins.

Company’s stakeholders should be aligned with your pricing strategy, knowing why you priced each feature the way you did, and feel comfortable defending it in front of the customer.

Key take away for the product manager:

 Be as transparent as you can – internally!

 Deliver a win-win pricing strategy for you and your customer

Supporting Tools & Related Conventions:

 EVE model combined with product cost analysis

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Why Customer Experience is an Important Part of Product Manager’s Responsibilities?

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When we discuss a product manager’s responsibilities we discuss it in terms of Product Strategy, Product Definition, Product Achievement (engaging the development process) and Product Marketing. All these dimensions include customer issues.

 

Product Managers should be able to engage all of the product team (including R&D and Sales) in generating, articulating and monetizing customer value. However, we rarely stop to think about how all these topics regarding the client are connected, how does this all become part of a bigger customer picture: the Customer’s Journey.

Customer journey or experience is a major point in product success measurement, and it does not rely solely on marketing, but on a customer planning in all 4 product dimensions.

 

A product manager is responsible for connecting the dots and creating a full Customer Journey circle for his product. The process of creating a customer journey happens while building the product and dealing with the Product Management dimensions. All the pieces are there, but connecting them is what makes the difference.

 

Transitioning from Product Management to Customer Experience consider the following:

Product Awareness

The first step in every Customer Journey is Product Awareness – the product’s brand and value proposition. This is about first impression – getting the right perception from a customer’s perspective and an effective media exposure to the right customer. This means presenting the product value and theme to target audience.

User Experience vs. Customer Experience

Part of Customer Experience cycle is User Experience (UX). In spite the fact that Customer Experience is mostly generated by the Product Manager (formally or not), UX is an issue that Product Managers often tend to treat as a given part of R&D and design. This unit of Customer Journey tends to get autonomy. UX affects many aspects of Customer Journey and has a crucial impact on the ability to discover and engage in a product customer experience. As well as getting the right information easily, achieving high customer satisfaction and finally customer return. UX has a major impact on product success as well as Customer Experience, because all customer dots in a product planning and management should be connected.

 

The bottom line is that a product’s success is determined by customers, whether the product has reached defined goals, reached the defined target audience and gained satisfaction among them. If a product’s planning and management was thorough in customer terms, it has a major contribution to a product’s success. Customer Journey allows to see the bigger customer picture, connect all the dots and fill in all blanks. Customer Journey is an important responsibility for every Product Manager to reinforce.

Want to find out more about Customer and User experience? Visit our User Experience Workshop for Product Managers page.

User Experience and the Science of Product Management

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Product Managers need to be good at understanding the value the product generates to the customer.

Product value to the customer should grow over time.

This is a responsibility. One of the key areas to grow value is the User Experience.

There are many aspects to User Experience, there is the Exploration experience, the Commitment experience (when the customer buys), the Introduction experience and the User Experience. Over the last few years, inspired by the Mobile revolution User Experience becomes a major issue for technology product companies.

Some Product Managers are using the fact that UX experts exist in the company to leave this issue outside their domain. This is a mistake!

Product Managers should do just that, Manage and this includes the user experience. Even if delegated, UX is something that should be managed.

Some Product Managers, are taking a step back when it comes to User Experience, it seems to them that it is “one of those things”, “it is about intuition” and NOT about rationally calculating what needs to be done. It is NOT an algorithm that needs to be applied. “It is an art” they say, it is not science.

STOP THE TRAIN – YOU ARE GOING IN THE WRONG DIRECTION!

Creating products is a science, NOT an art! It is NOT about intuitions and making intuitive decision, (although intuition may play a role, it should not run the process). So when you hear this about User Experience and you think “well, let those UX experts manage the User Experience”, think again, User Experience is too important to be left to the UX experts, it is strategic.
The bottom line is that Product Managers need to understand and manage UX, just like they manage any other meaningful aspect of the product.

For this growing need, StarVision have generated an innovative User Experience workshop especially for Product Managers. For more details click here.

Fly Me to the Moon!

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Sometimes, Product Management is about making your dreams come true. As a Product Management expert, I am always searching for examples of places where product Management is about having a vision and establishing a mission. What we, at StarVision, refer to as Strategic Product Management.
A couple of weeks ago, I found such a place at (SpaceIL).

Eran Privman, the CEO of SpaceIL, reminded me of the old Bazooka Joe’s, Futures section, where a script read, “By the time you are 21, you will reach the moon”. Well, Eran is not 21, and he is not flying to the moon, but he is making a dream come true. Eran is in charge of an ambitious project that is going to put an Israeli Spaceship on the moon.

SpaceIL is an Israeli organization that is on a mission! Safely landing an Israeli Spaceship on the moon. A few facts that most of us are not aware of is that only three countries have accomplished such a mission, The US, The USSR and China. Israel is going to be the fourth!
The idea was born with three technology enthusiasts, Yariv Bash, Kfir Damari and Yonatan Weintroub, who had heard about the Google and Xprize competition and decided that they have to be in this race.

If you want to hear more and you are in the Tel Aviv, or can be there by Thursday, January 21, join us at this event: StarVision Technology and Product Management Meetup.

Next-Generation products – Evolution? Revolution? Creative destruction?

 Hi-Tech companies need to innovate at all times. Technology is changing constantly, and if you don’t innovate, you stay behind. We all know this is true.

One of the big dilemmas for hi-tech companies who already have a product, is whether they should continuously improve the current product , or innovate with a totally new product. Some call it evolution vs. revolution, while some use the terms “creative destruction” or “cannibalization”. But it’s all the same. In this paper, I will use the terms evolution and revolution.

 

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Product managers should weigh the pros and cons of the two, so different, approaches.

 

The “Revolution” option:

It sounds great for the developing company. They can develop from scratch, they are not dependent of the current product and therefore don’t have to carry along problems this product might have. For the developers – revolution is heaven: rather than adding to an existing product, they get to develop a brand new product, with whatever tools are available today, as if they work in a startup…

This approach fits with the notion of “creative destruction” – a leading concept in innovation theories. Creative destruction means that one gets rid of the old product in order to replace it with a newer one. It stems from the fact that if you don’t come up with a very up-to-date product, your competition will do so. Therefore, don’t fear to “kill” you own product in order to introduce a new one. One more point in favor of revolution is the product’s perception in the market. – customers might like the idea that the company they are buying from keeps creating products with the latest technology.

 

The “Evolution” option:

The company has a product, it’s selling well today, there are lots of customers using it around the world. For these customers evolution is a smooth way to get improvements on products that are already being used at their premises. Just imagine a customer who uses a complex software solution for the last 7 years. Now assume the software provider offers a brand new product, to replace the current one. From the customer’s viewpoint – this is extremely risky.

Moreover, it might cause them to examine the competition: If they have to migrate to a new product provided by their own supplier – why not open it for re-evaluaion of the other options in the market. This, in turn, means that revolution is risky for the provider as well, and not just for the customers. The more customers you have – the more likely you will select the evolution option.

So – which is best? There is no clear answer. Like most difficult questions – it depends…

 

I would suggest that:

  •  If you have many customers, go with the evolution option, but make sure that the evolution brings your product to a top of the line competitor in its market, and not just makes it “stay alive”

  •  If you have few customers, or if the migration from the old to the new product can be relatively easy – consider evolution

  •  If you believe (and can show a solid business case for this) that a new product will be 10 times better than the current one, do it!!! (Now, how do you know what 10 times better is – that’s for a different article)

Product Management and SaaS

Today, more and more products are offered as Software as a Service (SaaS).

Is the product managers’s job the same for SaaS offering, or is it completely different than the product manager’s tasks for the traditional, non-SaaS product?

In short, we can say that the product manager’s “job description” is the same whether the offering is a traditional / on-premise one, or if it’s SaaS. In both cases, product managers are expected to understand the market needs, perform competitive analysis, define the roadmap, provide high- and low-level requirements, and define the positioning, packaging, pricing and messaging of the offering. So, at first sight, there is no difference.

 

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However, the difference lies in the CONTENT of the above tasks, the dilemmas we have to solve, and the way we do it.

Here are some points that can illustrate the above:

 

1. Product releases –

for on-premise products, we define the roadmap, with major and minor releases. In SaaS there is no reason to discuss major and minor releases – the users do not care whether the changes in the product are part of a major release or not. They don’t pay for it anyway. Once they subscribe to the service – they automatically get whatever is there. This implies that the product manager is “free” from these definitions, and can introduce any changes at any time, if these make sense.

 

2. How many releases?

How often do we make changes to the product? – For on-premise products, the answer is clear – every release, according to the release policy (normally, one to a few releases per year). For SaaS offerings, the decision is more complex. Think about yourself, as a user of Gmail or Facebook: Do you like the fact that the product changes often? Would you prefer to see less (or more) changes? The answer is tricky.

On one hand, the ability to add/change things in SaaS is great and very tempting. After all, that’s one of the benefits of the SaaS business model. On the other hand – if we change too much, we might irritate the users. Product managers should find the fine balance between the two options – and it’s not an easy job!

 

3. Pricing –

Pricing for traditional products is based on licenses. In SaaS, we use the subscription model. And on top of it, we normally offer either a free trial and/or the Freemium model. So it’s clear that the product manager’s job in determining the pricing model is very different. Just think of the Freemium model: it is the product manager’s responsibility to decide which parts of the product are provided for free, and what is “the first step” for which users will have to pay. A poor decision here can affect the company’s ability to be profitable! It could be a life and death decision.

 

4. Product infrastructure –

do product managers have to care which technological infrastructure will be used for the products? In the traditional model – the product manager has a strong say, as the customers will have to support this infrastructure and approve of it. However, for SaaS – product managers should not care. Let the R&D people make these decisions.

 

5. Simplicity –

the name of the game in SaaS is simplicity. If the product is complex to use – no one will buy or stay with it. So please, no bells and whistles – just make it simple and easy to understand with little or no training.

There are many more differences, but this list shows that even though it’s the same product manager, with the same tasks, there are significant differences in focus within each task. Does it mean that traditional product managers cannot do it for SaaS – absolutely not! They should adapt to the changes in focus, but overall their role is unchanged.

Mind the Gap

Sometimes it is all about the distance. Proxemics – You can tell how close people are by the distance between them when they talk.

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Mind the Gap – You need to watch the distance between the train door and the station platform.

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In Hi-Tech Product Management you need to be careful about the distance between you and your customer.  This is a key issue for many companies.  As a Product Manager you need to understand the customers and the value you bring to them.  That is very difficult to do when you keep your distance.

This is a huge issue for young companies and startups (and their Product Managers) struggling to establish a business model.  Get too close (engage directly with your customers) and you find out your resources are stretched and are holding you back.  Get too far (use various self-serve options or distribution channels) and you will not understand your customer.

The answer is to do keep just the right distance:

* Engage directly with a few, wisely selected, customers that will be a representative sample of your target market.

* Use Self-Serve sales in a way that you are still engaged and build a process where you can actually learn about your customers

* Use traditional distribution channels carefully – make sure they do not extend  the distance unnecessarily

This is important especially early on when you are shaping your product strategy and define your business model.

Notes on Pricing

This is what we need to focus on – our customer’s Demand – and guess what is missing from the graph below

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Here are my thoughts on the issue today:

Goal:

 

The goal of this series of blogs is to get you think out of the box about pricing and to get away from cost based pricing.

My point about traditional economic pricing theory is that, unlike classic supply and demand theory, in hi-tech we do see a demand curve, however there is no supply curve and we should actually aim to be on as many points on the demand curve as possible.

This discussion is not designed to be a theoretical academic discussion about pricing but to be a practical way for you as Product Managers to think about Pricing.

 

Assumptions:

  • Companies want to maximize their profit and in order to do that they need to optimize the price point on the demand curve.
  • A company’s goal is to be on the demand curve for every single point on the curve above a certain price point.
  • Hi-tech companies are not (in most cases) producing commodity Products.

 

Few Notes on Pricing:

Hi-tech companies all too often take the easy way out of the Pricing Dilemma by resorting to cost base pricing.  That would not be so bad except in most cases they actually underprice their product!

If a company does not understand the market then it is unlikely to understand the Demand curve.  Marketing Principle Number 1 – know a day in a life of your customer.

In almost every market there are companies who can and are willing to pay more for your product than others; however they will not be paying more if they can pay less for the same product and the same quality.

Your challenge as a Product Manager is to optimize your product portfolio so to offer to each customer the maximum value for their needs.

Value for the customer is perceived value in the eyes of the customer not in your eyes.  Marketing Principle Number 2–perception is greater than the truth .

Product Management, Dolphins and Awareness

Business and technology, the one function that needs to know the customers and the value we bring to them.

You are a Product Manager in a technology organization.  Your life is exciting, dynamic and ever-changing.  Usually you are busy moving from one task to another.

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You are always focused, always busy. However, by constantly focusing on specific tasks you may actually lose one of your key roles as a Product Manager –watching the market!

This is about Product Management excellence.  One position in the company that needs to look at the business andtechnology, the one function that needs to know the customers and the value we bring to them

Product Manager – Watch the Market!

You are a Product Manager in a technology organization.  Your life is exciting, dynamic and ever-changing.  Usually you are busy moving from one task to another.  You are always focused, always busy. However, by constantly focusing on specific tasks you may actually lose one of your key roles as a Product Manager – watching the market!

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Dolphins

Product Managers should be like Dolphins* in order to make real progress you need to constantly go in and out of the water – watch this.  When you are in the water you focus on delivering user stories and writing MRDs or getting on sales calls and answering RFPs, but it is a MUST for you to also spend time outside of the water where your vision is wider and you see things from a different perspective.  Take a look at the market, new technologies, new industries and new ways for your customers to conduct business – All this will affect you, and if you stay underwater for too long you may miss your market!

* The original Product Manager Dolphin analogy was made by Adi Pundak-Mintz, a VC investor and formerly a Product Manager.

Awareness

Take a look at this before you continue reading!

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This little demonstration is based on an experiment by Christopher Chabris of Harvard University and Daniel Simons of University of Illinois at Urbana-Champaign.

Fact:  People focused on a specific task will not notice other obvious market trends.  As one of the key responsibilities of the Product Manager is to be in touch with the market it is imperative that Product Managers keep time for listening to the market activities so they will notice the moonwalking bear (or the invisible gorilla as in the original experiment – seewww.invisiblegorilla.com ).

Thinking Fast and Slow – Understanding Product Management

Product Management Dilemma:

Are product decisions intuitive or should product decisions be based on a structured rational process?  Is Product Management an art or a science?  This book is probably the strongest supporter for the claim that Product Management is a Science and the decisions Product Managers make (hard as they may be) should be based on rational analysis and not on intuition.

The WYSIATI Trap – What You See Is All There Is:

Product Manager focuses on information about a problem, a pain that the specific customer is experiencing, RFP requirements … and stays in the narrow frame of the context the problem.

We take a customer requirements without asking ourselves – is there more?  Are other customers facing similar problems?  Will this problem be as painful in the future?

If we see Product Management as a science we should always ask ourselves… Do I have all the information?  Should I be searching for more dimensions of this problem/issue/feature/requirement?

Points on Strategy

Practical Product Strategy should highlight the following steps

So what is Practical Product Strategy?

Strategy is a big word, huge… sometimes a little intimidating.

Think about it, what is your strategy?  Do you know what it means?

I’d like to think of strategy from a practical perspective – Practical Strategy!  Practical strategy is the guideline for the  Product Manager.

Strategy is the grand plan…  The Master Plan … the way you achieve your ultimate goals. To do that you have to know what is your ultimate goal – that is also part of the strategy.

If your product is a journey, the strategy the high level plan of where you want to go and how you want to get there.

So let’s break it down – I would like to think of strategy in terms of 9 items that define strategy.

From a practical perspective – we have 9 steps that build us into producing the Business Plan!

Please see the key items to consider below.

Item Questions Action (Y/N)
1.1 Definition Product Definition
1.2 Value Proposition Unique (hopefully) Value Proposition
1.3 Mission and Vision Our Vision and Product Mission
1.4 Positioning Market Dimension that Determine Product Positioning

Product Values within these Dimensions

1.5 Pricing Determining the right price
1.6 Business Model Product Business Model – The way we engage with customers to monetize value
1.7 Competitive Analysis Industry Competitive level (Porter Model)

Specific  Competitors

1.8 Segmentation Market Dimension

Focus on these dimensions

1.9 Business Case Expected Revenues and Costs Over Time

Long term and Short term

Product Management and The Cyber Revolution

Do you read books?

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I was at Tel-Aviv University today.  In the Social Sciences Library they are giving away books.  Giving away books for free!

It made me realize books are dying.  Libraries as we know them are fading away.  One day your grandchildren will come to visit and they will look at your books and ask “…hey, what’s this?”  What will you say?  Will you tell them that for thousands of years this was knowledge, wisdom, education?

Go to your book shelf, take a book, feel its weight, smell it.  Then realize that we are the last generation that will experience books in this way.

The world will never be the same again.

In the Product Management course, I try to explain that we are going through a revolution, a cyber-revolution.  How is this going to impact your product?

What products are in danger?  Think how fast things are changing.  Remember voicemail?  Remember Comverse?  Remember older Cellphones?  Remember Nokia?   Remember sewing machines?  Remember the typewriter?

What is next?  What does the future hold for telecom?  What will happen to traditional Billing Systems?  What will be of the computer desktop? Will they survive, and where will Amdocs, Ericsson and Microsoft be in 10 years?

In the meantime – go smell your books.

Science Fiction, Star Wars and the Future – Prediction in Product Management

Niels Bohr, the Danish Physicist (1885 – 1962), said that predictions are difficult especially about the future. We all make predictions all the time. We have to. Specifically if you are part of a technology company. You need to consider what direction to take with your product.

What can we learn from Science Fiction? Do you watch a science fiction film and think “wow, this is the way life is going to be like”? Can we look at science fiction that was done 50 years ago and see if the writer was able to predict the ways things are today?

What can we learn from the Science Fiction predictions? What can we learn from the miss-predictions?

Think about Star Trek. How technology was predicted? Is there technology there that shaped our future (Cell Phones)? Is there technology that is yet to come – “Beam me up, Scotty”?

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Think about Blade Runner[1], written in 1968 by Phillip K Dick, depicting life on earth at 2020. We are almost at there. Can we compare the way Phillip K Dick foresaw 2020, or Ridley Scott[2] in the film adaptation (1982), to what 2020 will really be like?

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Think about Minority Report, Written in 1956 by the same author adapted to screen in 2001 by Steven Spielberg[3], depicting life in 2040. Is this the movie that predicted the iPhone touch screen?

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This lecture series focuses on these questions from a technology-product perspective. We will be looking on how Science Fiction creators look at the future and see what we can learn from it.
What does the prediction process look like? What do we consider? What do we ignore? Where do we predict well? Where do we fall?
How can we predict more successfully?
Lecture 1 of 3 is by Lior Zadicareo, Partner at StarVision and Product Management Expert


[1] Story by Phillip K. Dick is “Do Androids Dream of Electric Sheep”, Film by Ridley Scott named “Blade Runner”
[2] Screen Play by Hampton Fancher and David Peoples.
[3] Screen Play by Frank Scott and Jon Cohen

The Final Showdown: The Product Manager and the Product Owner

It happens every time. Organization goes Agile. Smart move. Development organization makes the adjustments. Many adjustments. Next you see sticky notes hanging on office walls and in conference rooms. The art of the hi-tech generation.

Agile has many benefits for some tech organizations.

But one of the dilemmas that Agile raises is around where do requirements come from and how Product Management is incorporated or interfaced into the Agile organization.

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Does the Agile Product Owner replace the Product Manager?
If Question Above = Yes
Then
Does the Product Owner assume all the responsibilities of the Product Manager?
Else
What is the relationship between the Product Owner and the Product Manager?
The Final Showdown: The Product Manager and the Product Owner
It happens every time. Organization goes Agile. Smart move. Development organization makes the adjustments. Many adjustments. Next you see sticky notes hanging on office walls and in conference rooms. The art of the hi-tech generation.
Agile has many benefits for some tech organizations.
But one of the dilemmas that Agile raises is around where do requirements come from and how Product Management is incorporated or interfaced into the Agile organization.

Does the Agile Product Owner replaces the Product Manager?
If Question Above = Yes
Then
Does the Product Owner assume all the responsibilities of the Product Manager?
Else
What is the relationship between the Product Owner and the Product Manager?