AI and Machine learning are hot topics these days.
Companies are using AI to obtain valuable insights from data and make their products better. From a Product Manager’s perspective, this is an excellent opportunity to adopt cutting-edge technologies to solve a problem. That means more problems can be solved more elegantly.
However, an AI-based product presents many challenges for the Product Manager, and it often requires the Product Manager to use different tools and technical knowledge as machine-learning, statistics, and probability on some level.
AI-products unique challenges
- First, the relationship with the Data scientist is different from the conventional R&D developer: Development times are offbeat, uncertainty is much more significant, and often there are difficulties in communicating the needs.
- The most critical factors in AI-based products, (more than the algorithms!) are the size and quality of the data. The Product Manager must collect the right Data with the right features that would give the best result later. This task should be prioritized very carefully.
- The communication throughout the organization is also different since people do not like black boxes. The PM must explain thoroughly, but in layman terms, how technology work for the executive, customers, and sales. Otherwise, it may cause over expectation on the one hand or skepticism on the other.
AI-products conventional challenges
- As with any product, the Product Manager must make sure that real problems are solved, real value is provided, and the customer is likely to pay for the company to address its problems. In the case of an AI-based product, there is sometimes a tendency to forget the ‘main thing’ and focus more on the technology and execution than in the problem space.
- Last but not least are the matrix for success that may look different in an AI-based product as probability and statistical terms may be introduced.
It appears that the role of the Product Manager is stretched when it comes to an AI-based product, and there is a strong need to come up with different methodologies for this kind of products.
A Product Manager owns a large set of activities: feature description, sprint definition and roadmap detailing to name a few. All of them should be iterated over and over again. In many companies, these processes are managed in several different tools.
Many R&D teams use dedicated software management tools such as Jira to manage the development activities. However, most product teams do not use a dedicated tool to manage product activities. While there are many tools that can help manage short-term product activities, these general tools do not help manage longer term, strategic product activities effectively.
There are currently several software tools in the market (e.g. Aha!, ProductBoard, ProdPad, Craft and more) which capture the product processes and the data they define, allowing for single place of truth for the entire product management processes or part of it. This allows for better and more efficient control, saves time, and enables creation of a better products.
Focus on Product Strategy
Product Management tools provide a framework for defining your product strategy. This enables product managers to focus on the strategy definition, helps them to ensure all strategic elements are covered and to set product goals.
Structured Product Definition process
Based on the strategic definitions, product managers can create a roadmap to achieve the goals, define features, prioritize them and associate them with releases. Some of the tools provide a mechanism to gather ideas from internal and external sources – the product manager decides which ideas will become features and which will be discarded.
Align strategy and execution
Product managers can link releases and features to the goals so that prioritization will be done considering the strategy. As a result, product managers are less likely to lose the big picture under the pressure of day-to-day challenges.
Single repository for product information
In many cases, product information is spread in various tools, documents, presentation and excel sheets, resulting in some cases in working according to a document that is not updated. Product Management tools provide a single, up-to-date repository for product information.
Product Management tools allow visibility of product information and status to all relevant stakeholders (Management, R&D, Customer support, etc.), who can log in to the system and view the desired information. In addition, Product Management Tools enable generating reports and make it easier to share product information and updates.
Product Management tools can help product managers be more effective and focus on adding value to their products. As a result, they can shorten time-to-market and help creating better products.
While implementation of a Product Management Tools involves setup effort (customizing the tools to the product processes that work best for your company), StarVision believes the value exceeds the cost and therefore recommends using a Product Management tool. In the coming posts we will review some of the popular tools and provide more information that will help you choose which of the tools is suitable for you.
Habit Number 1: Bottom-Up Approach to Product Management
The Habit: Most products are developed with a bottom-up approach. Many requirements are piled up from various sources dealing with various issues and are than prioritized into a version, some may hold a common value, but for the most part they are addressing various issues that are raised from customer requests, POCs (Proof of Concept), and are quite specific and detailed.
The Result: Your product lacks focus, and when a potential customer asks you, “what is new with your product?”, you are bound to respond with a long blurb including many items but with no one coherent theme, or give them a few highlights extracted from that list.
The Solution: Combine top-down and bottom-up approaches to Product Management. At any given point in time your product should be focused on achieving specific themes, creating concrete customer value. A theme can remain the same over time or can change based on market trends.
Practical Comment: You should not promote more than two or three themes at any one time.
Habit Number 2: Letting You Most Vocal Customers Lead the Product
The habit: Customers and potential customers are key influencers on the product roadmap, this is especially true for younger companies and B2B companies who are focused on large targets. So when you ask yourself what should you do (next) with your product, there is always a new customer around, or more likely a salesperson who is working on a deal, that has a long list of features that need to be developed.
The Result: Your product becomes one dimensional, addressing a market segment of one, or few, very specific customers. Strangely enough, this works sometime, especially early on in the product lifecycle, when the functionality required still basic. However, you need to realize that this is not the case in the long run, and developing a tunnel vision that is focused only on specific customers may ruin your product. If you adopt this method you are basically taking a big gamble that the customers you focus on are an accurate representation of the target market.
The Solution: Base your product on a representative sample of your target market. Do not ignore customers within your target market because they are not vocal enough and do not let sales people define your product. Make decisions after
Practical Comment: This is not always possible, but, … consider the option of customers paying for functionality that is developed especially for them. If this is an option consider separating this functionality into a separate layer of the product, a customer specific layer.
Moving to agile has a major impact on our work as Product Managers. While it improves visibility, increases team productivity and enables managing priority changes more efficiently, agile introduces challenges such as finding the time to be available for R&D while handling all other product tasks, breaking requirement documents to user stories and more. Here are 4 tips that can help you be a more effective Product Manager in an agile environment.
#1 – Do not neglect longer term Product Management activities
Agile introduced the Product Owner role, which many confuse with the Product Manager role. Although in many cases one person performs both, these are different roles (with some overlap). The Product Manager is more customer-focused and market oriented, and the Product owner has internal focus and handles more detailed definitions. You can easily find more information about the differences between these roles, for example, this post from Aha! Blog.
If you are a Product Manager who is also acting as a Product Owner, you can easily become entangled with Product Owner responsibilities which are usually more urgent. Be careful not to neglect your Product Management responsibilities which are more strategic and long term. Allocate specific, well defined, time for your Product Management activities. Do not allow those times to be compromised with your Product Owner activities.
#2 – See the forest for the trees
In agile, you break requirements into many user stories. With so many user stories, it is not easy to keep the bigger picture in mind. Furthermore, the constant pressure to define enough user stories for the team to work on may draw you to detailed definitions and distract you from strategic definition of requirements that add significant value to your product.
Follow a structured Product Definition process that starts top-down with definition of strategic goals and themes for your product. Make sure the detailed requirements you work on are not there because they help you fill the team capacity, but because they are steps on the way to the product strategic goals.
#3 – Do not define details ahead of time
In order that the agile team will be effective. You need to provide them well defined User Stories they can implement. If you use SCRUM, you have to provide enough User Stories until a deadline before every sprint. You may be tempted to define many detailed user stories for backlog features, in order to avoid the deadline pressure. Don’t!
While you do need to have enough stories that you want to implement in the near future (next sprint and a few more), defining User Stories that you plan to implement later is in most cases a waste of time, since by the time you get to implement them, things change and you have to rewrite the User Stories. When you add items that are not for immediate implementation, write only a high level definition, start with a title and elaborate later. Write the detailed definition only when you plan to implement the feature.
#4 – Adopt agile product processes
There is no reason that only processes that involve R&D will be agile. Apply agile process and practices to other Product Management dimensions – Product Strategy, Product Marketing and Product Definition. Increase visibility of these processes, involve relevant stakeholders early in the process and manage changes using strategic goals as guidelines.
If you use rituals when you work with R&D, use rituals for strategic activities. Following such rituals will help you allocate the required time for longer-term activities.
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.
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:
that reflect the individual psychological characteristics of a person.
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.
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.
Guest Post by Sagy Gulinka
Part I – Quantitative Tools
Pricing is one of the critical and complex processes in a company. Complexity stems from many factors, among them are company’s strategy, competitors’ pricing and positioning, market segmentation, products’ portfolio, cost structure and more.
Pricing decisions making associated with these factors requires data from different sources and involvement of different stakeholders in the organization, sometimes with conflicting interests. In light of this complexity, it is no wonder that Product Managers sometimes feel that their impact is eroded and they find it difficult to navigate pricing decisions.
Another point worth mentioning, and I face it frequently – pricing discussions are too often qualitative in nature and are not based on enough quantitative data and facts. This kind of discussions is sometimes leading to bad pricing related decisions. As bad as it is, in life, every problem can be also an opportunity – Product Manager’s opportunity to lead a structured pricing process based on facts and data. The Product Manager is in a central position and in close relations with all stakeholders and hence can be the focal point that balances a variety of different vectors.
Directors tend to side with anyone who brings facts and knowledge to a decision-making process. The tools available to product managers include:
- Quantitative metrics and reports that point to the price performance of the product
- Methods and specialized Pricing knowledge
- The presentation of an integrated picture of the various considerations (marketing, sales, development, finance, etc.)
Example: Quantitative Analysis – Sale Price Distribution
Sometimes you may be asked questions such as: “Why is the average deal price significantly lower than the goal you have set a specific corresponding segment of customers?”
This below form of presentation better allows understanding the company’s sales operations because we look at the amount of deals made at every price level rather than just discussing the average deal price…
In this example you can identify a well-known phenomenon called the Magnet Effect. Sales people are selling at the lowest price allowed to the point where they have to get a managerial approval (in the graph above it is happening at a price of 110). Even an intermediate level manager will try to exhaust the process prior to turning to the next level of approval (for the price of 70).
I will quote a sales manager at a large high-tech: “We did not hesitate to drop the price as long as it was allowed, but we made a tremendous effort not to reach the regional manager for approval…”
The key, in this case, was the remuneration model of the sales team that was based mainly on sales quantities and without direct binding to the sale price. You can see in the chart different selling prices of the same product within a specific market segment and it is clear that there are deals that were closed at a too low a price due to the magnet effect.
This example demonstrates how collection and integrated presentation of quality facts and data can assist in fixing product pricing and sales guidelines which immediately inflicts on the company’s bottom line.
In Part II of The Product Manager and the Art of Pricing we will explore 2 additional tools that are more qualitative in nature. See you soon…
This is a guest post by Sagy Gulinka, Owner at TMsight
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