I recently did a presentation at AIPMM’s PMEC West conference in San Diego and had the opportunity to speak with a lot of smart, energetic product managers and product marketing managers about product launch. It struck me that there’s a conventional wisdom that needs to be changed. Radically changed. It has to do with where product launch fits into the grand scheme of things.

It has to do with something I discovered a while back. Product launch IS NOT the end of the development process. It is the BEGINNING of the sales process. Noodle on that a little and then re-read what I just stated.

You probably have been in the situation where you scramble at the last minute to get ready to “launch”. To make matters worse you probably encountered a delay of some sort. It doesn’t really matter what it was. What’s important is that you discover late in the game there are material changes to the product that radically change the original assumptions you had about your product launch plan.

Now you have a serious delay. Marketing materials have to be revamped. In some cases a whole new approach is required. The sales team is up in arms because - yet again - the organization isn’t ready and they’ve already been given their quota. Of course it’s the marketing team’s fault again.

This is “end of the development process” thinking. Now change it to a “beginning of the sales process” thinking. Your goal in a product launch is generate momentum. What would you do differently?

Technorati Tags: product launch,launch clinic,selling process,development process,marketing

I have come to embrace the use of cross-functional teams for product launch as being vital.  But my initial exposure to cross-functional teams was frustrating to say the least.  I was working for Viasoft in Phoenix.  At the time Viasoft was rocking and rolling due to Y2K hysteria and we were loving every minute of it.  Viasoft had grown to a size where bringing a new product or version to market was getting complex, and being a publicly held company there were more T’s to cross and I’s to dot.

For the most part the company was winging product launches. Diving catches in the end zone with seconds before the game ends were the norm. Wisely, the management team adopted the cross-functional team (CFT) approach.  We started a project office and a small team of people with no previous product launch experience were given the task of defining a company standard project template for product launch.  These folks were talented project managers with a commanding knowledge of MS Project, but they just weren’t familiar with the nuance of bring a software product to market.  There are lots of variables and gray areas that aren’t always easy to represent in a project plan.

I was given responsibility of a product line and walked into my first CFT.  The attendees were already designated and of course we had someone from the project office to oversee the process.  I walked into a conference room filled with 22 people.  These were people from every nook and cranny of the company and believed they had a stake in the process.  I conducted the meeting and smiled, but knew that this would never work.  This many people in a room at one time is counter productive.  Period. The first meeting went for several hours. The expense to the company on an hourly basis was immense.

Keep in mind that although the company wanted CFTs to improve execution, we didn’t receive any training on how to use CFTs effectively.  Every product manager approached their CFTs differently.  Some refused to use them at all.  I decided to lean into it.

I started by setting some ground rules.  First, there could only be one representative from each functional area.  That person must have the authority to act on behalf of their department.  That one took a little finesse to make happen, but it worked. OK, now the number of people was cut down considerably.

Second, I limited CFT meetings to 1 hour.  This was a status meeting.  Anything that started down the path of problem solving or brainstorming was tabled and scheduled as a separate meeting.

Third, I developed a standing agenda that was distributed in advance of the CFT meeting.  Everyone had what they needed to be prepared for the meeting.  And they knew if their participation was mandatory or optional.

Fourth, I schedule a standing meeting.  Same day of the week.  Same time.  Even when I was traveling we conducted the meeting. No excuses for not knowing when the meeting was scheduled.

Fifth, it became apparent that these meetings could easily be dominated by the development team going over the status of the most minute feature details that had no relevance to a number of the CFT members.  To address this  I scheduled a separate, standing meeting with the product development group just to cover product development status.  Established members of the CFT could attend if they wanted, but it wasn’t mandatory.

Sixth, I designated someone to take meeting minutes.  That freed me up to drive the meeting and keep the flow going.

I still had challenges and learned many more ways to make CFTs better, but these 6 simple things enabled the team to be more effective, more attentive and more committed to achieving results.

Our long awaited "How to Organize and Manage a Cross-Functional Team" webinar is now available.  The topic of CFTs consistently ranked high from our customers so we thought we could do more justice to the topic by offering a separate webinar.

The format is 1.5 hours.  In addition to the live content you will receive a copy of the Cross-Functional Team Leaders Toolkit, which we will cover in the webinar.  The first session will be delivered on January 31, 2008 at 9AM Pacific Time (Noon Eastern, 17.00 GMT).

This webinar will be offered with a tiered promotional discount.  The sooner you register, the better the value.  The full price for the CFT webinar will be $129 USD, but here’s what we’re going to do:

There will only be 40 seats at the discounted price. After that the webinar will be sold at the full price of $129 USD.

If you have any questions about the webinar or would like to see if a particular CFT challenge you are facing is covered, please let us know.

Early stage companies often start ramping up sales as soon at the product is out of development.  The product is ready and it’s time to sell.  You hire experienced sales guys.  As many as you can.  The deals don’t close as quickly as expected.  You are burning through cash.  It must be the sales guys.  Somehow the wrong guys were hired.  It couldn’t possibly be the product.  Fire them and get new sales guys.

Many of you reading this will probably have at least one experience in your career to relate to this scenario.  I’ve recently read a paper titled "The Sales Learning Curve" by Mark Leslie and Charles Holloway.  Their hypothesis is that like manufacturing, sales must go through a sales learning curve to work out the kinks and shortcomings in the product, and to understand the most effective methods to sell the product.  Once that happens then it’s time to ramp up sales.  More importantly there’s no way to shorten the learning curve.  It varies in duration from company to company and it happens organically.

During the Sales Learning Curve your team will go through the process of learning how to acquire customers, what customers want in the product and the sales tactics that work.  Once you’ve been through the learning curve you can confidently begin ramping sales.

This process unfolds in three phases, each requiring a different size sales force that have different skills:

Initiation Phase - completion of beta testing and have few prospects.  Hire a few salespeople to learn how customers will use your product and to help other people in the organization refine the product offering.  These salespeople must be good communicators, tolerate ambiguity, have a deep interest in your technology, and can make their own sales models and tools.

Transition Phase - a critical mass of customers is acquired and sales are accelerating.  Keep the initial sales team focused on learning.  Now add salespeople who can operate within an evolving sales model, but don’t need to have the analytical and communication skills of the initial sales team.

Execution Phase - you’ve developed the formula for sales success.  Hire traditional salespeople and give them a territory, sales plan, marketing materials and price book.

The trick is knowing when you’ve transitioned from one phase to the next, and The Sales Learning Curve offers methods to identify when transitions are occurring.

If you are in a startup and feeling the pressure to add salespeople quickly, read the The Sales Learning Curve today.  It could mean the difference between success and failure.

I discovered CookZ while cruising through Flickr. CookZ delivers visual recipes. They’re still in beta and are adding to their content. The visual approach they’re using could be used to communicate complex B2B products. Check it out!

Software companies traditionally use a Beta program to expose the product to more rigorous testing by customers. Depending on the nature of the product it may be thousands of beta testers or in the case of enterprise software it might be a more tightly controlled number.

What’s often overlooked is the valuable market feedback that should be obtained and acted upon during a Beta program. That’s why Beta programs should be co-managed by development and (product) marketing. Each group brings a different perspective to the party that can ultimately result in a better solution that will generate more momentum at launch.

The Problem with Beta Programs

The problem with beta programs is that most are half-baked excuses for beta programs and here’s why:

• The size of the beta testing population is not large enough to get any meaningful feedback
• The duration of the beta program is arbitrary and too short, lacking specific milestones
• The beta program is run by Development and Marketing is left on the sidelines
• Gathering feedback isn’t a proactive process

It goes something like this. Development is pressured to get the product finished. Company practice is to run a beta program. Afterall, if a beta program is conducted then Development is off the hook because real customers used the product before is was released. Three customers actually give feedback and they are customers that have been using the product for years and tell you what you want to hear. The Beta program runs for the minimum required 4 weeks. The product ships and the larger population of customers complain that the features suck and don’t make any sense.

The Purpose of a Beta Program

The purpose of a Beta program is to get early market feedback on your product. It does not relieve you from the responsibility of doing a quality testing job. From a testing perspective the Beta program gives you an opportunity to test your product in “real world” environments and identify problems that can be addressed before you ship. The real value in a Beta program is to get customer feedback on the usability of the product, performance, perception of value and usage patterns. All of which help refine the message, positioning and pricing.

Do you know your buyers? Really?

Successful companies are successful because they have a deep understanding of their buyers and the problems they encounter on a daily basis (not just the problem your product solves). A rule to live by is that a good product manager will know her customers’ problems better than the customer does. And the process of understanding your buyer and the buyer’s problems is a continuous process. Better buyer understanding translates into better products - products that buyers want to buy.

It’s easy to spot a company that knows very little about its markets and its buyers. Their conversations focus on the features of the product. Little discussion is on the buyer and the buyer’s experience. Their explanation of their target markets is broad and lacks details. They use descriptions like “Financial Services” to articulate their target market segment.

Why do companies get into this situation? They have talented engineers designing and building cool products that don’t sell. They resort to discounting, assuming the price is wrong. Some individuals are arrogant enough to believe they understand the problem space based on a single work experience and that talking with buyers is a waste of time. Others are afraid to learn bad news. Still others are blocked by cultural constraints that prevent them from talking with customers. The only way to fix it is to engage in a conversation with your buyers and make it part of your culture.

Many product managers lament that with the demands of their position, they don’t have the time to talk with customers. That is a huge mistake. Marketing leaders know that a product manager that doesn’t dedicate time to meet with buyers is not going to be effective. If you don’t believe this to be true, you may be a conspirator to the problem and don’t realize it. You need to demand that your product managers dedicate a percentage of their time on meeting with buyers. The amount of time can vary but there should be an understanding that a minimum amount of time must be dedicated and it is a priority. When other activities prevent the product manager from meeting with buyers, someone needs to step in and fix it. Quickly.

Steps to a better understanding of your buyers

Call 5 customers each week - if you have a customer base use it. If you’re a startup and don’t have customers yet, reach out to individuals that could be buyers. Start your conversation with “Hi, I’m ________ and I’m a product manager for ________. I’m responsible for bringing new products to market and would like 5 minutes of your time to see if I’m heading in the right direction…”

Don’t lead the witness - when you make contact with potential buyers, be sure to ask open-ended questions that will ensure discussion. Don’t ask questions that will get you the answers that you (or your boss) want. Your goal is to create a dialog that will result in a better understanding of the market and the buyer. The moment you seem to be selling the conversation will end.

Don’t argue - it can be frustrating when the person on the other end of the phone doesn’t “get it”. Consider that maybe you’re not explaining yourself in a way that your buyer understands. Arguing with your buyer or implying that they are wrong is a waste of time. Your goal is to learn.

Document each discussion - who, when, and summary of the discussion. It may be helpful to create an outline to keep you on track and remember what information to capture (e.g., job title, reports to, department, how long in the position).

Attend an industry trade show as an observer - even if your company is not exhibiting. Use the opportunity to mingle, talk with other attendees, visit booths of competitors and partners, talk with analysts and media. You may not get this opportunity for another year.

Block out 1 hour per week researching industry publications - take those magazines and analyst publications and dive in. Tear out the articles and items of interest. Find out what is being discussed and why.

The analogy of a funnel is almost universally used to visualize how leads go through a process of qualification that eventually results in a sale. But everyone knows that not every lead result in a sale. A funnel implies every lead is squeezed and smashed through the bottom of the funnel. Wrong analogy.

Think of the lead qualification process like a series of rooms connected by doors. Some doors lead to other rooms but some lead outside. If a lead continues to have an interest in your product and the qualification criteria determines that they are still qualified, then they get to go on to the next room. Eventually the last room is where they purchase.

Now if the lead loses interest in your product or it is determined that it is no longer a qualified lead, it’s time to go outside. See ya. You got nothing to bring to the party. At least not for now. Those leads that bail or get qualified out may turn out to be qualified leads at a later time. Keep track of them for later cultivation. Mystery of the unqualified leads that are magically squeezed into a Funnel is solved.

What is your lead qualification process? What are the most important characteristics that define a qualified lead? Given those characteristics, how many actual qualified leads does your marketing efforts generate?

Technorati Tags: lead qualification process

Have you factored the implementation complexity of your product when establishing the price? By implementation complexity I mean the level of effort it takes for your organization to deliver the product to the buyer in a usable form. As implementation complexity increases you should expect to support a higher product price, as long as a corresponding value is delivered.

A simple way to illustrate this is with the following Product Price vs. Implementation Complexity chart.

The one quadrant to avoid is a product with a low price and a high implementation complexity. It’s a dead-end.

The chart below plots some products you may be familiar with and how they fall into the Product Price vs. Implementation Complexity chart.

Lower Price / Higher Implementation Complexity

The quadrant to avoid is the Lower Price / Higher Implementation Complexity quadrant. A product currently in this quadrant is GPS fleet tracking solutions. These are solutions that enable businesses to record and track the usage of the vehicles in their fleet. From an implementation perspective these are complex systems. A hardware component must be wired into a vehicle. It may require the installed of an external antenna. Once installed, the hardware must be tested to ensure it communicates over a wireless (cellular) network. Keep in mind customers rarely have all their vehicles in one place at one time, so it may require chasing vehicles to job sites often after normal business hours. Typically this requires a qualified technician to perform the installation with coordination from a customer service rep to verify the system is working. Vehicle by vehicle. After that is complete the customer needs to be trained on the use of the software. Customer service issues are chronic and unavoidable. Wireless coverage is incomplete and results in customer confusion. GPS units break. Employees find the units and try to disable them.

From a business model perspective the GPS fleet tracking businesses appear to have tremendous potential. Unfortunately few have delivered on that potential, are poorly capitalized and lose money. One shining example is Qualcomm. Qualcomm carved out a profitable niche with long-haul trucking companies and they charge a premium for their solution. More recently the sale of @Road to Trimble was engineered by founder Krish Panu. The exit was perfect timing.

For some customers GPS fleet tracking systems provide extraordinary value. Unfortunately the industry was heavily influenced by executives from the wireless industry that brought with them a low price/high volume philosophy. From the beginning they established commodity pricing long before there was justification to do so. Given the complexity described above, the typical selling price for these systems should be higher. The hardware sells for around $500 which often includes the installation cost. Monthly fees are charged for the use of a hosted software application and airtime (cellular data transmission) in the $20 to $30/month per vehicle range. Margins are thin and can be wiped out by just a few service calls. Qualcomm commands a price that is significantly higher and justifiable for the value they deliver.

So what can be done when your product is in the Lower Price / Higher Implementation Complexity quadrant? Two things. First, find a way to charge a higher price. You may able to do this by carefully segmenting your markets and identifying where delivering a high value in a segment can justify a higher price. Second, lower the implementation complexity. Carefully analyze your implementation process and find opportunities to simplify implementation.

Summary

Understanding where your product fits in the Product Price / Implementation Complexity continuum can give you tremendous insight that can help you with pricing and deciding on the most effective sales channels. If you’re in the no-mans land of a low price/high implementation complexity you need to identify a strategy for moving out of the situation as quickly as possible.

Technorati Tags: implementation complexity, Product Price, GPS fleet tracking

Why is Services Marketing Different?

Marketing services is distinctly different from marketing products and requires a different approach. Within the technology space services exist as a standalone business such as IT Services and as a supporting component of a product, such as training or implementation services

In this post we’re going to examine the characteristics that make the marketing of services unique and look at techniques that can be used to grow a services business.

Selling the Invisible

Services marketing is often referred to as “selling the invisible” because the buyer purchase is intangible. Services are not physical and cannot be possessed or inventoried. Additionally, there is nothing you can do to make services tangible.

Delivery Cannot be Separated from Production

People deliver services and the production of the services cannot be separated from the production of the services. Examples would be a haircut, a medical exam, installing software, or diagnosing a network problem.

Quality and Consistency Vary

Service quality and consistency are subject to great variability because the delivery of the service can change so much due to people factors and due to customer requirements. Ultimately the buyer will never know for sure how good the service is until it is delivered.

Delivery Involves a Process

Usually there is a process involved in the delivery of a service, either formally or informally. In the case of Launch Clinic, we use the Product Launch Framework as a methodology for planning and managing a product launch.

Pricing May Vary for Similar Services

Pricing may very for similar services

Techniques to Consider

If you are early in the process of getting your services company off the ground you will want focus on a few items that should make a significant impact on your selling process.

Reputation of the Founders

The early gigs you get for the services you deliver are going to be on the strength of the founders’ network and reputation. Work your network to get those initial customers and do whatever it takes to get testimonials and references.

Have a Documented Methodology

As a service provider you should have a documented methodology that you use to deliver your services. The methodology demonstrates your approach to delivering the services that leaves an impression in the buyer’s mind that your process isn’t open ended. The methodology tells your buyers that you know what you’re doing and you’re not going to “wing it”.

The methodology helps to convey to your prospects that you will deliver a level of quality and consistency.

Customer References and Testimonials

For a service provider nothing can have more impact than when your customers lavish praise on your company’s ability to deliver. Work carefully and methodically to cultivate and document that praise and don’t be shy about sharing it with your prospects and other influencers. The best way is to ask and to keep vigilant for testimonial opportunities. Think “Can I quote you on that?”. The quotes an be used on your web site, in your marketing materials and in your sales process. It’s easily one of the most important things you should strive to achieve.

Focus on the Value You Deliver

Customers want to know what you can do for them, not what you do. Depending on the service you deliver it may be important to indicate which technologies your team is competent with. However, it’s more important to convey the value you can deliver and why your company is the one to deliver that value.