Building Successful Products That Sell

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A successful company’s product portfolio connects well implemented technology to their customers’ business-needs.  I’m a Product Marketing Leader known for commercializing products and delivering programs that drive sales – excellent at understanding where technologies address business issues.

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Idea, App, Product, Business

Pitchfork of moneyAnytime developers get together, discussions will range across the spectrum of app status and financial valuations.  Even the VC community talks about their latest find and how it will be the next blockbuster. Some folks believe they have a great idea that just needs some coding tweaks to become the next big thing that will make them tons of money – fantasy status to the smart financial folks.

Substantial prospects start only when the idea becomes an executable app.  Few people can actually visualize at a conceptual level, even when talking to the best of story tellers. Those who can visualize will want tangible evidence that demonstrates viability and usability. There are few truly unique concepts.  The real differentiator comes with execution and scalability. Working code is not an app either.  Only code that has been sufficiently tested can be called an app.  Without adequate testing, it is a science project with potential. The app level needs a system for provisioning a user. Nothing is more frustrating than no ability to get to market – ‘for want of a nail.’

Once the app is complete, it could move to product status.  The major differences are that a product has infrastructure systems servicing the multiple constituencies. These systems start with scalable provisioning, then add billing, documentation, and customer service for example. Infrastructure needs integrated testing and end-to-end performance validation.  Too often there is fundamental failure to acknowledge, or understand, the need to service the customer. Bad experiences with the first few users kill prospects for winning evangelists for the product growth. Value ties to sales, which requires awareness.

A business starts with organized efforts and materials in the product’s go-to-market plan. Without sales – no customers and no revenue.  Further, a business has broader offerings than a single app. Business implies more products, accessories, upgrades and related offerings. When the dot com bubble burst, several found they had products at best, not a viable business. Higher valuations come with long term prospects. Products built to address a market need or business pain point always have a future. Technologies are just glitter that gets replaced over time.

Currently in the software markets, the ultimate business is a concept that becomes a platform. Think about search engine Google, messaging Facebook, and directory LinkedIn. Other high valuations come with key, market access capabilities like WhatsApp.

Stage Indicator – maturity range Valuation(1)
Idea Mental fuzzy concept to working alpha code Big bucks – with board game maker name printed on them
App Customer trialed beta code to listing in an app store Percentage of dev. costs and whatever else you can get. (Price and value are not the same.)
Product App selling well in store supported by business systems for finance, sales development, customer support, messaging,
Business Multiple apps with extensions accessories and affiliate sales in store and supported by business systems for finance, sales development, customer support, messaging, etc. Multiples of 5-10 X annual earnings, to more money than can be hallucinated.

(1) For a serious overview on valuation, see ‘Valuing Startup Ventures’ by Ben McClure on Investopedia.com (http://www.investopedia.com/articles/financial-theory/11/valuing-startup-ventures.asp)

The Whys Presentation, a foundation

ColonialResentTelling stories is a popular format for presenting material that’s easy for a listener to understand.   In trying to raise funds or to make a sale, the presentation needs engage quickly, and be succinct. The presentation won’t close the deal, but it does open the discussion that leads to a deal.

Here are why questions to focus your story’s content for better engagement.

  • Why does the market have the issue you’re trying to solve?

The foundation to any business product’s value is how it addresses a business issue. Useful is better than cool to business.  It’s not enough for one company to have an issue or for the issue to be occasional.  Address the business issue and not the technology.

  • Why are you talking to me?

If the audience doesn’t see a reason for their involvement, they’re lost in 15 seconds. The other side of this question is knowing your expectations from the audience.

  • Why hasn’t someone else come up with a solution?

Everybody likes to think they have a unique idea.  Typically, the difference between ideas is execution. If you’ve identified a real issue, clarify why yours is the best answer. Listen for feedback to understand where the story can be better developed.

  • Why won’t markets use another way to make a fix?

Clearly state the alternatives. They exist, including doing nothing. Enumerate the advantages and vulnerabilities to the options in a manner that puts your product in the best light. Customers can be ingenious at taking your observations, then developing their solution.

  • Why won’t somebody copy your product or idea? 

There was a time when development and set up expenses inherently built long delays into product knock-offs.  Patents are not ironclad protection and will be expensive to defend. The best medicine here is to be good, be fast, and be likeable.

  • Why will prospects buy from you?

What is there about your organization that makes it compelling as the provider for the solution?  Know your efficiencies and explain in simple, short terms. Beware of talking yourself into a hole from which you can’t deliver.

  • Why is your team the right group to run the business?

It’s one thing to have an idea and build a good beta product. Demonstrate that your staff and organization understand the industry issues as well as how to execute reliably.

  • Why should anyone put their money into the venture?

A customer wants to see financial improvement from their operation.  The investor wants to see a return on the money. Demonstrate character and responsiveness that validate the contribution from the product. A smart VC will want to know why you need their money, but more importantly, what else they can contribute to the business.

  • Why don’t you have more customers today?

The best validator for a product is paying customers.  Other customers feel more comfortable if they feel others have worked through the development issues and found value in the product. They all want to be early, but none wants to be first.

 Investors use the same gage to validate their participation. Tongue in cheek, they call it, the greater the fool theory. “I might be nuts to buy in, but somebody else did too, and someone else will pay more than me.”

 With answers to these foundation questions, the base content is available to build the VC pitch and sales support materials. Listen carefully to the questions, which are actually golden insights. Be sensitive to time because no audience will stay engaged forever.  Remember that in the end it is a story with a hero. Make your product the hero. The best presentations are more story and dialog than diatribe.

Related reading:

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Launch Readiness Review – Bakers Dozen Checklist

Michelangelo reportedly said, “A detail doesn’t make a masterpiece.  A masterpiece is made of details.” Similarly, a successful product launch needs to have the details in the functional ecosystem fully prepared.  Products successfully pass rigorous testing, but the support and enabling systems only get marginal review.

Once engineering says the product is fully market ready, it needs trialed in the production environment.  Any adjacent processes, applications, or services in the production environment need performance validated.  Of course, this includes the human support systems being fully trained and apprised of what is expected.

Order entry, CRM and sales commissioning services connections to billing and payroll need proven. (We had an experience that uncovered a rogue, order entry system in one region.)  If there are any royalty payments associated with the product, those need testing and validation to be audit worthy. No matter how many products have launched before, each addition or change needs systems validation.

Here is a quick baker’s dozen checklist to review before making any sales announcement.  Customer satisfaction starts with ordering and activation.

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Product Marketing, no really what is it?

Over the last week, I’ve had conversations with several people who do related but different jobs that all think their job is product marketing. I talked to a marketing communications person with a journalism background who writes papers, articles, manages a website, and believes that’s product marketing. An engineer that develops product, and occasionally talks with customers also believes he is product marketing.  Designers fall into a category similar to engineers. The salesperson who meets with the customers is convinced that’s product marketing and thinks he knows all customer wants.  So the question becomes, what really is product marketing?

Peter Drucker said, “The role of a company is to attract and retain customers.”  He requires these customers generate revenue that support continuing operations for the company’s stakeholders.  This means there’s also a financial element to product marketing.  I haven’t yet had a finance person tell me they were product marketing. The key word here is yet, and I don’t work in financial industry.

The best answer comes through a position balancing across functions with all of these groups.  A solid product marketing person brings together internal and external resources required to develop, maintain and grow products that address customer needs.

A salesperson builds relationships with the customer to understand their business environment including, the technology and people.  The communications person polishes the product capabilities story for market viewing consistent with the company’s branding and image.  The engineer and designer are more the manufacturing side to the final product.  Each of these components is important and valuable to the company to service a customer.

Key performance indicators reflect how each of these roles are more accurately defined.  I’ve had salespeople call, excited because they wanted a bigger price discount for a marginal account.  They were quota driven instead of profit oriented.  Marcom people do a fine job of generating customer interest, but don’t always understand nuances as to why the customer is interested or how the product fits the business operation.  They measure themselves in numbers of leads.  All too often those leads are little more than names that came to get a freebie or maybe read a paper. Designers and engineers frequently measure themselves in terms of product features, coolness, lines of code, and other things that don’t clearly address market needs.

Product marketing leads this team of groups to establish, maintain and grow a balanced product portfolio.  The balance requires a profitable basket of products that address a range of opportunities in the customers’ value chain.  When we first launched data products on mobile phones, we had a dozen candidates that did essentially the same thing – tell a worker about the next delivery or pick-up.  To broaden opportunities, products for time records, asset management, and project management were added to the portfolio.  This broader product line allowed the partners to also profit by not competing for same target customers.

The challenge extended to helping the sales team understand the differences.  Where the retail channel sold commodity voice service, data solutions required deeper understanding of the applications and the customers’ industry. Product marketing translated features into customer benefits and created selection guides.  The business sales teams brought back issues their customers started sharing as those customers now started to perceive us as interested in their business.

Designer/engineers brought great new ideas and capabilities to the party as technology improved. Processor, memory, display and transport improvements each expanded capabilities.  Product marketing focused on what customers would pay real money to use.  At times, the slow response frustrated the engineer.  Other times, we had to work with customers and sales to recognize the value. Putting the mobile Internet in a field person’s phone was initially perceived as a distraction from productivity. We had to share the broader vision and value to the capability.

Product management works months or years ahead of today’s sales goal.  This means bringing new technologies, practices, and capabilities into products in a timely fashion. Too early means long sales development.  Too late and the market has moved on.   This requires a balance across customers’ with capabilities for offerings that meet their needs, which translates to a reason to buy.  Financial issues around pricing, prospects and profitability are significant enough to deserve a separate post later.

I’m interested in your thoughts and experiences in the role for product marketing.

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Do you have a hidden product?

Last week I attended a Tech Breakfast in AOL’s offices with several start-ups and government contractors.  Once again, I heard comments that made me wonder how many companies have similar issues.  A Business Dev. person talked about having many projects that tend to be repetitive of the same basic services.  A few minutes later, he talked about how sequestration slowed business. He also commented that agencies were able to buy products, but they couldn’t hire contractors.

Especially with government, contractors working in security audits and security reviews have similar programs that they run for multiple groups, each based on separate RFPs.  As they describe it, they bring in techs who run the same test series such as those for security breaches and firewall connections.  Even the sales folks talk about how it’s a routine project that the text find pays, but is not particularly rewarding.

The work is routine and has the ability to be scaled.  If the contractor could productize what they are repeatedly doing, they could improve margins and reduce cost for their customers.  From what I hear in the descriptions, it sounds like these organizations do the same things without realizing potential efficiencies.  They’re doing things the way they’ve always been done.  By putting product definitions and an ordering process in place, they could make life better for everybody.

The classic contracting practice is to sell an original base, then charge for add-ons, changes and scope expansion. It might help to recognize;

  • Core efforts commonality
  • Typical, common add-on modules
  • Cross group commonalities

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CRM what does it mean to your company?

CRM ConnectionsCRM is a term so many folks use differently that it has no clear definition.  In the late 90s, I asked friend of mine with a manufacturing software company for their definition.  For them, it meant Customer Resource Management.  The company’s order entry product needed updated as hardware and operating systems upgraded. So for the new version, they changed the product name from order entry to CRM.  The order entry product followed from product scheduling, which came from the material planning application, which came from inventory control.  A number of upgrades were new coats of paint on internally focused products. Yes, there were new features -you get the point.

Today, most folks take CRM to mean, Customer Relationship Management.  By definition it implies that there’s a two-way commitment between the customer and the vendor.  This means value flows both directions.  In reality companies don’t buy from companies. People in companies buy from people in supplier companies.  Salespeople have a leading, significant role in this relationship, generally developed over a history of being credible and helpful.  I wish I were astonished when I heard last month, a friend of mine’s recent employment story.

The Fortune 200 company, he’d been with for 15 years decided that it no longer valued the line of business where he sold and been well compensated.  With two kids in college, my friend still needs a job and income.  Through one of his college friend, he learned of an opportunity that sounded good.  The new employer, an IT consulting firm, wanted to break into manufacturing markets.  They offered my friend reasonable base pay with high commissions prospects as deals closed.  My friend has a deep and wide Rolodex in big-name manufacturing operations. He had used his engineering and IT background to help them over several years.

On his sales calls, the new employer included a third-party, on the seemingly reasonable guise of making sure the sales process and capabilities were correctly represented.  After about six months, while the large dollar projects worked through the approval stages, the new employer fired my friend.  They thought they no longer needed him.  The company had the third-party who had joined all the calls and now knew the contact names with the discussion details.

When the prospective new customers found out the person they knew had been cut, they no longer trusted the new company. Further discussions stopped – cold.  Now consulting company’s tagalong representative and president have jobs in jeopardy for not understanding the value of relationships.  (You have to wonder if the company doesn’t also have a questionable future with the tarnished reputation.)

When I was in Monsanto’s planning group, there was an inside joke that new sales reps had their reports filed before they got back to their car. With the major customers there were multiple personal connections, up, down and across functions. Sales people knew buyers sure enough. Product people knew brand managers. Also, operations people, logistics people, even QA groups had cross contacts.  Each of these groups visited the other’s facilities and spent time talking.  In good years, there were even some joint outings.  People who understood and trusted each other were better able to adjust to late shipments, delayed orders, spec. changes, quality issues and order scheduling – the stuff of regular business.

Now think about the CRM system and business practices in your operation.  Does it really foster relationships, or just manage materials?  CRM is more than software.telegraphkey

MoDev-DC Social Media Week 2-21-13

MoDev DC LogoMoDev-DC joined the Social Media week theme this week.   Presenters covered topics from user privacy to a panel on the general topic of social media impact.  The session opened with Pete Ericson announcing new affiliates in Austin and Hong Kong.

Morgan Reed from the Association for Competitive Technology (ACT)  talked about the ongoing discussions in DC regulatory circles concerning User Privacy. At previous meetings, Morgan has strongly stated the need for companies to have a written and easily accessed privacy statement.  Current debates revolve around not only the disclosures Privacy Dashboardrequired, but also the user interface even before getting to the application.  Legal types advocate an arduous document that in all probability users would skip.  There are also debates around where the information would be disclosed.

The perception is developers want no privacy statement or at best to have it available from a link in the application.  The legal types want to require reading the detail statements even before downloading the application.  The preferred delivery is to make the information available as part of the application installation and setup.

Todd Walderman, Ryo Games, spoke about the business of mobile applications, especially around the market for under 13 year olds.  He is also working to offer Wovenly™, a tool that helps developers make money.  Todd is developing these analytical tools for base lining, then optimizing channels. He emphasized that retention is key to profitability.  The stages to value are:

1) Acquire,

2) Convert,

3) Up-sell, and

4) Retain.

The difficulty of getting recognized to even acquire a customer gets plenty of attention.  Todd emphasizes that the money only comes in converting the ‘free version’ user to a paying customer that sticks.

The third presenter, Jeremy Pennycook from NPR, talked about how social media is changing the web experience.  His primary point related to how users are accessing web sites everyplace, not just through the traditional home page.  Content is delivered by users via embedded links and links shared via cut and paste through chat sessions, called ‘dark social’ connections.  The current thinking at NPR is to consider the website a public space like a public park, where people decide to use it for their own purposes.  There are multiple interest paths available to users’ selection.  The waypoints he named are context, content, and continue.

The final session of the evening was a panel discussion around social applications and interactions.  Facebook, Google, Amazon and Apple are viewed as so big that they can withstand catastrophic failures and still survive.  Twitter was part of the discussions but not referenced as a central force in social.  One panelist was dismissive of Google+ and LinkedIn was given only a passing reference.  Pinterest is still in question as a product, but may be the start of a trend for curated content sites that will be adopted by others.  Amazon was called the best untold story in technology.  Their Kindle is a competitive device, where the Nook is fading from lack of marketing support and development.  Amazon also has customer acceptance of its use of big data used to profile customers to target ads and behaviors.  The Washington Post teased about an upcoming application for the Cherry Blossom Festival where Instagram photos will be aggregated.

Of note was the absence of Blackberry in any discussion.  Google and Apple were primary platforms.  Windows 8 was only recognized during an audience poll about development.

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