After working with a variety of Fortune 1000 and emerging growth companies, it is clear that the Product Marketing function is often less than optimal in most organizations. Specifically, the root causes uncovered in the majority of ten Product Marketing audits performed can be clustered around six particular “breakage points”. The good news is that each breakage point is manageable and, if harnessed, can be directly correlated with improving the effectiveness of Product Marketing and should lead to market penetration, increased revenue and profitability.
Science of Product Marketing – Breakage Point 1: Aligning the Organization
The first step in setting your Product Marketing function up for success is to ensure the goals, objectives and strategies of the function are aligned with those of Marketing and the overall organization. Think within the framework of an organization chart-now imagine the top box summarizing the organizational objectives for the year and feeding the subordinate boxes the strategies for achieving those objectives. This framework provides direction, a “True North,” for the organization to rally itself around when tactical decisions must be made.
The next step involves the Marketing team reviewing the company’s objectives and strategies and documenting where and how they will support the company’s plan. In most situations, Marketing will not have a direct role in facilitating the achievement of every objective and/or partaking in every strategy. However, there will be certain efforts that fall squarely within Marketing’s domain. For example, Product Marketing should be required to document its plan explaining specifically how it will support the overall go to market plan. Once this task is accomplished, a vision of what is expected and when it is expected becomes clear and provides the guiding light for managing tactical issues that will arise during the course of the year.
Science of Product Marketing – Breakage Point 2: Establishing the Market Strategy
Establishing, reviewing, updating, communicating and executing market strategy constitute the core of the company and dictate whether or not a company is successful in the long-run. Initially, sizing the market opportunity may seem to be an overwhelming task until it is accomplished and attention turns to where the point of entry in the market will be, what the adoption rate will be and how this foothold will be leveraged to overtake the vast majority of this market. Deeply understanding your market, the competitive players in the market (doing nothing, a homegrown solution and/or knocking off a budgeted item can also be considered competition) and the needs and requirements of the decision makers, approvers, influencers and recommenders is paramount. Collaboration between Sales, Development, Services, Support and Marketing is critical because it is the only way to secure customers and make them successful such that they can be leveraged to acquire additional customers.
Once the initial beachhead is secured (typically an industry, geography, size of company, etc.), attention needs to be directed to the next domino to fall in the quest to become the market leader. If there is unanimous agreement within the organization about the end game, the steps to get to integrated objectives and strategies are followed in a well-thought out plan with relentless abandon, with success becoming imminent.
Science of Product Marketing – Breakage Point 3: What is the Goal of the Development Effort
The development of a product all starts with an idea followed by a solution and hopefully results in a satisfied customer. The task of deciding what to develop is difficult in the beginning but gets even more complicated once that initial success has been achieved. This complexity grows exponentially when there are many markets, industries, customers, partners and concerns that can fulfill the same value proposition. Providing functional benefits for end-users and strategic value for economic buyers is one of the greatest challenges. Expenditures by the CIO need to be justified to achieve a company’s strategy, fulfilling the corporate goals set by the Board must be explained and how the investment can satisfy Wall Street enough to influence the stock price will rise are all issues that must be addressed. The number of developmental efforts required to solve every need for every business is infinite and must be tamed by a process to be manageable.
One approach to tackle this problem of manageability is through a new product development process-not the kind of process that requires committees and task forces to write binders of “information” that sits on the shelf, but a truly dynamic and interactive model to facilitate discussion. To create such a model, one must ask the basic questions including:
- What are we trying to accomplish with this development project?
- Is the goal to fix a release of a product that is not providing the value it was promoted to solve?
- Is it to decrease the time needed to implement the solution?
- Is it to add more value than originally promised?
- Is it to move to additional customers in the same market or to open up a whole new market?
This first step that is critical in order to marry the organization around a common focus and to set accurate expectations both internally and externally. ￼
Science of Product Marketing – Breakage Point 4: Organizational Readiness
If the element of surprise is a useful tactic in securing victory for a nation during wartime, why would an organization use this key factor against itself in the launch of a product or service? Our research has shown that months before and all the way up to the launch, employees across the organization could not consistently and accurately answer basic questions about a new product/ service (product name, pricing, positioning and messaging) and did not know where sales tools (demo, white papers, ROI analysis) could be found. The underlying theme that consistently ran through the organization was that most information about the launch was an unknown-a surprise.
The best examples of organizational readiness came from companies that had the Product Marketing team engage representatives from each function within the company to build and share the same passion and vision. Meetings to initiate this passion began as soon as a development project was kicked off-before the market requirements document was created and continued throughout the end of life process. The basic premise of these meetings is to create an understanding of what is required from each function to successfully launch the product/service and to learn from past experiences such that institutional memory is created, and teams are not trying to reinvent the wheel.
Functional needs are clustered, segmented and ranked, prioritized and spread across the development cycle from concept through end-of-life. Deliverables are created with detailed project plans with clear owners, budgets and timelines identified and with consistency in regards to the new product development process. As the development of the product/service progresses through the development cycle, the needs of each functional group are met or exceeded at each phase-the organization becomes ready at each phase of development.
Science of Product Marketing – Breakage Point 5: Go-To Market Plan
The foresight and insight that leads to the development efforts must be resurrected, leveraged and energized to successfully penetrate the market. Efforts include developing a market backgrounder; market, product and feature requirements; and Go-To Market or product introduction plans. This information will need to disseminated to a wide audience ranging from internal groups (functional teams) to external individuals (customers, prospects, partners, analysts, press, etc.).
The knowledge of Product Marketing needs to resonate in the demand creation and management activities in order for the offering to have a legitimate opportunity to reach the revenue targets that have been established. A deep understanding of the pain and the old manner in which it was addressed, the vertical industries that are most impacted, the companies that have tackled these obstacles and the strategic and tactical economic impact that results in the new offering being implemented need to be addressed. The channeling of this knowledge into creating rich demographic and psychographic profiles of the targets, meaningful messages that resonate to the target audience, compelling offers that show benefits and thought leadership and penetration into the people and communication vehicles that influence purchase are the factors that will directly affect the offerings overall success.
Science of Product Marketing – Breakage Point 6: Conversion in the Pipeline
At the end of the day, there is a very clear metric for whether the product development effort was a success or not-has revenue been generated? At a high level, there should be a revenue target; depending upon the objective of the new product this can vary widely. A forecast should be established for the year and quarter, with cross-sectional data for industry, geography, distribution channel and application being even more beneficial.
In the end, if results exceed expectations, the only questions that remain are about promotions, bonuses and stock option grants. If performance is below expectations; however, the scenario generally turns into the blame game-Development suggests that Sales does not know how to sell the offering; Sales indicates the product is too expensive, lacks functionality and does not fulfill the promise; or Marketing claims there was not enough time or money to properly develop and/or launch the product or service. One way to objectively isolate the problem is to examine the sales funnel and the conversion rates between the phases within it. Internal information that can highlight response rates, lead and qualified lead conversion and how a lead converts to a deal are all critical issues to be addressed. In general, the conversion rates should increase as you move down the funnel. Weak conversion rates at the top of the funnel tend to suggest communications and lead generation issues. On the other hand, if the inconsistencies occur near the bottom of the funnel, the pertinent issues usually revolve around the product (functionality, pricing, performance, etc.).
The point is that sales are a significant cost (time and money) and developing a prospect only to have your competition close them is the worst of all situations. However, with some due diligence, active participation and collaboration within the organization, effective sales tools can be built and deployed to increase the effectiveness of closing each opportunity in your funnel.
In the case that managing the six breaking points discussed has not completely overwhelmed the Product Marketing organization, there is still more to consider. Product Marketing is a very visible role, with its constituents (sales, press, analysts, customers, prospects, etc) being quite open, opinionated and verbal. Each of the deliverables that Product Marketing is responsible for (including product roadmaps, Go-To market strategies, positioning and messaging, collateral and content for demand creation programs, sales tools, sales training, pricing and anything else that has to do with the product), is on display for all to see and comment upon. The Product Marketer’s job is never done, and the bar is continuously raised by and for an insatiable audience. ￼
If you are creating, restructuring or enhancing your Product Marketing function, these six breakage points must be addressed up-front to establish a strong foundation:
- What are the goals of the group and the strategies to achieve those goals?
- Are they consistent as you move down the organization?
- Is there a clear market penetration strategy that the organization supports?
- Is there agreement within the organization as to what is being developed and why?
- Does each function in the organization have what it needs to be successful at launch?
- Is there a comprehensive and integrated go-to market strategy that will produce the desired results?
- Are sales tools in place to allow the organization to optimize each sales opportunity?
And remember, the end result of all this work should be that each offering introduced to the marketplace should lead to increased revenue, profitability and market penetration.
Visit fourquadrant.com for B2B go-to-market resources.