annual product management salary survey 2003 · 2003. 1. 7. · “product managers” weren’t...

Vo lume 2 Issue 1 J a n / F e b 2 0 0 4

Annual Product

ManagementSalary Survey

Results

Monitoring Metrics Puts You in the Driver’s Seat

High-Impact Product Management: Creating and Measuring Product

Management Success

Integrating Users into Product Development

Technical Sales vs. Marketing

2003

1 • productmarketing.com • January/February 2004

I am frequently asked whichPragmatic Marketing® seminarwould be most appropriate for a given group of people in alarge high-tech company. Theyoften identify two groups of

product marketing people within their organization.

The first set is comprised of what isusually titled as product managers. It is not unusual to find that the functionthey are performing is to coordinate with Development in arranging projects,prioritizing bug and enhancement requestsand just being the resident product expert.They work closely with Development andrarely, if ever, visit customers, evaluators, or potential prospects.

The second collection of marketersencompasses communications peoplewho creatively take the message to the market. Generally, in high-tech, werefer to this department as MarketingCommunications, or Marcom.

Recently, a company organized in thisfashion asked me which training wasmost appropriate for the second group—the Marcom people. They assumed thatour Effective Marketing Programs seminarwas the perfect fit, but wanted my advice.After listening to how they were organized,I said I only had one question, “Who’sgonna be the product manager?” Puzzled,they said, “Well that’s simple, the peoplein Development with the title of product manager.”

I explained that just because they havethe title of product manager, doesn’t meanthey are doing the job of a product manager.The effective implementation of this roleincludes lots of time outside the office,bringing in unresolved problems fromboth people who own your product aswell as the ones who have yet to buy it.

This information is critical to the directionof the product, and becomes the basis for the positioning, ultimately driving themessage that Marcom communicates. Ibroke the bad news to them that their“product managers” weren’t accomplishingthe job of product management.

The good news is that it really doesn’tmatter who does the job of productmanagement. Someone needs to knowthe market and its problems. Is thisProduct Management? Is it Marcom? Is it someone else? It would be nice if the titles aligned, but it isn’t mandatory.Almost anyone can do the job if theyhave a fundamental understanding of capabilities of the product and have the time.

So, if you want your Marcom people toassume the role of product management,and they meet my criteria for the job(market and product knowledge, and thetime), then that works for me. The nextundertaking is to explain to the Marcomstaff why they should attend both PracticalProduct Management™ and EffectiveMarketing Programs™. The first seminarshows how to understand the market and their problems; the second is abouthow to take the product to market.Occasionally, there is some push-backwhen Marcom people are asked to attendproduct management training. Once theyunderstand that they are taking on acritical, unfulfilled role within thecompany, they embrace the idea.

Craig StullPresident and CEOPragmatic Marketing, Inc.

The effective implementation of

this role includes lots of time outside

the office, bringing in unresolved

problems from both people who

own your product as well as the

ones who have yet to buy it.

Who’s gonna be the Product Manager?

productmarketing.com • January/February 2004 • 2

Inside this issue:productmarketing.com

16035 N. 80th Street, Suite FScottsdale, AZ 85260

President and CEOCraig Stull

Pragmatic Marketing, Inc.

Managing EditorKristyn Marathas

Contributing WritersSteve AugustSteve JohnsonBarbara Nelson

Rick TathamWerner Wingen

No part of this publication may bereproduced, stored in any retrieval system,or transmitted, in any form or by anymeans, electronic, mechanical photocopying,recording or otherwise, without the priorwritten permission of the publisher.

productmarketing.com™ is available free of charge to qualified subscribers. For subscription inquiries or back issues call (480) 515-1411; or visithttp://www.productmarketing.com

For advertising rates, please call (480) 515-1411.

Other product and/or company namesmentioned in this journal may betrademarks or registered trademarks oftheir respective companies and are thesole property of their respective owners.

productmarketing.com is a trademark ofPragmatic Marketing, Inc. Printed in theU.S.A. All rights reserved.

About Pragmatic Marketing, Inc.

Based in Scottsdale, Arizona, PragmaticMarketing, Inc. was formed in 1993 toprovide product marketing training andconsulting to high-tech firms by focusingon strategic, market-driven techniques.Pragmatic’s training courses emphasizebusiness-oriented definition of marketproblems, resulting in reduced risk andfaster product delivery and adoption.Since its inception, Pragmatic Marketinghas successfully graduated over 24,000product managers and marketingprofessionals, and was named one of the Inc 500 fastest-growing companiesof 2000. For more information aboutPragmatic Marketing and its courses,please visit www.PragmaticMarketing.com or call 480-515-1411.

™

Special Features Vo l um e 2 I s s u e 1

3 Monitoring Metrics Puts You in the Driver’s Seat

Learn to focus on key performance indicators to find what is on track and what needs to be changed before it is too late.

7 Annual Product Management Roles & Salary Survey 2003

The results are in and show that salaries are up. Read more about statistics and comments from 2003.

11 High-Impact Product Management: Creating and Measuring Product Management Success

A discussion about how to measure the impact of product management, the need to be proactive, and key elements andconsiderations for successful product management programs.

17 Debugging the User Code: Part IIIntegrating Users into Product Development

This conclusion of a two-part series explores the impact and process of incorporating users into product design/development.

25 Technical Sales vs. Marketing

Identify the differentiators between marketing and technical sales to sweeten the message to your customers.

In This Issue

1 Who’s gonna be the Product Manager?

15 The Pragmatic Marketing® Framework

In this issue, we examine the activities that can make or break a product launch.

• Launch Plan• Market Messages• Lead Generation

20 Ask the Expert

27 Book Reviews

Reviews of two must-have books for a product manager’s library.

28 Case StudyKinderstreet – Start-up Software Company Learns to Listen, Listens to Learn

31 Calendar of Upcoming Pragmatic Marketing Seminars


Edward Deming, the quality guru,says, “You cannot manage whatyou do not measure.” Maturebusinesses rely on metrics togauge product performance in themarket, as well as monitor thecost of building the product.

Product managers in technologycompanies typically don’t spendenough time analyzing productmetrics. The numbers aresometimes hard to obtain and thevolume of tactical activities theyare faced with is overwhelming.When they do manage to carveout the time to figure out what’snext, they don’t know where tobegin. As companies downsize to bring expenses under control,more work piles up on the alreadyoverworked product managers whoremain. And yet, executives expectproduct managers to run theirproducts like a business.

In the fast-paced world oftechnology, product managersneed to balance time-to-marketpressures with risk mitigation.Market analysis, which takes timeto do, is simply done to mitigaterisk—risk that you’re buildingsomething no one wants; risk that you can’t deliver somethingto the market profitably.

In mathematical terms, there areinfinite things to measure andanalyze. But, in the world ofpractical product management, we can’t measure everything. We need to focus on a few keyperformance indicators (KPI’s)that give us feedback that we are on track or indication that weneed to make changes before it istoo late. The question is, “Whatshould I measure and analyze?”

Think about your car. It has gaugesand dials and displays. They providemeasurements or metrics. But whichgauges do you actually need tounderstand and monitor? For thenovice driver, the speedometer isthe first gauge you learn about.

How fast are you going? Youcompare that to the speed limit.As you drive, you monitor yourspeed and either accelerate ordecelerate based on externalconditions. Another gauge a novicemust understand is the gas gauge.How far can you travel before yourun out of gas? You learn to plana trip to the gas station to fill upthe tank before it is empty. Theodometer tells you how far youare traveling.

As you become more proficient,you start paying attention to othermetrics such as oil level and tirepressure. A car buff or professionalrace car driver cares about oilpressure and revolutions perminute (RPM). When you takeyour car in for routine service,your mechanic will check thealignment, the timing, fluid levels,and will probably perform a 20-point computer-based analysisof other “systems” in your car. But normal drivers don’t need to know about these when driving around town.

Just as we need gauges andmetrics for operating a car, weneed similar metrics to run aproduct. This article highlights ten product metrics that productmanagers should monitor. Somegauges are harder to find or seethan others, but all provide insightinto either how well the productis performing in the market orwhat impact the product has onthe organization. The focus of thisarticle is on business-to-businesstechnology products soldprimarily through direct saleschannels but can be applied toany technology product.

For any metric, you should firstestablish a baseline measurement.Then, keep track by period(weekly, monthly, quarterly, orannually) and observe the trends.Establish goals and measure howyou are doing. If you are notmeeting the goal, find out why.

MonitoringMetrics Puts

You in theDriver’s

Seat


MonitoringMetrics Puts

You in theDriver’s

SeatBy Barbara Nelson


And remember, the answer to thequestion is probably not in thebuilding. Leave the building andinterview customers and potentialcustomers to find out what is going on. Once you have figured out what is going on, you will need a plan or a program to improve or change the situation.

The first one you should look at is thecustomer gauge.

New/lost customersHow many new customers are youacquiring per month? How manycustomers have canceled maintenanceor subscriptions per month?

These metrics tell you whether yourcustomer base is growing or shrinking.You need both of these numbers. You might have high customer retention(few customers ever leave you), but if you are not also acquiring newcustomers, eventually you might nothave enough business to sustain thecompany. Customer count is thespeedometer of a product. Fallingcustomer numbers indicate that theproduct will fail. This informationshould be easily attained from Sales,Customer Service/Technical Support, or Accounting. A more advancedcustomer metric is to calculate thelifetime value of a customer. Howmuch profit does each customergenerate? Go to Accounting for this. It is an important metric, but more like the computer-generated analysisyour mechanic does.

Product qualityProduct quality should be monitoredon an ongoing basis to make sure itdoesn’t become a serious problem. Setup a spreadsheet with either weekly or monthly statistics of the number ofdefects. A stacked bar chart can showtrends over time.

For released products, Technical Supporttypically keeps track of open defects.As soon as a product is released, it iscommon for the number of defects to

go up as more people use the product.If the quality is high, it should be amanageable number and should settledown after awhile. For unreleasedproducts, ask Quality Assurance for thestatistics. If the number of open defectsis not going down as the release dateapproaches, the release date is likely toslip. Obviously we want the Sev 1 andSev 2 defects approaching zero as therelease date approaches. (Releasing aproduct with poor quality will cost youmoney, time, and reputation—don’teven go there!) Severity four “defects”are typically enhancement requests andare often ignored in terms of productquality. Yet they indicate areas wherethe product fails to satisfy the customer.Product quality is the best indicator ofinternal health of the product; quality is the gas gauge of the product.

Technical supportTechnical (or Customer) Supportalready measures the number of callsper product and the nature of the calls.Product Management should analyzethese numbers to identify areas of thatproduct that can be improved for abetter customer experience. Are thereproblems with installation of theproduct? Is the documentation too hardto understand? Is the product too hardto use? By streamlining a process, willyou cut down the number of technicalcalls? To uncover hidden profit leaks,review the number and type of callsfor your product.

Product life cycleAlthough product managers usuallyhave no control over the productdevelopment process, you should betracking what is going on. How longdoes it take from the time you definerequirements until you have a finishedproduct in the market? Is the cyclepredictable? Keep track of the percentageof original approved requirements thatget delivered in the final product. Howmany “out of scope” requirementswere included? Do your developershave a clear idea of what problem tosolve and for whom? The problem maybe poor requirements definition, whichyou can control, or it may be scopecreep which you need to communicateto your management. Report the factsand let management manage.

Sales supportHow many non-sales people does ittake to support the sales cycle? Everysix months or so, do a poll of productmanagers, developers, and executivesto find out how many hours per weekthey spend in direct sales efforts. This would include demo support,conference calls with prospectivecustomers, on-site presentations, needs assessment, and other sales calls. Early in a company’s life, thisnumber is typically high. People wearmany hats and everyone seems to support Sales.

In order to grow the company, rolesneed to become more specialized, and you undoubtedly need salesengineers. Sales engineers (as part of the sales organization) are factoredinto the cost of the sale. Hopefully,the price point of your solution warrantsthe cost. (If not, you won’t make it up in volume!)

Consider how to make the producteasier to sell by creating sales tools that limit the amount of time non-salespeople have to support Sales. Whennon-sales people participate heavily inthe sales process, they are not doing

0

10

20

30

40

50

60

70

80

90

Week 1 Week 2 Week 3 Week 4

Severity 4

Severity 3

Severity 2

Severity 1

5 • productmarketing.com • January/February 20045 • productmarketing.com • January/February 2004


Metric What to track When to track it Where to get it What to look for

1. New customers

2. Lost customers

– Plot trends of new and lostcustomers over multiple periods

– Calculate customer retention %(divide the number of customers this period by the number ofcustomers in prior period)

Monthly or quarterly Finance or CRM system A drop in the customer retention percentage is an indicationthat something is wrong. Do win/loss analysis to figure outwhy you are not acquiring enough new customers. Interviewlost customers to find out why they are leaving.

3. Product quality – Stacked bar chart for severity 1 -- 3 defects

– Trend graph of total defects

Released product: weekly

Unreleased product: daily

– Tech Support

– Quality Assurance

Released product: is quality an issue?

Unreleased product: will we ship on time?

4. Technical support – Number of calls per product

– By category (defect, procedure,ease of use, missing features)

Monthly Technical Support – What changes to the product will reduce # of calls?

– Can we improve profitability by addressing areas with high call volume?

5. Product life cycle – Time from requirements to finished product

– % of original requirements

– # of “out of scope” requirements

After every release cycle Release team or track it yourself

– Use facts to instill change

– Is the development cycle longer than the sales cycle?

– What are the causes?

– Work with development manager to improve the process

6. Sales support How many non-sales resources aresupporting the channel: # of resourcestime hours/week

Every six months – Survey ProductManagement

– Development

– Executives

– Look for more efficient ways to utilize non-sales personnel

– Is the product too hard for the channel to sell?

– Do we need more sales engineers? Sales tools?

7. Product revenue Bar chart of actual versus plannedrevenue by:

– channel

– region

– market segment

Monthly Sales Management When forecasts aren’t met:

– How was the forecast developed?

– Overly optimistic?

– Channel not trained?

– Product/market fit?

– Address areas to improve

– Improve future forecasting

8. Product profit – Revenue & expense by product

– Net profit or contribution

At least annually Finance (if tracked),or estimate

– To manage the product as a business

– To justify investment

– If the product isn’t profitable, can you justify it (lossleaders)?

– Are there other profit models you can use?

9. Market share – Graph trends over multiple years

– Market share by key players (3 -- 5) in your segment

Annually – Industry analysts

– Trade associations

– Publications

– Surveys

– Look for changes from year to year

– Is the market shrinking or growing?

– Is your share shrinking or growing?

– Are there new competitors?

10. Marketingprograms

– Lead quality (leads to close ratio)

– Return on Investment (ROI) formarketing programs

– Cost per lead closed

Quarterly MarketingCommunications

– Identify areas for improvement that Product Managementcan impact

– Are we targeting the right segments?

– Do we have the right messages?

– Do we know the buyers?

– Do we have a compelling solution?


their day job. And the cost is rarely attributed to the sales activity; anotherhidden profit leak.

Now it’s time to look at revenue andprofit. Ultimately, we want to build andsell products profitably.

Product revenue/profitCongratulations if you are alreadytracking both of these by product. Ifnot, how do you know which productsare worth investing in and whichshould be retired?

Sales should be able to tell you how much revenue is generated perproduct. In order to calculate profit,you need to subtract costs from revenue.The tricky part is getting the costs.Unless each discrete product (notproduct family) has a profit and lossstatement tracked in Accounting,product managers don’t have access to the actual costs, even if they haveaccess to product revenue. Financemay already have this number.

Here’s a simple way to calculate costs: multiply the number of full timeequivalents (FTE’s) times $100,000 foran annual cost. If resources work onmultiple products, estimate how muchtime is spent on your product todetermine the FTE’s. Include development,quality assurance, release control,technical support, sales, productmanagement, and marketing. (You canuse a flat percentage across all productsfor general and administrative costs.Ask Accounting for the number.)

The last two metrics are not easy to getand yet management expects productmanagers to know them.

Market shareEveryone wants to know what marketshare you have. By tracking this metricover time (year over year), you candiscover whether the market is saturatedor ripe for expansion. If the market is growing and yet your market shareis shrinking, it indicates that anothercompetitor is growing at a rate fasterthan you are.

But…getting this metric is extremelydifficult. Conducting your own surveyto find this information is usually costprohibitive. Research analysts typicallyhave market share information byvendor (you will pay for it). However,you should question their researchmethods. Where did they get theirnumbers? What assumptions weremade? Our experience is that allvendors “stretch” their sales numbersand the analysts make corrections basedon their own market research.

Other sources for market share estimatesare technical publications and tradeassociations in vertical markets. Theyoften survey their readers and membersto find out who is using what products.

Marketing programsIneffective marketing programs mightbe another profit leak. MarketingCommunications must demonstrate a return on investment for marketingprograms. Theoretically, this is goodand makes a lot of sense. Practically, itis hard to do and not many companiesdo it very well (if at all). In order to dothis well, you need a closed-loop leadtracking system that allows you to trackactivity from the marketing programthat generated the lead all the waythrough to a closed deal. Are the rightmarket segments being targeted? Dothe positioning and market messagesresonate with the buyers? Do you have a compelling solution? ProductManagement typically doesn’t own this,but should report the metrics (obtainedfrom Marketing).

What to do with the numbersStart looking at your product gauges.You won’t be able to collect all of themetrics at once, but determine the keyperformance indicators you need to starttracking. Report the baseline, begintracking on a periodic basis, graph the trends, and drill down to find out what is going on.

Start with the metrics for customers and product quality. These are thespeedometer and gas gauges of theproduct. When customer count andproduct quality are dropping, so is the product speed in the market.

Calculate the profitability of your product.If you have a loss leader, can you justifyfurther investments? Do win/loss analysisto find out whether your product isdriving business, even though it isn’tprofitable. If it should be retired, showsome leadership and present the factsabout why it should be retired and howyou would redeploy the resources in a more profitable way.

To run your product like a business,act as the CEO of your product. Reportthe metrics at least annually, and usefacts rather than opinions to help youmake decisions. Publish the facts ofyour results to your product teams and senior management.

And don't forget to look up from thedashboard once in awhile to see whereyou’re going.

Barbara Nelson is an instructor forPragmatic Marketing. She has 21 yearsin the software industry, including vicepresident of product marketing for aleading provider of business andaccounting applications for the middlemarket. Before her decade of productmarketing experience, she workedclosely with customers in severalcapacities, which taught her theimportance of listening to the customerand solving critical business issues.


Co

mp

an

ies

1 2 3

Year

Us

Competitor 1

Competitor 2

4 5


Profile of a product manager• The average product manager

is 36 years old

• 84% claim to be “somewhat” or “very” technical

• 94% have completed college, 56% have some MBA classes

• 47% have completed a mastersprogram

• 30% are female, 70% are male

• The typical product manager hasresponsibility for three products

OrganizationThe typical product managerreports to a director in theMarketing department.

• 43% report to a director

• 33% report to a VP

• 27% report directly to the CEO

• 23% are in the Marketingdepartment

• 15% are in Development or Engineering

• 10% are in the ProductManagement department

• 10% are in a Sales department

Impacts on productivity• Product managers receive 65

emails a day and send about 33.

• Product managers spend roughlytwo days a week in internalmeetings (14 meetings/week).

• But 30% are going to 15 meetingsor more each week and 25%attend 19 or more meetings!

Working with requirementsThe majority of product managersare researching market needs,writing requirements, andmonitoring development projects.

• 72% researching market needs

• 55% preparing business case

• 24% performing win/loss analysis

• 85% monitoring developmentprojects

• 79% writing requirements

• 50% writing specifications

Working with Marcom and SalesProduct managers also spend timeproviding technical content forMarcom and Sales.

• 49% writing promotional copy

• 38% proofing promotionalcommunications

• 38% talking to press and analysts

• 53% training sales people

• 35% going on sales calls

Annual ProductManagement Roles

& Salary Survey2003By Steve Johnson

Each year Pragmatic Marketing®

conducts a survey of productmanagers, marketing managers,

and other marketing professionals.Our objective is to providePragmatic Marketing clients

with industry information aboutcompensation as well as the

most common responsibilities for product managers and

other marketing professionals. The survey was mailed to 5,000

marketing professionals with 560 responses. The survey was

conducted during the period of November 25-30, 2003,

using WebSurveyor.


CompensationAverage product managementcompensation is $91,650 (US) salaryplus $11,363 (US) annual bonus (as in 2002, 78% of product managers get a bonus).

Bonuses are based on:

• 57% company profit

• 30% product revenue

• 42% quarterly objectives (MBOs)

Almost 40% say the bonus does notmotivate at all and only 10% say the bonus motivates a lot.

What should the company know aboutthe role of product management? • PM role is more strategic

than tactical.

• I don't have time to do all that I can contribute strategically.

• We tend to be understaffed.

• Product Management is not sales support.

• I need to visit the market to be a good product manager.

Product management ratios within the companyHow are product managers allocatedrelative to other departments? Foreach product manager, we find:

• 2.7 products

• 0.7 product lines

• 1.0 services

• 13.3 developers

• 1.7 Development leads

• 1.7 sales engineers/pre-sales support

• 5.0 Sales people

For companies with both product managers and productmarketing managers, the average is 3.82 product managers and 2.63 product marketing managers for 13.84 products.

Product management technology environmentProduct managers use a fairly standardcomputing setup, usually a laptoprunning Microsoft® Office XP, withthese operating system characteristics:

• Windows® 2000 Professional (50%)or Windows® XP (25%)

• Internet Explorer 6.x (94%)

• 1024 x 768 screen resolution (65%) or better

• 16-bit color or better (98%); 32-bit color (50%)

• Java™ with cookies enabled (95%)

• Plugins installed:

– Shockwave Flash (95%)

– Adobe® Acrobat® [PDF] (70%)

– RealPlayer (50%)

– QuickTime (20%)

Regional impact on compensation

Compensation Female Male Overall(in US$) Salary Bonus Total Salary Bonus Total Salary Bonus Total

Midatlantic $85,154 $10,900 $96,054 $92,278 $10,286 $102,563 $89,290 $10,542 $99,832

Midwest 75,941 6,818 82,759 82,404 11,649 94,053 80,688 10,542 91,229

Northeast 87,600 15,625 103,225 99,070 12,194 111,264 94,853 13,250 108,103

Pacific Northwest 86,667 4,000 90,667 87,563 7,333 94,896 87,421 6,857 94,278

South 83,100 12,000 95,100 89,647 11,174 100,821 88,159 11,367 99,526

Southwest 93,250 9,200 102,450 83,333 11,250 94,583 86,783 10,647 97,430

West Coast 90,452 6,421 96,873 106,571 14,537 121,108 101,255 11,967 113,222

US Average $86,252 $9,914 $96,167 $94,097 $11,943 $106,040 $91,650 $11,363 $103,013

Canada (in US$) 77,556 3,500 81,056 74,750 12,500 87,250 75,432 11,115 86,548

Canada (in CN$) 102,916 4,645 107,561 99,193 16,588 115,781 100,099 14,750 114,849

productmarketing.com • January/February 2004 • 8productmarketing.com • January/February 2004 • 8

Compensation for 2002Results from last year’s survey showed a product manager’s average salarywas $88,496 plus $8,092 annual bonus.

Build market-driven products by listening to the marketThe Practical Product Management course fully explores the role of technical

product management, providing tools and a framework to help get products

to market more efficiently. This comprehensive course offers real-world

product management techniques—using software and hardware case studies

from enterprise-level to desktop products and services.

Product marketing activities are analyzed in detail with tips for how to be

effective at the strategic elements and how to manage multiple tactical

activities. This seminar is a challenging program that emphasizes strategic

product marketing and market-driven management. Every concept is

designed to be actionable as soon as you return to the office.

The third day of the course drills down into the often-difficult process

of articulating product requirements. Using concepts from the prior two

days, students learn a straightforward method for creating product plans

that product managers can write, developers readily embrace, and that

result in solutions that the market wants to buy.

Learn what

every product

manager

needs to

know

High-Tech Product Marketing Training

Course designed for:Product managers or marketing managers and directors; marcom specialists

and product developers. You should attend if you manage or contribute to

aspects of product marketing and management.

Call (800) 816-7861or go to

www.PragmaticMarketing.comto register!

Days 1 – 2I. Strategic Role of Product Management

• What is marketing?

• Definition of the role of product management

• Contrasting product management and product marketing

• Assigning ownership of responsibilities

• Identifying the “first steps” with gap analysis

II. Market Analysis• Distinctive competence

• Market research

• Market problems

• Technology assessment

• Competitive analysis

III. Quantitative Analysis• Market sizing

• Product performance

• Operational metrics

• Win/loss analysis

IV. Product Strategy• Business case

• Pricing

• Buy, build, or partner?

• Thought leaders

• Innovation

V. Product Planning• Positioning

• Sales process

VI. Case Study

VII. Delineating Responsibilities• Communicating market facts

to Development, Marcom, and Sales

• Drawing the line between Product Management and the other departments

Day 3 Requirements That Work™

(for those who write requirements)

VIII. Building the Market Requirements Document (MRD)• Writing requirements

• Implementing use-case scenarios

• Programming for the “persona”

• Determining product feature sets

• Creating the MRD

IX. Analyzing Business and Technology Drivers• Reviewing specifications

• Prioritizing the product feature set

X. Getting (and Keeping) Commitments• Product contract

• Getting the product team in sync

• Getting executive support

• Communicating the plan in the company and in the market

Still not sure

Practical Product

Management

is for you?

Attend a FREE 1/2-day session.

See back cover for details.

Practical Product Management™


There are many different wayscompanies structure and approachproduct management. Particularly in firms where a certain productmanagement maturity level hasn’t yetbeen reached, product managementprofessionals can struggle with howto do their job in the most effectiveway. It doesn’t help that sometimesmanagement and other groups don’tnecessarily understand what productmanagement means, what aspects itmust cover, and how it should functionwithin the company. Overlaps andinconsistencies in authority andresponsibilities can also createadditional hurdles and challenges. For this reason, it is important forproduct management professionalsand newcomers to think about theimpact and influence they plan tohave in the company’s success andhow to gain respect within thecompany. This article is a discussionabout how to measure the impact ofproduct management, the need to be proactive, and key elements andconsiderations for successful productmanagement programs.

The importance of measurable success High-impact product management isconducting product management withthe objective of staying as close aspossible to the business reasons and

objectives for product management as a professional discipline. Theseobjectives relate to clearly measurableresults (see Primary Measurements in Table 1-1). More so than “soft”MBO-type goals (see SecondaryMeasurements in Table 1-1) businessresults-oriented goals will alwaysreceive higher consideration by seniormanagement for measuring the ultimatesuccess of product management.Product Management goals such asplanning documents, analysis projects,and meeting delivery dates are alsovital and should not be underestimated,but they can be less important as truemeasurements of success. On their own,these goals say little about the ultimatesuccess of product management.

Product Management should frequentlybe asking if what it does instrumentallyimpacts the business results shown in Table 1-1. If not, it could be timeto change or improve the productmanagement approach.

Product managementproductivity: reactive vs.proactive product management Unless you work for, or with, otherproduct management professionalswho have already set many of theengagement and process ground rulesfor “good and effective” productmanagement within the company,chances are that you will be expected

to help take care of the various “crisesof the day.” If you are not careful,you can quickly inherit some of thebiggest reactive challenges of thecompany. These challenges usuallyexist due to:

• lack of process and methodology,resulting in bad or wrongexpectations (deadlines, estimates,market needs, etc.) and poorproduct quality and delays

• lack of planning, resulting inshortage of business or marketfocus, foresight and strategy

• lack of communication (verbal orwritten), resulting in internal and/orexternal confusion or frustration,and inability of company staff toproperly execute their job duties

• lack of organizational clarity ofresponsibilities and authority

You’ll not likely be able to changethese issues overnight or on yourown. There is no sense runningaround on the job like a chicken withthe proverbial head cut off and nothaving fun. Ensure that you first bringyour product management piece of theorganization under control with yourexperience, professionalism, andprocess/methodologies, and that you start discussing with others whatyou expect from their organizations.You must initiate changing the rulesof the game.

High-Impact Product Management:High-Impact Product Management:Creating and Measuring Product Management


Reactive product management isn’t agood way to continue and isn’t in thebest interest of your company. Theword “management” implies a soliddegree of proactive actions and planningto be present at all times.

You can’t carry all the company’sproblems on your shoulders. Not onlyisn’t it fair to yourself, but it isn’t fairto everyone else who can and shouldbe expected to step up to the plateand contribute just as much to thecompany’s success as you do.

How much do your actions and the company’s collective actionstruly maximize the company’sprogress along the four businessresults objectives listed in the Table?The answer may be “not enough.”You and the company deserve betterand must collectively make changesto get back on the right track.

Effective product management isabout being proactive and facilitatingpositive change in the organization:changes in processes, attitudes,responsibilities, cooperation betweenteams, in how customers/target marketsare defined and viewed, in whatproducts and services the companysells (or not!), and more.

No matter how senior your productmanagement position is, you are atleast in part responsible for makingand facilitating these changes, whether

you have the authority or not. Ifnothing else, it is your professionalproduct management responsibility!If you don’t want to go down thatpath, you might consider switchingto an analyst, customer support, orperhaps a sales support position—theyrequire little of these skills. In 20 yearsof product management in several firms,I haven’t found a company yet whichcouldn’t benefit from a little (or a lot!)of positive change.

Proactive product managementinitiatives and activitiesYou might be only one person fightingthe product management battle orperhaps you are part of a larger team.In any case, time and energy must bemaximized and focused on the correct set of proactive efforts and initiatives.The priority and emphasis of theseinitiatives can be different in each

Primary Measurements

Business ResultsFactors Contributing to Success Success Measurements

Increase customer wins • Target market analysis/planning• Target market sales support• Competitive product/solution/pricing• Reference customers

• Number, frequency, and size of wins• Market share• Financial trend analysis

Increase customer satisfaction and loyalty

• Competitive solution• Quality of solution • Quality of support services• Pricing

• Customer satisfaction survey• Customers willing to act as reference• Low customer attrition rate• Trend analysis

Product and product-line profitability

• Pricing• Measured product investments• Sunset unprofitable solutions

• Product P&L• Financial trend analysis

Cost-effectiveness of the support organization

• Effective product support and training materials

• Cost of sales• Cost of goods sold• Financial trend analysis

1-1. Measuring Product Management Effectiveness and Success1-1. Measuring Product Management Effectiveness and Success

By Werner WingenSuccess

Secondary Measurements

ProductManagementActivities and Deliverables

Factors Contributing to Success Success Measurements

Product/market planning and other planning documents

• Product planning• Business opportunity analysis• Product marketing requirements

• Availability and quality of materials(Note: it may prove difficult to measureultimate success of such materials)

Manage execution towardsdeadlines being met

• Status monitoring• Facilitate inter-team communication• Escalation

• Deadlines being met(Note: it may prove difficult to measurethe quality aspects of the deliverables)

Launch and support-related documents

• Sales support materials• Marketing materials• Staff training

• Availability and quality of materials(Note: it may prove difficult to measureultimate success of such materials)


company (based on existing strengthsand weaknesses). In my experience,the list will however almost alwaysinclude the following:

1. Understand product managementroles and responsibilities. Jobdescriptions are helpful. Ensureyou understand the roles andresponsibilities of the people youwork with (Development, QA,Marketing, etc.). This will get you at least the correct set of company and managementexpectations—even if you may not always agree with them. Alsorefer to the article Role of ProductManagement by Steve Johnsonfeatured in productmarketing.com,Volume 1, Issue 2, June 2003.

2. Understand Goals and MBO’s.Understand your annual personaland group goals and those of thepeople you work with and for.Chances are that you get paid abonus for meeting your goals, so itpays to pay attention to this. Yourgoals likely include standard productmanagement goals such as productrevenue and profitability as well asmeeting key project/product dates.If the company doesn’t do it foryou, be sure to establish your own set of proactive productmanagement goals related to keyproduct management initiatives(as listed in Table 1-1).

3. Understand the elements ofProduct Management—and whodoes what in the company. Newproduct managers may not alwayshave hands-on experience withall aspects of product management,ranging from Market Analysisthrough Product Planning toChannel Support (also refer to the chart in the article The Product Management Triad by Steve Johnson featured inproductmarketing.com, Volume 1,Issue 2, June 2003.) Your companymay expect you to focus only on limited aspects of product

management (for example, ProductDefinition or Release Management).It is to your advantage to look at the bigger picture! You mustunderstand how many of theproduct management elements are “under control” and how manyare not. You also need to knowhow many of the non-productmanagement components (R&D,QA, Implementation) are undercontrol. You can, for example, dothe world’s best product definitionsbut the product and businesssituation can get out of control ifmarket analysis hasn’t been properlydone, if QA lacks, or if the launchis ineffective. Take ownership, evenif you don’t have the title. Ask toughquestions and get involved in issuesthat might be considered by someas none of your business!

4. Effective time management. Don’tbecome a victim of reactive productmanagement! It is easy for ProductManagement to make a full-time jobof doing nothing else but email andattending meetings. Don’t respond toevery email you get, avoid jumpingon email chains. Don’t attend everymeeting you are invited to. Don’tsupport all Sales calls you are invitedto. Don’t participate in every crisismeeting. It’s not beneficial to thecompany if you get dragged intoeverything. Be selective in how youspend your time! Spend more timethinking about your goals andobjectives and how they relate to thebusiness objectives. Gravitate to theaspects of the job that require yourattention because they matter for the bottom line. Keep in mind thatproduct management greatly benefitsfrom highly-leveraged activities.Good examples are sales guides,demo narratives, training videos,(product lifecycle) process standardsand guidelines, defect andenhancement tracking databases,RFP response databases, status and progress reports and so forth.Such activities go a long way!

5. Effective internal communication.Product Management’s job is to frequently and effectivelycommunicate with virtually all parts of the company: ProductDevelopment, QA, Sales, SalesEngineering, Customer Support,Implementation Support, Marketing,and so forth. Always be courteousand professional—don’t makeenemies—and find out what makespeople tick. Share information suchas status reports and be sure to askfor the same courtesy in return.Effective product managementneeds all the allies it can get, allthe data it can get, and to knowwhere any potential non-supportersand obstacles might be hidden.

6. Effective external communication.Talk frequently to your customersand prospects—find any excuse todo so! You will learn a lot abouttheir expectations, buying reasonsand behavior, and perhaps even abit about your competition. Usergroups and conferences are terrificplaces. Tell management you needto attend, even if they tell you thatyou don’t. Talk to your competitors,analysts, reporters, the firm’sexecutives, and to just aboutanyone who might give youadditional insights and perspectives.Also, refer to the article I AmCustomer, Hear Me Roarby Les Jickling featured in productmarketing.com, Volume 1, Issue 2, June 2003.

High-Impact Product Management: Creating and Measuring Product Management Success High-Impact Product Management: Creating and Measuring Product Management Success

7. Effective planning. This is a keyfoundation for product management.Just as every company will do its annual budget plan, ProductManagement must create a productplan at least once a year. Be surethat it specifies your target marketsand how the revenue/budget goals relate to new and existingproducts. Explicitly point out keyrevenue, expense and profitabilitydependencies. Explain thecompetitive standing of yourproducts and indicate how properpositioning and effective marketingactivities can help. Product releaseplanning is also critical. Everysoftware product manager shouldhave a current product releaseroadmap in the top drawer,available at an instant. Otherplanning activities include marketanalysis, gap analysis, sales win/lossanalysis, and more. Plans should bein place related to all majorcomponents of product income and expense and any time asignificant product milestone event is at stake.

8. Effective processes. Many experiencedproduct management professionalsgravitate to the development and/orrefinement of new or improvedbusiness and product lifecycleprocesses and will spend a lot ofenergy focusing on this area. This is great business sense because

these processes can be highly-leveraged throughoutthe company and makeseveryone’s lives easierand more predictable.For such processes tosucceed, they must be

easy and almost intuitive to understandand follow. They must also be fullyendorsed/supported by the highestlevels of management so that peoplecan’t conveniently ignore them.

On a high level, the most importantprocesses for Product Managementinclude:

• creation, distribution andapproval of key documents:Business Plan, Product Plan,MRD, Specification, Test Plans,Market Launch Plan

• process for multi-departmentalsign-offs, milestone events, andgo-aheads

• guidelines for meetings, statusreports, and internal/externalcommunication

• standards for tracking key data (contract commitments,enhancements, defects, etc.)

• process for escalation, changemanagement, etc.

9. Metrics. Track as many of thesuccess metrics as possible, asdefined in Table 1-1. You shouldreally understand how well you are doing because it will help you adjust your approach andmake more effective presentationsto executive management. Making a case based on money andbottom-line results is always anappealing and effective approach!

10. Learning. You are the expert foryour markets and for productmanagement activities andmethodologies. You can’t afford to stop learning. Learning efforts

include vertical market information,product management disciplinesand methodologies, and generalbusiness planning and businessmanagement techniques. Perhapsthis is one of the reasons whyProduct Management never becomesdull and boring for productmanagement professionals. Readbooks and magazines, go to seminars,trade shows, talk to people.

High-impact productmanagement is more fun! Practicing high-impact productmanagement is neither a difficult nornew concept. Put your best productmanagement hat on, pretend (at leastto yourself) that you are running thecompany, and focus on those tasks,actions, and initiatives that are mostimportant and make the biggestdifference between success and failureof the products (and the company).

Be sure to draw many of your co-workers into your circle of peoplewho try to make the products andcompany better. Emphasize pride ofownership and professionalism, lead by good example! Set an example by being proactive and smart in yourworkday. Occasionally make a pointand demonstrate a bit of pity and/orlack of tolerance for those people whodon’t share your passion for results andseem to just do their nine-to-five job.Product Management, perhaps morethan any other group in the company, is critical for the future and the successof the company. You owe it to yourself,your co-workers, your customers, andyour shareholders to do the best job you possibly can.

High-Impact Product Management: Creating and Measuring Product Management SuccessHigh-Impact Product Management: Creating and Measuring Product Management Success

Werner Wingen is Director of Product Management for Metavante’s Corporate BankingCash Management solutions. He has worked for Metavante (a division of M&I Bank) since1999. Werner is a Product Management and Product Marketing professional with two decadesexperience in the Financial Services and B2B/eCommerce industries. He has worked for smallto medium-sized privately-held software providers, as well as large software firms such as GEand ADP. This gives him a unique perspective on what it takes to make Product Management viable, successful, respected and exciting in different environments.Werner can be reached [email protected] or at [email protected].



Framework for a LaunchWhen we created a ProgramStrategy column for the recentlyupdated Pragmatic MarketingFramework, we added activities thatfrequently fall into the gap betweenproduct management and marcom,causing go-to-market programs to fall short of expectations. Wedescribed two of the ProgramStrategy activities in the last issue of productmarketing.com, MarketingPlan and Buyer Personas. In thisissue, we examine the activities that can make or break a product launch.

The Pragmatic Marketing® FrameworkThe Pragmatic Marketing® Framework

Effective launch plans are a roadmapfor marketing programs which, likea quality product roadmap, can onlybe developed by marketers whounderstand the potential buyers.From this perspective, marketerscan objectively evaluate thecompany’s “marketing assets” anddevelop a plan to selectively deploythe assets that will most effectivelyengage the target buyer during thelaunch. Examples of marketing assetsinclude sales channel readiness,product/market maturity, websitecontent, sales tools, customer stories,prospect databases, and historicalprogram results. Marketing assetshave the same properties of qualityand usefulness as the company’sphysical assets, and the marketerwho knows their buyer well, can

objectively evaluate their usefulnessfor the launch. The launch’s mostvaluable marketing assets are builtduring personal meetings withpotential buyers, where the marketergathers answers to questions such as:

• Where does this solution fit into the target buyer’s currentbusiness priorities?

• Which type of buyer (i.e. economic,user, or technical) should havethe first contact with vendors?

• Where will this buyer look forpotential vendors, and what criteriawill they use to conduct theirevaluation?

• Who are the other decision makersin the buying cycle and whatinformation will they need beforethey can commit to a solution?

With this insight into the buyer’smindset, plus a focus on thecompany’s launch goals at the levelof revenue, positioning awareness,and customer retention, marketerscan develop a strategic and tacticallaunch plan that is both effectiveand measurable. Note that asuccessful launch does not end aftera week or a month of intensiveactivity. The launch continues untilthe market outcomes are achieved,and an effective launch plan includesa sustained marketing effort.

Launch Plan

Launch Plan

LeadGeneration

MarketMessages

Pragmatic Marketing seminars introduce a framework that gives technology marketers the tools to deliver market-driven products thatpeople want to buy. They focus on the practical aspects of juggling daily tactical demands of supporting the sales force withstrategic activities necessary to become expert on the market.


Watch for future issues of productmarketing.com as we continue to highlight and further explore the framework.

A market-driven model for managing and marketing technology products

A 2001 study by Harvard BusinessSchool reported that 80% of all leadsgenerated by marketing are nevercontacted by Sales. Our experienceshows even poorer results for high-techcompanies launching a new productthrough an existing sales force.

Marketing must develop a strategy toovercome the two primary causes ofpoor lead follow-up. First, Marketingneeds programs to follow through onany prospect inquiries that are notreasonably expected to close within a near-term sales period. Second, andequally important, marketing must take steps to overcome the channel’sresistance to selling products that differfrom current solutions on any of thefollowing dimensions:

• The sale involves a new typeeconomic, technical or user buyer

• The sales process should require farfewer steps over a shorter time period,or is more complex and requires alonger, more complex sale.

• The technology is unfamiliar.

• The market is much more or lessmature.

• The price point is much higher, ormuch lower, than current productsor services.

Problems with lead follow-through aren’teasy to resolve, but the launch will failto produce revenue, and may create anegative reaction to the new product,if the handoff from Marketing to Salesis inconsistent. Marketing teams needto ensure that their internal launch

includes an adequate commitment to“selling” the product to the Sales teamand training them to work in any newenvironment. Depending on the salesculture, Marketing should retain leadsthat don’t meet the most stringentqualification criteria, adding thesenames to a list for ongoing Marketingprograms. If management insists thatSales should get all leads, Marketingwill need to monitor and recover thosethat are not contacted within a certaintime period. Every demographicallyqualified response is a valuablemarketing asset that will continue to return dividends with appropriatemarketing investments.

Lead Generation

Market Messages

The Positioning activity (in column four of the Framework) is only the first step in creating market messages.While positioning summarizes themarket problem and the product’svalue proposition, market messages are the very few words that the launchprograms will use to capture the buyers’attention and move them into the salesprocess. Messages must be developedfor each type of buyer who will betargeted by the launch programs andsales tools (see explanation of BuyerPersonas, Issue 1, Volume 4 ofproductmarketing.com).

Many companies try to “reverse engineer”their market messages, building a longlist of all the problems the productcould possibly solve. Later, when brief

messages are needed for launchprograms, creative teams debate thevalue of different messages, and everyprogram has something different to say.

In contrast, marketers who interviewpotential buyers are surprised at howeasy it is to build market messages.Potential buyers have told them whichproblems are most urgent, and whichaspect of a vendor’s solution will gettheir attention. Marcom teams canconsistently apply the message to allprograms targeted to that type of buyer.The buyer sees the same messagerepeatedly presented in words theyfind meaningful, improving recall andprogram response rates.


Integrating Users intoProduct Development

This two-part series explores the impact and process ofincorporating users into the product design/developmentprocess. In the first article of this series, we examined thebusiness case for user-oriented product development. InPart II, we examine what user testing looks like during the different stages of development, and then offer adviceand resources helpful to implementing user-orienteddesign/development, including information about cost and budgeting.

Debugging the User Code

By Steve August

A new product rises from the creativeimagination and technical expertise of a person or a team. The product mayarise from an observed need, a newtechnology, or a new application of anexisting technology. Many times it willbe created in some sort of isolation—perhaps in the fabled garage or maybein a team that has been given theindependence to create something new.

More often then not, the product’sintended users are conspicuously absentin the creation process. While leavingthe user perspective out of the initialdesign process can allow for unfetteredcreativity, it can lead to disaster when itcomes time to create a business aroundthe product. From the earliest possiblemoment, it is necessary to understand ifthe product’s intended users actuallyfind the product useful enough tospend money on it.

This article will examine how and when to bring the user into the productdevelopment process. It will first discussthe kinds of information user testingneeds to obtain and at what point usertesting needs to be integrated into thedevelopment process. Finally, the articlewill examine what user testing lookslike during different phases of productdevelopment.

Useful and usable

“In the end, products and software that

were faithful to meeting the needs of those that

would use it will be useful. And in order to be

useful, they will have to be usable so as

not to impede their usefulness.”J.O. Wobbrock

Usable vs Useful

When talking about user testing or user experience, the most commonassumption is that the product will betested to make it more usable for itsintended users. However, user testingalso seeks to answer another importantquestion, namely whether a product isactually useful to its intended market.

A product’s usefulness determines itsvalue to customers. A product’s usabilitydetermines how easily customers canutilize the value of the product.

It is possible to create an eminently usableproduct that fails because it is of littleuse to its users, and conversely it ispossible to create a very useful productthat doesn’t succeed because it is too

hard to use. To succeed, user testingmust test both the useful and the usable.Depending on the phase of development,the focus of user testing changes betweenuseful and usable.

Building users into the process

“Seeking customer input and feedback

is a vital and ongoing activity throughout

development, both to ensure that the product

is right and also to speed development

towards a correctly defined target.”Robert G. Cooper

Winning at New Products, Second Edition

Another important point is that buildingproducts around the user experiencemeans that user testing must be built in as part of the product developmentprocess. In other words, it needs toconsist of more than one or two quickhits of internal or external usabilitytesting. User-oriented developmentmeans that testing with users needs to be as much a part of the process as debugging code is in softwaredevelopment. Doing smaller, quicker


and somewhat less formal testingconsistently at all key points of the process will pay much greaterdividends than a bigger, more formalone time effort.

The main benefit of properly integratinguser testing into development is that itprovides the project team with consistentfeedback on whether the product ishitting the target. This allows the teamto avoid unnecessary rework, anddeliver the right product on time and on budget.

The product development process has been divided into many differentphases and stages by many differentauthors. However, for the sake of thisarticle, I am going to divide the processinto three main phases: Concept,Development and Release/lifecycle. The Concept phase contains the genesisof the product, when the idea for theproduct begins to take its initial shape.Development is the process of takingthe initial concept from the whiteboardand building it out so that it is ready forrelease. Release and lifecycle pertains to the product’s release to market andsubsequent revisions and releases. Themore the user experience is consideredin each of these phases, the better chancethe product will achieve success.

ConceptDivining user needs and wants

“Whenever you gather requirements, the challenge

is to gather the real requirements. Sometimes

discovering the real requirements calls for digging

beyond the surface requirements.”Steve McConnell,

Rapid Development

During the concept phase, it is crucial that a product’s usefulness be tested and understood. Without a fundamental understanding of thevalue of a product for its intendedusers, product development is builton assumptions that amount to educatedguesses, at best. Very rarely do theassumptions of product developersmatch the actual needs of the intendedusers, and without a strong grasp ofthose needs the best efforts of theDevelopment team will most likely be spent on a product that users will not embrace.

So, how do you find out if something is useful to people? The most obviousand direct way is simply to ask them,and certainly this is an important firststep in understanding user needs. Thereare several techniques to directly gatherrequirements from users: conductingfocus groups, conducting surveys, and, of course, directly interviewingindividuals.

Talking with people in order tounderstand their work and businessproblems can elicit good information,but it can also generate a puzzling listof requirements that can sometimes becontradictory and misleading. This is dueto the fact that, by and large, people areconsumed with their day-to-day tasksand cannot often verbalize or imagine a solution that would truly make theirlives easier.

The most powerful technique forunderstanding user needs and desires is carefully observing them in theirenvironment and participating in theirworld. This kind of user research iscalled ethnography, and it is especiallyadept at providing context and clarity to user requirements. By understandingbusiness tasks from the user point ofview, and looking for patterns andopportunities to significantly improvecustomers’ lives, ethnography is veryeffective in providing developers the necessary information to create useful products.

Many useful and successful products hadtheir genesis in ethnographic techniques:VisiCalc®, the original spreadsheet,WordPerfect®, one of the very first wordprocessors, and the Zip® drive werecreated by product developers observingpeople’s work practices, and then usingtheir creative and technical expertise to craft innovative solutions.

DevelopmentKeeping users in the loop

“Maintain regular customer contact to keep

yourselves moving forward.”Hugh Beyer & Karen Holtzblatt

Contextual Design

Taking a concept or initial design fromthe whiteboard to release is an iterativeprocess—the product evolves oversuccessive rounds of developmentmarked by specific milestones. As eachiteration evolves, it is important to keepusers in the loop to ensure the productis meeting or surpassing expectations.Successive rounds of testing will ferretout issues and problems as they ariseand keep development surprises—whichgenerally lead to expensive rework—toa minimum. User testing duringdevelopment evolves as the product

Debugging the User Code: Part II: Integrating Users into Product Development


moves from concept to release. Asdevelopment progresses, user testingbegins to focus on making the productusable as well as useful.

In the early stages, as the team isassimilating the information from the concept phase testing, a goodapproach is to conduct user testingwith simple paper prototypes thatconvey the intended functionality and structure of the product. Paperprototypes allow users to impact adesign at the most useful time—theearly stages of development beforethe design has been locked down.Testing with paper give both the users and the project team a sense of freedom to change and experimentthat is not possible further down theroad. Many times major design flawsand decisions can be addressedthrough initial rounds of testing with paper prototypes.

As development continues andsuccessive iterations of the productbecome more sophisticated, consistentuser testing will uncover performanceissues and usability issues as theyarise, as well as ensure that the design is providing the intendedfunctionality.

Frequent usability testing withfunctional prototypes will provide a steady stream of feedback to theproject team. This feedback acts asthe final arbiter on the many designdecisions that need to be made as the product progresses, and serves tokeep the project team focused on thetarget. If all goes well, the end resultis a product that customers find bothhighly useful and extremely usable.

Release and life cycle

Once a product is released, essentiallythe process starts all over again. Thebig difference is that user informationwill funnel back to the product teamthrough avenues other than direct user

testing. Support calls and logs, featurerequests, and information gathered bythe sales force provide a great deal of data to work with as the productteam begins the task of creating thenext release. If this data is properlyharnessed, it can provide a road mapfor the project team developing thenext release.

While the user data may have differentsources, the process of building the nextrevision of a product takes the samecourse as building the first version. The process starts by focusing on userneeds and desires, understanding userworkflow and obstacles to develop aset of requirements. Again it may benecessary and desirable to spend timeobserving users with the product toplace feature requests in context.

As the release moves through successiveiterations from initial design to release,usability testing with increasinglysophisticated prototypes will again allowthe project team to ensure that thedelivered product will hit the target.

By integrating user-testing into eachphase of the product developmentprocess, companies can better ensurethat they create a product that customersfind both useful and usable. In the end,that is the only sure way to deliver aproduct that people will want and,more importantly, a product thatpeople will buy.

Unfortunately, we don’t live in an idealworld. The pressures of time and budget,of getting a product to market as rapidlyas possible, as well as other work factorsmake it challenging to implement usertesting in an ideal fashion. What followsis some practical advice on integratinguser testing into your productdevelopment process.

Focus on business questionsBy its nature, integrating users into thedevelopment process forces a team orcompany to stay focused on the mainbusiness question: how do we deliver

a product that people will buy? At eachstage of development, user testingprovides answers that can guide theteam in building a successful product.During the concept and initial designphase, user testing seeks to answerquestions about what fundamentaluser needs the product or technologycan fill, what features and functionalitycustomers desire most, and whatopportunities exist in the market. Asdevelopment proceeds, user testingseeks to answer questions regardinghow to organize features and developan interface that mates the product to the users’ workflow. After release,user-testing focuses on specificproduct improvement goals, such as reducing support calls and theirattendant cost, as well as keepingpace with technological advances anduser needs. Setting goals and keepingan eye on what it means for thebusiness can help prioritize anddetermine testing needs.

Budgeting for user testing—how much is enough?So, how much of a productdevelopment budget should beallocated to user testing? The usabilitygurus at Nielson Norman Groupconducted research to determine if it was possible to determine a rule of thumb regarding how much of a project budget should be devoted to usability testing. They surveyed 863 web and intranet projects thatinvolved systematic usability testing,and found that usability testing costswere between 8% and 13% of theproject budget, leading them tosuggest 10% of a total product budgetas the sweet spot in terms of returnon investment. (Nielsen, J, Alertbox:Return on Investment for Usability,January 7, 2003)

Of course, every project is different and depending on the kind of productand the scale and scope of the project,user-testing budgets can vary. While

(continued on page 22)

What is the career path for productmanagement? Product managers learnhow to run teams and run businesses.Just as the producer of a moviefocuses on the business aspects, so does a product manager.

Product management is one of the most common training groundsfor senior executives. Many VPs and CEOs were formerly productmanagers. The joy (and sometimespain!) of product management is itshorizontal nature, working with Sales,Development, Marcom, Finance, TechSupport, Professional Services, Finance,and the senior executives. Productmanagement is where we learn to lead through influence ratherthan mandate.

So with that objective in mind, what do you need to do to prepare?

The first thing I would do is a self-assessment of your currentskills. The Pragmatic Marketing®

Framework is a good place to start.Do a gap analysis—for each box,determine how important is it toyour career (high, medium, low).Then, assess your skill level (high,medium, low). Where are the gaps?And which of the areas do you reallyenjoy? Some product managersprefer the technical aspects, somethe business of the product, somethe sales and marketing efforts.

Second, figure out which part of the framework you are currently in (above the line, such as a line of business director; bottom left as technical product manager, orbottom right as product marketingmanager).

Third, figure out where you want to go. If you are a technical productmanager, for example, is your next

step line of business director? Ifyou’re already a director, have youbeen acting as president or CEO of your product? The next step might be vice president of productmanagement or general manager of a business unit. A lot of it dependson your experience and in what sizecompanies you have worked.

Fourth, do you have the skills toperform the job that you want? Ifyou have the skills represented bythe framework (and are a practicingmarket-driven product manager), youhave the foundation for becoming a market-driven executive.

Last, but not least, create a plan toclose your skill gaps between whereyou are today and where you wantto be. Put together a plan of actionwith a timeline to achieve that goal.Think of yourself as a product. Usethe framework to market yourself.Identify your distinctive competence;position yourself; create a marketingplan to find job leads; know your“buyer” persona; and producecollateral to prove your positioning,such as your resume and otherartifacts of your career.

I am a product manager, but trying to figure out what’snext. Is there a career path in product management andwhat do I do to get there?

Ask the Expert

Barbara Nelson is aninstructor for PragmaticMarketing. She has 21 yearsin the software industry,

including vice president of productmarketing for a leading provider ofbusiness and accounting applications forthe middle market. Before her decade ofproduct marketing experience, she workedclosely with customers in several capacities,which taught her the importance oflistening to the customer and solvingcritical business issues.

email your questions to [email protected]

requirementsmanagement?Does your requirements managementprocess feel like this? Having troublefleshing out the customer needs,convincing other stakeholders therequirement is “worthy” of being on the top ten list? Or are you everuncertain where your little wish is once it reaches development?

We’re taking a closer look at howrequirements management tools areevolving to meet product managers’needs, and will share our findings in an upcoming article. If you’ve got anopinion or experience, let us know your thoughts.

What tools do you use?

– Microsoft® Excel, Word, other?

– biggest gripes and praises?

– how effective are they?

Do you havethe right tools when it comes to

Send an email to Rick Moy [email protected]

Rick is president of the San Diego Product Management Association. His firm, AppliMetrics, provides productmanagement and marketing services

to high-tech companies.


The story of the Zip drive is an excellent example of how melding continual focus on customer needs and desires with a compelling product vision andthe ability to quickly deliver a product as promisedcan produce a smash success.

Before the Zip drive, Iomega® was struggling,producing and selling only a few thousand Bernoullidrives every year. In 1994, then new CEO, KimEdwards had a vision to create a removable storagedrive that could hold up to 100mb of data and wouldcost $200. He committed the company to making it areality. Iomega hired an outside design andresearch company to test Edward’s assumptions andgather information that would inform the design ofthe drive. Researchers observed people using floppydrives, conducted focus groups and surveyedthousands of users to determine if they were on the right path.

The researchers came back with a number of insightsthat drove the development of the drive. They indeedfound that many users were looking for a personalstorage format that would help them transfer largerfiles and backup their data. Most importantly, theresearch confirmed that consumers would snap upa 100mb drive that was priced at $200.

The user research also pointed out opportunities to create a more usable product. It turned out thatmany users were scared that their floppies woulddisappear forever into their computer because theycouldn’t see their disks when they put them in theirfloppy drives. To address this fear, it was decidedthat the new drive would have a window. They alsoobserved that men and women worked with disksdifferently, as many women with long fingernails

needed to cock their finger in order to grip the disk,so the new drive would have a notch to facilitatewomen with long fingernails. The research alsorevealed that most people considered the data ontheir drives to be “their stuff,” so Iomega decided tomarket the drive as a place to stash your stuff, evenshipping the drives with labels for media that read“Old Stuff,” “Work Stuff,” and other labels thatallowed users to personalize their drive.

Armed with this information, the designers andengineers raced to quickly develop a prototype forthe drive. The first prototype featured a top-loadingdoor, inspired by those found on portable CD players.However, before committing the prototype designto production, the drive was tested with users togauge their responses. Their response was surprisinglynegative. Users felt the top-loading door was notonly too flimsy to withstand the rigors of everydayuse, but also would allow dust and other contaminateseasy access to their precious data.

The designers and engineers went back to thedrawing board, and the drive was redesigned toaccommodate the now familiar front-loading door.The case was designed so that the drive could beoriented vertically or horizontally, and was made of a molded blue plastic that immediately gave thedrive a more personal feel. Eleven months after theinitial concept, the final version debuted at Comdexin 1995, and was met with rave reviews. With a sixmonth lead over competing drives, the Zip drive wasa runaway hit, selling one million drives its first year,elevating Iomega from a niche company makingspecialty storage products to a big player in theconsumer electronics market.

Case Study: The Zip® Drive



the 10% figure represents just onestudy’s perspective on user researchbudgeting, it does offer a sense of usertesting priority in relation to the entiredevelopment budget.

Getting buy-inOne of the biggest issues with usertesting is getting it to happen in thefirst place. The twin pressures of time and money are usually the most commonly cited reasons for not conducting testing, especially inthe current economic environment.However, as we saw in the first part of this series, user testing generallypays for itself both in time and inmoney by keeping the project teamfocused and identifying design issuesas they come up, not to mentiondelivering a product more likely to be accepted by customers. There arenumerous objective case studies thatdemonstrate that in the end, it is muchmore costly to rebuild a product thatcustomers reject on the first go aroundthan to take the time and money toget it right the first time. Presentingdecision makers with real-world casestudies and strong financial reasons to implement user testing providesthe most compelling case.

It is crucial that the main decisionmakers on the project team and thosemanaging the budget of the projectteam see the value of systematic usertesting. Without management buy-in, itis not likely that users will be part ofthe development process and if some user testing is conducted, thefeedback will not be valued.

Do what you can on your ownSince user testing works best when it becomes a systematic part of thedevelopment process, it may makesense to develop the ability to conductuser testing in-house. There are manythings teams and companies can do ontheir own to understand their customers.The first place to start is to maximize

the customer information that alreadyexists within the company walls.Support calls, feature requests, salesforce feedback and web logs can offertremendous information aboutcustomers and how they relate to theproduct. When collated and parsed,these disparate pieces of informationcan yield important insights intocustomer needs and desires, andidentify specific goals for the productteam to address (i.e. reducing supportcalls around a specific feature orinstallation).

Beyond the information gathered from internal sources, it becomesnecessary to solicit feedback fromusers in a more direct fashion. Usingthe information from internal sources,project teams can understand andsegment the different kinds of usersworking with the product and makedecisions about what kind of testingneeds to be done. The kind ofinformation sought determines thetype of testing. Broadly, user testingbreaks down in to qualitative testing,which focuses on understanding in-depth the experience of a smallnumber of users, and quantitative,which seeks to understand marketissues with a larger number ofstatistically representative users.Qualitative testing provides answers to questions regarding user experience.Qualitative techniques include usabilitytesting, focus groups, one-on-oneinterviews and ethnographic research.Quantitative techniques focus on thedevelopment and analysis of surveys,and seek to answer questions aboutmarket size and opportunity.

There are several options for bothqualitative and quantitative do-it-yourself user testing. For usabilitytesting, you can set up a lab on-sitewhere you can invite users to workwith your product. If space is notavailable on-site, there are off-siteusability labs that can be rented.Another option to consider is creatinga panel of users, ideally representing

your target market, to quickly evaluatenew features and test prototypes.Users can be incented with discountson products, priority support or otherkinds of compensation.

For quantitative testing, there arewebsites that allow you to set up yourown surveys and email them to a listof users that you provide or to a sampleprovided by the site. The sites providetemplates on which to build your own surveys. Visit Zoomerang atwww.zoomerang.com to see an exampleof a do-it-yourself survey site.

While all of the above is possible todo in-house, it is unrealistic to expectgood information from in-house usertesting without undergoing at leastsome basic training on how to recruitthe right users, conduct usability testswithout asking leading questions, andaccurately analyze test information.There are user research consultantswho will train teams in usability testingtechniques. Several local universitiesalso offer extension courses on thetopic of user testing (often they arecoupled with interface design classes).

Working with consultantsWhile there is a lot that you can do onyour own, there is an art and a scienceto user testing. As with any skill, theexperience and training of the peopleconducting the testing can have a bigimpact on the quality of the results.Using a professional usability consultantcan dramatically improve the quality of the testing, as well as help get themost out of the resources available.Bringing in someone outside thecompany also provides a degree ofobjectivity that is simply impossiblewhen doing testing internally. Manyconsultants will also manage therecruiting process—which can be timeconsuming and is extremely importantin getting the right people to test. Anoutside hand can also lighten the loadon the project team. In choosing a


Helpful resources

IBM Ease of Use website:www.ibm.com/easy

This site features IBM’s take on user-centered design. It features detailedinformation about implementinguser-centered design, business casestudies and interviews. The site is a great starting point with links toconferences, articles and books.

Nielson Norman Group Websitewww.nngroup.com/www.useit.com

These sites are the home of JakobNielson and Donald Norman, whoare considered two of the leadingthought leaders in web, software andproduct usability. The sites containarticles and other reports pertainingto usability, and you can sign up fortheir Alertbox email newsletter. Asthought leaders, their opinions areoften on the mark, thoughsometimes controversial.

Good Experience Newsletterwww.goodexperience.comThis e-news newsletter chroniclesusability and customer experiencefoibles and achievements in a lightand lively style.

Usability ProfessionalsAssociation (UPA)

Another organization devoted topromoting usability techniques andconcepts. For more information, go to the UPA website atwww.upassoc.org.

Contextual Design

Hugh Beyer and Karen Holtzblatt’senlightening book on their method of customer-centered productdevelopment.

user testing or usability consultant,it is important to look for a researchbackground, especially if you arelooking for help creating the testmethodology. Organizations such as San Francisco Bay Area ComputerHuman Interface Group (BayCHI)and the Usability ProfessionalsAssociation (UPA) can help youtrack down a usability consultant.Nearly as important as findingqualified consultants, is findingsomeone who you can work with,who integrates easily with theproject team. Interview any potentialcandidates to understand how theywork, and if their personal style gelswith you and the team.

Rates for user testing vary by projectand by vendor. Remember, however,that most vendors’ price for agiven round of testing is somewhatnegotiable. You can work with theconsultant to get the most for yourmoney. For example, you can askthe vendor if they are willing to giveless formal reports or test with theminimum number of users. Basically,it’s best if you have in your mindwhat your ideal situation is and thenfind the consultant who will matchyou in terms of service and price.

Believe your usersIn the course of developing aproduct, the team and the companybecome immersed in the productsinner workings. The product teamand the company make assumptionsbased on this intimacy, and one of the most important things usertesting does is to check theseclosely held assumptions with thepeople who will buy and use theproduct. Sometimes it can be anuncomfortable process, especiallywhen user testing challenges thosebasic assumptions. As human beings,we generally find it hard to acceptthat customers do not see theproduct the same way we do. Oneof the toughest challenges with usertesting is not rejecting user feedbackwhen we disagree with the message.It is important that user feedback,especially when it challengespreconceived notions, be seriouslyconsidered. After all, at the end of the day, it is the customer whopays for the product and the salariesof all the people who build theproduct.

Steve August is a principal at KDA Research (www.kdaresearch.com), a SanFrancisco based consulting company that specializes in integrating consumer

and user experience into products and communications. KDAResearch has provided usability and consumer research servicesto a variety of companies including LifeScan, Netgear, Nikon andClorox. He can be reached at [email protected].

Reprinted with permission from SVPMA.ORG NEWS



Product Marketing TrainingHigh-TechRequirements That Work™

Course designed for:Product managers who are responsiblefor defining and delivering high-techproducts. Product managers get morefrom this course when trainedsimultaneously with their counterpartsin Product Development.

I. Defining Roles and Methodology• Understand the source of

conflict between Developmentand Marketing

• Define clear roles andresponsibilities

• Introduce a product planning methodology

II. Gathering Input• Channels of input to

product planning• Organizing product ideas• Quantifying market needs

III. Building the Market Requirements Document

• Writing requirements• Implementing use-case scenarios• Programming for the “persona”• Determining product feature sets• Creating the Market Requirements

Document (MRD)

IV. Analyzing Business and Technology Drivers

• Reviewing specifications• Prioritizing the product feature

set

V. Getting (and Keeping) Commitments• Product contract• Getting the product team in sync• Getting executive support• Communicating the plan in the

company and in the market

Create MarketRequirements

Documentsthat get

executed and deliver

solutions yourmarket wants

Requirements That Work is an intensive one-day course that introduces a straight

forward method for creating product plans that product managers can write,

developers readily embrace, and that produce solutions the market

wants to buy.

The seminar gives you a repeatable method for product planning that results

in a Market Requirements Document that others can read and use.

This training establishes clear roles for team members, and teaches a process that creates an executable plan that delivers solutions that sell.

Call (800) 816-7861 or go to www.PragmaticMarketing.com to register!


Many would argue that recent yearshave marked a significant downturn incorporate America. I would say that theproblem has existed for years and onlynow are we really feeling the effects.Somehow we’ve lost touch withmarketing fundamentals and moveddirectly to technical sales.

It was a brisk fall day as we left the hotelto go to our first Pragmatic Marketing®

class. I remember pondering what mightlie ahead. About two hours into the class,the instructor, Barbara Nelson, mentioned,“If high-tech product managers wereselling fried chicken, they’d talk aboutdead chicken parts, fried in grease, at400 degrees.” She said, “Talk aboutwhat you do for people, not the technicalfeatures in your products.” My colleagueswere astonished. It was as if a light bulbhad just gone on. Funny, I had beenpreaching this philosophy for more thana year, but few people had listened.Then again, I was not an instructor for a prominent school, just a productmanager in the technology sector.

What I had noticed happened in thetechnology sector was now commonplacein most American corporations. Theconcept of marketing had been lost andinstead replaced with technical sales.Now, more than ever I could see thatthe problem was a fundamental problemand could easily be fixed.

Having clarity of thought meant I couldset about the task of identifying thedifferentiators between marketing andtechnical sales.

I’m not suggesting that you turn yourcurrent sales collateral into a hoppedup drag racing commercial, but rathersweeten the message to your customers.Pretend that you’re explaining yourproduct/service to a friend in a non-

related industry (such as healthcare).Would you use acronyms or jargon?How about operational details? Chancesare you’d keep things conversational,explaining the value and benefits of theproduct/service.

Technical sales target the personinstalling the product or using theservice, addressing issues such ascapacity, performance and compatibility.Marketing targets the decision maker,demonstrating cost savings and benefitsof the product.

Simplicity is keyMost people know that a Storage AreaNetwork (SAN) is basically a network of storage devices (hard drives, diskarrays, etc.) connected to a local areanetwork. The SAN stores all of the data from different operating systems(Windows®, NetWare®, Unix/Linux®) inone area. Workstations on the networkaccess data stored in the SAN as if itwere stored on their computer. In large enterprise networks, SANs offersignificant advantages because allcorporate data, regardless of operatingsystem, can be managed and backedup from a central point. According toGartner, the implementation cost of the average SAN is about one milliondollars. Here’s a product descriptionfrom a prominent Storage Area Network(SAN) vendor. I’ve changed the details,but not the wording:

Blanko’s SAN 2150 Multilayer MasterSwitch provides 16 to 256 ports, with1.8 Gigabit per second performanceand a high-availability design. It offers6 to 36 Gigabit Ethernet ports for iSCSIor FCIP connectivity. It includesVirtual SAN (VSAN) capability for SANconsolidation into virtual SAN ‘islands’on a single physical fabric. It providescomprehensive security for largeenterprise SANs deployment. TheMaster Switch uses intelligentnetworking services to help simplifySAN management and reduce totalcost of ownership.

That example reads just like a classictechnical sales piece. Who is the targetaudience? Is it the IT Manager, CEO,CFO, CIO, or EIEIO (old MacDonald)?

Given the information above, here’s anidea of how you might begin the sameproduct description using understandablelanguage:

In today’s economy, preserving ITinvestments and reducing the totalcost of ownership are of paramountimportance. Blanko’s SAN 2150provides the perfect blend of topperformance and expandability….

Blanko’s SAN 2150 offers a host offeatures without compromisingperformance or security….

Technical Sales• Boring – used as a sleeping aid

• Extensive vocabulary – great reading for PhDs, confusing to the rest of us

• Acronyms – mean nothing to someoneoutside the industry

• Industry-specific jargon – more confusion,only using words instead of letters

• Discusses how the product operates,not the benefits to the customer

• Professes ease of use that often isn’t there

• Does not solve any problems

vTechnical SalesThe gradual demise of corporate America

By Rick Tatham


vs.

The goal is to givethe audience a reason

to keep reading. Capturetheir attention, and keep

it. Simplicity is the key!Here’s another example:

Problem: Customer runs out of harddisk space.

Solution: Marketing Slogan. “NeverRun Out of Disk Space Again!”

It’s that easy! The hardest part is to notover think things.

Visit your corporate website and read a product or service description. Is the first sentence captivating? Does itmotivate you to read on? Is the writingstyle relaxed and friendly? After readinga short description could you explainthis product/service to a teenager? Havesomeone else (outside of your office)read the description and explain theproduct/service back to you. Do youunderstand how this product fixes aproblem you have? Do you want toknow more? Or, have you just lapsedinto a coma? Remember, there’s nopenalty for making something too easy to understand.

Tips for improving marketing descriptions• Write in a relaxed, quiet environment

(outside the office).

• Jot down the general points youwant to cover.

• Don’t use a computer. Use a pen and paper (this is difficult).

• Don’t worry about grammar,punctuation or proper writing (fix it later).

• Write your description as if you wereexplaining it to a friend.

• On your first attempt don’t use anydiagrams or pictures.

• When you’re done, write a veryconcise summary, and then move itto your second sentence.

• Write an attention grabber, think boldand even unusual. Example – Imaginenever having to worry about your_______ again.

Rest assured that anyone can writegreat marketing copy if they breakthings down to simple steps.

At times, creative writing can bedifficult even for the most experiencedwriters. Some years ago, I learned atechnique called “mind mapping” or“clustering” that simplifies the task. Just follow these steps:

1. Start with a blank piece of unlinedpaper.

2.Write your product, service or topicin the center of the paper.

3. Circle it – stimulates the creative halfof the brain.

4.Write down anything that comes tomind. Don’t be afraid to write downitems that are not very related, theycould come in handy later. The goalhere is to get everything out of yourhead and on to the paper.

5. Circle it.

6. If two items are related, draw a lineconnecting them.

7.When you’re done, you should havesomething that looks like a complexmolecule, but with words inside eachcircle. Review the words and numberthem to create an outline.

8. Cross off the ones you don’t want.

9.Need more material? Just copy one of the circles (topics) to another pieceof paper and repeat the process.

I strongly recommend that you practicethis technique with something simpleto start. Write a letter to a friend, makea list of things to do around the house,but don’t try this for the first time onyour Master’s thesis. If you commit topracticing this style of writing at leastthree times you’ll never go back to old school writing again.

Put what I’ve said to the test. Pick a flyer, brochure, presentation oradvertisement that has a measurableresponse. Make it Simpler, Friendlierand more Enthusiastic. Then measurethe results again. I’ll bet they are 30%higher, and at nearly no cost. GoodLuck and Happy Hunting!

Rick Tatham is a formerProduct Manager/ProductMarketing Manager forLegato Systems, Inc., acompany that recentlysold for $1.3 billion. He

is dedicated to ensuring that Marketingremains “Simple, Friendly andEnthusiastic.” If you enjoyed this article,please send him an email [email protected]

Marketing• Simple – easy, obvious

• Friendly – fun, relaxed

• Enthusiastic – exciting, interesting

Marketing

The Art of ProfitabilityBy Adrian Slywotsky

In 23 chapters, Mr. Slywotsky engagesthe reader with a storytelling style andoutlines 23 profit models for business.He challenges the reader to read onlyone chapter a week to allow time to reflect before moving to the nextchapter. (I read the book in twohours—I couldn’t wait.)

One of the key messages of the bookis “The pathway to profitability? It liesin fully understanding the customer.”You won’t find a quick fix to profitwoes in this book if you are not willingto invest in what happens outside the

walls of your company,but if you are strugglingwith how to make agood product moreprofitable, this bookmight providesome inspirationon how toachieve betterresults. Thewise, seasoned

guru teachesthe eager, young

student lessons about business in an entertaining (although sometimestrite) fashion. He gives the studenthomework and reading assignmentseach week (a bit of self-promotionsince some of the books and articleswere written by the author). There are many practical tips to help youmaximize your profits.

Voices into ChoicesBy Gary Burchill and Christina Hepner Brodie

“Voices into Choices” is a practicalguide that teaches you specifictechniques to listen to your customersand turn what you learn into solutionsto their problems. The easy-to-followformat is full of case study examples at every step in the process, withchecklists, templates, and detailedprocesses that make it immediatelyactionable. It dovetails well into thePragmatic Marketing® Framework,providing practical advice forlistening to the market.

The techniques apply to new or existing products or services. It is written in

a step-by-step cookbook style, but even if you don’t follow the formalprocess, there are numerous gemsthroughout the book that you can use right away. Not only is the bookfull of examples and exercises to helpyou prepare to do on-site research, theformat of the book itself is practical. It is hardbound with a spiral bindinginside—when open, the book lies flatso you can actually use the checklists.

At first glance, the 20-step FOCUSprocess seems daunting. But Burchilland Brodie have broken it down intomanageable segments that are welllaid out and easy to follow. At times,some of the instruction seems too basic(reminding you to bring paper andpen to take notes), but the book is

valuable not only for the novice,but for experts who have

conducted on-siteinterviews for years.

Book Reviews By Barbara Nelson

• As a high-tech executive, are you unclear about the strategic role of product management?

• Does the role of product manager in your company need to be defined to the CEO so support can be given to strategic activities?

• As a product manager, do you strive to lead the organization rather than react to it?

This half-day session is a subset of the Practical Product Management™ seminarand introduces the industry standard for high-tech marketing, the PragmaticMarketing Framework. Refined over ten years and implemented byhundreds of technology companies, this framework shows how ProductManagement and Marketing personnel can move from tactical activities to quantifiable, strategic actions that deliver tremendous value to thecompany. This session includes immediate actionable ideas about how to best establish the role of Product Marketing/Management and definemarket-driven products that make customers want to buy.

This seminar is open to anyonecurrently employed in high-tech

marketing, including seniormanagement, product marketing

managers, and product managers.

There is no fee to attend, butregistration is required via our website.

www.PragmaticMarketing.comSeats are limited, so early registration is recommended. See available dates on back cover.

The Strategic Role of Product Management ™

Freeseminar!

Take a look behind the scenes at any after-school program or childcarecenter and you’ll discover a lot morethan crayons and storybooks. You’llfind reams of paperwork andadministrators who spend countlesshours communicating with parentsand generating reports for regulators.Kinderstreet Corporation is changing allthat. Launched in 2000 by six founderswho are passionate about making a positive impact on young lives,Kinderstreet is ensuring that childcareproviders and parents can focus oneducation and child development—not on processing paperwork.

Before embarking on its mission to helpits customers improve their learningprocesses, the Kinderstreet foundersknew that they themselves had a lot to learn. Scott Lindsay, who heads up operations for Kinderstreet and is acompany founder, explains, “When westarted the company, we had a strongconcept of the type of product wewanted to build. But we also decidedthat Kinderstreet would be a companyfounded on customer focus andcustomer care. So we funded an eight-month research period, where we didabsolutely no product development.Our goal was to study childcare andafter-school programs in extreme detail.By becoming intimate with every iotaof our customers’ practices and theirneeds, we hoped to find uniquesolutions to their challenges.”

Toward that end, the founders wentout and talked to nearly two percent of their target market to get feedbackon their concepts. “Initially we weregoing to produce a record managementsystem to keep track of families and dobilling. But when we polled the leadingpeople in the market, we realized therewas a vast, untapped opportunity. Our

research showed that the majority of theadministrator’s time was spent talkingwith parents and regulators. So weexpanded our product vision to includecommunication tools in the initialproduct launch—a system that wouldget mom and dad more involved intheir children’s activities. One thatautomatically gives the government all the information it needs—and all in a way that saves time for providers.”

A Pragmatic approach—from the ground upLindsay learned the importance oflistening to your market from themany years he’s been practicing thePragmatic Marketing® approach toproduct management. In fact, he likesto say that he practically grew up onPragmatic Marketing’s strategic productmanagement methodology. “I startedout as a developer, spent time in salesand implementation, and then went intoproduct management in the mid-90s. I came out of the field and straight intomy first Pragmatic Marketing training. A few years later, when I moved toSolomon Software (now MicrosoftBusiness Solutions), I brought thePragmatic grid along with me tomanage products there.”

He adds, “Now, the Pragmatic grid isthe fundamental way I manage all ofthe product marketing tasks that needto be done—filling out the grid andidentifying who in the organization isgoing to do those things. When welaunched Kinderstreet, we started withthat grid as the model of the thingswe needed to do from a productperspective—especially listening toour market. If the Pragmatic structureand influence hadn’t been there, wewould not have justified that amountof research, and we would have misseda critical market opportunity.”

Based on the new product vision, theKinderstreet team spent another eightor nine months to build the solutionand deploy it to a select group ofcommercial customers. The objectivewas to test the complete servicedelivery system, not simply launch theproduct. The result of the exhaustiveresearch, development, and testing is Kinderstreet: a suite of innovativeInternet applications that streamlineadministration, simplify billing, eliminatestate licensing paperwork, and keepfamily members informed 24/7.

Mastering the chaos and the competitionOf the six Kinderstreet founders, all were “product-type” people, butonly Lindsay had gone through thePragmatic Marketing courses. “All of ushave worked for companies that builtcustom products or know the lifecycleof software products,” he remarks. “ButI was the one who provided a work-structured task list for developing and

Case Study


Start-up Software Company Learns to Listen, Listens to Learn


managing the product vision. That’swhat Pragmatic Marketing did for us from day one—it filtered out thetypical chaos into a structure ofeverything we had to deal with, fromthe strategic issues down to the tacticaltasks. The Pragmatic methodology reallyopens the minds of product managersand empowers them to get their jobsdone in a way that will help theorganization succeed—much betterthan everybody playing cowboy andrunning in their own direction.”

Having a market-focused methodologyin place from the beginning not onlyhelped Kinderstreet master the chaos,it also helped the company master thecompetition. “The deep market researchwe did definitely gave us a leg up onthe competition,” Lindsay emphasizes.“It’s a fragmented market, and theplayers in this space are not Internetbased. The majority of the tools havefocused more on accounting and back-end business applications than oncommunications. We made a strategicdecision early on, to specialize incommunications solutions and partnerwith others for accounting tools. Thatmeans we spent our resources on atruly unique value proposition—one thatdifferentiates us from the competitionand puts up barriers to entry to our space.”

When a start-up company starts talkingabout a proven methodology for productdevelopment and a focus that sets itapart from the pack, investors tend tostand up and take notice, as well.“When you approach investors to getcapital to start a company, they like tohear that there is a structure underneaththe product that makes them feelcomfortable with giving you theirmoney. While that’s not the only thingthat got us start-up capital, I do thinkthe Pragmatic approach was an integralpart of that success. Our investorscould see that we are a professionaldevelopment organization, using a

methodology that produces results.That makes a positive impression.”

Know your customersCustomer intimacy has now become away of life at Kinderstreet, along withthe company’s commitment to serviceand ongoing product enhancements.Not one to rest on its laurels, thecompany continues to seek new ways to improve the care andeducation of the nations’ youth. As part of its first salvo into marketresearch, Kinderstreet lined up aproduct advisory board comprisingsome 50 different companies. The teamcontinues to listen to the market andtest products and features with focusgroups geared to obtain feedbackduring the building cycle.

“The most valuable thing I’ve learnedover the years from the Pragmaticcourse is to know and talk to yourprospective customers,” says Lindsay.“As soon as you understand what theyare saying, you can build a valueproposition. And that permeates everylevel of your company—from sales todevelopment to marketing to services.From a development standpoint, themethodology helps us prioritize whatthe next tasks are on the productionlist and ensure we are always tied backto the strategic vision of what we wantto provide to the market.”

The results speak for themselves. “Our first customer satisfaction ratingwas in the high 90s,” he emphasizes“That success is 100 percent driven bythe fact that the Pragmatic grid helpsus recognize how to fully serve ourcustomer—not just what features arein the product. That’s what we allrefer to as a whole product.”

A small company thinks bigToday, you can still count the numberof Kinderstreet employees on twohands. But while the company is small

and growing, there is no shortage ofbig thinking, especially when it comesto product management.

“Because we are a market-drivencompany with a proven methodologyfor listening to customers and managingour organization, we believe we arepositioned to lead our niche—anddominate it in the coming years,”Lindsay emphasizes. “The power ofthe Pragmatic approach works as wellfor a start-up as for a behemoth. I’veimplemented the Practical ProductManagement™ course at very largecompanies and now a very smallcompany. In both cases, it has helpedme plan where to spend my time to achieve maximum return oninvestment. In a start-up company,with investors watching very carefully,that ROI question is right up front.And the Pragmatic Marketingmethodology helps you answer thatquestion definitively. I would actuallysay it’s almost more essential forsmaller companies.”

When asked about advice for othersmall companies trying to come to grips with professional productmanagement, Lindsay says, “If youlook at product management and youcan’t figure out how that organizationshould work, Pragmatic is the place togo. It provides you with the structure.It helps you make the decisions aboutwhere product management should fit and how it should work in yourorganization. And it also helps yougive responsibility to those peoplewho need authority over certain areas.The Pragmatic Marketing methodologyis an essential part of getting rid of the chaos and the floundering that somany organizations experience. Overthe years, the Pragmatic process getsingrained in you, and it just makessense. I consider Pragmatic Marketingto be the professional productmanagement company.”

To feature the product management success at your company, contact [email protected]

Case Study

Call (800) 816-7861 or go to www.PragmaticMarketing.com to register!

Product Marketing TrainingHigh-TechEffective Marketing Programs™

Course designed for:Product managers, marketingmanagers and directors, industrymarketing managers, fieldmarketing and marcom managers.You should attend if you areresponsible for planning or executionof programs and tools that buildmarket share in high-tech markets.

I. Roles and Responsibilities• The Pragmatic Marketing®

Framework

• The Effective MarketingPrograms Process

• Role definitions & skillsassessment

II. Buyer Personas• Positioning by type of buyer

• Creating buyer personas

• The sales channel persona

III. The Strategic Programs Plan• The business case for marketing

programs

• Supporting sales goals

• Metrics that engendermanagement support

• Building the right marketing budget

IV. High ROI Sales Tools • Writing useful, high-impact

collateral

• How to generate success stories

• Real thought leadership in whitepapers

• Building a strategic website

V. Goal-Oriented Program Execution• Controlling lead quality

and throughput

• When to use online marketing

• Measure results without CRM

• Program priorities for each goal

VI. Start Where You Are• Prioritizing next steps

• Start with existing programs

• Setting measurable goals

Achievemeasurable

growth inrevenue,

awareness,and customer

retentionEffective Marketing Programs is an

intensive two-day course that explainshow the most successful high-tech

companies plan, execute and measuremarketing programs and sales tools.

Through real-life case studies, you will see how high-tech companies

of all sizes get their message heard in markets both large and small. Takeaway skills and ideas that immediately

impact your results, and then paydividends throughout your career.

Calendar of Upcoming 2004 Pragmatic Marketing Seminars

16035 N. 80th Street, Suite FScottsdale, AZ 85260

PRSRT STDUS POSTAGE

PAIDPHOENIX, AZPERMIT 995

productmarketing.com™

1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31

MarchS M T W TH F S

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30

April S M T W TH F S

1

2 3 4 5 6 7 8

9 10 11 12 13 14 15

16 17 18 19 20 21 22

23 24 25 26 27 28 29

30 31

MayS M T W TH F S

1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

20 21 22 23 24 25 26

27 28 29 30

JuneS M T W TH F S

* Requirements That Work, Day 3

Advertise in the journal that 50,000 high-techproduct marketers

rely on.

Companies who have advertised in this print journal,productmarketing.com, cite a great response and continue

to place ads. Call (800) 816-7861 x10 to inquire about our low advertising rates.

Practical Product Management™

March 1 - 3* ............San Francisco, CAMarch 15 - 17* ........Boston, MAMarch 22 - 24* ........Toronto, OntarioMarch 29 - 31* ........San Francisco, CAApril 19 - 21* ..........Boston, MAApril 26 - 28* ..........San Francisco, CAMay 17 - 19* ............Boston, MAMay 24 - 26* ............San Francisco, CAJune 14 - 16*............Boston, MAJune 21 - 23*............San Francisco, CAJune 28 - 30*............Atlanta, GA

* Requirements That Work, Day 3

Requirements That Work™

March 3 ....................San Francisco, CAMarch 17 ..................Boston, MAMarch 24 ..................Toronto, OntarioMarch 31 ..................San Francisco, CAApril 21 ....................Boston, MAApril 28 ....................San Francisco, CAMay 19......................Boston, MAMay 26......................San Francisco, CAJune 16 ....................Boston, MAJune 23 ....................San Francisco, CAJune 30 ....................Atlanta, GA

Effective Marketing Programs™

March 17 - 18 ..........Boston, MAApril 28 - 29 ............San Francisco, CAMay 19 - 20..............Boston, MAJune 23 - 24 ............San Francisco, CA

Call (800) 816-7861 or go towww.PragmaticMarketing.com

to register!The Strategic Role

of Product Management™

March 18 ..................Boston, MAMarch 25 ..................Toronto, OntarioMay 20......................Boston, MAMay 27......................Santa Clara, CA

Free

A subset of the two-day Practical Product Management™seminar, this session introduces the industry standard

for high-tech marketing. Shows how Product Managementand Marketing personnel can move from tactical

to strategic activities.

Registration for this free seminar is required via our website:

www.PragmaticMarketing.com