Faster! Gaining Product Momentumstates that you can push a thing to make it go faster, and that as a...

Vo lume 3 Issue 2 M a r c h / A p r i l 2 0 0 5

T h e M a r k e t i n g J o u r n a l f o r Te c h n o l o g y P r o d u c t M a n a g e r s • A P r a g m a t i c M a r k e t i n g ® P u b l i c a t i o n

Faster! Gaining Product Momentum

The Exceptional Product Manager: What is the “Right Stuff”?

Who Needs Product Management?

Due Diligence for New Product Ideas

Seven Things You Can Do to Improve Your Credibility on the Web

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About Pragmatic Marketing, Inc.Pragmatic Marketing, Inc. was formed in 1993 toprovide product marketing training and consulting to technology firms by focusing on strategic, market-driven techniques. Pragmatic’s trainingcourses emphasize business-oriented definition of market problems, resulting in reduced risk andfaster product delivery and adoption. Since itsinception, Pragmatic Marketing has successfullygraduated over 30,000 product managers andmarketing professionals. For more information, visitwww.PragmaticMarketing.com or call 480-515-1411.

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Contributing WritersSteve GuengerichCatherine KitchoJacques MurphyBarbara Nelson

Ross SpeirMark J. Tiedeman

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Volume 3 Issue 2March/April 2005

4 Faster! Gaining Product Momentum

One of the top tasks of a product manager is to make theproduct gain momentum. Read on for tips about how tobuild momentum to catch up with competitors andeventually pull ahead of the pack.

8 The Exceptional Product Manager: What is the “Right Stuff”?

What separates an exceptional product manager from a merely competent product manager? Read and find out.

11 Pragmatic Marketing Surpasses the 30,000-Student Mark

12 Who Needs Product Management?

Product management is a well-understood role in virtuallyevery industry except technology. In the last ten years, theproduct management role has expanded its influence intechnology companies yet we continue to hear the question,“Who needs product management?”

18 Due Diligence for New Product Ideas

Any company can use due diligence principles to evaluatenew product ideas. This article presents a hypotheticalexample of how to use due diligence for new productideas.

26 Seven Things You Can Do to Improve Your Credibility on the Web

When it comes to believing what one reads online,credibility matters. Credible sources have the ability tochange opinions, attitudes, and behaviors, to motivate andpersuade. Read the top tactics and persuasion strategiesyou can employ to improve your own website’s credibility.

29 Case Study

Metavante Corporation—Capitalizing on the Power of Positive Change

productmarketing.com • March/April 2005 • 3

4 • productmarketing.com • March/April 2005

Faster!Faster!

We have all heard the stories aboutpeople, during the dot-com era, whobypassed tried and true businessconcepts to champion untried—anduntrue—concepts such as “The Internetchanges everything.” and “The companywith first mover advantage wins.” Whilethere is some truth to these concepts(and I think we will learn where toapply them correctly) the problem wasthat they were built on beliefs that theold rules—the law of gravity, for

example—no longer applied.

We all know, however, that thelaw of gravity does in fact still

apply. And like the law of gravity, the Law ofMomentum is one

of the most important laws for your product.

The Law of Momentum basicallystates that you can push a thing tomake it go faster, and that as a thingbuilds up speed, it’s easier to make it go even faster.

One of the top responsibilities of aproduct manager—and I’ve never seenit on a job description—is to make theproduct gain momentum. When youmake it gain momentum, it catches up to competitors that were alreadyahead, and eventually pulls ahead ofthe pack, leading to a more profitableproduct and a more successful company.

And once you’ve got the momentum,you don’t have to work so hard toincrease your speed.

Read on for tips about how to buildmomentum for your product.

From good to great The book, Good to Great: Why SomeCompanies Make the Leap...and OthersDon’t by Jim Collins (HarperCollins,2001) analyzes companies that went from being good companies to being extremely successful anddetermines the factors that led to theirtransformation. One of the conclusionsin the book is that there is no silverbullet that makes a company suddenlypick up momentum. It compares theeffort to pushing a really big, heavywheel. At first, it requires lots of pushingjust to get the wheel to budge. Then,very gradually, the wheel starts movingfaster and faster.

Our focus here is pushing on the bigwheel that is our product in order toget it moving, and then moving faster.It’s a lot of hard work.

They all feed off each other The first thing to understand is thatbuilding momentum is a cumulativething. It comes from adding upmomentum in such things as launchingnew features, marketing success, andcustomer success stories. Momentumin each area can be used to feed theoverall momentum.

This is the equivalent of the need toexpend a lot of effort to push on thatbig wheel. There isn’t just one thingyou can focus on to gain productmomentum. It’s the result of sustainedhard work on many fronts.

Feature momentum… The most noticeable momentum thatyou can gain relative to competitors is “feature momentum.” This is whereyou can develop more new features—and better versions of features that yourcompetitors are working on—in thesame amount of time.

To increase the pace at which youdevelop new features, you need to relyon a structured process to: 1) identifyand define competitive features, and2) design, code, and test these features.The more you can structure yourproduct research, requirementsdevelopment, and prioritization ofnew features, the better you can focusexisting development resources ondeveloping the features you choose.

One way to focus developers on developing, as opposed toinvestigating and speculating, is toprovide requirements that are factualand provide broad instructions whilealso making the major judgment callsthat let a software developer focus not on what a feature must do, but on how to make it work.

By reviewing your requirements with thedevelopers assigned to create designsfrom them, and learning what the majordecisions are that must be made, youcan indicate some of the decisions upfront in the requirements.

For example: “Provide ability to exportcustomer records for merge mailings”is a decent first start. But it’s probablyworth specifying that you want to exportthe records to “comma delimited filescontaining the specific fields selected


Gaining Product MomentumBy Jacques Murphy

from a list of all potential fields in the customer record.” It saves you alot of back and forth, plus it preventsa programmer from possibly thinkingthey need to develop something thatexports into a complex data format.

...And feature fatigueAt this point, it’s helpful to discusssomething I call “feature fatigue”which happens when your developmentteam can crank out features faster thanthe consultants and trainers at yourcompany, not to mention your existingcustomers, can absorb them.

It isn’t enough to speed things up in only one area. Good momentumrequires progress on all fronts, or elsethe organization as a whole gets wornout trying to keep up with the partthat has gained speed.

For example, you want to ensure thatMarketing is building up the momentumto take advantage of your featuremomentum, or any other momentum.

If you stagnate on any one front, you may find it creates a drag on the momentum you worked so hard to build somewhere else.

Release momentumRelease momentum has two aspects.The first is the ability of Developmentto package and release new features.The second is the ability of your

company as a whole to receive theoutput of your software developmentengine and launch it to the market. Thisis where a structured and predictablerelease cycle is extremely helpful.Using tactics such as release and phasedates on a fixed schedule, with the samestructure and timeframes for eachrelease, Development can focus onproduction, rather than spending timewrestling with setting schedules andswitching gears due to unexpecteddeadline changes. This is also where a cross-functional team that preparesfor every launch can coordinate all theefforts needed for a smooth launch,both internal and external.

Make sure that the product launch teamtruly includes all individuals needed foran unimpeded launch. Did you thinkabout including Accounts Payable, so they know exactly how to bill forupgrades and new modules? For somereason, people keep forgetting theteammates whose job it is to make sureyour company actually gets paid forwhat it sells.

Marketing momemtumMarketing momentum increases whenyou time your output of collateral andsales tools to hit right at product launch,not to lag the availability of the featuresby weeks or months.

But marketing momentum goes farbeyond that. Ideally, by the time newfeatures officially hit the market, your

Marketing department has alreadypresented case studies to analysts and to the press.

When it comes to press coverage, it’simportant to remember to go back tothe publications that have covered youpreviously. The tendency is to try tohit as wide a number of publicationsand channels as possible. While that is a good thing, it’s easy to forget thatyou already have some momentumgoing with the places where you havegotten coverage before. In this case, youget more speed by pushing a wheelthat was already moving.

Finally, by creating a series ofcoordinated campaigns that buildupon or complement each other,rather than carrying out isolatedcampaigns that don’t work together,you get more marketing motion. Don’tspin the wheel once and let it come to a stop only to find you have toexpend the exact same effort as beforejust to get the wheel to go another turn.Craft messages and creative materialsthat build on earlier ones. With allyour effort, the first campaign probablydoes nothing more than open thedoor. The second campaign gets younoticed. The third actually grabs theprospect’s attention.

So for the same amount of effort with each ensuing campaign, you get bigger results.


Sales momentum Sales momentum builds off marketingmomentum and feeds customermomentum, as described below.

One good way to maximize salesmomentum is to ensure, as the productmanager, that you fully train the salesforce on all sales tools developed for them.

Another way a product manager cansupport sales momentum is throughconsistent support, tailored to thevarious reps’ differences. For instance,for some reps, ensure you’re a greatresource for competitive information.For others, the best help from you couldbe setting up and running demos.

Of course, it’s the VP of Sales who canhave the most impact on momentum.But by coordinating your efforts with thesales managers, you add to the speed.

Partner momentum Partner momentum is probably theslowest to build. Partner momentumadds to all your marketing efforts, andin fact may make the difference betweena good return and no return on a marketing campaign.

Partner momentum benefits from astructured review process that regularlyreviews each partner effort and measuresthe return. It’s better to considermarketing and sales efforts separately.

By creating marketing campaigns thatfeed leads to partners, and publicizingthe leads and a partner’s success withthem, you create a lot of momentumamong the partner’s sales force.

Working with a larger company as a partner adds momentum to yourmarketing campaigns because youhave more “feet on the street” tofollow up on leads.

Customer momentum Customer momentum comes fromcustomers experiencing good returnson their investment in your product.This leads to stories that get noticed in the press because they’re real-worldstories rather than simple marketingpromotion.

One satisfied customer can lead to othersatisfied customers through a definedreference program that rewardscustomers who serve as referenceswith prospects or the media.

Employee momentum Finally, employee momentum may be one of the least noticed, but it feedsall the others. Employee momentum is where employees begin to worksmarter, more collaboratively, andproduce more as a team than theywould as a combination of individualcontributors.

Ways to build employee momentuminclude general efforts such asempowerment and training inteambuilding skills. Also included are more specific initiatives to trainstaff in common processes and buildteams that work to common goalsusing common tools.

Don’t get even, get ahead! By increasing the product momentum,you can enjoy watching your product—and your company—pull even withcompetitors who once outpaced you,and then pull ahead of the pack...

Jacques Murphy has over 15 years of experience inthe software industry. Hewrites an email newslettercalled Product Management

Challenges that focuses on increasingsoftware product momentum in termsof development, marketing, sales, and profitability in order to improvethe product’s competitive position. To regularly receive helpful tips for software product management, send an email to [email protected] “subscribe” in the subject line.Subscribers can also request a zip file of 80 back issues covering a widerange of topics.

Reprinted with permission from PRODUCT MANAGEMENT CHALLENGES, a Bi-weekly

Newsletter of Tips For Companies that Develop Software.Copyright © 2002 - 2005 Jacques Murphy.

All rights reserved.



What is the“Right Stuff”?

The Exceptional Product Manager:

By Mark J. Tiedeman

What makes an exceptional productmanager? I was struck by this veryquestion many years ago when I firstbecame a manager. When it came timefor the company’s annual performancereview process, it seemed that managerscould agree most of the time on whothe top performers were, but whenasked to articulate the reasons why,the answers invariably were phraseslike “high output, high-quality work,”“displayed leadership,” and so on, withan example or two given. While true,these reasons were too ambiguous anddid little to guide people. Intuitively,we all know a star performer whenwe see one, but we are often at a loss to succinctly say why.

Hence, I asked myself: “Why is so-and-so a star and what makes him/herstand out?” What emerged was a listof attributes that were essential to notmerely fulfilling, but exceeding, therequirements of the job. Star performersinvariably scored well on virtually allof them, while others scored lower.

I use the list of attributes as acomplement to the standard companyperformance review forms to bothassess an individual’s performanceand to coach them. In so doing,keeping the list to a single pageensures maintaining focus on the keyattributes. Employee feedback hasbeen consistently positive because itprovides specific goals in performingthe job, practical assessments andtangible improvement ideas.

I found that about a third of the list is common across all jobs, not justthat of product manager: for example,exhibiting a good attitude is universal.Other attributes, such as goodcommunication skills, are also universalbut their importance and the degreeto which they are used varies by jobfunction. Still, other attributes are uniqueto the product manager job itself.


So, what is the “right stuff” for productmanagers? Here is my list of exceptionalproduct manager attributes, forged andhoned from 15 years in high-techproduct management.

Attitude: Foundation for successAttitude is the first attribute on the list because it is what drivesindividuals to achieve results andimprove their performance. This is especially important for productmanagers because they must be self-starters and leaders who mustconstantly move their products andorganizations forward.

ATT1 Is enthusiastic, sees problems asopportunities, and proactivelydevelops knowledge and skillsneeded.

ATT2 Perseveres through any and allsituations with indomitable spirit andprofessionalism, keeping perspectiveand displaying a good sense ofhumor.

I remember being told as a youngengineer fresh out of school that if theboss said, “I have an opportunity foryou,” to run for cover because it wasprobably an undesirable problem. Withmany “opportunities” under my beltsince then, I have learned that problems—while admittedly sometimes painfulto have to deal with—truly offeropportunities to improve. For example,customer objections to purchasing aproduct often require sharpening thevalue proposition and/or competitivepositioning. Or, by clarifying theobjection, an alternative solution may emerge that is much easier to deal with.

In a world that is increasingly global,competitive, and perhaps uncertain, howwe handle adversity can determine thewinners. In short, product managersare highly-visible role models: they arelooked to by other members of thecompany for direction and, when timesare tough, for how they respond andfor assurance that the right things are

being done to ensure success. Humoris an especially effective tool. After a particularly difficult call with acustomer, I recall my manager slowlyshaking his head, and saying with aresigned smile, “In the next life, I wantto be the customer!” That instantlybroke the tension we all felt andallowed us to get on with addressingthe customer’s issues.

Knowledge:Applying what is learnedKnowledge provides a groundwork for most of the other attributes and itsapplication helps product managersexcel at them.

KNOW1 For each product managed,intimately understands its features andcapabilities, how they relate tocustomer benefits and uses, and howthe product compares to competitiveor substitute products and solutions.

KNOW2 Understands key applicablemarket, customer, industry, competitive,environmental, regulatory andtechnological forces and trends.

KNOW3 Is well-versed in marketrequirements and product definitionusing best current practices, and theend-to-end product realization processfrom conception throughdiscontinuation.

As a product manager, I spend a lot of time being an “Information Broker”since I am constantly called upon toprovide information to engineers, the sales department, and customers.Engineers want to know: Why is thisfeature or requirement important? Whymust this be developed by such-and-such date? What is happening in themarket or with a particular customer?Sales and customers want to know:Why is your product superior tocompetitive solutions? When will thisfeature be available? How does thisfeature work? And, so on. The fact is,knowledge inspires confidence andconfidence breeds success. Knowledgeis the source of a product manager’s

ability to influence and lead: engineerswill be confident in the decisions wemake, Sales will be confident in theability to sell the product, and customerswill be confident in both the productand the company.

Communication:Engaging othersAll jobs require some communication,but effective, proactive communicationis especially important for productmanagers, who must engage a widevariety of co-workers, partners,customers and industry colleagues.Product Management is aboutcommunicating with others to bothlearn and convey what is—and isnot—important, and what should be done, and why.

COMM1 Superb, empathetic, open-minded, active listener; asks good questions.

COMM2 Demonstrates clear, articulate,and well-organized oral and writtencommunications style.

COMM3 Proactively interacts andestablishes rapport with people ofdiverse styles, backgrounds and jobpositions/levels.

The previous section on knowledgediscussed examples of communicatinginformation. However, effectivecommunication begins with listening:“Seek understanding before seeking to be understood.” In communicating,nothing is worse than conveyinginformation that the other party iseither not interested in or cannotunderstand. When called upon tomake presentations to customers, for example, I always try to find outas much as I can about the audienceand what they want to know, as wellas what we, as the vendor, want toaccomplish. At the meeting itself, Ialso seek to have the customer talk firstand I ask clarifying questions. All of this allows me to target what I present and how I present it to the customer’s specific needs.

The Exceptional Product Manager: What is the “Right Stuff”?

Customers: Being the customer advocate“It’s the customers who pay our bills”is an old and very true saying. Theproduct manager’s fundamental role is to ensure the bills keep getting paidby identifying the intersection betweenwhat customers value—and are willingto pay for—and the organization’sdistinctive capabilities to satisfy thembetter than anyone else.

CUST1 Understands, empathizes with,and can articulate customers’ viewpointsand perspectives. Understands whatproblems, challenges and opportunitiescustomers face in their businesses andhow customers use, or could use, theproduct(s) to address them.

CUST2 Translates customer wants andneeds into concise technical marketingrequirements.

CUST3 Synthesizes and prioritizes acrosscustomers’ wants and needs, balancingthem with company capabilities.

Having an engineering background, I have seen first-hand how easy it is to become enamored with technologyand the tendency to add “bells andwhistles” because it’s fun and becauseit can be done. As product managers,however, we must realize that thelimited resources available to us mustbe laser-focused on solving customerproblems and opportunities. Simplyput, to be successful, help make yourcustomers successful. At the sametime, customers sometimes want theworld and it is up to the productmanager to qualify this, make thenecessary tradeoffs to fit within companycapabilities and timeframes, and driveambiguity out of what needs to bedone via articulate technical marketingrequirements.

Managing: Passion for resultsExceptional product managers areextremely results-oriented, doingwhatever it takes to achieve thedesired objectives.

MANG1 Establishes appropriate goals.Plans and manages toward achievinggoals, anticipates problems and issuesand proactively drives their resolution.

MANG2 Handles many tasks at onetime and prioritizes among them.

MANG3 Able to lead a team and be ateam member. Instills a winning, “can-do” spirit among co-workers and teammembers, bringing out the best in themand lifting their level of play.

The first two attributes, here, areimportant yet basic “Management 101”concepts. The third attribute is lessobvious and crucial. As a productmanager, you are, by definition, theChief Cheerleader for your product.You must believe passionately thatyour product is a winner and beable to communicate crisply why it is. You count on your teammatesin engineering to build the product(to your specifications) and youcount on your teammates in

Sales to sell the product (using materialsyou have developed). As a result, youhave a great ability—and responsibility—to enable others to do their jobs well.

Decision-Making: The essence of product managementThe best, most succinct definition I everheard as to what my job as a productmanager entailed was: “Your job is tomake decisions.” Product managersface a never-ending progression ofdecisions that range from the veryspecific and tactical, such as, “Whatwords or letters should go on a label?”to the highly strategic, “What marketsdo we want to go after two years from now?”

DEC1 Understands the problem to be solved, the issue to be addressedand/or the need to be satisfied.

DEC2 Determines the criteria (business,technical, economic, customer impact,etc.) to be used in making the decisionand formulates the path leading to the decision.

DEC3 Makes sound decisions in atimely manner knowing when to get more information and when to proceed with incomplete information,avoiding “analysis paralysis.” Acceptsresponsibility and accountability fordecisions made and their consequences.

DEC4 Envisions possible futurescenarios and outcomes and developsappropriate business and productstrategies and contingencies.

A typical decision product managersface is to decide which features—andwhich capabilities within a feature—to include in a software release forDevelopment. That release may take 6-12 months to develop and another6-12 months before it is deployed andused by customers. That means it couldtake 12-24 months before it is knownwhether the decision was a good one—a lifetime in most markets wheremuch can change. Waiting to get more



information to make the decision canhelp reduce risk, but it can also delaythe release (and associated revenues),possibly missing the market window.Unlike the engineering world I startedout in where things are “black andwhite” and answers are “right or wrong,”most decisions product managers faceare in a world of “gray.” One of themost important lessons I learned camefrom an ex-CEO professor in businessschool who said: “There are no rightanswers, only intelligent choices.”

ConclusionProduct management is a demandingdiscipline because it requires makingsense out of a changing and uncertainworld in which, as we have seen, thereare often no “right” answers. It requiresleadership, to relentlessly drive one’sorganization and product forward in an increasingly challenging andcompetitive world. Yet, the joy andrewards of winning in the marketplaceand seeing one’s product address acustomer problem or need better than any competing solution areincomparable. By using the list ofattributes, product managers canimprove their effectiveness–and theirmanagers can better coach them sothey develop and have the “rightstuff,” and, in turn, more frequentlyexperience those joys and rewards.

Mark Tiedeman is VicePresident of Marketing at Copper MountainNetworks, Inc. He hasover 25 years in the high

tech telecommunications industryincluding 15 years in productmanagement and marketing roles. You can contact Mark [email protected]

As we closed out 2004, we alsomarked another important milestonefor Pragmatic Marketing: InDecember, our 30,000th student—Noriaki Ikeda, a Research Analystfor Marketing Strategy with SPSS Inc.in Cambridge, Massachusetts—attended our Practical ProductManagement® seminar in Boston.

Reinforcing our belief that everyonein the Marketing organization willbenefit from our courses, Nori’sprimary responsibility is competitiveresearch and analysis for thisworldwide provider of predictiveanalytics software and solutions.Here’s what he had to say aboutwhy he attended the course and theimpact it has made on his job:

Several of my co-workers haveattended the Pragmatic Marketingcourses and highly recommendedthe seminar to me. I was lookingto strengthen my knowledge ofbest practices for conductingcompetitive research and win/lossanalysis. I was also interested ingetting more information abouthow to improve our positioningand better define our distinctivecompetencies.

I learned all that—and muchmore—from the seminar. As I amconducting competitive analysis, I am using the course materials to construct stronger competitivewrite-ups. Every day, I am usingthe templates provided in theseminar as a reference for mywrite-ups. For win/loss analysis,we continually work on improvingour efforts and processes, and the knowledge I gained from theseminar and the templates will be a great reference in that area, as well.

The instructor for the seminar was a terrific lecturer. The coursecontent is very interesting, and heprovided very funny, real-worldexamples based on his ownexperience. He is very interesting,and he has a powerful commandof the subject.

The fact that 30,000 students have taken these courses is proofof its value. Based on my ownexperience, I would tell othermarketing professionals, “Just go! You will learn meaningfulinformation that you will definitelyuse in your day-to-day work. Evenafter the course, you will refer to the course materials and theframework and the templates tocontinue to improve your skills.”

Pragmatic Marketing instructorSteve Johnson congratulates our30,000th student, Noriaki Ikeda,a Research Analyst for MarketingStrategy with SPSS Inc., andpresents him with an iPod and a certificate for 101 songs.

Pragmatic Marketing® Surpassesthe 30,000-Student Mark

The evolution of a technology companyWe’ve all seen a typical technologyevolution. An entrepreneurial foundercreates a utility that she needs to simplifyher daily job. Explaining it to another,that person asks if it’s for sale. Basedon the enthusiasm of a few friends,she convinces her husband that thereis an opportunity here and starts acompany. She becomes a vendor. She quickly hires someone to sell the product while she handles all thetechnical work. Over time, she growsthe company, hiring more developersand some technical support people anda documentation writer and a marketingspecialist. But she continues in therole of technical leader. After the huge success of the first product, sheenvisions other products that peoplesurely must need. But the secondproduct isn’t very successful and the third is a disaster.

The problem, of course, is that she no longer knows or understands hertarget market. Having become apresident, she is no longer working in the domain and doesn’t reallyunderstand the environment of themarket. Instead of managing databasesor warehouses or assets, she’s nowmanaging hiring and firing andfinancing. With her new income, she’s buying toys that she could never before afford and she’s reallyfocused on her new set of interests.Because the new products haven’tbeen successful, she challenges herexecutives to find new ways to generate

revenue. Firstthe new headof Developmenttakes control.Since they onlycontrol the featureset, developersbuild “cool”technology leveragingthe latest tools. Butthese products don’t selleither. Now the VP of Salestakes control and we increaseour sales reach, adding remoteoffices, paying large commissions,and having offsite meetings in exoticlocales to attract the best sales people.Revenue increases a bit but not enoughto offset the costs. Then someone readsa book on branding so we hire a VPof Marketing to “get our name out there”and to “generate some buzz.” Afterwatching all these departments spendmoney like crazy, the VP of Financesteps in to bring some order from thechaos. Since Finance can’t increaserevenue, they focus on cutting costs,cutting all the excessive spending ofthe other departments. When Financegoes too far, the founder steps back in and focuses on her roots—thetechnology—and the cycle beginsagain. The VP of Development says,“Customers don’t know what theywant.” The VP of Sales says, “I can sellanything.” The VP of Marketing says,“We just have to establish a brand.”The VP of Finance says, “We have to control spending.” Our focus goes from technology to revenue to branding to cost-containment, over and over again.


Product management is a well-understood role in

virtually every industry except technology. In the

last ten years, the productmanagement role has

expanded its influence intechnology companies yet

we continue to hear thequestion, “Who needs

product management?”

Companies that have notseen the value of product

management go through aseries of expansions andlayoffs. They hire and fireand hire and fire Product

Management. These samecompanies are the ones thatseem to have a similar roller-

coaster ride in revenue andprofit. Product management is

a job that can even out theups-and-downs and can helppush a company to the next

level of performance.

Who Needs Product Management ? By Barbara Nelson


To those who have seen the impact

of strong product management on

an organization, asking “Who needs

product management?” is like asking

“Who needs profit?”

This story is all too familiar to thosewatching the technology space. Andwe’re seeing it in biotech and lifesciences, too. What the president needsis someone to be in the market, on herbehalf, just as she used to be. What’smissing from this cycle is the customer.The customer with problems that wecan solve. And one who values ourdistinctive competence.

Why is there air? To those who have seen the impact of strong product management on an organization, asking “Who needsproduct management?” is like asking“Who needs profit?” A president at acompany in Florida explained it thisway, “Product management is my trickto a turnaround. If I can get ProductManagement focused on identifyingmarket problems and representing the customers to the company, thenthe company can be saved.”

To break the viscous cycle of beingdriven by one VP or another, productmanagement brings the customer intothe equation. Instead of talking aboutour company and our products, thesuccessful product manager talks aboutour customers and their problems. Aproduct manager is the voice of thecustomer. The product manager is also the business leader for a product,looking across all departments.

“There will always, one can assume, be needfor some selling. But the aim of marketing is to make selling superfluous. The aim ofmarketing is to know and understand thecustomer so well that the product or servicefits him, and sells itself.”—Peter Drucker

This is the essence of being marketdriven—being driven by the needs ofthe market rather than the capabilitiesof the company. Being market drivenmeans identifying what dishes to servebased on what patrons want to eat

rather than what foodstuffs are in thepantry. A market-driven companydefines itself by the customers itwishes to serve rather than thecapabilities it wishes to sell.

Companies that are not market drivenbelieve the role of Marketing is to createthe need for our products. You can seethis in their behavior. Marketing is wheret-shirts and coffee mugs come from.Marketing is the department that runsadvertising. Marketing is the departmentthat generates leads. Most of all,Marketing supports the sales effort.But mature companies realize that theaim of marketing is to make sellingsuperfluous. Marketing defines ourproducts based on what the marketwants to buy.

What is product management? Because the term “marketing” is so often equated with “marketingcommunications,” let’s refer to this market-driven role as productmanagement.

You need product management if youwant low-risk, repeatable, market-drivenproducts and services. It is vastly easierto identify market problems and solvethem with technology than it is to findbuyers for your existing technology.

Product Management identifies amarket problem, quantifies theopportunity to make sure it’s bigenough to generate profit, and thenarticulates the problem to the rest ofthe company. We communicate themarket opportunity to the executiveteam with business rationale forpursuing the opportunity includingfinancial forecasts and risk assessment.


Who Needs Product Management?

We communicate the problem toDevelopment in the form of marketrequirements; we communicate toMarketing Communications usingpositioning documents, one for eachtype of buyer; we support the saleseffort by defining a sales processsupported by the requisite sales toolsso that the customer can choose theright products and options.

If you don’t want to be market-driven,you don’t need product management.Some companies will continue tobelieve that customers don’t knowtheir problems. Some companiesbelieve that they have a role infurthering the science and building the“next great thing.” These companiesdon’t need product management—they only need project management,someone to manage the budgets andschedules. But these companies alsoneed to reexamine their objectives.Science projects cannot be made intoproducts in the short-term. Don’texpect revenues if your company isfocused on the “R” in Research andDevelopment. Product management canguide you in the “D” in R&D—thedevelopment of technology intoproblem-solving products.

Strategic sales? There are two ways of using salespeople in a company: there’s sellingand there’s “not their job.” When weinvite sales people for guidance onevents or product features, we’re askingthem to stop selling and start focusingon “not their job.” Assessing marketingprograms or product feature sets orproposed services or pricing are all

“not selling” and therefore “not theirjob.” We invite sales people to help us because they know more about themarket than the people at corporatedo. But the VP of Sales does not paysales people to be strategic. She paysthem to sell the product. If sales peoplewant to be involved in these activities,they should transfer into ProductManagement; I’m sure there’ll be an opening soon.

In the classic 4Ps (product, promotion,price, place), sales people are the lastP, not the first. We want them to bethinking weeks ahead, not years ahead.We want them selling what we haveon the price list now, not planningwhat we ought to have.

Instead, we should rely on ProductManagement to focus on next year andthe year after. To be thinking manymoves ahead in the roadmap insteadof only on the current release.

Product management is a game of thefuture. Product managers who knowthe market can identify and quantifyproblems in a market segment. Theycan assess the risk and the financialsso we can run the company like abusiness. They can communicate thisknowledge to the departments in thecompany that need the information so that we can build products andservices that actually solve a knownmarket problem—so that we canexpand our customer base profitably.

Product management is the key torunning your business like a businessinstead of a hobby.


Why are we PragmaticMarketing?People sometimes ask why thecompany is named PragmaticMarketing. The “pragmatic” monikershould make sense: we offerpractical, no-nonsense solutions tothe problems facing technologyproduct managers.

It’s the term “marketing” that throwspeople.

In technology, there are twodefinitions of marketing:

1) the market experts and businessleaders for the product

or

2) the t-shirt department. As quotedin this article, Peter Druckerdefines marketing as “to knowand understand the customer sowell that the product or servicefits him.” We use this classicaldefinition of marketing.

Pragmatic Marketing was formed in1993 to provide product marketingtraining and consulting to technologyfirms by focusing on strategic,market-driven techniques. Ourtraining courses emphasizebusiness-oriented definition ofmarket problems, resulting inreduced risk and faster productdelivery and adoption.

Barbara Nelson is an instructor for Pragmatic Marketing.She has 21 years in the software industry, including VicePresident of Product Marketing for a leading provider ofbusiness and accounting applications for the middle market.Before her decade of product marketing experience, sheworked closely with customers in several capacities, which

taught her the importance of listening to the customer and solving criticalbusiness issues. Contact Barbara at [email protected]

Phil Myers, President and CEO, Cyclone Commerce

“To make marketing a strategicweapon in your business,

Pragmatic Marketing’s Framework is your blueprint. I have used it

for ten years and it works.”

If you are trying to leverage your investment in product management

and marketing, the first place to start is with a proven methodology.

Pragmatic Marketing® has always focused on the unique challenges

of managing and marketing technology products.

The Pragmatic Framework has been fine-tuned by 30,000 attendees

over 11 years and has been proven to create technology products

that customers want to buy. Pragmatic delivers on the promise in

its name—presenting a practical course of action that really works.

– Phil MyersPresident and CEOCyclone Commerce

Visit www.PragmaticMarketing.com to learn more.

The Industry Standard in Technology Product Management and Marketing Education

The process of due diligence issomething that is customarily done in the venture capital community toevaluate the potential of ventures andstartups, and it consists of analyzingand validating the information that iscontained in the business plan. Thisprocess is valuable for entrepreneurs,startups and companies of all sizes to use for any new product idea.Because of the thorough approachnormally used during the process,every aspect of the idea is examined,from market potential to customer fitto technology solution to the financialforecast. This cross-functional evaluationmeans greater potential for the ideasthat pass this scrutiny and ultimatelyresults in greater profitability as the ideais developed and then launched. Anycompany can use due diligence principlesto evaluate new product ideas.

Think like an investorThe best way to objectively approachthe due diligence process is to assume the perspective of an investor. What would you look for in order to be assured some return on yourinvestment? It might be a very largemarket, a ready customer, a sustainablecompetitive advantage, short-termprofitability, or all of these things. Evenif the new product will be developedinside a company, it’s important to vieweach idea as a new business. Basically,you need customers with a compellingproblem, a product that addresses theproblem, resources to develop andlaunch the product, and profit in order to sustain the business.

A good set ofdue diligencecriteria can be foundin Chapters 3 through 8 of my book, From Idea to Launch at Internet Speed. There is one chapter for each of the following six criteria:Strategic Fit, Customer, Competition,Market, Resources and Profit. The bookhas a lot more detail about how togather information for each of thecriteria and how to do analysis, but I’ll provide a brief summary here.

Start with the customerUnfortunately, the vast majority ofcompanies first develop products andthen look for a market, not the otherway around. However, if companiescould first think about customerproblems and how they could usetheir core competencies to solve it,market pull is created, and it’s a loteasier to achieve early sales and growmarket share quickly. Even if youalready have a product concept inmind, it may not be too late to usethis approach. For instance, youprobably have some idea as to thetype of customer that might beinterested in your idea. That’s whereyou start, by actually talking to a targetcustomer. You will want to find out asmuch about the customer as possible,as if you were creating a biography ofthem. You’ll want to know how theymight currently solve the problem thatyou think you will be solving with yournew product. Sometimes, you find thata customer is interested in a slightlydifferent product, and if your company

can still build it, you may end up witha more lucrative opportunity than your original idea.

Once you have an idea of how youcan solve the customer’s problem, thenyou must determine what it’s worth to the customer. How much are theywilling to pay for it, and what are thebusiness benefits to them? This is calleddefining the value proposition. Whenyou’ve found your target customer,then it’s time to figure out how manycustomers are out there who might bewilling to buy this product; that’s howyou estimate the market size. You also need to look at market trends to determine whether the target marketis shrinking or growing, and by howmuch per year.

The customer and market are only half the battleSo you have a potential customer andyou know the value proposition. Thenext questions are: can you develop a product that will fit the valueproposition, and can you build and sellthe product at a price the customer canafford? This is the point when you needto objectively look at your new productidea; is it really what the customer needsto solve their problem? Sometimes newproduct ideas are “ahead of market,”meaning that the customer isn’t readyfor the product your company has inmind. The customer may, however,need something similar or some of thefunctionality, so there may be a fit.


By Catherine Kitcho

If there is a fit, do youalso have the capacity to

deliver the product to themarket and achieve your target

market share? To determine yourtarget market share, you first need to take a look at the competition.

Don’t look now, but there are competitors lurkingNo matter how brilliant your productidea, there will always, always becompetition. There’s no getting aroundit, so the best thing to do is just planfor it. Competitive analysis should be done at three levels: competitiveenvironment, company level andproduct level.

The competitive environment is ahigh-level look at your target market.Who else is there? Are there one ortwo major companies, lots of companies,or none at all? The competitive strategyas well as the market entry costs willbe driven by this characterization of the competitive environment.Fragmented markets with lots of competitors require a strongdifferentiation strategy. If there are noestablished competitors in the market,it may require more money to educatethe target customer about the product.Competitive analysis should also bedone at the company level and productlevel. Examine the company factorssuch as financial health, history,mission and vision, partners, and sizeof the companies that you will competewith. At the product level, do a one-for-one comparison of features andfunction. Create a matrix that showsthe comparison at a company and

product level. Once everything is on onechart, you will then have a better ideaof how much market share is possible.

Other factorsStrategic Fit and Resources also needto be examined. Sometimes, a newproduct idea is so radically differentfrom its organizational culture or theway the company does business that it requires too much radical change.Technology and human resources alsohave a bearing on whether the ideacan be fully productized. Intellectualproperty protection and technologyknow-how are critical for developingthe product idea. The availability of theright types of human resources duringthe new product cycle are also key; dothey exist, or will significant hiringneed to be done in order to fullydevelop the idea?

The bottom line Profitability is not often projected oranalyzed during the idea phase of thenew product cycle, but it certainly canand should be. You need to take a lookat the end-to-end costs for the wholeproduct cycle to evaluate the cost side.You need to project the sales over a period of years to evaluate therevenue side. Plot the costs and the sales, and where the lines of the graph cross, that’s the point in timewhen the product becomes profitable.The amount of divergence between thetwo lines on the graph is the profit, andinvestors should ask: is this enoughprofit, soon enough, to warrant the investment?

Gather the data and think it throughUsing the six categories of criteria,gather all the data together andanalyze. The next step is to think it through as a business. When thebusiness plan is developed and thepresentation is made to internal orexternal investors, it should be presentedas a business case, not just a great idea.

The quick and quirky exampleHere’s a hypothetical example of howto use due diligence for new productideas. Let’s assume you have just been transferred from the marketingdepartment to a product group in yourcompany. Your first assignment is toput together the internal business planfor the most promising product idea inyour group, which consists of twentyengineers and developers. They havesubmitted ideas for ten new products,and your boss has prioritized them. Youdecide to do detailed analysis for twoof the product ideas and then developthe business plan for the idea that willgenerate the most profit in three years.Your boss agrees with your approach.

You roll up your sleeves and dopreliminary research on each idea:collecting information from the Internet,the corporate market research group,the research and development team,and one of the company’s financialanalysts. Now you’re ready to assemblethe information for each product ideaas follows on the next page.


Due Diligence for New Product Ideas


HealthCardThe first idea is for a medicalrecords card, HealthCard, whichwould contain laboratory and othertest results that patients can carrywith them for doctors to use. Thisis similar to the embedded chipconcept, except this is not aninvasive procedure and thethinking is that more peoplewould be willing to carry a cardthan having a chip implanted. A card would give the patientmore control as to who hasaccess to it, and how the data is used. Information would beadded to the card each time newtest results were made available to the patient. The card would beupdated using a programmablecard read/write device in the lab,clinic or doctor’s office. The patientcould choose which data to addto the card.

Memorial PathwaysThe second idea is an online portalfor the bereavement and funeralindustry, which would link charitieswith people who wish to makedonations to memorialize thedeceased, which is often done in lieu of sending flowers. It’scalled Memorial Pathways, andthe business model would consistof donors paying a fee to recordand submit a donation, and thereceiving charity also paying atransaction fee to receive thedonation. The online portal wouldlink funeral homes, newspapersand other publishers who printobituaries, and charities.

Strategic Fit 5

Since your company is in the business of software and database applications, this idea complements the company’s strategy and provides a way to enter the healthcare market, one of the company’s longer-term goals.

Customer 4

For the HealthCard, there are two types of customers. The primary customer is a consumer with personal medical information. The value proposition is that theHealthCard will give consumers greater control of their medical information interms of how and when it is shared with their healthcare providers. According to your research, most people would prefer a card than an implanted chip becausea card is less invasive and can’t be accessed without the person’s knowledge. Thesecondary customers are the medical services providers, such as clinics, laboratoriesor doctors. These providers would be updating the patient’s card with test results,diagnoses, and other information. They would have to purchase equipment toread from and write to the card. The value of this system to the providers is inreducing the time it takes to retrieve and update patient records.

Competition 3

There are a broad range of competing solutions here, including the chips that canbe implanted under the skin, insurance credit cards that could carry medical info,and bar code systems. With all the competition, your primary differentiator will bethe claim that the patients have greater control. The medical offices will still needto purchase some unique equipment for scanning and updating the card, so thereis no particular advantage to them.

Market 3.5

Because there are so many competing solutions, your ultimate market share will belimited. However, that may be offset by the fact that there are millions of patientsout there who are potential customers, so the target market is pretty large.

Resources 4

With your company’s software and database savvy, the network and softwareinfrastructure for the product will be relatively simple. However, the card scanningand reading technology will require hardware, which means that a technologypartner would have to be found to build that end of the solution. Other than that, you have all the resources you need to carry this out.

Profit 3

With the help of the financial analyst, you have estimated the end-to-end costs ofdesigning, developing and selling the HealthCard system. There will be relativelyhigh costs for initial marketing and sales because it will require selling on two fronts:the consumers and the medical office staff. On the revenue side, the numberslook very large from sale of the cards and look average for sale of the card scanningdevices because you will be a reseller of the hardware built by your strategicpartner. You estimate being profitable in the third year.

HealthCardRating

(5 possible)

The Final ComparisonDrum roll, please. The average score forHealthCard is 3.75 and theaverage score for MemorialPathways is 3.58. So, basedon this rather unscientific,gut-level scoring system,you will spend your timedoing a full business planfor HealthCard, satisfied that you did at least somehigh-level due diligence for each new idea.

Catherine Kitcho is a consultant and author knownas the Launch Doctor. Thisarticle is based on her secondbook, “From Idea to Launch at Internet Speed,” available at http://www.pelepubs.com.Since 1995, Catherine hasworked with more than 50 companies of all sizes to launch their companies andproducts, develop business and marketing plans, andimprove product launchprocesses. Visit her website athttp://www.launchdoctor.comfor many free articles onproduct marketing and launch.

Memorial PathwaysStrategic Fit 4

The company has been successful in web-based deployment of softwareapplications and databases but not specifically with portals, so this would be a new experience. The company has had a lot of experience in developingpartnering relationships, however, which would be required to pursue this idea.

Customer 3

There are two distinct customer groups that are sources of revenue: individualdonors and charities. Although funeral homes may be involved in the businessmodel, they more likely would provide referrals and links to you for their clients.Your company would be responsible for: providing a website for donation notices(bereaved family requesting donations); listing donations (that state the donorand the person being memorialized); creating links to newspapers for obituaries;handling the transactions from the donor side, and processing the notificationsand transactions for the charity side. In terms of numbers, the only two things in life that are certain are death and taxes. So, there will be a continuous supplyof grieving families and friends who will want to memorialize their loved ones.Today, many families request that people make donations to their favoritecharities instead of flowers; it’s a growing trend.

Competition 4.5

This is a fairly new concept, so you’d probably be the first to provide this set ofservices. Charities themselves could be considered competition, but sometimesit’s difficult for individuals to find out how to contact charities for makingdonations and, in effect, they might get more donations if somebody set up aportal system. Newspapers might also be partial competition because they postfuneral notices and obituaries. So, this would be a new market, which meansspending money to develop it and educate people about how the service works.

Market 3.5

By being first to market and with a steady market demand, the combined marketfactors look good as long as you can set up all the business relationships tomake it work.

Resources 4

Your company may need to bring in a specialized consultant for portal systemsand some other domain experts who know something about charities and thefuneral industry. Other than that, you will have enough resources to completethe product.

Profit 2.5

On the cost side, your biggest expense will be engaging a consultant with portalexpertise to set up the system. Once the portal is in place, your ongoing expensesshould be minimal. On the revenue side, the transaction fees will be relativelysmall, so there will have to be considerable volume in order to break even andbe profitable. This product might not create high revenues in the longer-termbecause the market may be slow to develop into sustainable volume.

Rating(5 possible)


Practical Product Management ®

MarketAnalysis

TechnologyAssessment

Win/LossAnalysis

CompetitiveAnalysis

MarketSizing

MarketResearch

ProductPerformance

MarketProblems

QuantitativeAnalysis

OperationalMetrics

DistinctiveCompetence

Problems. Solved.Do you understand the relationship between product management and product marketing?

Does it seem that product managers are overloaded with tactical activities?

Are you getting the most out of your investment in Product Management and Product Marketing?

Does your Product Management function need more structure and process?

Are product managers spending too much time supporting Sales? Development? Marketing Communications?

Do your product managers and product marketing managers understand their roles?

Are your product managers trailing the other departments instead of leading them by six or more months?

Are requirements a moving target?

Do your product managers rely on the sales channel for product requirements, positioning, name, or pricing?

Are your Market Requirements Documents not providing enough detail to Development so they know what to build?

Do your product managers wander into design in the Market Requirements Document rather than provide the market facts that Development needs?

Are you struggling to keep control during the product planning process?

Is there agreement between Product Management and Development on what to do?

Does your Product Marketing function need more structure and process?

Is your marketing plan just a revised list of last year’s tactics?

Do you want better workflow between Product Management, Product Marketing,Industry Marketing and Marketing Communications?

Is Marketing disconnected from the sales process, generating leads and sales tools that go nowhere?

Is your message and program strategy based on a clear understanding of buyer problems and the reasons they should prefer your solution?

Do you know how to effectively measure all of your programs?

Have you been asked to create a marketing plan, without any guidance on what should be in a marketing plan?

© 1

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Effective Marketing Programs

RequirementsThat Work TM

TM

SalesReadiness

ChannelSupport

Innovation UserPersonas

Collateral &Sales Tools

ChannelTraining

BuyerPersonas

ProductContract

"Special"Calls

MarketMessages

ReleaseMilestones

WhitePapers

EventSupport

LaunchPlan

CompetitiveWrite-Up

AnswerDesk

LeadGeneration

BusinessCase Positioning Marketing

Plan

Pricing SalesProcess

AwarenessPlan

Buy, Buildor Partner

MarketRequirements

CustomerAcquisition

ThoughtLeaders

ProductRoadmap

CustomerRetention

ProductStrategy

ProductPlanning

ProgramStrategy

Presentations& Demos

The Industry Standard in Technology Product Management and Marketing Education

Visit www.PragmaticMarketing.com to learn more.

Complete Curriculum for Technology Product Managers

Pragmatic Marketing

seminars introduce a

framework that gives

technology marketers the

tools necessary to deliver

market-driven products

that people want to buy.

We focus on all practical

aspects of juggling daily

tactical demands with

strategic activities

necessary to become an

expert on the market.

Solutions.

Visit www.PragmaticMarketing.com

Build Market-Driven

Products byListening to the Market

Pragmatic Marketing has

always focused on the

unique challenges of

marketing technology

products and services.

The framework we teach,

refined and perfected over

20 years, shows specific

processes to find and develop

profitable opportunities, plan

market-focused products and

create winning promotional

and sales campaigns. Each

seminar offers immediate

actionable ideas, templates

and tools.

Practical Product Management is for product managers and those who manage or contribute to aspects of product marketing and management. This two-day seminar fully explores the role of technical product management, providing tools and a framework to help get products to market more efficiently.

I. 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 StudyVII. Delineating Responsibilities

• Communicating market facts toDevelopment, Marcom, and Sales

• Drawing the line between ProductManagement and the otherdepartments

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

PRACTICAL PRODUCT MANAGEMENT®

Still not sure Practical Product Management is for you?

Attend a FREE 1/2 -day session. See back cover for details.

The Industry Standard in Technology Product Management

and Marketing Education

Requirements That Work is an intensive one-daycourse that introduces a straightforward method forcreating product plans that product managers canwrite, developers readily embrace, and that producesolutions the market wants to buy.

Effective Marketing Programs explores the roles and processesthat align outbound marketing with strategic business andsales goals. This two-day workshop is filled with practicaltools for product marketing, industry marketing and marketingcommunications managers who are tired of wasting time on tactical “list” marketing.

or call (800) 816-7861 to register


Win/LossAnalysis Innovation

CompetitiveAnalysis

BusinessCase Positioning

MarketSizing Pricing Sales

Process

MarketResearch

ProductPerformance


MarketProblems

ThoughtLeaders

OperationalMetrics


I. Defining Roles and Methodology• Understand the source of conflict

between Development and Marketing• Define clear roles and responsibilities• 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

I. Roles and Responsibilities• Differentiate the roles of product management

and outbound marketing

• Distinguish sales support from marketing

• Overview of strategic outbound marketing process

• Workflow between product management, productmarketing, industry marketing and marketingcommunications.

II. Target Audiences• Build useful audience profiles

• Influence the buying process

• Create high-impact market messages

• Select the right programs for your audiences

III. The Strategic Program Plans• Develop clear market strategies

• Create the right budget

• Relate plan elements to company and sales goals

• Build the business case for marketing investments

IV. Align with Sales• Respond to endless tactical requests

• Collateral and tools that impact buying decisions

• Measure and improve sales tool productivity

V. Goal-Oriented Program Execution• Manage lead quality and throughput

• Integrate programs by target audience• Build and measure positioning awareness

• Influence customer retention

• Measure progress, with or without CRM

VI. Start Immediately• Prioritize next steps

• Apply the process to current programs

• Continuously measure and improve

REQUIREMENTS THAT WORK™

EFFECTIVE MARKETING PROGRAMS™

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June 1, 2005.

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When it comes to believing what onereads online, credibility matters. Crediblesources have the ability to changeopinions, attitudes, and behaviors,to motivate and persuade. In contrast,when credibility is low, the potentialto influence is also low.

On the web, credibility has two sides.On one side are the web users tryingto determine what information iscredible. On the other side are theweb designers trying to create highly-credible websites.

So, what can you do to increase thecredibility of your company and itsproducts or services on the web?Fortunately, the answer is not a matterof gut instinct or luck—the answer lies in science.

The science and study of credibilityIn 1999, graduate students at StanfordUniversity studied web credibility on a large scale for the first time, andpublished the results in a Web CredibilityStudy. The study was re-run in 2002,during which the results from theearlier study were compared. Eachtime, a snapshot was taken of theperceptions of approximately 1,500participants.

The result of the study shows strongscientific evidence of specific designelements that web users impart withgreater credibility.

Here are seven of the top tactics youcan employ to improve your ownwebsite’s credibility. And for eachtactic, we have provided an associatedpersuasion strategy to which it is linked.

Seven ThingsYou Can Do to

Improve YourCredibility on

the WebBy Steve Guengerich and Ross Speir


1. Associate your website withrespected organizations.

Websites that are associated withorganizations that people respect,receive the highest ratings of credibility.If you are a resort or golf club, youwant to be associated with JackNicklaus; if you are a car company,J.D. Power and Associates®. On a locallevel, respected organizations mightinclude the Chamber of Commerce.

Along these lines, having your websitelinked to by other websites that usersthink are believable is another sign ofcredibility. For example, if your site islinked to by a news organization thatis well-respected outside of the Internet,like Consumer Reports, the implicationis your website is perceived as credibleas Consumer Reports.

Persuasion strategy: Social Proof.If everyone else is doing it, it must begood or right. This strategy relies onthe use of customer lists, testimonials,and other similar examples of socialproof to provide a persuasive case for a website’s products or services.

2. Respond to inquiriesreceived through the web.

Nothing kills credibility faster thanprospective customers try to reach youat your “sales@…” email address onlyto have their inquiries go unanswered.Conversely, users consider a websitecredible if you provide quick responsesto their customer service questions. Evenbetter, your site sends emails confirmingthe transactions that users make.

Persuasion strategy: Permission.The simple act of an email inquiry to your website is the first step in a permission-based strategy. Byresponding to the inquiry with aquestion and choice of next steps, you ease customers into action, ideallyshowing them value before asking for commitment.

Another way this strategy can beapplied is at checkout, by havingcustomers incrementally commit to a purchase, as opposed to “Do youwant this? Yes or no!” Some incrementalsteps ask them to “verify products you want,” or ask where to ship, how to ship, and request preferredpayment information.

Permission doesn’t work whenrequirements are sought too early inthe dialogue, for example, prematurewebsite registration requirements.

3. Anyone home? Make themfeel that you’re real.

Users like to see websites that list anorganization’s physical address. Theyalso like to see a contact name, phonenumber, and email address.

For all of us who suffer spam, thereare ways to provide an email addressand thwart the email address bots.Among them is simply writing out theemail address such as “You can emailme at ‘steve at perceptivesciences dotcom’ if you wish to reach me online.”

Persuasion strategy: Visualize.Users want to visualize their interactions.This means being able to associate a concrete address with perhaps apicture of a building, or to see picturesof a product in its context of selectionand purchase. For example, Lands’ Endemploys visualization effectively withits My Virtual Model™.


The science of credibility, especially in regardsto the use of computers, has advanced agreat deal over the past five years. Itsadvance is a branch of the larger field of persuasive technology, popularized byacademic thought leaders, such as BJ Fogg.

“Persuasive technology is any interactivecomputing system designed to changepeople’s attitudes or behaviors,” said Fogg,in his seminal book Persuasive Technology(Morgan Kaufmann, December 2002).

Credibility can be defined as believability;it is a perceived quality, like beauty. Muchlike evaluating beauty, people often agreewhen evaluating a source’s credibility.

Most researchers and psychologists confirmthat there are two main dimensions ofcredibility: trustworthiness and expertise.People evaluate these two elements andcombine them to develop an overallassessment of credibility.

Trustworthiness is the quality of beingperceived as truthful, fair, and unbiased.

Expertise is the quality of being perceivedas knowledgeable, experienced, andcompetent. The most credible sources arethose perceived to have high levels oftrustworthiness and expertise.

Think how much we entrust every moment tothe credible operations of computers. Wedo so only when we know they are trustworthyand we have a high degree of satisfactionthat they operate with a great deal ofexpertise. When they don’t, we lose faith.

Credible sources have the ability to

change opinions, attitudes, and behaviors,

to motivate and persuade. In contrast,

when credibility is low, the potential to

influence is also low.

4. Content you’re willing to signyour name to—literally.

Users consider websites that havearticles containing citations andreferences as more credible. They also like to see authors’ credentialslisted for each article.

Persuasion strategy: Authority.People respect authority. Having anauthority associated with a service orendorsing a product simplifies thedecision-making process. That’s whyproduct reviews are so powerful—seeAmazon.com®!

5. Content you’re willing to vouch for.

Closely aligned to the previous item,users consider sites more credible whenyou include a policy about your content.Along the lines of a privacy policy, acontent policy addresses issues of whoyour authors are, how you check thecontent veracity, etc. Also consideredmore credible are sites that let you searchfor past content, like archives.

Related to intra-site (archive) content,is inter-site search. Users like sites thatlink to outside sources and material.

Persuasion strategy: Reciprocity.You do something nice for someone;they’ll return the favor. You treatsomeone seriously, with the appropriateamount of concern and respect for theirpersonal identity, and they are morelikely to respond in kind with reliabledata about themselves and genuineinformation describing their purchase-selection process.

6. Dress for success.

Web users are more sophisticatedtoday than ever. Come on—we talkabout “googling” our competition!Thus, your website should lookprofessionally-designed. If you plan to spend money listing your productsand services on the web, do so in away that represents you professionally.

Likewise, arrange your site in a mannerthat makes sense to users. Nothing is more off-putting than a registrationform that lists state before city. Or wherethe search box is in the bottom rightcorner of the screen—“below the fold”!

Persuasion strategy: Liking.People are more likely to interact withentities they like or can relate to. “Liking”can manifest itself in a variety of ways:

• Website—is the “look and feel”appealing? Is it easy to use?

• Company—is the brandingrecognized? Does it connect with the customer?

• Community—are there pictures ofpeople “just like me” on the website?

7. Stay current.

A web visitor considers a site morecredible when the site has been updatedsince the user’s last visit. At first thought,this may seem expensive, especiallyfor a small business, but it’s easier toachieve than many think. There arerelatively simple, automated steps you can take to feed today’s date andcompany-relevant headlines to yourhome page, keeping the content fresh.

Persuasion strategy: Scarcity.If something is scarce, people will wantit all the more. This strategy connects toan element of human decision-makingthat tends to value the potential ofsomething lost more than the potentialof something gained. So among theupdating tactics to keep websiteinformation fresh is to highlight scarcity,such as “limited time offers” and“supplies limited”–compelling actionby those who may be undecided, but leaning towards a purchase.


Seven Things You Can Do to Improve Your Credibility on the Web

Steve Guengerich is an award-winning writer on information technology. You can reach him at [email protected]

Ross Speir is a user experience architect at Perceptive Sciences, Corporation who specializes in designing and conductinguser research studies. He can be reached at [email protected]

SummaryThe bottom-line is that web credibility—like personal credibility—is paramount,and deserves every businessperson’s attention. As you consider how you canmake your organization’s web presence more credible, we encourage you to doso in the larger context of one or more persuasive strategies. These strategies canhave a significant positive impact on the results you’ll achieve online.

Today’s banks are being heldaccountable by regulators likenever before. To keep pace,the financial services industryhas been spending its ITdollars in new and differentways. Rather than “nice-to-have”software, such as marketanalysis or sales tools, asignificant portion of the IT budget is now going toproducts that help banksprevent fraud and complywith new legal and regulatorymandates. And that means thattechnology companies providingsoftware solutions to thefinancial industry must keep afinger on the pulse of shiftingmarket demands.

That’s where MetavanteCorporation and its ProductManagement team come in.Metavante delivers electronicbanking and paymenttechnologies to financialservices firms and businessesworldwide. Several years ago,the firm realized it needed tosharpen its focus on buildingsolutions that solve today’stoughest challenges and thatbring real value to its clients.Toward that end, the company

launched an effort to revampand revitalize its ProductManagement organization.

Today, Nancy Cody, VicePresident and Manager ofFinancial Technology ServicesProduct Management, headsup a team of 20 productmangers with responsibility for more than 50 products that make up Metavante’s core offering. “We’re settingthe tone for where we want to take Product Managementacross the company,” she emphasizes. “We aretrailblazers, and we like thatrole. Previously, most of ourproduct managers were in the development group. Wemoved the team into ourbusiness division to focus onwhat our clients need most—so we can make productinvestments with their bestinterests in mind.”

Listen up Cody’s first challenge in takingover Product Management wasto bring together a diversegroup of people who wereexecuting the product managerrole in different ways. “Somespent much more time ondevelopment; others weremore industry focused. We

had no standard definition ofthe role of a product managerand no real best practices inplace. Most important, we werenot listening to clients nearlyas much as we should. As aresult, we were spending timeand money on products thatwe thought were great; butwhen we got them to market,customers weren’t willing tobuy. Now, our objective is tomake sound product decisionsbased on information that isvalid and reliable.”

One of Cody’s immediategoals was to get a handle onindustry best practices and toraise the product managementprofession to a higher levelwithin the company—whereproduct managers wererecognized as key decisionmakers. “In the past, theperception was that theproduct managers were justsuper technologists,” sheremembers. “If you neededsomebody to give a demo or to answer a question abouthow a product works, go toProduct Management. That’snot what we want the role to be. So we embarked on a program to change the way we performed productmanagement in order to changehow we were perceived.”

Metavante Corporation—Capitalizing on the Power of Positive Change

Case Study



Case StudyThe team initially began its rebirth bytaking a product management class atthe University of Wisconsin, Madison.While the two-day session provided agood, basic foundation, the coursewas geared toward managing the typeof consumer products you might buyin a drugstore or a supermarket. Codyfelt her team needed something morerelevant to take them to the next level. And she discovered PragmaticMarketing® and its Practical ProductManagement® course.

“The appealing aspect about PragmaticMarketing is that it is exclusivelytechnology focused,” says Cody. “Iattended the public session and said,‘Wow! This is exactly the situationwe’re in.’ The instructor understoodour business and the challenges thattechnology companies face. Plus thecourse provided us with an outstandingframework for advancing productmanagement. It is a framework wecan actually implement to improve our business.”

Let the fires burnAfter the session, Cody says she madesubstantial progress just by knowingthe Pragmatic Marketing Framework.“I re-defined all of our jobs and wrotenew job descriptions. I customized theframework a bit to reflect the Metavanteorganization. Then I decided to bringthe training in-house, and we had 45or 50 people attend. It was time well-spent. If we take time away from our jobs for training, it needs toprovide real information that we canuse when we go back to work. Theexercises and the tools we learnedwith Pragmatic have been very valuable,and we are utilizing them every day.The course is very practical in termsof getting results quickly.”

According to Cody, one of the mostvaluable lessons learned was toevaluate where the product managerswere spending their time and ensurethat they were focusing on the “lefthand” or strategic areas of theframework. She says, “We realized we must always ask ourselves thequestion: What problem are we tryingto solve on behalf of our clients? Wemust get out and talk to our clientsand do more research in the industry.Another message that hit home for theproduct managers was to ‘let the firesburn.’ At first they asked, ‘How can Ido that? Don’t I need to pick up thephone and answer the latest questionand try to put out the fire?’ The coursetaught us that when we do that, themore strategic work gets pushed off to the side. So we talked a lot aboutsetting priorities and focusing our timeon the work that has real value.”

Results that speak for themselves Today, Cody’s Product Managementteam spends 30 to 40 percent of theirtime on the road, interacting withclients. They regularly attend meetingsof Metavante’s seven regional usergroups, plus two national user groupsand a client conference. “One thingwe consistently hear from ourcustomers is that they are impressedby our commitment to them. Not onlycan they talk to us on the phone, theycan meet us in person and can talkabout the challenges they face and the product enhancements they wouldlike to see. We are listening to ourcustomers and actively engaging themin our product process. Best of all, ourexecutive team hears from customersat our CEO conferences, and thegeneral theme is: ‘You seem to beinvesting a lot more in your productdevelopment and delivering better

enhancements.’ The fact is, we’reinvesting in the right things andmaking decisions that best meet theneeds of our clients.”

Beyond customer meetings, the teamhas also put several standard customercommunication programs in place.“We have become much more openwith our clients and now providethem with a steady stream ofinformation about the vision for ourproducts over the next three years,”Cody notes. “We share a customer-ready version of our product plansand updates on projects, which weupdate quarterly so customers can see where we are. Last year, we began hosting bi-monthly conferencecalls with customers to tell them about enhancements and new releasescoming out within a 60-day timeframe.We now have over 200 clients call in, and they tell us the calls are someof the best things we’ve ever done.Recently, we hosted customer webinarsto go over our product roadmaps. And the customers love them.”

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

Another success story was a majorinitiative to implement a productlaunch methodology that was drivenby the Product Management team. Theseven-step process involves everythingfrom evaluating market and revenueopportunities to assessing the value a new product would bring to clients.Every product launch starts with asteering committee representing allstakeholders. At various “gates” in theprocess, the group hammers out andsigns off on each decision. The productlaunch methodology was a directresult of recognizing the need tobetter understand market needs andmake decisions along the developmentpath that would result in more valued products.

Playing a more strategic role Based on the progress made over thelast few years, the Product Managementorganization has elevated its rolewithin the company. “We are buildingup the position of product managerhere, and they are gaining morerespect,” Cody says. “Now, their jobsare recognized as an importantcontributor to our company’s success.In fact, we recently began a company-wide planning initiative on growingour business organically. And theproduct managers have been asked to participate. We are drawing on our research and product plans todemonstrate how we can contribute to new revenue growth opportunitiesfor our company. Because we have an in-depth product planning processin place, we have most of thatinformation at our fingertips—asopposed to having to rush out andresearch it at the eleventh hour.”

She adds, “We are working closelywith our business strategy team tounderstand where the new market

opportunities are and anticipate whatproducts might solve problems in thosemarkets. We are taking a longer-rangeview of the market needs, so we areprepared when our executive teamasks us to think about new businessopportunities. We want to be ready togo—armed with our product plans andthe research we have done. It is somuch better going into those meetingswith facts rather than opinions.”

Building on the momentum Cody concludes that, while herProduct Management group has madeconsiderable progress, there is alwaysmore work to do. She believes thatthe training and methodologies theynow have enable them to build ontheir success. “We have established best practices and have a productmanagement framework developed byan industry leader with which to guideour processes. This is not one person’sgrand idea. It has been proven to workin the industry by an organization withan established reputation.”

She says, “We are continuing to usethe knowledge and tools we gainedfrom the Pragmatic Marketing trainingon a day-to-day basis. We are usingthe framework in our monthly teammeetings, where we focus on an areaof the framework and share bestpractices for how each of us arehandling it. More than anything else,we are working hard to continue tobe market focused. We are constantlyasking: What does our customer want?What problem are we trying to solve?It’s amazing what a difference it makeswhen you shift the mindset to focusoutside your walls.”

As a technology executive, are you unclear about thestrategic 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 theorganization rather than react to it?

This half-day session is a subset of thePractical Product Management® seminar andintroduces the industry standard for technologymarketing, the Pragmatic MarketingFramework. This framework shows howProduct Management and Marketing personnel can move from tactical activities to quantifiable, strategic actions that delivertremendous value to the company. Learnimmediate actionable ideas about how to best establish the role of Product Marketing/Management and define market-drivenproducts that make customers want to buy.

The Strategic Role of Product Management™

This seminar is open to anyone currentlyemployed in technology marketing, including

senior management, product marketingmanagers, and product managers.

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

www.PragmaticMarketing.com

See available dates on back cover.

The Industry Standard in Technology Product

Management Education

Free.

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

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productmarketing.com™

The Strategic Role ofProduct Management™

Registration for this free seminar is required via our website:

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April 8 ....................San Jose, CAMay 12 ..................Minneapolis, MNMay 19 ..................Bedford, MAJune 9 ....................San Francisco, CAJune 16 ..................Vienna, VAJuly 14....................San Francisco, CAJuly 21....................Austin, TX

A subset of the two-day Practical ProductManagement seminar, this session introduces the industry standard for technology marketing.Shows how Product Management andMarketing personnel can move from tactical to strategic activities.

FreeThe Industry Standard in Technology Product Management and Marketing Education


Win/LossAnalysis Innovation

CompetitiveAnalysis

BusinessCase Positioning

MarketSizing Pricing Sales

Process

MarketResearch

ProductPerformance


MarketProblems

ThoughtLeaders

OperationalMetrics


PRACTICAL PRODUCT MANAGEMENT® REQUIREMENTS THAT WORK™ EFFECTIVE MARKETING PROGRAMS™

Introduces a framework that gives productmanagers the tools to deliver market-drivenproducts that people want to buy. Focuses on the practical aspects of juggling dailytactical demands of supporting the channelwith strategic activities necessary to becomeexpert on the market.

April 4 - 5 (6)* . . . . . . . . . San Francisco, CAApril 11 - 12 (13)* . . . . Bedford, MAMay 2 - 3 (4)* . . . . . . . . . . San Francisco, CAMay 9 - 10 (11)* . . . . . . . Minneapolis, MNMay 16 - 17 (18)* . . . . . Bedford, MAJune 6 - 7 (8)*. . . . . . . . . . San Francisco, CAJune 13 - 14 (15)*. . . . . Vienna, VAJune 20 - 21 (22)*. . . . . Bedford, MAJuly 11 - 12 (13)*. . . . . . San Francisco, CAJuly 13 - 14 (15)*. . . . . . Bedford, MAJuly 18 - 19 (20)*. . . . . . Austin, TX

* Requirements That Work, Day 3

Provides a repeatable method for productplanning resulting in a Market RequirementsDocument that others read and use.Establishes clear roles for product planningteam members and teaches a process thatcreates an executable plan that deliverssolutions that sell.

April 6. . . . . . . . . . . . . . . . . . . . . San Francisco, CAApril 13 . . . . . . . . . . . . . . . . . . . Bedford, MAMay 4. . . . . . . . . . . . . . . . . . . . . . San Francisco, CAMay 11 . . . . . . . . . . . . . . . . . . . . Minneapolis, MNMay 18 . . . . . . . . . . . . . . . . . . . . Bedford, MAJune 8 . . . . . . . . . . . . . . . . . . . . . San Francisco, CAJune 15 . . . . . . . . . . . . . . . . . . . Vienna, VAJune 22 . . . . . . . . . . . . . . . . . . . Bedford, MAJuly 13 . . . . . . . . . . . . . . . . . . . . San Francisco, CAJuly 15 . . . . . . . . . . . . . . . . . . . . Bedford, MAJuly 20 . . . . . . . . . . . . . . . . . . . . Austin, TX

Delivers practical tools and processes forproduct marketing, industry marketing andmarketing communications managers whowant to improve their strategic contributionand align with the sales organizations.Learn how to develop, build and measureprograms that are more than a revised list of last year's tactics.

April 6 - 7 . . . . . . . . . . . . . . . . San Francisco, CAMay 18 - 19. . . . . . . . . . . . . . Boston, MAJune 8 - 9•. . . . . . . . . . . . . . . San Francisco, CAAugust 3 - 4• . . . . . . . . . . . . San Francisco, CAOctober 5 - 6• . . . . . . . . . . San Francisco, CADecember 7 - 8• . . . . . . . San Francisco, CA

Upcoming Pragmatic Marketing SeminarsCall (800) 816-7861 or go to www.PragmaticMarketing.com to register!

• Price increase effective for registration on or after 6/1/05

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