Currently, we are in a global recession (Yes I am tired of hearing it is coming, for all practical purposes we are in one). Pundits predict this to last a while since we are breaking new grounds with the global financial crisis, two wars, new President and the interlinking of economies on a scale never seen before.
So how can we as product managers manage products so that our company remains in business selling products and in turn we get to stay employed.
Quite simple – Focus even more on your customer’s perspective of your products.
In a downturn economy, customers are cutting back on budgets and are going to be very picky in what they buy. So what factors could convince your customers to buy your product? One way – $$$$$.
1) Does your product allow customers to do more with less? – With layoffs, hiring freezes, companies are looking to do more with less. Does your product help them do this? You can’t just make this up, but deep in your heart do you believe it to be true? If yes, then market your products this way. If not, how can you enhance your product to position your product this way?
2) Does your product allow customers to cut expenses?
- Is the customer currently using manual, error prone, time consuming ways to do things? Can your product help automate these tasks at a reasonable price that again allows the customer to do 1).
- Is the customer currently using a very expensive competitive product, but only uses only a small portion of its capabilities that are your strengths.
- Is the customer using multiple products to do a given task? If yes, can your product do it all? If yes, talk about the cost savings that can be gained by dropping the two products and buying your product. This assumes that your product’s TCO is lesser than the current two products combined
All of this will work only if your product indeed satisfies a customer need that is in the critical path of the customer doing business. But if your product is only satisfying a “want”, your company could be in for a tough ride as the recession is asking customers to trim all discretionary spending, unless you figure out how to make it satisfy a critical need.
What are your thoughts on this?
2 thoughts on “Managing products in an economic downturn – Part 1”
Great post. I have had loads of conversations around this lately. Basically, when times are bad a message of increased productivity isn’t strong enough. Customers need to cut costs in the short term. End of story. If you don’t have a good story around that, go away until you get one.
Great points, Gopal, about focusing on how changes to the economy affect your customers.
One thing I would add – determining if changes to the economy affect your company’s strategy. Does cash flow in the near term suddenly become more important? Do strategic (3-5 year) initiatives now have less relative importance than shorter term (6-12 month) payback projects? Is there increased benefit to serving markets you “already know well” versus discovering needs in markets you “intend to know well?”