Friction points – Why customers don’t buy from you

It is our job as product managers to find out why our customers “buy”. Buying is a very emotional behavior especially when it comes to consumers. When selling B2B products, the purchase cycle typically follows a chain of events – RFP to demos to pilots to implementation to release to production. But what about consumers? How do they make buying decisions?

It is very important that you delve deeper into the customer’s lives to see what influences them. For example, on eCommerce websites, shopping cart or checkout abandonment is quite common. This is one of the metrics eCommerce retailers keep a close eye on (or should keep an eye on). Why? Consider the chain of events that happens before the customer abandons the shopping cart.

  1. Customer comes to your site instead of going to one of your competitor’s sites. Awesome, they know that you exist and they have selected you!
  2. They find the items they want to buy. Awesome, you have exactly what they want.
  3. They like the price and add the items to their shopping cart. Hurrah, it is wallet time!
  4. They start the checkout process (I see them pulling their wallets out)

Then whoosh! all of a sudden they abandon you. You almost had their money, but in a flash they were gone. Given that it is a website, you don’t know who they were or how to contact them to understand why. All you know is that you just lost a sale.

So what can you do to improve your situation when faced with this? I propose that you pay close attention to “friction points” that cause the customer from not buying from you.

There are many eCommerce “friction points” that have been well documented, but you still see so many sites that make these mistakes.

1)   Form fatigue – every field on the form that you are asking the customer to fill out is a friction point. Especially, if you are asking for information such as fax number, address (especially if I am signing up for an email service), annual income (yes, I am so inclined to reveal this to a complete stranger) and the list could go on. Your marketing department will likely have justifications as to why each of these fields are needed, but you as a product manager must think from your customer’s perspective. Yes, marketing is important, but you have to find the right balance between your needs and the customer’s needs. After all, your marketing department is not the one paying you money to keep you in business.

2)   Required registration – If users don’t understand why it is needed and the value registration would provide them, they will flee in droves. I have seen this in person during focus groups and usability testing. Common reaction: “S***w this, I am out of here”

3)   Surprises – Don’t surprise them! Imagine that you as a customer gets to the end of the checkout process and the retailer springs a $15 shipping fee on you. How will you feel? Would’nt you abandon if you think the shipping fees is a rip-off?

However, there are a lot more friction points that certain verticals take advantage of or there are others that if solved can increase conversions. The classic example I always use is “mailing” – the old fashioned way where you have to deal with envelopes/boxes, stamps, post office

Let us first look at the example where the company is hoping and praying that you will not mail anything. The commonly used marketing gimmick of “Mail-in rebates”. Retailers offer discounts on products via mail-in rebates. The price after mail-in rebate looks very attractive while you are in the store or when shopping online. But these companies make you buy at the full amount and want you to send mail-in a flimsy card to get the rebate. They are banking on the fact that most customers will not mail it in because of the “friction points”  involved in filling out the long form, attaching all the required documentation and making sure they mail it within the specified time period. And they are pretty successful at it because research shows that 90%+ of customers don’t.

Now let us take another example, where it is paramount to the company that customers mail things in for it to be successful. I currently work at where our customers trade-in their used electronics such as laptops, iPhones, Blackberries, cameras, camera lenses, gaming consoles, movies, video games etc. for cash. We sell the gadgets we buy via eBay, wholesale channels or recycle them responsibly all here in the United States. The process involves the following steps:

1)   You tell us about the model and the condition your gadget is in by answering a few questions on

2)   We tell you right away what we will pay you if the gadget passes our inspection and matches the condition you told us in.

3)   You mail us the gadget, we pay for shipping.

4)   We pay you via the payment method you selected (check, Paypal, Amazon gift card etc.) after we complete the inspection within 10 business days.

We are experiencing explosive growth, but one of the “friction points” we always think of, is the act of our customers having to ship their gadgets to us. It does not matter if a million customers come to our website and tell us that they have a million items to sell us. Unless they actually put it in a box and mail it to us, it does not matter.

So here are ways we work hard to reduce this “friction point” of shipping:

1)   We always pay for shipping – we email you a pdf that has the packing slip and pre-paid shipping label.

2)   For many categories, we even send you a box free of charge so that you can use it for shipping.

3)   We keep you informed throughout the process once we receive your gadgets.

4)   We pay you as soon as we complete the inspection. In fact, if our inspection shows your gadget to be a better condition than you had told us, we pay you the higher trade-in value, no questions asked. In the event we find the gadget is in a worse condition than you had stated, we send you a revised offer and explain the reason for the reduced offer.

5)   We give you the choice of accepting this revised offer so that we can send you the payment or if you decline and want your gadget back, we ship it back to you free of charge.

Now if you happen to live or work near our office, you can even walk in with your trade (forget about boxes and shipping labels) and we will pay you on the spot.

Now these are the things we do today. Are we done yet, hell no!. We are always looking for new ways to further improve our processes such that we can eliminate the “shipping” friction point.

We continue working on finding economical ways to reduce these “friction points” so that we can stay in business and work on our vision to “change the way consumers consume.” When we still have a vast majority of electronic gadgets ending up in landfills and polluting the environment, we at Gazelle know that we still have a lot of work to do.

As product managers, it is important for us to realize that unless we reduce our customer’s friction points of doing business with us, we are not going to be successful. And the friction points may not always be related to the product, but it maybe within the ecosystem of your product – whether it is customer support, documentation, order management, sales support etc.

Thoughts? What are your customer’s friction points and what are you doing to solve them?

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Is software product management needed in a startup?

Note: I had written this as a guest blog post last year on Subrata Majumdar’s blog called Confessions of a Digital Immigrant, that I am publishing here.

Is a software product manager needed during early stages of a startup? If yes, what should be his/her role,  given that everyone tends to wear multiple hats and the distinction between Product Management/Marketing and Architecture/Development is blurred. Is this a healthy cross-pollination or a disaster in the making?

I will offer my opinions on these questions drawing on my 13+ years of experience in the software industry and having played a role in the creation of successful products and utter failures.

1) Is a software product manager needed during early stages of a startup?

Yes, a software product manager is absolutely needed right from the early stages of a startup. A bunch of engineers can band together and write awesome software. But often, engineers fail to ask the fundamental questions – nothing against my development colleagues, they have enough to worry about to begin with.

1.    What problem does it solve?

2.    How many customers have the said problem?

3.    Are the customers willing to pay to solve the problem?

4.    Who is going to buy the darn thing and will they pay enough for us to be profitable?

5.    Does this solve the problem the way the customers expect it to work or do they have to change their ways?

It is a software product manager that will help a company to answer the above questions and make sure product development is aligned with customer problems. Only then will a company be able to create a business, sustain it and be successful.

Otherwise, you run into the infamous argument (I call it a trap) that I have heard over and over – if we build something, they will come. No – unless you have something they absolutely want at the price they want, they will NOT come. If the user experience does not save them time or money, they will keep solving the problem the old way because a) they do not have time to learn new ways and b) humans by nature are resistant to change.

There have been very successful products that created paradigm shifts, but more so because of the tremendous value and differentiation they offered the customers. For example, in mid 80’s, Pro/ENGINEER the 3D mechanical design software from PTC was the pioneer in creating this market segment by switching a lot of users from AutoCAD 2D design software to 3D. It was hard to use, it was expensive, it needed designers to completely switch their ways, but the design benefits were very obvious to those users that switched (and not to mention PTC’s very aggressive marketing and sales force). But paradigm shifts are rare. I am not suggesting that you do not innovate and create new ways to solve existing problems, but new ways should always have easily understood customer benefits. Otherwise, you will face adoption resistance.

You could also argue that one could launch a product and let the customer community take the role of helping you discover problems the product could solve. Yes and No. I would argue that it needs to solve one particular customer problem well enough to get noticed even by the early adopters. Unless you do this, no one is going to even consider buying/using your product. Unless this happens, no one is going to help you shape the future of the product to solve other problems it could potentially solve. I will draw an analogy – does anyone ever get out of the house and start driving hoping that you will end up somewhere nice by chance. Not very likely. But we are willing to take such a risk developing products, hoping that we will strike rich?

In this day and age of the internet and its free products, there are companies that have created free products that have sustained themselves for very long (Facebook and Twitter come to mind), but in the long run even these companies have to figure out ways to monetize their business to survive.

2) What should be a software product manager’s role in a startup given that everyone wears multiple hats and the distinction between Product Management/Marketing and Architecture/Development is blurred?

The roles of Product Management/Marketing are blurred primarily because the industry does not have consistent job descriptions for these roles. In some companies, Product Marketing does market sizing, segmentation, positioning and pricing decisions and Product Management figures out the customer problems in the selected segment and then works with engineering to make sure the right and usable product is being built. In other companies, all of this ends up with the software Product Manager and this is usually true during the early days of a startup.

But are there limits to what the product manager needs to do, such that he/she is not spread too thin? Yes, there are. I tend to use a very simple litmus test to determine activities in which a product manager must be involved – Does this activity help the product manager in listening to the market and making sure that the right and usable product is being built? If the answer is No, free up your time by getting it off your schedule.

I would especially shy away from getting involved in architectural and development related decisions for a very good reason. As a product manager, it is your role to think like a customer and then inform engineering what problems need to be solved and how. You can advise engineering in terms of customer expectations in terms of scalability and performance. But it should be engineering’s sole responsibility to figure out how to architect/design the product to solve the problems a product manager has identified. If you get involved in the latter, very quickly you are going to look at problems in terms of implementation details rather than from a customer’s perspective. Not a good idea.

Having said this, I will not hire a product manager if he/she is not ready to wear multiple (but relevant) hats even in a mature organization, leave alone a startup. Product manager’s role is one of the most cross-functional roles in an organization. Hence, by definition, such a role requires one to wear multiple hats, supporting sales, supporting marketing efforts, making sure the right product is being built by engineers and so on.

Thoughts? Comments? What have you learnt from your experience as to what works and what does not?

Products/features don’t ship with inventor’s name tag

All products ship with one label – your brand label – IBM, Microsoft Office, HP Pavilion, whatever your company’s brand name is. That is all what your customer gets to see. No product/feature ships with the name of the person who came up with the idea. So it “was my idea” or it was “Tom’s idea” actually does not matter in the scheme of things. So anytime spend worrying about who came up with the idea instead of collectively trying to make the idea better for the customer is wasted time. Your customer really does not care. There are only two outcomes – the product is a winner or it sucks. All of “us” are going to be considered a bunch of heroes or a bunch of idiots. Which would you rather be? So if we focus only on the opinion that matters, that of the customer, we should all come out ahead. But often this is easier said than done, isn’t it?. Unfortunately, we are human. But let us try darn hard reminding ourselves and our team members that products/features don’t ship with the inventor’s name tag!

Started my new gig at Gazelle

This week, I started my new job as Director of Product Management at (aka Second Rotation Inc.) What do we do at Gazelle?

  1. We allow consumers to get cash for their used electronic gadgets such as cell phones, GPS, laptops, camcorders, MP3 players and even ebook readers.
  2. You can find out right on our site how much we will pay you and then if you accept our offer, we even pay for you to ship the item to us. If the item has no monetary value, we will even recycle it for you provided you send it along with some thing else that has a monetary value.
  3. We then find new homes for these acquired items to other consumers in the secondary electronics market.

We thus prevent these electronic gadgets from ending up in landfills. Want to know more and see if you can get cash for your gadgets? Check us out at – want to see how we all of this happens inside gazelle? – check out the nice slideshow on Gazelle put together by the Wall Street Journal.

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4 lessons from Massachusetts Senatorial election

The results of the Massachusetts senatorial election this week to elect the replacement for the senate seat held by Ted Kennedy shocked the entire nation. A Republican named Scott Brown who not many people had heard about about as recently as a month back won the seat convincingly in a largely Democratic state. Ted Kennedy had held this seat for the last 46 years. As recently as Jan 1st, the Democratic candidate Martha Coakley was considered a shoo-in for winning the seat. But then she lost. The repercussions are large with Democrats losing the filibuster majority in the Senate and President Obama’s health reform in its current form nothing but dead. What an irony. Ted Kennedy had spend his whole life championing health care reform.

As a software product manager, I took away the following 4 lessons from this election:

  1. It ain’t over ’til the fat lady sings – I am sure all the pollsters who advised Martha Coakley told her that she was a definite win. She did not run a hard campaign. In the corporate world, often times sales thinks that a deal is in the bag long before the deal has been signed. No, it is never done until the signature is on the contract.
  2. There is no entitlement – Yes, the seat was held for 46 years by one of the legends in the senate. It is a largely democratic state. But none of this gives anyone an entitlement to a senate seat. You could be the incumbent, a highly entrenched software vendor in an enterprise, but this does not give you the entitlement that you will always win all the future deals. Companies switch vendors all the time. So in every deal, give your best fight as if your whole business depends on it. This is the only way you can guarantee a win. For the election, people send a clear message as to who are the decision makers. In your sales situations, don’t forget that the customer has the last word.
  3. Keep the message simple – I don’t remember one thing that Martha Coakley said. But for Scott Brown, I know about him riding around 200,000 miles in his truck campaigning, his message that he is the 41st vote. I did not vote for him, but he kept the message simple and it resonated with the electorate. That is all that matters. Your customers do not know as much about your products/technology/company as much as you do nor do they care. But they know about their problems, their products, their business, their company much more than you ever will. So make it relevant to them and keep it simple, if you want to win.
  4. Don’t forget the network effect – The election was for one senate seat, but it drew world’s attention. The impact has been earth shattering. In your sales situations, losing a customer may appear like losing just that – one customer. But in the social media age we live in, how many are going to find out and how many are you going to lose based on this one customer’s influence? On the flip side, it may sound like one new customer, but how many new customers will this help you win? I remember from my SolidWorks days that winning Halliburton was a huge deal for us. Because it helped us establish a beach head in the oil and gas vertical and since then, it helped us win so many large customers in that vertical. So be aware that every action you take may have a network effect – consider this before you act.


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Software product manager’s first 45-90 days at a new job ….

This is a continuation of my previous blog post of Software product manager’s first 30 days at a new job …..

Now that you are already settled into your new job and the first 45 days have gone by. You have done everything that was listed on the 30 day checklist. You have met with the stakeholders, they know who you are, you know the product, you are gaining momentum. Now what next? (BTW, in case you are wondering why I skipped the time period from 30-45 days, read on.)

It is hard to describe what the next steps need to be because it will depend on many factors such as organization structure, where the product is in its life cycle, your vertical etc. But here are 4 things I recommend you do during these 45-90 days to keep up the momentum. I think these 4 things apply no matter what product you are managing.

  1. 90 day plan – If your boss and you have not already put a next 90 day plan, you put one together. Create a proposal on what you think you need to accomplish, where you need help from your boss etc. Then sit down with your boss, refine it and finalize it. This will speak volumes to your boss of your organizational skills, your ability to set goals etc. But then, make sure you follow them and get it done. Achievements and not goals are the only things that matter after everything is said and done.
  2. Customer visits: Try to visit at least 5 current customers. If customer visits are not possible, try to make phone calls at the very least. If I am still not completely comfortable with the product/service by now and are nervous to engage with a customer, I try to go with someone else who may be visiting the customer. This could be a sales person, another product manager, customer support person etc. Here is what I typically tell these customers during these calls:
    1. I am new to the company (sets expectations that you are not an expert on your product yet)
    2. I introduce myself to them including explaining what my role is (believe it or not, many customers don’t understand what a product manager does, I also tell them that my call is not to sell them anything)
    3. I want to understand their business processes and where my product fits into their business process
    4. Understand why they chose to use my product or service?
    5. What do they like about us?
    6. Where do you think we fall short? Make sure that you set expectations that you cannot commit that these will be fixed. Remind them that you will get the information to the right people and that you are still a newbie.
    7. I want to build an ongoing relationship with them to make sure I continue to listen to their needs and painpoints, run future ideas by them to get their early feedback etc.
    8. I leave my direct phone number and email with them

    Write a report on what you heard from customers (good and bad) and send it to your product team and other stakeholders. This will help you build credibility within the organization that you are quickly getting up to speed and that you have started gathering real market data. In the future this credibility will help, because others won’t mistake your recommendations to be just your opinions but instead ones grounded in market facts.

  3. Secure early wins in areas that are important to your boss and where you build credibility within your organization. But before you commit to do anything, get permission from your boss. While the idea is to start getting yourselves en-grained into the process, you also don’t want be the newbie to be assigned a task by someone because it is an unpopular task and a setup for failure. What you should be looking for are tasks where you can start making contributions that your boss and others in the company start recognizing you and getting to know you. Try to find tasks that others may not want to do – that is OK. The idea is to help the team win. This may be anything such as:
    1. helping putting together a customer presentation
    2. updating the product roadmap by incorporating the latest changes
    3. testing a new piece of functionality that has been implemented
    4. helping with usability testing on a new feature (helps you get in front of a customer, observe and listen to how they react to your product)
    5. providing your input on a small feature that is going to be implemented. Research how the feature needs to be implemented, write requirements document. Believe it or not, this will help you understand all the inner workings of your product – what it takes to make even simple changes.
    6. writing release notes for an upcoming new release
    7. helping fill out an RFP from a prospect etc.
  4. Product demo – Call a meeting with your product team and anyone else who think can help you. Tell them that you would like to do a product demo to them to simulate a customer situation. Let them know that the whole point of the exercise is to gauge where you stand in terms of knowing your product in and out and also figure out gaps which you need to fill. This event is not because product managers will be demo jockies, but because you as a product manager must be able to demo your product in the event of a crunch.

Now why did I leave out the 30-45 day period. Only because I think to complete everything that was listed in the previous post will likely take you 45 days. Stakeholders will ask you to reschedule your 1 on 1 with them, you will run into hurdles such as getting accounts setup for all the tools you need to use etc. And if you don’t and you are rocking, I am sure your boss will give you new tasks to do that you had not planned for.


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Software product manager’s first 30 days at a new job ….

Happy New Year! I wish you all a prosperous 2010.

So you found a new software product management job or you are moving into a software product manager’s role in your current company. Congratulations! Now what do you do in the first 30 days to make sure you start off on the right foot? Here is a list I have successfully used in the past when I have switched jobs. I hope you find it useful.

Company’s vision and Business Strategy: Your focus should be to first gain a solid understanding of the company’s vision and business strategy and take stock of what exists within the company. Specifically, find answers to the following questions by interviewing internal resources:

  1. Company’s vision and business strategy
  2. What are the current hypotheses?
  3. What are the data points (customers, research sources, analysts, partners etc.) that have been used to arrive at the vision and business strategy?

Target market: Who are we selling to?

  1. What segmentation and sizing has been done?
  2. Which segments are we targeting?
  3. What do we know about the target market?
  4. What do we not know about the target market?
  5. Who are our top customers today?
  6. Who are the customers with the largest potential?
  7. How is market research done? Customer visits? Surveys? Focus groups? Advisory boards? User conferences?
  8. Which customers have we talked to? Key learnings?
  9. Which customers should we talk to next?
  10. What are the pain points that exist in this market that customers are willing to pay for?
  11. What is a typical sales process and how long does it take?
  12. Is there a win-loss document that will give you an idea on why you win and why you lose?
  13. Common objections that are raised in a sales situation
  14. Why do customers buy from us?
  15. What is our unique value proposition?
  16. What solutions are prospects using today? Or in other words, how are they solving the problem today?
  17. What are the pain points of their current solution?
  18. What is the business impact ($, outdated information, process inefficiencies etc.) caused by these pain points?
  19. Have they tried to solve these pain points? And?
  20. What are they planning to do to solve these pain points and what is the urgency?

Your company may not have the answers to all of the above questions, but asking all of the above will help you identify the gaps that you should look to fill.

Competitive Analysis: Who are our competitors?

  1. Who are the main competitors? If you are breaking new ground, is anybody else trying to do anything similar? If yes, what are they trying to do? Traction?
  2. Has anyone talked to competitor’s customers to understand how their solution is working for these customers? Why did they buy?

Get to know your product

Simulate the experience of a new customer. Install your software (if on-premise) or create a new account (if a SaaS product) and learn everything about your product that you can. Understand the development process from identifying needs to writing requirements documents to getting it build, tested and shipped. Attend every meeting you are invited to.

The four ways I have done this are:

  1. Take all the product training that exists
  2. Read through the documentation (Yes, do the RTFM – this may be the only time you would do this)
  3. API documentation (if API exists) – this will allow you to quickly understand different aspects of the system
  4. Specs – read through as many functional specs as you can. It will give you a history of the product and also quickly understand what exists, why it exists and what it is supposed to do.

Your goal should be to be able to demo your product to your peers after the first 45 days. I would recommend that you do not use any demo material that exists today such as product presentation slides etc. Make your own. Can you explain in very simple terms of how your product will help your customers? By making your own slides, you will be forced to think and learn stuff as you are putting your slides together. Just using the current demo material is not going to help as much.

Tools used

Learn every tool that is being used in the company. Ask your manager to get you a personal account in these systems if this has not been done already. This would include

  1. CRM system such as salesforce
  2. Enhancement request database (if one exists) where customers submit requests
  3. Bug database
  4. File servers where important information is stored or can be stored for backup purposes
  5. Specs database
  6. Reports server – where are product usage reports stored? Where are key financials regarding your product stored?

Who do you need to talk to internally?

Given that software product manager’s job is the most cross-functional job you will ever find in a company, you need to plan on sitting down with key stakeholders in every department that touches your product from start to finish. Ask your manager to help you create a list of these key stakeholders.

This includes the obvious ones such as engineering, sales, marketing and also departments such as QA (how do they test your product), order admin (if appropriate – how does a new customer’s order get fulfilled?), shipping (if appropriate – how does your product get to the customer?) etc. Again, you have to understand the entire process from start to finish and get perspectives from everyone involved in the process. Believe me, you will learn something new from every one you see.

Understand people dynamics

This is the most important part, more important than even your product in the first 30 days. You have to start building relationships from day one. Every company has some form of internal people dynamics that you need to observe and learn as you get used to your new position especially in a new company.  People may approach you and tell you stuff (good and bad), but never get involved in any gossip (not that this is just when you are new in your job, gossip is never a good thing) and never take any sides no matter who says what to you. Stay neutral, keep your thoughts to yourselves, just observe and make mental notes.

The last thing you want to do in a new job is to step on the wrong shoes accidentally. Be the most professional as you can be, never let your guard down. But don’t be wooden, start building relationships.

I strongly recommend the book The First 90 Days: Critical Success Strategies for New Leaders at All Levels by Michael Watkins. Great book with great strategies that will help you ease into your new job.

Thoughts? What have your experiences been? What has worked for you and what has not? What are the pitfalls you would advise other software product managers to avoid?

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SEO Basics for Software Product Managers

I am sure you have heard about Search Engine Optimization, commonly referred to by its abbreviation of SEO. If not, which planet have you been living on? Welcome back to Earth! SEO efforts in companies are often handled by someone who knows more or is very interested in SEO (smaller companies) or an in-house expert or with the help of a consultant (in mid-size to large companies).

But given that we live in the times of social media and where findability of products is predominantly done via online searches, software product managers need to have basic understanding of SEO. It does not matter whether your company sells a dog-grooming product or document security to senior citizens, you as a software product manager must have a basic knowledge of SEO.

But why? Why should you as a software product manager care about SEO? Here is why. You have likely worked very hard in leading your development team to create a product for which you have determined there is a lot of market demand. We know that people are searching for stuff online all the time – doing research on possible solutions, understanding how to buy, what to look out for, reading reviews on products etc. So if your company is not doing SEO, your prospects are very unlikely to find about your product(s) online. And if they don’t, how is your sales team going to meet your product’s sales goals? If you as a product manager are responsible for your product’s business, then you should drive your company’s efforts to make sure your products are found online. This does not mean you do it yourself, but you make sure your marketing department gets it done either internally or by hiring an SEO consultant.

In my opinion, being clueless about SEO as a software product manager is not acceptable anymore. While I am not an SEO expert, here are 7 things that in my opinion all software product managers must know about Search Engine Optimization. My objective here is to give you a basic understanding of SEO such that you can learn more about via numerous resources available on the web.

For the purpose of this blog post, assume that you work for a fictitious company Shenoy Shoes that sells women’s shoes.

1) KeywordsSEO starts with keywords. Think of keywords as terms that users are searching for via the Search engines. You need to find keywords that are highly relevant to your products or business and then decide to optimize your website for that keyword. The strength of a keyword can be expressed as

Keyword strength = function (number of monthly searches for the keyword, competition for the keyword and relevancy of the keyword to your business)

So how do you select keywords? I use Google Keywords tool whenever I am looking to select keywords – whether it is for this blog or for websites I have been involved in.

Be very selective on which keywords you choose – the rule of thumb is not to select the keywords which have the highest search volume because this would also mean that the competition for those keywords is also very high. Instead, find your own niche by selecting keywords with decent volume, decent competition and highly relevant to your business. Selecting very basic keywords such as “tools”, “security”, “cars”, “shoes” “pants” etc. is usually not a good idea – they are too generic and are going to be highly competitive.

For example, for Shenoy Shoes trying to target the keyword of “women’s shoes” (monthly search volume is 45 million+) may not be a good idea given how highly competitive the keyword is. Instead if you optimize your pages for less competitive keywords (provided you carry these products) such as “suede women’s shoes” (monthly search volume is ~300,000) or “women’s boot shoes” (monthly search volume is ~246,000), you may be able to get the SEO efforts for your new website going.

Once customers find your website using these niche keywords, there are things (merchandising, promotions etc.) that you can do to get these customers interested in other shoes you sell. The most difficult step is to getting them to your website when they are searching for stuff you sell.

2) Creating content based on keywordsOnce you have selected the keywords you want to target, create content based on these keywords – content that is optimized for these keywords such that Google indexes your pages and dishes out your pages first when someone searches for these keywords.

Bear in mind, SEO efforts do not bear fruit overnight. It can typically take anywhere from 4-6 weeks before you start seeing results. SEO is not easy and is not scientific as far as I know. You need to keep at it and continue to create content that people want to consume. If you are selling B2B products, the idea is to establish yourself as a subject matter expert on the keywords you have selected that people start trusting you. It is all about building relationships first before you offer to sell them what you have.

For example, there are ~246,000 monthly searches for the keyword of “women’s shoes size” and the competition is not that high. This looks to be a good keyword for Shenoy Shoes to build content around. You could write articles on how to choose right shoe size for women, size conversion between different countries, things to watch out for when selecting shoes between different shoe types (boots, suede, walking shoes etc.) – content that will educate your target customers on to how size their shoes. Once they find this page and understand that your company is a subject matter expert on women’s shoes, they are bound to listen to your recommendations when it comes time to buy.

3) Landing PagesLanding page is simply a page that a website visitor lands on when he clicks a link in the search results or clicking on one of your ads or a link in your marketing campaign. Landing pages are great because you can have as many of them as you want, with each of them optimized for a specific keyword. Think of every landing page as an opportunity to optimize for a keyword. More landing pages you have, more opportunity you have to optimize for specific keywords. 100 landing pages are always better than 10 because you have an opportunity to optimize for 100 keywords.

For example, assume that Shenoy Shoes sells branded shoes such as Birkenstock, Clarks, Converse, Dansko, Ecco etc. Looking at Google keywords tool, we notice that the monthly searches for women’s shoes of these brands are as follows:

Birkenstock women’s shoes – ~33,000
Clarks women’s shoes – ~90,000
Converse women’s shoes – ~90,000
Dansko women’s shoes – ~33,000
Ecco women’s shoes – ~27,000

To get found when users search for each of these shoes, you want to create five landing pages, one for each of the above brands and where each page shows all the shoes of that particular brand. The landing page content should then be optimized for the keyword selected for that page. For example, the Clarks shoes landing page will be optimized for the keywords of “Clarks women’s shoes”.

Warning – NEVER EVER create landing pages that are optimized for stuff you do not carry. For example, if you optimize a landing page for Clarks women’s shoes and you get ranked, a user who clicks on that page link expects to find Clarks women’s shoes, period. So if you don’t carry these shoes and use the landing page only as a lure to get users to a page where you can show them the wares you actually sell, you are doing it wrong. Your visitors will be pissed and will walk away. Remember that on the web, it only takes one click to go to your competitor’s site. Hence always be honest and always establish trust and relationships first. Play only if you can help your target customers make right decisions and eventually purchase from you. Think long term and not just that first sale.

4) Title tagsA title tag is the title text that will appear in the header of the window when a page loads. Search engines pay a lot of attention to title tags. The title tag is also what search engines use as hyperlinks in search results – results users will click on. So it is extremely important that you define a title tag for each page you have on your website. It still appalls me that some well known companies even to this day use the same title tag for every page on their website.

For example, a title tag of “FAQ” for Shenoy Shoes FAQ page is essentially useless in my opinion from an SEO point of view. Instead, if the title tag said something like “FAQ – Women’s Shoes – Shenoy Shoes” it is more meaningful because it provides context. Otherwise, you are ignoring one of the precious SEO elements that has such a high impact on SEO ranking.

I would also advise against using just your company name as your title tag unless your company name is a household name among your customers or prospects and that they would be searching for your company name (I would doubt it).

For Shenoy shoes, the title tag for the home page could be something like

Women’s walking shoesShenoy Shoes

Women’s shoes online – Shenoy Shoes

This is likely to give you much better SEO results than “Shenoy Shoes” or something very generic as “Home Page”. Believe me when I see websites using such generic title tags as Home page or Home, I know that the company is missing out big time by not doing SEO.

5) H1 Tags – In HTML, headers of pages or paragraphs are coded using <h1> through <h6> tags. Of these tags, <h1> is the tag of the largest font size. Google thinks that if you’re using a <h1> tag, then the text between the <h1> tags must be more important in relevance to the content on the page than anything else on the page. Hence, <h1> tags have very significant value from an SEO perspective. It is important that you take advantage of this on every page

For example, the Clarks women’s shoes landing page should have the <h1> tag of “Clarks women’s shoes – Shenoy Shoes”.

6) Meaningful URLs
Another SEO element that Google pays a lot of attention to is the page URL. Keywords that occur in the URL are considered relevant to the search being performed.

For example, the page that lists all of the Clarks women’s shoes it carries should not have a url that reads something like

Instead a better URL would be

In SEO jargon, this is often referred to as URL rewrite.

7) Measure, Iterate, Measure againNow that you have done the above basic SEO sites and launched your new pages/website. Are you done? No, absolutely not. SEO is a chess game. You are competing with everyone else, especially your competitors.

Your company needs to periodically measure whether your site is getting found by users and how. Many web analytics tool including the free Google Analytics tool can help you understand as to how many users are finding you while searching for the keywords you have selected. If not, you will have to make adjustments along the way. You may even have to choose different keywords if the initial ones do not get you results you intended to get.

So it is all about measuring, making adjustments and then continuously measuring the results again. Even if you get the results you wanted at your first attempt, it does mean you are all set. Remember that your competitors are also competing for the keywords you have targeted. They are going to be making changes along the way and trying to beat you to the top ranking on Google. So there is nothing called resting on your laurels.

I hope the above has helped you in understanding the basics of SEO. Believe me, this is just a start. Like everything else, there is a lot more to SEO than what is listed here – linking, anchor text, site maps, images vs. text etc. Here are some valuable resources I would suggest you read to get more knowledgeable.

Search Engine Optimization Starter Guide from Google

SEO Fast Start by Dan Thies

Internet Marketing Blog by Hubspot – this is a lot more than SEO and all about Inbound Marketing – I am sold that this is where marketing is going.

Your thoughts? How well is your company doing SEO? Do you know of any other good tips or resources for SEO and internet marketing in general? Please share via comments.

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What is good enough? “Lame Duck” vs. Phased Releases

As a software product manager, you are more than likely called to make the decision whether a product/service is ready for prime time.  Often it is a challenge because there is a lot of pressure from internal stakeholders to release it.

There is a fine line between what I call a “lame duck” product/feature and phased release of a product or a feature. Lame duck is a product/feature that is dead on arrival. When customers try to use it, they either cannot figure it out (usability issues), find it to be so slow (performance issue) or basically find it useless (functionality issue). Phased release on the other hand is where a very large piece of functionality is broken down into logical units and delivered in a series of  releases. The latter approach makes a lot of sense because each of these logical or atomic units are still usable by the customer to get their job done. The additive nature of the logical units also usually makes sense to the customer because it lets them start using the new functionality in a gradual fashion and eventually end up automating/changing their entire process over a series of releases.

Unfortunately, “lame duck” product releases are very common. I have heard the excuse of “If we build it they will come” or the reasoning of “Let us release it and customers will shape it for us.” – all of this will hold true ONLY if you have build something that is complete and useful for the target customers. Customers usually have a low tolerance for products especially when they have choices and will only put with something when they absolutely don’t have any. The latter is very rare if you ask anyone other than software vendors. This is even more true with new products especially websites targeted towards consumers. Customers will not give you the second chance if they visit your website, don’t see what they wanted and leave. First impression matters. It does not matter how much effort you put in the second round to make things better and complete, it is a lot harder to convince your prospects/customers to come back and try it for the second time.

I am not preaching “perfection” here by any means – I am a strong believer in “perfect is the enemy of the good”. But I continue to be appalled when companies release products into the marketplace as “lame ducks” and wonder why they are not successful. One of the common places where you can find such products is when a company takes an enterprise product, turns off a few features and releases it as a small business version. This assumes that small businesses don’t have the same needs as the enterprises – not always true.

To clarify further what I define as “lame ducks” vs. “phased releases”, let us consider some examples purely for illustrative purposes.

Lame ducks
1) Photo community website launches with a bunch of photos, but there is no ability for community members to contribute photos. Result, community cannot contribute content and the content becomes stale very fast.
2) Tables functionality inside word processor – can create tables, but cannot add/delete rows or columns after the table is created – have to delete and start over.

Phased releases
1) Photo community website launches with awesome functionality to view, share and upload photos. The experience is outstanding, the community spreads the word and the site takes off. The creators extend the site to support videos within 3 months of launch.
2) Tables functionality inside word processor – all of the basic functionality is included. However, you cannot create rich text inside tables (different fonts, font size, font treatment like bold, underline, italic etc.) is not supported in Release 1. Rich text functionality is released in release 2.

As a software product manager, the best way to avoid having to make a decision to ship or not to ship is to prepare for this during the product planning session than waiting till the tail end. Plan for this, because it is bound to happen. During product planning, make it crystal clear as to what you think is the minimum set of functionality that is needed to release the product into the market. Once agreed upon, all stake holders should be aware that this minimum functionality is not up for negotiation no matter what issues are uncovered during the product development process. The solution could change based on how the product development proceeds, but the functionality set cannot. You should plan on building support for this approach with your executive stakeholders upfront so that you do not have to face the death squad when you vote “No” to prevent the product from shipping.

Have you experienced such a situation? How have you made the right decision? Please share your thoughts.

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3 ways software product managers can work effectively with development teams

As a software product manager, I spend a lot of time working with my development team in making sure that they are well aware of the customer pain points and the requirements of the solution we are trying to build. I have heard from time to time from my colleagues and also from software product managers in the community as to how development team does whatever they want without paying too much attention to the market requirements. While it is true that development does embark on some “skunk-work” or their “sandbox” projects, I have been lucky enough to have my product development teams more in tune with the market research my product management teams have done.

Here are some tips on how you can make sure your development team stays tuned in to the market needs and builds very simple, easy to use products that will delight your customers.Software product manager

1) Involve the development team early – One of the common complaints I have heard from my developer friends is how their product managers do not get them the actionable information they need about customer needs. Go figure! We as software product managers think that development teams want to do whatever they want and the developers are complaining that we are not getting them the information they need. Guess how developers find solace? They start writing code. When they have written enough code to solve the customer problem they perceived to be right, you as a software product manager stepping in with market information is of no use. Here is one of my common mantras to anyone who cares to listen – “Developer resistance to a software product manager is directly proportional to the number of lines of code written.” More code they have written, less chance you have to influence them and get anything changed. And guess what ships – what was written.

So how can you mitigate this problem? Involve the development team early. Trust me there is no time called “too early” to involve your development team. Involve them even when things are fuzzy so that they can start asking you all the questions to which you have to find answers. Make it a collaborative process. Set expectations that you do not have all the answers yet. This puts their skin in the game – it builds a sense of ownership. Product ownership can do wonders. Before you realize, everyone is rowing in the same direction and everyone wants to win by building the right thing. I am yet to meet a developer who wants to create a product that will fail. Yes, there are developers who want to build the pie in the sky solution that only they will use, but you are bound to find such people in every profession including product management. There is nothing you can do to prevent the occasional “skunk work” or “sandbox” projects – but if this is the norm at the place you work, it can only be one of two things – you are not doing your job as a software product manager or you are working for the wrong company. This is because with such state of affairs, market failure can only be a corner away.

2) Be a good strategist, but more importantly be an excellent tactician – Set a good product strategy that will help your company achieve business success. But make sure you remain involved in the execution of your development process. You as a software product manager need to know exactly where the development team stands on your product on a daily basis. You need to know of every bottleneck or hurdle faced by your development team and your job should be to find a way to resolve these issues. This in my perspective is one of the greatest reasons why Agile product development methodology is so successful – every team member is on the same page every day and there are no unpleasant surprises.

Being involved at the execution level will help you build a great rapport with your development team – it has for me. It sends the message that you care about the success of the product and that you are in the trenches with the development team.

3) Be the team’s cheer leader – Being a developer is not a fun job – it is a very stressful job. I won’t be able to do it. Every product development cycle has its ups and downs. Be the cheer leader for your team during these ups and downs. This may mean that you get your team the beer of the week from the nearest micro brewery or you take them out for lunch or dinner once a quarter. Always keep the human perspective – it is not all about work.

Take every opportunity to make sure you stand up for your development team. If your executive management team wants you to give them a briefing on the progress of the development effort, team up with your development lead to do the briefing. If you are going on a customer visit or going to be on a conference call with your customers, invite your development team to accompany you or listen in if appropriate. More you bring them up to speed on the customer’s needs, less battles you have to fight on the problems the product has to solve.

Don’t try to hog the limelight – it is not all about you. It is all about the team. After all your customer really does not care who is getting the internal limelight or who came up with the solution. The only yardstick for the customer is if your company can solve his painpoint with a very elegant solution.

Thoughts? What are your key learnings on how best to work with your development teams?

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6 “bootstrapping” tools for software product manager

You are a software product manager trying to start a software company on your own. Or you work for a startup or a small software company and don’t have much money to spend. But you still need to design a good user experience, do early usability testing with your prospects, do a quick show and tell of your ideas to your management, your customers or potential investors. Here are 6 “bootstrapping” tools that I have used a whole lot to communicate and collaborate without denting my wallet too much.

1) SnagIt – When doing wireframes or mockups, you want to steal UI ideas from different websites you see – you want something quick and dirty to show your product development team or your customers to get some early feedback. SnagIt is one heck of a tool that comes to the rescue. It is super easy to use and helps you capture images from your screen and edit it quickly. Cost: $50

2) Balsamiq – An outstanding, super easy to use tool for creating early wireframes. I am a very visual thinker and need to draw when trying to communicate user experience ideas. This is the best tool I have used to quickly create some quick and dirty wireframes. The wireframes look hand-drawn so your management team or your customers do not think you have it all coded and ready to ship. The palette that is available is exhaustive including the very nice interface elements for developing wireframes of iPhone apps. Cost: $79

3) Google docs – Need to write functional specs? How about revenue modeling or what if product pricing analysis? Google docs works very well. Its collaborative ability where users can markup documents and can compare the different revisions is good enough. You will not find everything Microsoft Office has, but it has a lot of the things that you commonly use (except Pivot tables – can do via Gadgets, but painful to use). But then beggars cannot be choosers. If you don’t have money to pay for the expensive MS office ($149.95 for Home edition per user) and need most of the features that one commonly uses, Google docs does the trick. Plus it is all online and everyone is working off one copy of the document. Nice! I personally have not used the presentation functionality and hence cannot comment how useful it is. Cost: $0

4) Goto Meeting – So you have created the mockups and want to do some quick usability tests with your customers and prospects and none of them are local. You want to do web conferencing for free? Goto Meeting is my favorite tool. So easy to use and works like a charm everytime. In the hundreds of times I have used it, there were only 2 instances where the customer could not use it because of firewall issues on their end. Though it is a little expensive to use, it is something where I would spend the money so that you can easily collaborate via web conferencing. Cost: $49/month or $468/year

5) Skype – Do I need to say anything about this popular FREE tool? I use Skype in conjunction with Goto Meeting so that I get free phone calls. The only thing you need to make sure is that the folks at the other end also have a Skype account. You can get your team members to create an account, but with customers or prospects you may have to use Goto Meeting’s audio. Cost: $0

6) Gmail – Again, want free email without having to shell out money for MS Outlook? Cost: $0

Overall, total fixed cost = $129, recurring cost = $49/month for GotoMeeting.

I am sure there are many more tools out there that one can use. What do other software product managers use? Please let me know.

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Death by a thousand paper cuts ….

In my last post, I discussed the benefits of doing an on-site customer visit where you get to observe customers/prospects use your product or competitive products to get their job done. In my experience doing these visits, I often discover what I call “death by a thousand paper cuts” issues. These issues are essentially annoyances that your users have to put up with when using your product. By itself, each of these issues will sound trivial. If your users call you up to complain about any one of these issues or to propose a solution, you could easily laugh it off as trivial.

But when you are on-site observing these customers, you will notice that these trivial issues quickly add up to cause significant loss of productivity for your users, especially when your users have to encounter them each and every time they use your product. But these to me are the slam dunk features – they are so trivial and hence are usually very easy to fix, but when you fix them you will be able to significantly improve the user experience. Your customers will notice these small improvements because they will reap significant benefits especially if these issues were in the way of a frequently performed task.

I have had many instances where such simple fixes have generated the loudest applause from the audience where as the big feature we were so proud of was met with very muted applause (to our chagrin, if I may add). Have you experienced something similar?


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Lots of data, no actionable information

I am big about making “data driven” decisions. I have written in the past as to how wiring your product can help you make data driven decisions. You cannot make the right decisions unless you know what is happening in the market, in your product. Data can be collected in a myriad of ways – listening to customers (one of my favorites – talk to real humans who use or will use your product/service), analyzing usage (web analytics, product usage metrics), win/loss analysis (again talking to humans to understand why they bought and why they did not), conversion analysis (who bailed out vs. who put money down etc.). mountainofdata

There are companies that don’t collect data. But there are a whole lot more companies that collect a lot of data. Unfortunately, they find that no one analyzes the data or the large volume of data is not what they need to help them make decisions. Just like how one says that a wrong decision is sometimes better than indecision, to me having no data is better than a ton of worthless data. At least you are not going to spend time analyzing the worthless data and draw wrong conclusions.

The sole purpose of data is to create “actionable” information that will allow you make decisions that will move the needle – increase in revenues, improved profitability, faster performance, higher customer satisfaction or whatever business metric you care about. But what I find is that many companies collect a lot of data, but none of it is actionable. It is almost like someone said “we need data” and someone ran and collected whatever he could.

So next time you or someone you know is going to start a data collection exercise – here is what I suggest – pause, take a deep breath and ask yourselves three simple questions:

  1. Why do I need this data – meaning what decision am I looking to make?
  2. What is the right question I should ask that will get me the “actionable” information? Make sure you phrase the question right.
  3. How many people do I need to collect it from before I can call it trustworthy?

Make sure you have solid answers to questions 1) and 2) and if you don’t, drop the data collection project. Yours truly is also guilty of this rush to go and collect data. Surveys especially are not easy to do – hence put in the right amount of time to make sure you ask only the needed questions (and phrase them right!) to get the right information to make the right decision.

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Software Product Manager’s tip on Optimism vs. Reality

As a software product manager, we have to be cheer leaders for our team. We have to make sure our sales team, marketers, developers, the QA team are all staying pumped up about the products that we have asked them to sell/market/develop/test. But optimism that is not well grounded in reality is bound to backfire.

How many times have you met an optimistic sales person? They are always optimistic about meeting their sales quota – “Oh, I will make my $100K!” – when they very well know that the average deal size is $10K and there are only 3 potential deals cooking in the pipeline. How many times have you heard developers being very optimistic of shipping on time even though they are currently two weeks late and the original ship date is only a week away? It is also common for many of us to overpromise on what we can do for others, just because we hate to say No to someone.

To me, such optimism is very common but when reality strikes, such optimism does nothing but burn trust. Be optimistic about future success, but make sure it is grounded in reality. There are only 24 hours in a day and you are not inventing time to make the impossible come true, just because you are optimistic.

Trust once lost is hard to gain. Push yourselves to do more, but don’t set yourselves up for a definite failure. Under promising and over delivering is always a good option!

Agile Product Owner – New Name, Same Old Problem

This is a guest blog post by John Mansour, Founder and Managing Partner of ZIGZAG Marketing

In the world of agile software development, the confusion over product owner versus product manager is hardly new. This problem has existed as long as software and product managers have been around. It merely has a new name.

First, let’s cover the basics. There are two key roles in the software product delivery continuum that must precede the first line of code being written, regardless of development methodology.

  1. The “what & why” role – responsible for determining “what” functionality should go into a product and “why” from a market and business perspective. The “what and why” role serves as the conduit for all inputs both internal and external. The end game of this role is to grow revenue by aligning product direction with market dynamics and customer needs. The “what & why” function is typically the responsibility of the product manager. Traditional or agile, it’s necessary regardless of who does it, their title or how it gets done.
  2. The “how” role – responsible for determining “how” product features should work to support the things users do. In its most basic form, this role is a surrogate user responsible for explaining in verbal, written and illustrated forms and in excruciating detail, what users do, how they do it and how software must work “functionally” to support the users. They spend most of their time with developers and they test functionality to make sure it works as designed, along with a host of other responsibilities. And yes, the best people for this role are former users or those who have worked intimately with a variety of users in multiple environments.

The “how” function is typically the responsibility of a functional product designer (for lack of a better title). For the fraction of software companies that have them they go by such titles as Business Analyst, SME (subject matter expert) and Technical Product Manager. In an agile environment they’re called Product Owners. Call them what you want, every company with high user interaction products needs them. They get much of the credit for things like iPhones and TiVo where the cool factor is the usability.

In my humble opinion, the confusion lies in two areas. First, software companies have been trying to combine responsibilities of the product manager and functional product designer for years and it’s a nightmare in every single case I’ve ever seen, and I’ve seen a lot. Plus it creates the same identity crisis as the product manager vs. the product owner in an agile world.

Regardless of development methodology, combining these roles is a recipe for failure because the skill sets and personality types required are distinctly different for each, not to mention the time commitment. When combined, the end result is either the right functionality with poor usability or highly usable features no one cares about. A dilemma on par with, “would you like to lose an arm or a leg today?”

The bottom line – your products will eventually fail. Second, “product owner” couldn’t possibly be a worse title, given the responsibilities of this role. Furthermore, product managers have always been affectionately referred to as product owners because they “own” the ultimate success of a product. Perhaps a dope-slap is in order for the person who coined the title “product owner.”

In summary, two distinct roles are necessary to feed requirements to software developers if you want usable products the market will buy, regardless of development methodology. The titles are less relevant as long as the responsibilities are clearly defined. For more on functional product designers read the article titled, Product Management & The Functional Designer – 3 Reasons it’s a “Must-Have” for Successful Products.

5 symptoms that software product managers are worrying more about competition and not customers

In the video presentation soon after Amazon’s acquisition of Zappos, Jeff Bezos, CEO of Amazon said “Obsess more about your customers than your competition.”  I could not agree more with him.

Here are 5 symptoms that you, as a software product manager, are worrying more about your competition and not customers:

  1. You spend more time benchmarking your competition than talking to your prospects or customers.
  2. Your sales team says that they cannot sell your current product because it does not have the latest gizmo widget that your competitor just released. They say “We need just that.”
  3. In internal company meetings, your team members spend more than 25% of the meeting time reviewing what the competition has done and dismissing them as a joke.
  4. Your company bad mouths your competition to customers and prospects.
  5. Your sales team brings up your competitor’s in presentations with customers and how you are better than them.

Don’t get me wrong, you need to keep a very good tab on your competition. You need to have a detailed understanding of their product strategy, their products, their financials, their pricing strategy – do as much competitive intelligence gathering as you can and make sure it is kept upto date. Use their products as prototypes. Get one person dedicated to that effort if you have the resource.

But spend at least 5 times more time listening to your prospects and your customers. Even talk to your competitor’s customers – understand how the competitor’s products work, where they fall short and why. Why did they select their product? What drove their decision making? What other products did they consider during purchase? How happy are they, why and why not? Would they be willing to test drive your product and give you feedback of what they like and don’t? Keep all of this customer centric and not competitor centric. Forget about the “corporate” nature of your competitor, instead keep it human, keep the focus on their products/services and how well they solve your market’s problems.

Just because your competitor build something does not mean they are right. They could be dead wrong. We definitely do not want to jump off the cliff with them, would we? Empower your sales team with all the competitive intelligence they need, in case they get questions on why you are better. But don’t make it their focus. More time they spend talking about the competition, less time they spend talking about you. Your sales team must not bring up your competitors unless you are asked. The whole show is about you, not about the competition. By bringing up their names unprompted, you are essentially creating free awareness and legitimizing your competition. For all you know, your prospects may have never heard about them.

I have written in the past on how it is not possible to win a feature war. Your competition will invariably have features you don’t have and vice versa. Instead focus on how you can build value for the customer and make them more successful in what they do. If you do this well, your success will come. No matter what competition throws at you, remain human. Civility never loses!

Never bad mouth the competition, respect them and beat them.

Thoughts? What are your insights?

7 things about product pricing

Here are 7 things I have learnt about product pricing.

#1 If price is your ONLY product differentiator, you are selling a commodity. And if your competitor is much larger than you, you may not have a prayer – they can run you out of town by giving the product away for free.

#2 There is nothing called perfect price. You will either overprice or underprice your product. The key is to test quickly to see what the market can bear, quickly iterate and arrive at your final price. Pick test markets, learn and manage, so that if you do not get it right, you do not have a customer backlash to deal with.

#3 Never roll out pricing increase to existing customers all at once. Why? – see #2.

#4 You cannot increase price without adding additional value for your customers. Customers don’t care about your expenses especially when they have choices. Focus on value you bring to the table for the customer, how it solves their pain points, not your expenses.

#5 You do not have to drop prices if your competitors do. If price is all you have to talk about, see #1. Refocus the discussion to customer value you provide and why the value is worth the additional price. If the customer will not, assess if the customer is worth acquiring. Not all customers are.

#6 You do not have to have single pricing. Promotions to attract new customers, rebates for large volume customers are things to consider only if it makes business sense. Don’t do any of this unless you have a sales strategy in place – what is the end goal for promotions and rebates – new customer acquisition? customer retention?

#7 If you want to price products based on value, think about packaging. Car companies do it – EX, LX, RX; consumer products do – large, medium, small; online services do – Basic, Pro, Premium.

What are your learnings about pricing based on your experience? Please share with me and other readers.

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Awareness, Persuasion and Shelf Life

Couple of weeks back, I was invited to write a guest blog post on On Product Management.

My post was titled Awareness, Persuasion and Shelf Life. I hope you enjoy reading it. If you do, please leave comments either on the post there or here.

Prevent your development team from turning into “blind men”

Involve them in exactly ONE customer interaction whether it is a customer visit or a customer phone call!

Not more, not less, exactly ONE and you as a software product manager would have done them the greatest disservice. blindmenandelephantThere is no better way for you to taint your team’s perspective of your market, your prospects, your customers, your buyers. They will now have ONE data point to rely on. Later when they question your market research based on your large number of customer data points, can you blame them? You will hear “That is not what I heard from the customer I talked to…..”

Instead as a software product manager, involve your cross functional team members (development, QA, product marketing etc.) in multiple customer interactions as possible. Avoid the situation where a team member just attends one. Set the ground rules – either you attend at least three customer calls (visits) or you don’t attend any. Having a musical chair of developers attend these customer calls (visits) such that each one gets to listen to one customer is not useful. If this happens, your team’s perspective of the customers will be akin to the Blind Men in the famous Indian fable of Blind Men and the Elephant.

They will miss out on seeing the patterns, trends, consensus, variations, contradictions that emerge after multiple customer calls. You will be better off in having less number of developers get a good feel for the user base by having them consistently attend multiple calls (visits) than spreading the wealth among all of your team members. Once you do this, it will be a lot easier to prioritize and decide what to build.


Image Courtesy of: Satrakshita

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Business Lesson from Wimbledon Finals 2009?

What an amazing Wimbledon Men’s final it turned out to be between Andy Roddick and Roger Federer. An epic battle of 4+ hours, 77 aces, 77 games, the fifth set alone lasting 90 minutes. Roddick brought his A+ game to try to beat his arch nemesis Federer who had beaten him 18 of the previous 20 times they had met. But alas after 77 games, 27 aces, holding serve until the very last game, winning 83% of his first serve points – the result ended up to be the same – Federer won it all. I felt bad for Roddick because he gave it everything and still came up short.wimbledon

As I was thinking about the entire match over the course of the afternoon, something dawned on me as a business lesson from this finals. It is every tennis player’s dream to win at Wimbledon. But not many do, it is a lot harder. But then there are tons of other tournaments where the competition is not that tough but with a lot of winners. This is where I thought businesses could learn from – which dreams to chase, where to play, where to spend the energy and time etc.

Imagine that you sell sales automation software. The market is huge since every company on the planet can possibly make use of it. Let us assume that you have $100,000 sales and marketing budget. Would you want to spend all of it in trying to win the “big fish” account – a Fortune 500 company trying to replace their current sales automation software? The stakes are high, competition is stiff with a lot of bigwigs with a lot of money in the fight. You could transform your company overnight if you win it all – but should you play? The question comes to something simple – what are your chances of winning? Are you better off playing in the smaller “tournaments” and building a strong customer base before trying to play on “center court” in the biggest tournament of your market? Will you survive if after all the effort you end up like Roddick – with no Wimbledon title to show? (Andy Roddick is still an awesome player who still has a lot to show since he has won 27 singles titles, $15M+ prize money).

The key is “focus” – where do you want to spend your money, time and energy? It sounds simple right? No. It is very easy to try to be everything to everyone and be nothing to anyone. It is easy to go chasing after the biggest deal on the planet and come up with nothing. It is easy to try to solve a problem more than you can chew and fail completely. A local company that recently shuttered its doors comes to mind – it (I am withholding the name) was launched with an ambitious goal of  developing a cross-channel commerce platform that would allow large retailers to integrate and manage content and sales across the Internet, catalogs, and physical stores – a novel idea, but with one problem – they had just one customer (its parent from whom they had spun-off) sign up on the vision – eventually the company folded when it could not deliver. TechCrunch report said “In retrospect, the warning signs were everywhere: 1) big company spin-off; 2) raised way too much money for a series A round; 3) reliance on that same big company as its main customer (and as an investor)”.

So everytime you are told by sales that this is “the” deal – ask about the stakes. What if you don’t win after all? Will you survive? Do you have eggs in other baskets? It could be your biggest win but could be your death knell as well. It may just be OK to say “No” to play and spend your energy in the smaller “tournaments” and notch up wins. Business after all is never a sprint, it always is a marathon.

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