Product Marketing Failure
With over 30,000 new products introduced annually at an astounding failure rate of 95% [HBR Feb2011] the importance and need for excellence in product marketing, hits home. Given the spectacular failure rates of New Product Introductions (NPI) it is clear that the profession is either not doing well at training, or businesses are introducing highly risky products which are prone to market failure. Reality is probably a combination of the two possibilities. Part of the product marketing challenge is the extreme diversity and breadth of responsibility and scope of this profession. Regardless of challenge, a first step toward improving the field is to seek a common understanding of the core elements, and define what entails excellence. Only after doing this can we begin to step toward broader scoped improvements and a greater level of consistency.
Excellence is a difficult concept to define in a profession. In high scope roles, this is especially true. Straight forward cases, like sales, are easier to define. Excellence in sales means significantly exceeding quota or significantly exceeding revenue targets without seriously discounting the product. For Product Marketing the question quickly shifts to ‘excellence in which area?’ Is it possible to choose the aspect of Product Marketing that is most important and ignore other elements, for example? Part of the challenge is that product marketing is largely done behind the scenes. Few people in an organisation get to see excellence in setting strategy, for example. We cannot always find excellence in strategy development. However, we certainly do find examples of ill-conceived strategy – when firms file for bankruptcy protection. Poorly set Go-To-Market (GTM) strategies can send companies spiraling into failure. So again, we define the importance and need to strive for excellence in a profession that can make or break a firm.
To define excellence we need a common understanding of the function itself. That includes a detailed definition of the job expectations, strategic goals and day to day objectives. Defining excellence for product marketing also means identifying examples of what other professionals in the field consider to be pinnacle examples of excellence.
At ProductCamp Toronto this year (Saturday July 25th) we set out to leverage the professionals in attendance – to define excellence in product marketing. Fifteen professionals in marketing, product management and product marketing brainstormed to create elements of a scorecard to assess Product Marketing Managers (PMM). Using a scorecard as a commonly accepted criteria set could even form the basis of a Product Marketing award. Today there is no such accolade to recognize the best in the field. Despite being a critical driving force behind launching new products and growing sales potential, there are no professional distinctions to honour our best.
The excellence session focused on four groupings; the professional’s background (qualifications), key functions accomplished, key product marketing metrics achieved, and examples of excellence in product marketing as guideposts against which to compare efforts. As in most brainstorming exercises, additional criteria emerged that did not directly fit these first categories, but which should be included as other considerations.
To start we combined an initiative 25 Director / VP and Individual Contributor, Product Marketing postings. Posting came from the Toronto area for 2014 and 2015. Running all words in these postings through TagCrowd provided a word cloud highlighting the most common words in the Product Marketing job descriptions. By no means is this a standard for excellence, but it is indicative of the typical expectations of the function. From this word cloud elements like positioning, strategy, communication, development, business, messaging and execution; all play strongly in the product marketing job descriptions.
As seen in the word cloud above, a PMM must have the right background to have a fair chance at succeeding in a highly diverse and challenging function. Being a critical role, organisations seek to find, hire and entrust the right people for the task. PMM’s need to bring hard attributes like solid industry connections (a strong network), a good understanding and experience managing the customer lifecycle (AIDA / ACPP, conversion and retention practices), and bring a background steeped both in technical aspects of the industry with breadth in marketing. Technical backgrounds and skills are useful to gain and understand the detailed needs of the client, and how it converts into a product offering. Besides a technical background, PMM’s MUST also have a solid grounding and education in marketing. Marketing knowledge can come from a myriad of reputable executive education programs in marketing management, certification programs, and other educations offerings.
Soft skills are equally important. Three examples garnered from the team include: possessing excellent communications and interpersonal skills, being sensitive to the market needs, and exemplifying exceptional strategy, planning and organisational skills. Our first two examples tie in with the key functions of Product Marketing discussed below. Element three explains why most PMM roles require candidates with MBA’s or Management degrees. An important part of Product Marketing is the strategy setting capabilities when developing plans to regain market share, or launch new products.
On key functions three aspects emerged as priorities. Product Marketing must excel at understanding the market and customer needs, lead pricing management, and establish the Why-Mission – or the storyboard for the product’s success. The first key function is clear. No doubt the PMM should have assessed the market during the business planning phase, and understand both the market dynamics, and competitive landscape. They must also have met with customers to get a general sense of the principle needs for the product offering. Next, pricing management can be a challenging topic. There are usually several stakeholders and many opinions on how to price the offering. Despite this, Product Marketing must take the role of championing the pricing discussions and analysis. As the one closest to the market, the PMM should best understand client expectations and what the market will bear, to drive pricing discussions. Finally, the ‘Why Mission’ provides the ‘Raison d’etre’ for the offering. Clearly defining what the product delivers to the world – is crucial to rally the sales teams. This mission (the reason for being) can also infuse a sense of energy and excitement throughout the organisation. Again, the evangelist for creating and championing the ‘Why Mission’ should be the owner – Product Marketing Manager.
Not expressly called out, an underlying theme across the key functions is the need for the PMM to be a strong leader. A PMM must be both a visionary and an evangelist to create and drive the mission for the product offering. A mission example might be to set up green technology in the wide format signage printing market to end the destructive and hazardous solvent chemicals used today. This particular example was HP’s Latex Inks launch mission in 2008. Rallying the division around a mission of bringing environmentally friendly industrial products to market became an easy win for the PMM, associating it with HP’s overall environmentally conscious stewardship.
Product Marketing needs its professionals to be highly visible evangelists, championing the product and mission. It means that PMM’s must truly own their product mission. Beyond creating exceptional collateral and content marketing material, the PMM must communicate the message of the new product’s potential, successes, and winnings – throughout the organisation and customer base. Social and digital marketing media make getting to both audiences easier. No doubt, successful PMM’s simply must be strong communicators. This includes both motivating internal resources, as well as driving outwardly focused tactics like customer oriented webinars, speaking engagements, conference presentations, and customer presentations which directly help the sales teams surpass quota.
Our exercise would not be complete without key metrics. Several are important to assess effective product marketing efforts. Hard metrics include reducing the customer acquisition cost (CAC), maximizing the customer lifetime value (CLV), and prolonging customer retention metrics. Three other top criteria include assessing the PMM’s results on Product Awareness and penetration in their target market, quality of customer reviews about the product (advocacy), and the level of customer engagement about the offering (customer interaction). Were we to compare the effectiveness of PMM’s across firms, company sizes, initial brand strengths and industries; all metrics would have to be reviewed as percentage growth or reduction metrics. As an example, for a New Product Introduction (NPI), the CAC should be monitored for the first month or quarter as the baseline. After setting the baseline, the metrics in the ensuing months or quarters could be compared against the baseline to show a percentage growth or decline. Such metrics could then be comparable across fields, companies, and industries. In other words, we could use these metrics to compare Product Marketing efforts and results.
Examples: Product Marketing Excellence
Our final brainstorming exercise took a glance at which companies are doing product marketing exceptionally well, today. Several examples emerged, and three top examples resonated with the seminar group; Apples’ iPod, Tesla and Netflix. These three are examples have succeeded using new technologies to capture markets, creating dominant brands. Recall the iPod was not the first MP3 player available. Yet it emerged as the dominant player that permanently shifted the music industry. Arguably, this was only possible as a case of extra-ordinary leadership, followed by a highly savvy product centric marketing approach. Tesla took the electric car paradigm and asked why it could not leverage the ultra high end to make a sexy and coveted electric sports car. Finally Netflix was an excellent example of a service offering that was able to pivot out of the DVD shipment’s business, to an Over The Top (OTT) internet content provider. In each case, technology played a crucial role, but it was not the technology that ultimately won the day. It was the effective and successful product marketing effort that made a difference, and created entirely new industries.
Having pulling together many elements of excellence, the next step will be to summarize this work into a cohesive scorecard for Product Marketing. This we will address in the next blog post.
Author: Charles Dimov