I had an interesting discussion recently with a delegate who came on our public training course in London.
Michel Roth is the Senior Director of Product Management at RES Software. His big issue with product management is that too often decision making is based on intuitive feel and limited facts.
“We tend to make too many decisions on ‘gut feel’. I’ve worked in 4 companies so far and in all of them, we have tended to make decisions based on anecdotal evidence from a few customers. And even that is often out of date.”
He has a point … (by the way, the picture above is not of Michel).
When a company is small, the founder is actively involved with the product and customers. Everyone knows everyone else. The senior people are close to the market and doing the product management. Their gut feel is normally right and if it isn’t they will get to know about it very quickly.
As a company grows product managers are appointed. The number of customers increases and things become more complex. No one person knows about all the customers. And information about how customers use the product can be very hard to come by.
With over 200 employees worldwide RES Software now serves more than 2,500 customers. “We have over 3,500 deployments in 27 different countries. No one person knows about all these customers. As product managers, we struggle to gather meaningful and representative data on which to base our decisions.”
So what is Michel doing about it?
“We have user groups and customer advisory boards which do give us great input but only from a small number of customers. So we’re now looking at online surveys and other tools that can help create a current baseline on how customers use our products.”
“Although our products can collate data about which functionality is used our customers have to opt-in to provide it to us and it’s difficult to persuade them of the benefits to them of doing this.”
“We also try to visit customers on a regular basis but we find it hard to find the time with all the other product management activities on our plate. When we do – we often get some great insights into how our customers are actually using our products to solve their business problems.”
Michel’s issues sound very familiar to us and in our experience, many companies struggle to build a solid understanding of how and why their customers use their products. It’s normally the case that there are many experts on the product in the building but many fewer experts on the market – and to be a market expert you need to get out of the building.
As Michel says…
“The trouble in our business is that there is never a shortage of good ideas! The challenge is being able to say Yes to the right ones and No to the rest. For that, we need some facts and data we can rely on. Using our gut feel is not necessarily a bad thing but we should always have other data points that we can check against.”
There are many ways to get insights into your market – how do you get the facts so you don’t have to rely purely on your gut instinct?
Director, Product Focus
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This article strikes a chord in my company. Too often, product launches in my company are based on anecdotal information or gut instinct. Sometimes it is also due to pressure from the supplier who has influenced your senior managers. I think a product manager still has to satisfy himself/herself that a market exists if he/she can. In a very large company, product managers can be completely disconnected from customers, which is perverse, but true, so therefore you have to rely on unstructured information from the sales force. In some cases, if the product is part of a larger product family, I find that it is appropriate to therefore look at the cost of launch as a deciding factor, rather than the propensity to sell, if your are satisfied that the product launch strengthens your portfolio.
Michel makes a number of great points in the interview and most of them definitely resonate with my own experiences. Dealing with the deluge of product ideas often feels like trying to drink from a fire hydrant. Saying yes to the right ones and no to the rest challenges every product manager.
I agree that small, start up organisations tend to rely more on gut instinct. I also feel this is the same for any organisation that is breaking new ground either through a change in strategy or a move into new verticals.
It is difficult to generate really acurate data to help drive product decisions.
User groups rely on the commitment of a subset of users which one would hope is representative, but is not always the case.
This approach is very inefficient, if they were solely for the purpose of collecting information on products are used they wouldn’t be attended – the reason they are is because of the network effect, community feel and other indirect benefits of participation.
This can be a barrier to some organisations in terms of costs and logistics to carry out such activities.
My own preference is to analyse the use of the product through the product itself. By capturing and tracking the activity of users a picture of use and trends across a whole user group can be developed. The really clever bit is tracking this data in such a way that it can be used to analyse where a user is not using the product as it was originally designed – i.e. they are trying using the product to solve a different problem.
As long as a product manager is aware of and understands these problems then they are one step further on than applying gut instinct
Online surveys are a way of getting feedback, but can be extremely limited.
Best practise when a company’s client base outgrows the ‘gut feel’ is a structured Voice of the Customer (VoC) policy implementation.
This is more than just banging out a few surveys, and requires a structured plan and buy-in from the affected stakeholders and above all executive sponsorship and culture change.
This can take a while and involves quite a few steps and needs a dedicated budget that is managed by product management, but external from the product KPI’s the team use to manage themselves and their portfolio.
Very interesting, and a very common issue we all face.
I was particularly intested by the comment about persuading customers to opt into data collection. My own feeling about this is that we need to be better at getting customer buy in. Pitching this to the customer that “it benefits them as the more we know the better we can make the product in the future” is not enough.
This is data is so valuable we need to provide tangible benfit to the customer so that they opt in. Trouble is I’m yet to find a way to provide or position such a benefit…..
I know what you mean. I always try to put myself in my customers shoes and the reality is that in a B2B environment it is very hard because some customers might perceive the ‘help us make our product better for you’ as a clichè.
From my experience leveraging customer relationships is the most effective way. I’ve asked/begged our Support and Pro Serv colleagues to bring this up in every customer contact.
Alternatively you could consider sharing the outcome once per year but this may not be something you can or want to do.
It’s great to this resonating – we’re not alone :-). Personally I believe in aggregating multiple sources into one ‘dashboard’ but this requires a structured approach. Using a BI tool for this helps. Sources could be: customer surveys, in-product data analytics, customer advisory boards etc.