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Is UX Part of Product Management?

Posted on 11 March 2015 at 9:43 by Adrienne

peas-in-a-pod-small

The topic of where User Experience (UX) belongs in an organisation’s structure is one that sparks many different opinions—much like that of Product Management.

I recently asked Matthew Magain from UX Mastery the question: “Is UX a part of Product Management?” His cheeky response was “Is Product Management a part of UX ?” I guess that’s a great question—is it?

Matt explained that the answer to the question really depends on the type of company.  “In design-led companies, UX designers will have a seat in the board room; in more technology-centric companies, UX will be seen as subordinate to Product Management.”

UX is a Part of Product Management

My opinion is that, in most cases, UX should be considered very much part of the Product Management family. Product Management is a broad professional domain with a spectrum of activities that range from marketing to engineering. UX has a narrower but important focus and fits nearly within that spectrum.

Whilst UX makes a significant contribution to the product’s overall success, it is not the only factor. In many instances, the core product attributes have little impact (unless its not functioning) on the user experience. There are two main parties that a product serves; the customer and the business. In my experience, UX typically looks after the customer, whilst Product Management looks after both the customer and the business. Matt disagreed and explained “if a UX designer is ignoring business goals she is not doing her job. We stress this point in our writing and make a big deal of this in our training.”

Matt made a great point. If we want our businesses to thrive we should ALL be focused on the business goals.

Product Management Has Broader Accountability

Product Management not only has accountability for the product experience, of which UX is a component, but it also has to juggle the business needs and capabilities. There may be customer problems that the business may not want to solve (called strategy). Not all customer problems are created equal. Some problems are severe and prevent a large number of customers from achieving their goals. However, there are some problems that are trivial and only affect a small proportion of customers. As an independent entity, the business can choose to solve either one of those problems. Or, it can solve neither of those problems because solving them may not deliver a business benefit that is sufficiently attractive for the business to pursue. It seems counter intuitive but solving some customer problems may not be a good business decision. Unlike UX, it’s more likely that the Product Manager will work closely with various stakeholders to make the decision to solve the customer problem within a timeframe or delay solving the problem indefinitely

Ultimately, though Product Management is the custodian of the product’s value in the market and that means the product has to be priced accordingly, accessible to the target market, supported operationally and uphold all the promises it makes.

UX Closer to the Customer

When I grilled Matt further, he made the excellent point that “UX designers, by definition, act as stronger champions for user goals,” given that’s their primary purpose in an organisation. “The nature of UX work means we probably end up feeling closer to the user and developing genuine empathy.”

In reality, Product Management is often spread too thinly across many different activities, putting out many fires. We’re called upon to uncover why sales are poor, to ‘quickly’ respond to competitor challenges, to work closely with our engineers to resolve technical faults … the list goes on.

Yet as Product Managers, we know that the only way to develop long-term business success is by spending time with customers and solving lucrative customer problems.

Many Benefits of Having UX as a Part of Product Management

If UX isn’t a part of the Product Management team in your organisation, it should be. The relationship between the two disciplines is important for the success of the product.

There will never be an opportunity in a company, big or small, for Product Management to be solely focused on the customer. UX facilitates the transfer of rich customer insights into Product Management. Vice versa, Product Management can offer business information that may help UX design better customer experiences, which in turn makes for a better product.

And that’s better for your customers and your business.

Tagged in:Organisational Structure, product design, product management, Product manager, Role Definition, UX, UX Designer

The Mom Test

Posted on 23 February 2015 at 8:20 by Adrienne

The Mom Test‘. Its a book by Rob Fitzpatrick. I like it.

It’s very simple to read but more importantly, it teaches Product Managers how to speak to customers and find out if what they intend to develop is a good idea. Lots of examples of good and bad interviews to takeaway.

More often than not, we tell Product Managers to get out of the office and speak to customers. From what we’ve seen, many are nervous and have difficulty asking the right questions to get the results they’re after.

And rightly so… Both parties (customer & Product Manager) are slightly anxious. Both parties want to please each other. Both parties also want to appear knowledgeable. In many interview situations, customers tend to validate the idea as ‘great’ whilst the Product Manager may stop probing for fear of appearing ignorant or annoying. The results are not usable at best or false at worst.

But customer interviews are worth it if done correctly. It reduces the risk of going to market with the wrong product, service or feature.

To do it better, firstly figure out what need’s to be tested. Is it a new brand product or service idea? Is it a feature? Is it a price point? Is it the brand? This will lead you to the right research approach.

If you want to test a price point, I think there are other more effective ways to test this. No need for interviews in this situation. It’s very difficult to test price effectively during an interview situation. If it’s a brand new product or service or feature, interviews are warranted.

When conducting customer interviews, Fiztpatrick talks about the concept of ‘zooming in’. He writes that it’s important to determine when to focus on problems. It can neither be too early or too late in the conversation. If we know the problem exists in the market there is not need to re-establish if it exists. During the interview, we can therefore zoom in on the problem and explore it in detail. If we’re uncertain if the target market has a problem that the idea intends to solve, then it’s imperative that we zoom out to establish the situation.

For me the key takeaway is this… “Customers own the problem. You own the solution”. Don’t ask customers to help you develop the product or service. Instead ask them about ‘their life”. Probe about their goals, specific instances where they’ve achieved or not achieved their goals. Talk about their problems – broadly or specifically. Ask them what solutions they’ve used to solve their problems.

That is inherently more useful than asking “Do you think this product is a good idea?” or “Would you pay XX for this product?” Seriously, what can customers say…..

And finally as Rob Fiztpatrick advises … “Talk less and listen more.”

Tagged in:Customer Analysis, Customer Insights, Customer Interviews, customer research, market research, product management, research, The Mom Test

Once Were Giants – Take Your Eye Off The Customer, At Your Peril

Posted on 23 February 2015 at 9:21 by Sean Richards

How many of you remember these famous, Australian taglines?

Not Happy Jan!” and “GO GO Mobile” are some iconic examples of Yellow Pages advertising campaigns that helped shape the Australia of today.

Yellow Pages was a much-loved brand that pervaded our lives in Australia. Everyone depended on Yellow Pages to find services, look up business contact details and double as makeshift TV and monitor stands. But, times have changed. My 10 year old daughter doesn’t know what Yellow Pages is, or was. It still exists but its importance to our lives is substantially different.

In many ways, this is not a new story. During the last 10 years we have all watched Google gobble up the world into its search index and change the way we find stuff. Many, once prosperous businesses have been left crushed in its wake. Google is now the standard for finding things and today, businesses prefer to direct their scarce marketing funds into paid search rankings on the most prominent online channel, instead of using a brand from a bygone era that has lost its relevance to society. The speed and scale of this change is worth writing a few words about.

Sensis is the owner of Yellow Pages and White Pages, along with several other brands that have ebbed and flowed over time. It was until very recently, a wholly owned subsidiary of Telstra. During my time at Sensis in the year 2000 (called Pacific Access back then) I recall the vibe. Sensis was prosperous, omnipresent and arrogant. We referred to the company as ‘the rivers of gold’ — a billion dollar corporate king and a highly profitable division of Telstra. Today, it is a shell of its former self. Its revenue sucked dry by market dynamics that left it behind.

The Sensis ‘rivers of gold’ have now run dry.

2014 was a hallmark year in the history of Sensis. Telstra sold it to Platinum Equityon the 28th February 2014 for $454M cash (and $157M in fair value consideration). Well, 70% was sold off and Telstra secured ownership of 30% of the new holding company for Sensis, called Project Sunshine I Pty Ltd, in the transaction. Telstra recognised the transaction on its books as a discontinued operation in their advertising and directories business. Despite various attempts, the declining revenues could not be abated. Telstra bugged-out for a bit over half a billion. Big numbers yes, but this sale value is about the same amount Sensis would generate in revenues in one quarter only five years beforehand.

Once were giants graph

Sensis financial performance 2009–2014

This decline was not due to reducing demand for the company’s products and services — in that time revenues for Google had tripled. What had changed was how people search and consume information. Sensis, it seems, had taken its eye off the customer.

Businesses grow and die. The scary thing is how quickly a business like Sensis can dwindle from billion-dollar household name to very much no so in the space of five years.

The Sensis of today is very different. Not the giant it once was, but it has new ownership, a new look and feel and new propositions for the Australian business market place. It would be easy to write off Sensis as yet another business crushed by the might of Google. But wait, the story may not end here.

Not everything is campfires and marshmallows when it comes to the Google juggernaut. Is it just me or are other people getting a little tired of having web search results squished in between paid advertisements? Or, if you are a business that has ventured into PPC (Pay Per Click) advertising you would have noticed it is getting more and more expensive to get your ad positioned on the elusive top spot.

It’s a #digitaljungle out there.

It is a #digitaljungle out there. Online presence these days is complex to get right: search engine marketing, search-optimised web sites, responsive design for mobile/tablet support, social media amplification, omni-channel marketing strategy, etc. Perhaps what Australian businesses need today is an organisation that helps with both online and offline presence — to help wade through the complexity and chose the right channels in which to invest. The Sensis of today is leaner, potentially more agile and less encumbered by ego, legacy and old world bias. It might just be the right kind of organisation to deliver the right kind of support needed to businesses struggling to establish a faithful brand presence, online and offline.

Product marketers, like those at Sensis need to keep a keen eye on the customer, to uncover their needs and position valuable solutions that help solve customer problems. What problems can your organisation solve with the right kind of customer-centric focus?

To learn how product marketing principles can help create more elusive value for your customers take a look at the ‘Ready, Set, Go-to-Market’ training course at Brainmates.

References

‘Not happy Jan’ image sourced from Campaign Brief

‘Go Go Mobile’ image sourced from AustralianAds

Sensis financials sourced from Telstra Investor Relations

Google financials sourced from Google Investor Centre

This blog was originally published on Medium

Tagged in:4Ps of Marketing, Australia, b2b marketing, build business, Go To Market, launch manager, lead funnel, market research, Pragmatic marketing, Product Marketer, Product marketing, Product Marketing Course, product marketing manager, training, value creation

The Danger of Agile Theatre

Posted on 19 February 2015 at 11:49 by Nick Coster

There are so many people and businesses that are adopting “Agile” as an approach to Product Development. I have these discussions with Product Managers who are often struggling to get their products or product enhancements to market because they are being told how to interact with a development team and are not getting the results that they need for market and business success.

The principles that Agile Software Development are framed around are fantastic and have the potential to achieve “Product/Market fit” in less time and will allow a high performing team to maximise their productivity. I am a fan.

Unfortunately the label Agile is being misused. Instead “Agile Theatre” is everywhere. You can observe “Agile Theatre” where the participants are pretending to be “Agile” because they are using User Stories, Stand-ups and a Planning Wall of index cards. However, the promised benefits of REAL customer and business value faster are not being realised.

Instead the high level intentions of Agile thinking and it’s benefits are so often corrupted or ignored as they are replaced by methodology dogma at the tactical implementation level of an overall Product delivery process. For example,

  • The software team is the only Agile part of the overall Product Delivery Team.
  • Product releases are never worked on a second time to improve them following market feedback
  • Product backlogs are prioritised for the ease of development and not for Business/Market Value
  • Businesses rush to build solutions first before validating a true market value hypothesis

These are just a few real world examples that I have seen recently that drive me crazy. These kinds of behaviours have the exact opposite effect to the success of a business, causing confusion, internal friction between Agile and non Agile teams, launch delays and an increase in organisational overhead without any pay off. This is further exacerbated by the misuse of the very good ideas presented in The Lean Startup (by Eric Ries) book, that is distilled down to the oversimplified language of BUILD/MEASURE/LEARN, MVP and “Fail Fast” by people who are too lazy to actually read and think about how to properly implement the ideas in the book.

These faked Agile and Lean approaches tend to ignore:

  • The very real, hard work that is required to test an assumption with the market place before any development commences.
  • The additional cost of acting on market feedback and working on the same user story multiple times to get iteratively closer to a better solution for the market.
  • The extra effort required to stitch together the parts of a product that were developed separately, one user story at a time.
  • That real testing is done with the customer and passing acceptance criteria is only the first step.

This continued misuse of the terms Agile and Lean to justify lazy and hard to track work practices. Instead Agile thinking needs to be applied in terms of the outcomes it is trying to achieve.

I would love to hear your thoughts in the comments below.

Tagged in:agile, Lean, Lean Start Up, Product development

Sales Funnel A B C’s for Product Marketers

Posted on 24 January 2015 at 8:40 by Sean Richards

Product Marketers are responsible for Building Business using the product or products they represent. We need to figure out how to connect our product with the market that needs it. The end game is revenue — the lifeblood of a business. But typically product marketers do not have a revenue target — it is usually a lead target.

Leads are the start of the sales funnel. So, what happens once they are handed over to a sales team for qualification? it is worth knowing the whole sales funnel story, so we can hone our lead creation powers for maximum global domination. Lets take a look at the relationship between lead and revenue and what levers we can pull.

Technocrat appeasement statement: The details provided here are based on a B2B scenario and simplified for the scope of this blog. To avoid triggering an endless debate on definitions, funnel granularity and terminology I’m adopting the following terms for the sake of simplicity:

  • Addressable Market: the market defined by the Product Marketer deemed a good fit for a product.
  • Prospect: someone from the addressable market that demonstrates interest in your product.
  • MQL (Marketing Qualified Lead): This is a lead deemed sufficiently qualified by marketing to be worthy for handover to sales for pursuit.
  • Opportunity: An opportunity is a lead that has been accepted by sales because it has met the necessary qualification criteria by the sales person.
  • Sales: A sale is the successful conversion of an opportunity into a done deal by the sales person.

Introducing the Funnel

 sales funnel

The funnel here shows what happens in a typical scenario. The percentages are just generalisations.

The sales funnel is a representation of what happens when a market is connected to a product of value. At any point in time a certain percentage of the market is interested in learning more. A percentage of that percentage might then be genuinely interested in purchasing that valuable product. At some point a percentage of that percentage will actually make a decision to buy that product. Yay, a sale.

These are stages in the sales funnel. Each stage represents the degree of qualified interest from a prospect. Each organisation defines what constitutes qualified interest, but I have added a brief summary of what happens when a prospect flows through the funnel.

Addressable Market > MQL: The Product Marketer runs campaigns to sift out prospects from the addressable market. This is actually the most exciting space for a marketer today. Techniques are evolving — technology is revolutionising this activity. Terms like inbound marketing, digital marketing and marketing automation now dominate discussion. This is something we can explore in another blog.

For now, lets assume all of those prospects you have successfully uncovered qualify as MQLs. The MQLs are assigned to sales.

MQL > Opportunity: A sales person assesses the MQLs and makes a decision on which are sufficiently interested to pursue as potential sales. MQLs that pass this process are converted into Opportunities.

MQLs that do not make the grade are usually turned back to marketing for subsequent nurture activity. Nurturing is an activity to keep the prospect ‘warm’ in case that mild interest changes to something more substantial in the future — where they can once again meet MQL status and be handed to sales.

Spoiler alert: if you thought sales converted all of your leads into opportunities then you are in for a rude shock.

The percentage of MQL that convert to Opportunity can vary wildly from organisation to organisation. From my experience I have seen a typical conversion rate of 20%. For every five MQL I have painstakingly uncovered, the sales team rejects four of them. This conversion rate is something to explore more as a means of improving marketing campaign performance.

Opportunity > Sale: This is the primary domain of the sales professional, where they practice their dark art of deal closing. The successful conversion of Opportunity to Sale = revenue. The Opportunities that fail to convert to sale are typically gone for good — lost deals. There is valuable intelligence here though. A Product Marketer will learn a lot by understanding why the deal was lost. This information can be used to enhance the product, service or sales enablement resources.

Again, conversion rates will vary greatly from one organisation to the next. A typical experience I have had in the enterprise B2B space is a conversion rate of about 30%. One opportunity in three successfully closes as a Sale.

Analysing the Funnel

Take a moment to think about how valuable it would be if you had access to historical funnel conversion rates for a product. You could estimate revenue potential for an addressable market. Or, if a sales target is assigned to a product launch then you could readily determine what share of the addressable market is needed to be successful.

To determine your conversion rates, get familiar with your CRM. Campaign reporting is common in most CRM and is typically an easy way to track what number of MQL are converted to Opportunities and which are then converted to Sales. Total revenue values can also be readily reported.

For example, if a product typically sold for $10,000 and some genius set a sales target of $1,000,000 for the year, then that would mean 100 sales. If the Opportunity > Sales conversion rate is 50% then that would mean we need 200 Opportunities in the pipeline. To get 200 Opportunities from pure marketing contribution (with an assumed MQL > Opportunity conversion rate of 25%), then we would need 800 MQL. All good right? If your addressable market is only 500, then…. Houston, we have a problem.

Optimising the Funnel

Getting a grasp of your sales funnel conversion rates is game-changing. Once you know your conversion rates and gather some intelligence around why MQL do not convert or why Opportunities don’t convert then you are perfectly placed to improve campaign performance.

Here are a few things within the control of Product Management and Product Marketing that are worth pursuing to optimise funnel conversion rates;

Effectively define addressable market — with research and validation. The right messaging to the right audiences will increase MQL capture rates from market efforts. It is also essential information to ensure target setting is framed within the context of what the market can accommodate.

Tighten the criteria for MQL — to better qualify a prospect before handing to sales. Steps can be taken to make prospects express more interest before engaging sales, thus lifting the bar to achieve marketing qualified status. .

Typically this reduces MQL volumes, but it does improve the MQL > Opportunity conversion rate. So it is not necessarily a great lever for business growth in a direct sense, but it is a great lever for improving the use of expensive sales resources, because less time is spent working on poorly qualified leads. This makes it a good business growth driver in an indirect sense. It also has a positive impact on the integrity of the MQL pipeline and the marketing teams reputation as a quality lead generator.

Improved Opportunity > Sales conversion — is the biggest lever of marketing campaign effectiveness. You have already invested substantially getting the leads into the pipeline. Improving the win rate delivers more revenue without costing you any more. Working on improving operations here is much smarter than just trying to increase your MQL volumes to grow revenue. You will spend more money capturing more leads. But, until you are satisfied the Opportunity > Sales conversion rate is as good as you can get it, then you are just wasting scarce funding.

Hmmm, we discussed at the start of this story that the Opportunity > Sales conversion is the domain of the sales team, not Product Marketing. So, what can Product Marketing do to improve that process? Well, here are a few examples of things you can do that will have a direct impact on sales conversion rates:

Improve value proposition — by ensuring you understand your Addressable Market, your buyer persona and the real value your products provide you ensure your value proposition message is on-key and the right kind of prospects are attracted to the business. Marketing messages that are off-key can attract lots of prospects, but looking for a solution you do not offer. Match your message with your products unique strengths.

Enabled Organisation — by understanding why Opportunities are lost you can find out what additional sales enablement resources are needed to ensure a better win rate. Perhaps it is information on the competitors strengths, or may be it is ensuring the product is explained in a meaningful way for buyers that don’t talk technical. Getting this right is the responsibility of the Product Marketer.

Other ideas? — there are all sorts of things that could be done to improve a marketing campaign if the sales funnel is analysed by the Product Marketer. What suggestions would you make to improve Opportunity > Sales conversion rates?

If you are a Product Marketer or Go to Market professional and want to sharpen your skills then Brainmates is here to help. The Ready, Set, Go to Market training course has been developed in Australia for Product Marketers and Go to Market professionals. More detail and course registration is available here.

Tagged in:4Ps of Marketing, Australia, b2b marketing, build business, Go To Market, launch manager, lead funnel, market research, Pragmatic marketing, Product Marketer, Product marketing, Product Marketing Course, product marketing manager, sales funnel, training, value creation