Aug 17

A Better Approach To Demoing Can Turn Sales Around

A Sales Demo Challenge

At one of my previous companies our new logo sales – that is, new customers – were tanking. The account reps were not hitting quota on new logos.

The sales engineers felt this was due to a large degree to our “story” on agile. Our product was not as strong as some of our competitors for managing agile projects. Even though we had a lot of customers successfully using it for agile projects, the sales engineers felt severely challenged because we didn’t have the features to show in the sales demo.

Doing a great job of go-to-market is one of my passions. I love working with marketing and sales to make sure they can sell my products effectively. But as I wrote the recent post on how my various articles align with the Secret Product Management Framework I realized I didn’t have many articles on go-to-market. So I thought I’d share a few go-to-market related stories. The first one is about “how to demo.”

Problem One: It’s Not About Agile

Because I have a long, strong background in agile, having created an agile tool myself (as a component of Accept360) and been involved in multiple agile transformations, the sales engineers asked for my help.

After reviewing the current sales demo, and following several long discussions about how to sell (from me to them), I gave them two specific areas to improve.

First, they were doing a feature-function type of demo. It was full of “Our product does X” and “Let me show you how our product does Y.” All without reference to whether the customer cared about X or Y. That wasn’t doing them, or our customers/prospects, any good.

Focus on customer’s problems

I had them rework the demo to be focused on the customer’s problems and how our product solved them. We had to learn about the problems in earlier discovery calls, or simply by asking questions during the demo.

Making the demo about the customers themselves is a very powerful technique. Talking about the problems that concern them shows we care about them.

Problem Two: Use all your ammo

To get out of the “agile project management” minefield, I had them move the agile discussion up a level. Our product’s portfolio management capabilities were a significant differentiator. But they weren’t being used effectively to differentiate in the demo.

Portfolio management has always been an “agile” activity. You take all the projects you want to do, and figure out which is the most important, and do those. You can think of it as “stack ranking” your project portfolio. Our solution was better than the competitors in this area, and we could reset the conversation.

Back on Track

These changes made it easier to sell, and easier to beat competitors. As a result we reversed the trends on new logo sales, where the demos are most important. I asked the Sales Engineering VP for her assessment, and she said “We really changed the way we demo. And we beat our quota on new logos the last three quarters in a row.”

Tying it All Together

The key takeaway in this story, and the relationship to the Secret Product Management Framework is this: if your product doesn’t actually solve a market problem, your demo doesn’t matter much. No one is going to buy it no matter how you take it to market.

On the other hand, if you solve a problem, as this product did, then your go-to-market can have a significant effect on how successfully you can sell the solution.

For more on demoing check out the article Everything I Wish I’d Known Before I Started Demoing SaaS from Joanna Weibe of Copyhackers. She goes into a lot more detail about these and other techniques for making your demo a LOT better.

Oct 15

5 Ways Product Managers Can Make More Money

I said a few weeks ago that we software product managers are responsible for $5-$10 million in new revenue over the next 12 months. How do you get that? There are five ways your revenues can increase:

  1. Your market grows, and you grow with it naturally
  2. You beat your competitors more in your existing deals – that is, you increase your win rate
  3. You get into more deals and win them at your normal rates – that is, you increase your sales velocity
  4. You extend your footprint in your existing market by selling more to each customer – or increase your average deal size
  5. You start selling in a new segment or market

Those are the fives ways to grow revenue. If you do enough of them, you might see your $10 million in incremental revenue in a year.

Given that those are (five of) the ways to grow revenue, what do we do about them?

Natural market growth

Your responsibility as the product manager is not for this growth, per se, but for not losing this growth. To keep your revenue growth up with market growth, you have to continue to win deals your current rate. You can’t do that by standing still. The competitors are always getting better. Just like Alice, you have to run very fast just to stay in one place, market share-wise. And even if your product continues to grow at the rate of the market, and doesn’t lose market share, you usually don’t get any product management credit.

Bottom line: growing at the market rate is table stakes, but it’s not winning.

Beat competitors more – increasing the win rate

This is also known as “taking away market share.” How do you do it? Especially if you have to do it right now and you don’t have the luxury of adding new features? This is all about go-to-market: helping sales and marketing tell the story of your product better, giving them better tools for objection handling and de-positioning the competition, creating the best possible demonstration. Bottom line, this is about doing a better job of convincing prospects that your product solves their problems better than the competitors do. If you can do that, you can win more deals.

Of course, over time you can also add features that help you in competitive situations. But you can’t do that today, so you need to use other tools in your quiver.

Get into more deals – generate more leads, increase sales velocity

How does product management have influence on more leads and faster closes? This is also a go-to-market issue. Many of the techniques you use for winning more deals can also help you get into more deals. Telling the story of your product better, especially using effective social proof showing how customers’ lives were improved due to your product.

Decreasing the time to the second sale is another important goal for getting into more deals. (New sales to existing customers are among the most attractive of all deals!) How do you get to the second deal faster? By making sure the customer’s initial experience is so successful that they can’t wait to buy more! Again, what are your options? Over time you can add features and capabilities to make the initial experience better. But in the short term you can give them better training and documentation, focused on solving the business problems your product addresses. And you can offer online videos that show how to quickly and easily do important functions.

Increase average deal size

There are tactical ways to increase average deal size, and strategic ways. For example, you can focus your sales efforts on your biggest prospects, and not pursue smaller deals. If you can win either size of deal with a comparable effort, this makes a lot of sense as a tactic. This is not so much a product management decision, although of course you have input into some of these sales decisions.

Our focus as product managers needs to be more strategic than tactical in this area. Larger deals, especially in business software, are often dependent on more “enterprise-level” features or capabilities. Those are longer term commitments from the you and the product team, and usually can’t make a short-term difference, despite their importance over the long term. But there are sometimes short-term workarounds. For example, a partnership with another vendor with a complementary product that addresses one of your enterprise-level shortcomings.

Get into a new segment or market

Now, this is where the real fun is! New products! New features! You’ve been working on keeping your product portfolio pipeline full, right? You have plenty of validated new product ideas to choose from, many of which will open new markets for your company. Some will be extensions of the existing product that will enable you to sell higher, or sell to adjacent markets. Some will be completely new products that will address completely new business problems.

Remember that for most successful product companies, 50% of their revenue comes from products introduced in the last three years – you have to keep that pipeline full and pumping out great new stuff.

Let’s make some money!

Our job as product managers is not to “make products” but to create solutions to market problems that people will buy. There’s only one reason people buy business software – to solve business problems. And there are only five ways to sell more of it.

Let me know what you think of this post. I’d love to hear your reaction – and how you’re handling this problem of making more money.

Jul 15

You Might Be Surprised Which Product Management Activity Is Most Important

podcast-image-origFundamentally, there are three top-level activities in product management:

  1. Find and validate market problems
  2. Create a solution to one of those problems
  3. Take the solution to market

Like any model, this is somewhat simplified. Each of these main activities covers a lot of ground! But it’s pretty good for doing some high-level thinking – about where we should be spending our time, and about the tools we use to be more effective.

Because we are product managers and technologists, we love to focus on #2 – creating the solution. But #3 – going to market – is more important than the product. And #1 – finding and validating market problems – is by far the most important. If you’re in doubt about this, consider Kickstarter. Many successful Kickstarter campaigns only have #1 and #3 – they’re raising money for #2, right? If a Kickstarter campaign doesn’t do a good job of #1, then they don’t make any money. And a Kickstarter campaign is by definition a go-to-market effort.

Or consider the long list of failed products in the world. There are multiple reasons for failure, but the most common is “it’s a solution in search of a problem.” The product – no matter its quality or polish – doesn’t solve a market problem, so no one buys it.

I’ve talked a lot in other posts and podcasts about how we don’t have good tools for either #1 or #3. I’m tempted to go on about that here as well. But my real point in this post was to introduce this framework for thinking about product management, and to set the stage for helping us do all these activities better. As I wrote a few weeks ago, if we become more effective at doing product management, everyone benefits. We have a lot of leverage on revenues, profits, and happiness.

So we’ll drill down into “finding and validating market problems” and “taking solutions to market” in the next few weeks. How can we be more effective at these activities, and as a result become more effective product managers?

Let me know if you have specific questions, or thoughts – or disagreements – about this basic framework.