Productside recently performed a survey of global survey to examine the skill levels of Product Managers across 15 dimensions and to create our Product Management Skills Benchmark. Through this survey of over 5,000 respondents, we discovered that the skill sets that these Product Managers rated themselves the weakest on were:
- End of Life
- Pricing
- Competitive Analysis
While these areas can be intimidating – particularly for those new to product management – a few simple hints can help Product Managers feel a bit more confident.
End of Life
End of Life is a natural part of the product management process – eventually all products (even those that have been around for decades) need to reach their time of retirement and this is necessary as we introduce new offerings unless we want to manage a limitless roster of product offerings. Three key challenges come up when the topic of retirement arises –
- How to decide when to retire a product
- How to convince others that a product should be retired
- How to actually retire the product
For the first point – how to decide when to retire a product – there are times this is easy; for example, if you have a new version of the offering that makes the prior version obsolete. But this is not always the case. Key guidance that I provide is to understand the market trajectory and your position in that market. If you are in a weak position in a significantly declining market, consider exiting that market – gracefully, of course. Think hard about those instances when you have a fairly strong competitive position in a weakening market. There are often valuable opportunities from a harvesting strategy for this type of product. As others exit the market, there are fewer competitors and, if you hold down costs to support and promote the product, there may be openings to reach more buyers and potentially drive higher profits.
Once you decide to retire a product, it can be hard to convince others of that need – oftentimes, those executives you need to convince were part of the team that introduced the product in the first place, and I have never heard of a sales team that couldn’t find a customer for a product that I was thinking of retiring. The key here is to clearly understand the total costs your company is expending to support that product – inventory, complexity, customer support, upgrades, maintenance, marketing & promotion, customer confusion, expanded test matrices – and carefully compare to the limited revenue that the product is generating. This is often an eye-opening discovery for many decision makers.
The process of actually retiring the product is also fraught with consternation – your goal here should be to limit potential customer inconvenience while also ensuring that you are not violating any commitments or contractual obligations that your company has with respect to the product. Work with the legal, sales and customer support to understand your commitments and how to ease customer transitions to the replacement offering you may have. Also, recognize that there is not just one end of life date, but that several milestones like end of sale, end of upgrades, end of support or spare parts ordering need to be planned out and considered. Building a schedule of all of these relevant milestones will make you an end of life champion.
Pricing
Pricing is often an intimidating task for product managers – partially because many product managers feel they are not responsible for it – but a few simple guidelines can help smooth the path to effective pricing decisions. First, recognize you are not alone in this process – finance teams are often a valuable resource for product managers. They can help you develop and run models and are often aware of corporate policies and guidelines regarding pricing. Don’t be afraid to contact them and leverage their knowledge and understandings.
The key insight on pricing is to recognize that customers pay for value – to determine how to price, you need to grasp what customers value with respect to your product. Reach out to customers and talk to them not about price, but about value; what do they value about your product and what job is that product performing for them.
Also, recognize that price is not the only determinant of what drives cost for your customer to acquire and use your product. Get an understanding of your customers’ total cost about your product, including items like customization, training, installation, integration, training, support and maintenance. A clear comprehension of all of these items will give you a better perspective on what the impact the actual price of your product has on your customer and how if fits into their decision process to deciding to purchase your product.
Competitive Analysis
Product Managers also seem to fret about competitive analysis. I fear this is because many of these leaders don’t keep a good track of their competition and when the request comes to build a better understanding of the competition, it becomes an “all hands on deck” fire drill to get and access the information and analysis.
A better strategy is to view competitive analysis as a standard part of managing a product and to keep your analysis of competition always up to date. Build and maintain a database of information about the key competitors to your product, so it always is a part of your radar. So, how do you keep that database maintained? Subscribe to new sources with your competition as a keyword so the information comes to your inbox on a stream (it is easier to filter out the information that is not relevant to you than to suddenly discover what is relevant) and I keep a calendar “tickler” for myself on a weekly basis to remind me to make sure that I have updated the information I have about competitors on a weekly basis.
For the type of information to track and analyze about competitors, I would go beyond the traditional feature vs. feature analysis of their product vs. your own. Get a clear understanding of their capabilities and market strategies as they relate to the products that you compete with them on. I would also go beyond the standard SWOT analysis (how many of those have remained locked in file cabinets or tucked deep on SharePoint sites never to be referenced again) and understand the intersection of your competitors’ internal Strengths and Weaknesses with the external Opportunities and Threats in the marketplace. These can give you better insight into the actions that your competitors might undertake, particularly in response to an action that you take with your own products.
Conclusion
While many Product Managers feel that they are weak in the areas of End of Life, Pricing and Competitive analysis, a few simple tips for each will go a long way to making you feel a bit more comfortable about these areas. For end of life, carefully consider all the costs you undertake to keep a declining product operating. For pricing, truly understand your product’s value for your customers and their total cost of engaging with your offering. And for competitive analysis, think of it as a source of information that you continually keep up to date, rather than a one-off study that you perform on an annual basis, when your strategic plan is due.
To learn more about these skill sets and many more topics relating to Product Management, visit our PM Topics resources section.
