The Accidental Product Manager

How Product Managers Manage A Product That Nobody Needs

Dr. Jim Anderson — Mon, 14 May 2012 09:00:01 +0000

Nobody needs a DAC, but everybody should have one…

What’s the first thing that every product manager learns? Simple, that you have to figure out what problem your product solves for your customer if you want the product to be a success – this is almost part of the product development definition. That’s all fine and dandy; however, what’s a product manager to do if it turns out that customers don’t really need the product that he’s managing?

Why You Don’t Need A DAC

Do you own an iPod or some other brand of digital music player? They’ve been on the market since about 2001. Pretty much everyone who wants to have one now has one. What this has meant for the music that we purchase and listen to is that its all gone digital.

Now my ears are not all that sensitive, but the people who care about such things tell me that digital music lacks something that the old analog music had: warmth. They say that the music that is streaming out of your iPod is dull and lifeless. The old analog music that we used to listen to when we all had record players had a lot more smoothness to it.

The good news for those of us who have invested heavily into digital music is that there is hope here. A product has been created that will turn our cold digital music into warm sounds. This product is called a “Digital To Audio Converter” or a DAC.

As cool as this concept sounds, there’s a problem here. Nobody really needs a DAC. I mean, clearly the music coming out of our iPods is good enough. Why should we go to the expense and effort of adding yet another component to our already overloaded home stereo system? If you can figure out a way to solve this problem, then you’ll have something to add to your product manager resume .

How To Product Manage A DAC

I guess that you could say that a DAC falls into the category of being almost a luxury item – you don’t need it, but you sure might want it. This presents a lot of different challenges for a product manager.

Since your customers wouldn’t realize that they had a problem, one of the most important things for a product manager to do would be would be to make the potential customers aware of the problems with their current way of listening to music. Although you could explain it using words, a much more powerful way to accomplish this would be to get them to listen to the difference.

In order to make this happen, you’d have to set things up correctly. The best way to do it would be to have your potential customer provide you with a copy of one of their favorite digital songs. Then you could run it through your DAC product and share it with them. The goal is make the difference as significant as possible.

The next challenge that you’d have to overcome would be the complexity issue. No matter how you look at it, a DAC is yet another device that your customers are going to have to hook into their home stereos. In order to help them get over this issue, some sort of product support material would have to be developed such as instructional videos that show how easy it is to add a DAC to their existing system.

What All Of This Means For You

The simplest products to manage are the ones that every customer has a very clear need for. Where things tend to get trickier is when you are asked to manage a product that your customers could get along without — this is the stuff that is never in your product manager job description.

Product managers who find themselves in this type of situation have to do two things. The first is to clearly demonstrate to their potential customers why their current way of listening to music is inferior. This will require a demonstration and if the demonstration can be done using the customer’s music than all the better. Next the complexity of adding a new component to a customer’s existing home stereo system needs to be mitigated via simplified installation instructions or videos.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that a non-necessary product can ever be as successful as a necessary product?

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P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

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What Product Managers Need To Know About Going Mobile

Dr. Jim Anderson — Mon, 07 May 2012 09:00:16 +0000

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Just how does a product manager create a mobile app?

If you have been out to a mall, driving in traffic, or attended a sporting event lately then you’ve seen that just about everyone had their faces planted into a mobile device of some sort. From a product manager point-of-view, this sure seems to be telling us that we need to find a way to get information about our product onto everyone’s mobile phones. But how?

Why Product Managers Have To Go Mobile

Clearly, trying to add a mobile marketing channel to your product communication program is going to cause more time, effort, and expense for you. Is it going to be worth it? The answer is almost assuredly “yes”.

The new reality is that people always have their mobile devices with them and they are almost always turned on. This is a product manager’s dream. If we can figure out how to make information on our product part of our customer’s mobile platform, then we’ll always be in their thoughts. Creating a mobile app for your product should almost become part of the product development definition.

Careful now. Nobody wants to have an ad for your product taking up space on their mobile device – space is limited and your app will be quickly deleted if it is not providing value. This is where your real product manager creativity is going to have to come into play.

Whatever application you create for your customers to download to their mobile devices, it’s going to have to either entertain them or provide valuable information to them. This means that you’re not going to be able to make an application that talks about your product directly, rather you’re going to have to deal with the problem that your product solves and somehow associate your product with that. Figure out how to do this correctly and you’ll have something to add to your product manager resume.

How Product Managers Can Create Their Own Mobile Apps

Once you’ve figured out what kind of application your customers would be willing to download and not delete, then the real work starts. Although I’m sure that your company’s IT department would be more than willing to help you out, if they don’t have any experience in this area, you might want to look elsewhere.

The simpler your application is, the easier it will be for you to do most of the design work. There are a number of online firms that are willing to provide you with templates that are designed for the market that your product addresses. No programming knowledge is required – you just change the text and specify when the various screens should appear.

As product features change over time, the product manager can return to these sites and edit the app’s content and republish an updated version of the application. A couple of firms that provide this service include Bizness Apps and Red Foundry.

Getting Someone Else To Do It For You

In some cases, who’s got the time to sit down and design their own mobile app? Alternatively, simple templates may not do it for you – you may need custom mobile app design work.

In this case, you’re going to need to hire a developer to create your new mobile app. As you might well imagine, prices for this kind of work are all over the map. However, if you need a planning price then you can assume that it could run you up to US$10,000 – $20,000.

For this price you will get to control all aspects of the app. This includes using custom photos and artwork. The nice thing about spending all of this money up front is that most of the time it’s a one-time fee. That means that if after the app is developed you start to sell it to your customers and potential customers, then you will have created a new source of revenue for your product that you will get to keep 100% of.

What All Of This Means For You

Part of the joy of being a product manager is that the job is always changing. Right now we’re seeing one of those changes show up and start to knock on our door – the arrival of mobile applications. I’m willing to bet that we’re going to see the ability to add these apps to a product become a part of every product manager job description in the future.

Every product manager needs to be taking a close look at the world of mobile applications and trying to determine how you can use them to boost sales of your product. You need to see if you can create an app that will either entertain or provide value to your customers. In order to create the app you have many choices: you can design it yourself or you can hire a developer to do it for you.

One of my customers runs their product management department with the slogan “fail early, fail often”. I think that applies to the world of mobile apps. It won’t cost you that much to get started so give it a try and who knows, you may have just created the next “Angry Birds” app for your product!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: For the first mobile app that you create, do you think that you should sell it to customers or give it away for free?

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Product Managers Learn To Optimize Prices In Order To Boost Margins

Dr. Jim Anderson — Mon, 30 Apr 2012 09:00:14 +0000

Image Credit

Forget market share, it's really all about profit margin…

So what does a product manager need to do in order to make his / her product more profitable? As I suspect every product manager learned during the last global recession, cutting costs associated with your product is one important step. That’s a nice skill to have on your product manager resume, but it’s not enough. Once that’s done, what comes next? How about raising your product’s price? Great idea, but how does a product manager go about doing that?

Why Raising Your Product’s Price Is So Hard To Do

During the product development definition stage, we set a price for our product. Then things change. How hard could it be to raise your product’s price? Just go out there and do it – right? Hold on just a moment, you really don’t just want to raise your product’s price. What we’d all like to do is to find a way to optimize our product’s price. Hmm, that sounds rather fancy. Let’s see how we can go about doing that.

What product managers would like to have is a way to have the insight that they need in order to both improve and manage their product’s profitability, defend their profit margins against internal and external threats, and finally come up with a competitive price that their product’s market will accept.

The first thing that a product manager needs to decide on is just exactly what do you want your product’s price to do? You’ve got a lot of choices here. Do you want your price to get customers to come in and check your product out? Do you want it to simply boost your margin?

When salespeople get involved in determining what your product gets sold for, this is when things really start to get tricky. Since the sales person really controls the company’s relationship with the customer, in the end they are the ones who get to control your product’s pricing no matter what you’ve told them.

As the bad economic times start to fade into the past, product managers are seeing demand for their products start to rise. Now is the time for them to figure out how to get their product’s pricing right.

3 Things That A Product Manager Needs To Do In Order To Raise Prices

I think that we’re probably all on board in regards to wanting to come up with the right set of prices for our products; however, how to go about doing it is the unanswered question.

It turns out that there are three separate steps that product managers need to take in order to come up with the types of insights that you’re going to need in order to convince your sales force that your price is the right price.

Price analytics is the process by which a product manager uses all of the data that you have about past sales in order to determine what is important to your customers. While doing this task, you need to look at what the data is telling you and determine the variables such as share of invoice, volume trends, and customer total revenue which influence how much your customers are willing to pay for your product.

Price optimization comes next. During this activity, the product manager creates pricing models that use market data to create price bands that the sales teams can use with specific customers or in specific situations. The goal of this activity is to identify the specific areas where your product can generate higher margins by increasing it in one situation or decreasing it in another.

Finally, price execution comes into play when the product manager focuses on communicating the product pricing scheme out to the sales teams. This activity includes finding ways to enforce the usage of the prices that you’ve created and finding ways to prevent your sales teams from creating their own discounts.

What All Of This Means For You

The days of squeezing more margin out of your product simply by looking for ways to reduce costs are coming to an end. We’ve all been there, done that. This means that product managers are going to have to finally bite the bullet and take a look at how they are pricing their products.

The goal is to find ways to maximize the profit margin of their product. One of the biggest challenges that we all face is that our sales teams don’t like to be told what they should be selling our product at. In order to address this, product managers need to start to do 3 things: price analytics, price optimization, and price execution. Keep your eyes open, these are going to start showing up in the next product manager job description you take a look at.

I agree that tinkering with your product’s pricing can appear to be a dangerous thing to do. However, the payback can be fantastic: you can significantly boost the margin that each sale of your product brings in. Be brave and start to perform the 3 pricing actions that we’ve discussed and then sit back and watch the money start to come rolling in…!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What do you think is the best way to get your sales team to sell your product at the price that you’ve set for it?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

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5 Tips For Product Managers From The Former Bergdorf Goodman CEO

Dr. Jim Anderson — Mon, 23 Apr 2012 09:00:22 +0000

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How to be a better product manager from a retail success story

As product managers we are always looking for someone to tell us how we could be doing our jobs better so that we can look even better on our product manager resume. The problem is that it’s all too often hard to find someone who can give us good advice. Is it our boss? Our competition? Somebody that we bump into at a trade show? Or could it be the 90-year old former CEO of the successful Bergdorf Goodman retail chain of stores?

Who is Ira Neimark?

Before you take advice from anyone, you should first make sure that you know who you’re talking with. In the case of Ira Neimark, you may not have heard of him, but you should have.

Ira started life out at a high-school drop-out. You might think that that would be the end of his story. However, it’s not. Instead, through hard work and just a bit of luck, he rose to become the CEO of the retailer Bergdorf Goodman.

Not only was he a CEO, but he was also a good CEO. It was under his guidance that Bergdorf Goodman transformed itself from a stuffy old department store into what it is today: a young and exciting place to shop. Clearly Ira knows a lot about product development definition

Ira is 90 years old. He knows a lot about what it takes to make a product a success. Clearly, when he speaks we all need to listen.

Ira’s 5 Tips For Product Managers

So what tips does Ira have for us product managers. The good news is that based on all of his years of experience, reporter Alexis Swerdloff has been able to take Ira’s insights and boil them down into 5 things that we all need to start doing. In the future, these should be a mandatory part of every product manager job description. Here they are:

First Impressions Count: How’s that career progressing product manager? Both within your company and with your product’s customers, the first impression that you make is key to your long-term career success. The key here is that you never know when you’re going to bump into a customer or your senior management. That means that you always have to be ready and make sure that you get everyone’s name correct when you greet them!

Every Customer Is Looking For Things To Make Their Lives Better: It really doesn’t matter how young or old your customers are, and it doesn’t matter if we’re in boom times or bust. Ira points out that everyone wants to add some excitement to their lives and at the same time make things better for them. Undoubtedly your product does this; however, are you doing a good job of telling your customer how this can happen for them if they buy your product?

The Clothes Make The Product Manager: Yep, sorry about this one but it’s true. As much as we’d all like to be judged by the quality of our product management skills, the truth of the matter is that all too often others judge us by how we look. The good news here is that you control this – take the time to always look sharp and you’ll be ready for that next surprise meeting.

Visit Everyone: Ira makes the point here that unlike some product managers, you really do need to visit everyone. This includes your competitors, their suppliers, etc. You never know what you’ll learn from these visits, but it’s always going to be useful info.

Know Your Customers: We have all heard this one; however, Ira adds a wrinkle to it. He believes that we need to know all that we can know about both our current and our potential customers. That’s a lot of homework, but it can really pay off in the end.

What All Of This Means For You

Ira is a success no matter how you choose to look at his life. He worked in a market that may or may not be closely related to your product. It really doesn’t matter.

His 5 tips should resonate with every product manager. Ira used these tips to make his product, a collection of retail stores, a success in his marketplace. As product managers we can learn a great deal from Ira and use his tips to make our products be even more successful than they are today.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you agree that how a product manager looks is important to your eventual career success?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

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Why Product Managers Need To Learn To Love Being #2

Dr. Jim Anderson — Mon, 16 Apr 2012 09:00:40 +0000

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Sometimes second place is where product managers want to be…

If you’re a product manager, then you always want to be a winner, right? It’s almost an integral part of our product development definition — you want your product to storm into the marketplace and kick some butt and become #1 overnight. You want to climb to the top of your marketplace and you want to stay there forever. Sounds simple, doesn’t it? You’d be right if it weren’t for the fact that sometimes you’ll be more successful if your product is #2…

The Problem With Becoming #1

Yes, becoming #1 sure seems like a great thing to do. Look at Apple’s iPhone, look at Google’s search product. We all know that these products are #1 and that they are very, very successful. That’s the kind of story that every product manager wants to add to his or her product manager resume

However, what we’re missing here is that it’s very expensive in terms of both time and effort to become #1. Also, there’s the downside in that once you become #1, everyone else in your market starts to try to take your position over – you have become a target.

The other challenge with becoming #1 is that nobody ever stays #1 for long – it’s always a temporary position. This was the challenge that I faced recently when I was working with one of my customers who sells products in the telecommunications space.

They had just developed a new product that promised to provide the fastest service to a very specific segment of their market. They were very excited about this new product and they wanted my help in determining how they could go to market with it in order to gain the most market share.

The problem that I quickly identified was that the customers that they wanted to go after had already solved the problem that their product addressed. These potential customers had needed a solution and so they had gone with the only solution that was available to them – which just happened to be offered by my customer’s competition.

The majority of the potential customers for this product were now locked up into multiyear contracts and there really were not that many customers available to buy my customer’s new product no matter how great it was. Talk about a product management problem!

Why Being #2 Is Sometimes Better

The more that I looked into my customer’s problem, the more that I realized that the end customer for their product was actually spending a lot more money on a solution than we had originally realized. It turns out that yes, they had solved their initial problem by selecting a competing product. However, they were required to also have a back-up communication path just in case something happened to their primary solution.

What this meant is that they were spending a lot of money to stitch together a second solution. Ah ha – an idea was born.

I sat down with some potential customers and discovered that they were eager to find a better solution for their backup solution. The way that they had solved this issue was not elegant and they weren’t very happy with it. Clearly this was a market that was waiting to be tapped.

You might think that that was the end of the story, but it wasn’t. My customer had a hard time with this idea. They were very, very proud of their product and they really wanted to go to market with a big splash and become #1. I think at one time or another we’ve all felt this way.

I ended up sitting down with them and having a long talk with them. The concept was simple, the explaining took some time. I pointed out that capturing a part of the “I’m #1″ market would be good, but it might be a struggle to make and keep their product profitable. However, there was a real opportunity for them to capture the lion’s share of the backup connection market and nobody else would be competing with them for that.

When you are #2, you generally have to price your product lower than the company at #1 does. However, there is a real good chance that you’ll be able to sell a lot more of your product and this means that your product could end up making a lot more money than the #1 product. In the end, isn’t that why we do what we do?

What All Of This Means For You

Everybody likes to be #1 and product managers are no exception to this rule. We’d all like to think that being #1 is a part of our product manager job description. However, sometimes we need to pause for a moment and determine if being #1 is really the best thing for our product.

When a product manager focuses on making their product #1, then it takes a lot of time and energy to get there. Assuming that it’s even possible, once you become #1 it can be very difficult to hold on to that title when there are so many competitors trying to steal your crown from you.

An alternative is to shoot for the #2 spot. This can be a much less contested position for a product. Additionally, it may turn out to be more profitable for your product because the available market may be several times larger for you.

Product managers always have to consider what’s best for our product. Sometimes our own ego can get in the way – we all want to be #1. Next time you have an opportunity to consider where you want your product to fit into a market, give the #2 spot a consideration – it might be a perfect fit…!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that there is any effective way to convince your sales team that being #2 is better than being #1?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

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Product Managers Could Learn To Love Lipitor

Dr. Jim Anderson — Mon, 09 Apr 2012 09:00:58 +0000

What would it take to make you choose Lipitor over a generic drug?

It is the best of times to be a pharmaceutical drug product manager, it is the worst of times to be a pharmaceutical drug product manager. Over at the drug powerhouse Pfizer they’ve got a very, very popular cholesterol-lowering drug that they market under the brand name Lipitor. Unfortunately, patents on drugs only last for so long and the patent on Lipitor is just about ready to run out. That means low-cost generic versions of Lipitor will be flooding into drugstores everywhere. What’s a (drug) product manager to do?

What’s The Goal Here?

You can well imagine the sheer panic that any product manager who is facing the looming arrival of a lot of competition must be feeling. In the world of pharmaceutical drugs part of the product development definition is that the manufacturer of a drug gets patent protection on a new drug.

Here in the United States, the patent that has been filed on a drug lasts for 20 years. It gets a bit more tricky however, because companies file even before clinical trials start. This means that by the time the drug hits the marketplace, the patent may only have between 8 to 10 years left. Once the patent expires, other companies can produce the drug using the same ingredients and bring their version to the market, introducing competition and generally lowering the prices for the drug.

In the case of Pfizer’s Lipitor drug, the time is up – by the time you read this article, its patent protection will have elapsed. This means that generic versions of the drug will be available and perhaps for a lot less money. Oh, oh – none of us have anything on our product manager resume that tells us what to do in this situation. Now can you see the Lipitor product manager’s problem?

Let’s face it: Lipitor is going to lose market share. It’s got to happen. In fact, there is a long list of other big name drugs that have almost vanished once their patent protection went away and cheaper generic versions showed up.

Pfizer’s product managers have a goal. Their CEO, Ian Read, stated it when he said that “…we’re going to do our best to enable the maximum number of individuals to stay on the brand that they’ve come to know and trust.” Powerful words, but how can they make it happen?

The Lipitor Action Plan

As you may have guessed, there is not just one thing that the Lipitor product managers can do that will minimize the impact of their loss of patent protection. Instead, they’ve launched an all-out frontal assault on their marketplace in order to minimize the damage that patent loss is going to cause.

First off, they have started to offer cards to their current customers. The use of these cards lowers the customer’s insurance co-pays down to $4 / month for a Lipitor prescription. They plan to keep this program in place even after they lose patent protection.

Next, they’ve taken steps to make it easier to actually get your hands on Lipitor. They are doing this by giving their customers the option of receiving direct delivery of the drug. They are also offering a program that will send emails to customers that remind them to fill their prescriptions.

Finally, Pfizer realizes that what drugs we get is heavily influenced by what drug-benefit plan we participate in. Because of this, they are negotiating special deals with drug-benefit plans so that Lipitor is not more expensive than the generic alternatives.

What All Of This Means For You

Product managers really don’t like competition. We’d rather have our customers to ourselves and not have to worry about fighting off competitors. However, that’s not the way the world works. In fact, the more profitable a customer is, the more competition we’ll have for their business. It’s almost part of a product manager job description.

The drug company Pfizer is getting ready to do battle with generic drug companies when its blockbuster cholesterol drug Lipitor loses its patent protection. Generic drug companies are getting ready to flood the market with lower cost alternatives.

Pfizer’s product managers are working hard to keep customers and the companies that manage their health care on board. They are doing this by slashing prices and creating “sticky” marketing programs that are designed to keep existing customers from leaving the brand.

Low price is a powerful pull even when we are talking about our own health. We need to watch and see how Pfizer does in their efforts to prop up Lipitor sales. If they can do it, then we will all have learned a good lesson on how to meet the competition on their own turf and still come away a winner.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think the Pfizer should launch a new low-price brand of Lipitor in order to better compete with the generics?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

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Pens Can Teach Product Managers The Write Stuff

Dr. Jim Anderson — Mon, 02 Apr 2012 09:00:39 +0000

Image Credit

Some product managers have found a way to make their old school product hot property…

Just imagine if you were the product manager who was in charge of one of the world’s simplest products: a pen. How successful could you be in this era of fancy smartphones and high-tech tablets? I would have been willing to say that your pen product had reached the end of its product life; however, the product managers over at Parker Pen have proven me wrong…

Say Hello To China

If, just I did, you thought that the days of pens being sold were on their way out, it turns out that you were only half right. In North America and Europe, pen product managers had made the decision to make money by boosting volume and lowering prices. That’s why you see lots and lots of cheap pens everywhere.

According to Cameron McWhirter, Parker and another brand called Waterman owned by their parent company, own about 25% of the global market for fine writing instruments. When sales started to go down in the U.S. and Europe, Parker turned their sights towards China.

China is a different story. The reason for this is that pens are seen as a status symbol by those middle-class Chinese who are busy climbing the social ladders. Not only are they seen as a status symbol, but they are also within reach – it is possible for middle-class Chinese to buy one or more fine pens.

When the Parker product managers realized that China represented a great opportunity for them, they sent their design teams to China. They realized that in order to be successful in China, they needed to customize their pen products for the Chinese market.

They did this by making two key changes. The first is that they added the Chinese character for “good luck” to the pen’s head. They also darkened the ink that the pen used so that the Chinese characters that they were being used to create would appear more attractive. These are exactly the kinds of actions that every product manager should be in the position to add to their product manager resume

Why The Chinese Buy Parker Pens

So why do the Chinese buy high-end Parker Pens? There are two primary reasons. The first is that they are an affordable accessory. Yes, they do cost a lot, but not so much as to be out of reach. Secondly, in China’s business culture, the concept of giving gifts is very important. Pens represent a great gift to give – they are practical and they can clearly show how much value you place on the relationship.

So how much do the Parker product managers sell their pens for? High-end Parker pens can run as much as US$7,500 (for “the golden dragon”) and more typically run in the $200 – $500 range.

Clearly the strategy of designing custom high-end pens for the Chinese market has paid off. The office products division of Parker Pen’s parent company has accounted for 40% of its sales and 30% of its revenues.

What All Of This Means For You

There are some very clear lessons for all of us from what the Parker Pen product managers have been able to accomplish. We need to take a close look and add them to our product manager job description.

First, just because your product has a pre-existing image in one market, that does not mean that you can’t create a new one for it in a new market. Maybe all product managers should add this to our product development definition. Parker Pens are a low-end commodity item in the U.S. and a high-end item in China. Next, customizing your basic product to meet the needs of a specific market can pay off handsomely. Finally, we need to understand how our product is going to be used and use that information to price it accordingly.

I’m not saying that we should all start to sell our products in China (but maybe we should!). However, the Parker Pen product managers have shown us that it is always possible to reinvent our products in new markets. That should give hope to product managers everywhere…!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What steps do you think that product managers at Parker Pen should take to fight off the competition that will be coming after their Chinese market share?

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Product Managers Need To Learn How To Fail

Dr. Jim Anderson — Mon, 26 Mar 2012 09:00:06 +0000

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Failure is not the end, but rather a unique learning experience…

How do you feel about failing at something? I’m willing to bet that you are just like the rest of us in that you HATE to fail. It turns out that if indeed this is the way that you feel, then perhaps you’ve been missing out on some great learning opportunities. Maybe I should explain myself…

Your Brain On Failure

Failure should probably be a part of the product development definition. Something that most of us have never spent any time thinking about is just exactly how we react to failure when it hits us. More importantly, how our brains react to failure when it shows up. Jonah Lehrer has been looking into this and has made some interesting discoveries.

It turns out that when we fail, two very important things go on inside of our heads. The first is that something called error-related negativity (ERN) which is triggered immediately after we realize that something that we’ve done has failed. We’re talking about a signal that shows up 50 milliseconds after the realization that we’ve failed and there’s not a darn thing that you can do about it – it’s pretty much involuntary.

However, that’s not all. There is another signal that our brain gets about 100-500 milliseconds after we realize that we’ve failed. This signal is called the error positivity (Pe) . We have some control over this signal: it happens when we start to pay attention to our failure and we spend time thinking about the results that have been produced.

The really smart scientists who study such things tell us that product managers who are able to have a large initial ERN signal and a more constant Pe signal are the ones who are best able to learn from failures.

How To Use Failures To Become Better

All of this brain signal stuff is good to know, but what’s a product manager to do with this new knowledge? It turns out that it all relates to what kind of person you are.

Scientists believe that the world of product managers is divided into two groups: those of us with fixed mindsets and those of us with growth mindsets. A fixed mindset means that we think that we are as good as we’re going to get at this product management thing. Those of us with growth mindsets believe that we can become better product managers.

Knowing about those brain signals, the scientists have done some studies. What they’ve found is that product managers with a growth mindset were generating a much larger Pe signal and were therefore able to learn more from the failures that they had.

I can almost hear what you are saying right now: great, how can I get this “growth mindset”? It turns out that it might be easier to do than you might think.

Product managers who surround themselves with people who are always telling them how smart they are seem to fall into the fixed mindset camp. However, those of us who surround ourselves with people who complement us on our individual efforts fall into the growth mindset camp. Being recognized for individual accomplishments seems to make a product manager want to understand why they’ve failed and to do better the next time around.

What All Of This Means For You

Every product manager will fail sometime. There’s nothing that we can do about this: it could be a product launch that goes flat, a successful product that runs into a wall, or a competitor that shows up and takes our market away from us. The end result is the same: we’ve failed. You might not be willing to put this kind of experience on your product manager resume, but if you’ve been a product manager for any length of time it’s happened to you.

What’s important is how we handle this failure. Studies have shown that we have two reactions to failure: the immediate reaction and the one that follows it. Product managers who are going to be the most successful have a stronger response when they detect a failure and they then take the time to learn from their failure.

Taking the time to treat each failure as a unique learning experience is what allows some product managers to get ahead. If they’ve taken the time to surround themselves with people who praise them for their efforts, then they’ll be able to turn every failure into a way to become better. Since we know that we’re going to fail, this sure seems like a good thing to do! Now that’s something that you can add to your product manager job description.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What do you think that the first thing that a product manager should do after discovering that they failed is?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

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Product Management Case Study: Pay Phones

Dr. Jim Anderson — Mon, 19 Mar 2012 09:00:59 +0000

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Hey product manager, can you pay to hear me now?

I don’t care what kind of product you are in charge of right now, let’s play a game. You are now in charge of a product that all of us see every day: pay phones. What would you do to breathe new life into this dying product line?

Everything You Need To Know About Pay Phones

Ah, the year 2000. Now that was the year to be a pay phone product manager! Back in 2000 is when pay phones hit their peak. 2.2 million of the ubiquitous communications devices were deployed back in the day. However, pay phones have fallen on hard times since then. These days, there are only about 425,000 of them left nationwide in the U.S.

So what happed to this product? How come what was once a popular, in demand item, has now fallen on hard time? Two words: cell phones. It turns out that in the U.S. there are now more cell phones than there are people (clearly a number of us have more than one of the things).

The companies that used to operate vast legions of payphones, Verizon, AT&T, and Sprint have all gotten out of the game by selling off their pay phones. Where this story starts to get interesting is that there are a number of firms, like Pacific Telemanagment Services, that are buying up these assets. Clearly they must see a market where the big boys don’t.

Creative Ideas

So if you found yourself as the product manager for pay phones, what would you do? Clearly the old role that pay phones used to fill – providing people with the ability to make calls while they were away from home, is no longer the primary way that they’ll make money in the future. No product manager job description will tell you how to handle this situation!

This is going to require some creativity on your part. I believe that what some of the new pay phone owners are doing is on the right track. They are viewing pay phones as being less about being a phone, and instead more about being an important piece of real estate. Remember that in the world of real estate, it’s all about location, location, location.

What this would mean to you as a payphone product manager, is that payphones could still be used as phones. In fact, if you could figure out where there are areas that cell phone signals are not strong or where natural disasters tend to hit, then those pay phones can still earn their money the traditional way: by completing calls.

What’s interesting about the payphone business is that it is actually very easy to measure the value of each payphone. The industry rule-of-thumb is that each payphone has to complete between 100-150 calls per month to profitable.

In order to drive up usage of your payphones (and hit the 100 calls per month mark), you might have to change what a payphone looks like. This might include adding fancy touchscreens and turning them into temporary Internet access locations.

Once again, it’s the location of the payphone that might bring the greatest value. This means that a clever product manager might find different ways to include advertising. Either on the payphone device itself or on a screen associated with it, advertising could be done a number of different ways.

What All Of This Means For You

So where does all of this leave you? In the scenario that we were discussing where you found yourself as the product manager for pay phones, you’d have your work cut out for you. You’ve got a product development definition that needs to be created.

The steep decline in the number of payphones that are out there has been caused by the arrival of cell phones. However, an enterprising product manager would realize that the real value in pay phones going forward will be tied to their location.

This means that you would be looking for ways to make every one of your pay phones generate 100+ calls per month. This is where the real product manager creativity would have to come into play. Transforming a traditional pay phone into an Internet access point or an advertising hub are two different possibilities.

The key here is that just because a product has passed its heyday, does not mean that there is nothing for a product manager to do. Instead, you need to take a look at the product cards that you have been dealt and then use your product management skills and training in order to determine how you can maximize what your product can bring to the table. Do this well and you’ll have another accomplishment to add to your product manager resume!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: What signs do you think will tell payphone companies that it is time to leave the market for good?

Click here to get automatic updates when
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P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

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Product Managers Are Learning The Marketing Power Of One (Database)

Dr. Jim Anderson — Mon, 12 Mar 2012 09:00:15 +0000

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Sometimes one is just better…

All too often Product Managers fool themselves into thinking that more is better. Yes, sometimes this may be true, but when it comes to keeping track of both customers and product inventory, it turns out that using one database is the key to long term success…

How Things Can Get Out Of Hand

Although we often talk about this problem when it comes to launching new products, it turns out that it can also affect older products – it just sneaks up on them. In both cases, things start out ok and then take a turn for the worse.

When a company starts to sell a product, they always seem to start with an initial sales channel. Your product’s account manager and business development manager will be working hard to make this channel a success. In this modern age in which we are living, it can very well be an e-commerce channel right off the bat. Customers who purchase the product using this channel will provide the company with a great deal of information about themselves. This information will then be stored in the e-commerce channel’s systems and databases. This all seems like a standard part of any product manager’s product manager job description, right?

If the company chooses to expand this channel, for example adding a gift card program, this additional functionality may come with its own database for retaining information about the customers that interact with it. Now things are starting to get out of hand. Throw in some strategic management and you’ll quickly find yourself adding in-store purchase data collection and tracking systems and perhaps an inventory management system and you’ll discover that things have completely gotten out of hand.

Once product and customer information has been spread out among so many different systems, problems can start to show up such as products being out-of-stock but the ordering systems not showing that when customers place an order. Many companies try to overcome the limitations of this type of solution by having people manually type information that is in one system into the other systems; however, even under the best of situations there is a time lag here. That means that your product’s inventory levels can change and your potential customers won’t know about it until after they have placed their orders.

The Power Of One (Database)

So what’s a product manager to do? Good question. It turns out that the solution is easy to recognize, hard to implement. What a product manager needs to do is to move to using one single database to handle all of the information related to their product.

What you should be looking for is a single database that can hold all of the cross-channel sales data along with any inventory data that your company has on your product. By implementing a solution like this, product managers will be able to offer their customers a real-time order management solution along with an improved customer experience.

Once a single database view of your product has been put into place, you’ll be able to do things as a product manager that you were never able to do before. The first thing is that you’ll be able to engage in true cross-channel marketing and selling of your product: you’ll know what’s going on so you’ll be able to tell the correct story to the correct channel.

Next, you’ll be prepared to move into the m-commerce (mobile) space. Making it easier for your customers to both buy your product and check on the status of their orders. Finally, the customer’s buying experience will be improved because company staff will have access to all of the information about both a customer’s order and your product’s inventory that will be needed to answer any questions that come up.

What All Of This Means For You

Product managers know that for a product to be successful, they are going to have to develop multiple channels to sell it. Once this process starts, it can be all too easy to start to create multiple databases that don’t talk to each other.

The problem with this is that once you start to spread important customer and product data across multiple databases, it become almost impossible to get an accurate picture of how your product is doing. Product managers need to take the time and make the effort to consolidate all of these databases into a single database.

This single database will allow them to overcome the cross-channel inventory disparity that can hold back their cross-channel sales efforts. Making the effort will result in the creation of an even more successful product. Now that’s something that you can add to your product manager resume!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that it is possible to use only one database from the beginning with a product?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

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