Re-Inventing
                Product Management
                        with
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Change or die                             direct customer meetings create           The key in the new environment is
    ...
The LOVE model explained
                                                                Co-Creation                      ...
Re-Inventing Product Management with LOVE



             Co-Creation                               Co-Creation           ...
Re-Inventing Product Management with LOVE



                                                         New products

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How LOVE changes product management
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Re Inventing Product Management With Love (Pragmatic Marketer)

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The critical role of the product manager is in the process of changing significantly, and both companies and product managers need to adapt. While product management is among the most critical roles in any company, it’s a role whose importance is under-heralded in most organizations. The extent and nature of the changes to the role mean that those that fail to re-invent themselves—or don’t try—are likely to find themselves displaced

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Re Inventing Product Management With Love (Pragmatic Marketer)

  1. 1. Re-Inventing Product Management with By Bruce LaFetra The critical role of the product manager is in the process of changing significantly, and both companies and product managers need to adapt. While product management is among the most critical roles in any company, it’s a role whose importance is under-heralded in most organizations. The extent and nature of the changes to the role mean that those that fail to re-invent themselves—or don’t try—are likely to find themselves displaced. 1 ­ 6­ •­ The­Pragmatic­Marketer­ •­ Volume­8,­Issue­1,­2010
  2. 2. Change or die direct customer meetings create The key in the new environment is a truly bi-directional relationship interacting with consumers rather Two major forces are driving of the type that is needed going than transacting with them. Product the need for change in product forward. These transactional type managers and marketers currently management. First, the nature activities are controlled and shaped lack a model for understanding of the competitive landscape is by the company. Non-transactional how to interact with consumers as changing with the emergence over interactions occur between peers. the company - customer relationship the past 15 years of low-cost, off- The need for interactions rather than evolves through different stages. shore manufacturing that quickly transactions changes the methods (Newsflash: not all consumers are clones successful products. Merely employed by the product manager the same.) This represents a huge manufacturing a quality product that (the “how”) every bit as much as the change for marketing managers people want has become a profit- need to accelerate innovation and as they must stop trying to bribe challenged commodity business. introduce solutions (the “what”). and manipulate people to get Earning the types of profits investors consumers to do what they want. expect from American technology To date, nearly all attention has This is transactional behavior that firms now requires rapid and focused on the “what,” although the doesn’t encourage your company— continuous innovation and a move “how” is no less a challenge. Since or the consumer—to seek new toward difficult-to-copy solutions customer interaction is growing forms of value. rather than products. Apple’s success in importance, a big part of the with the iPod and iTunes represents “how” is the manner in which your Product managers have a lot near perfect execution. Often company interacts with consumers. at stake as well. More than a solution may span companies This is a huge and visible change marketers (perhaps), product or involve active partnering with for the marketing function. To non- managers understand that customer users. Crowdsourcing and mash-ups product managers, the change is less relationships evolve. However, most are examples. visible for product management, but lack any sort of model to understand no less important for success. this evolution and use it to their The key to success is being open benefit. Even fewer use—or even to new forms of value. Some of Technology makes it easier than ever recognize the enormous power the new forms of value may be for product managers to listen in of—a model that is shared across unfamiliar: consumer products or interact directly with customers, all parts of your company. companies offering their “products” adding new tools to the product as components to third-parties manager’s kit such as crowdsourcing building unique solutions or even and co-creation. Technology is Why the World Needs LOVE entirely new products. Turning one’s an enabler, but doesn’t tell the customers loose is an excellent way The Lifetime Opportunity Value product manager when and how to to drive lots of innovation. iRobot Equation (LOVE model)1 departs engage customers, or to understand allowed its Roomba robot vacuum from the buying funnel by viewing how customers vary in their cleaner to become an open platform consumer relationships as an relationship needs. resulting in a nearly limitless variety evolving set of bi-directional of upgrades and modifications interactions. These relationships available from third-parties. Many We need a new model grow from an introductory stage of the resulting devices are not where neither party knows much even vacuums. To deal with the changes in how about the other all the way to customers interact with companies, co-creation. In a co-creative With so many more inputs, the role a new model for customer relationship, you and your customers of the product manager is becoming relationships is needed. Product share a common vision and align less about coming up with great management (and marketing) needs interests. The benefits of co-creation ideas and more about enabling, to lead the way in understanding are huge, and reach into every gathering, and coordinating inputs how to engage and leverage corner of your company and are as a sort of “traffic manager” or hub. customer relationships in the reflected in both top line revenue age of two-way media. and bottom line costs. Deeply The second force is the manner engaged customers buy from your in which companies interact Most organizations—probably yours, company not merely because they with their customers. Gone are too—define customer relationships like the product or service, but the days when companies could in terms of a linear path that allows because they genuinely want your broadcast a controlled message to deterministic modeling, such as the business to be successful. consumers. Two-way media such buying funnel process: awareness, as blogs, user reviews, and social consideration, and purchase. The media mean consumers can talk buying funnel is predicated on your company controlling the message, [1] The LOVE Model is built on concepts originally back—and to each other—without the company having any say in but this no longer works in an developed by Harry Max at Rubicon Consulting. the matter. Don’t fool yourself into environment dominated by two-way Harry also came up with the LOVE model name. thinking focus groups or even and unstructured communications. The­Pragmatic­Marketer­ •­ Volume­8,­Issue­1,­2010­ •­ 17
  3. 3. The LOVE model explained Co-Creation Co-Creation The LOVE model can be applied to any online relationship, not Commitment Commitment just to customer acquisition and purchase. Likewise, the benefits Stability Stability of the LOVE model extend far Power Struggle Power Struggle beyond social media and marketing campaigns making it of particular Romance Romance value to product managers seeking to drive change throughout their organizations. The LOVE model Romance Power Struggle drives long-term value in areas Getting introduced Maintaining interest as diverse as customer support, product development, and You can’t build a relationship Where Romance is about generating thought leadership. with someone you don’t know, interest and opening the door to so the initial phase of the exciting possibilities, the second consumer–company relationship phase, Power Struggle, is about Product managers will experience is Romance. Romance is about spending time together and getting an epiphany as they realize how introductions and learning and to know each other. In the world of to engage customers at each phase trying things. People don’t want commerce, this is about working to of an evolving relationship. By to think about big commitments maintain the consumer’s attention. understanding more about how to when they’re still trying to decide The power struggle isn’t adversarial, interact with customers, you can if they even want to get to but is a mutual effort to learn how tailor your interactions to be more know you better. both parties in the relationship are productive. Because the interactions going to fit together. After all, there are vibrantly bi-directional, your There are serious pitfalls in skipping needs to be balance if a relationship company and consumers grow the romance phase and moving too is going to last for the long term. in alignment as the relationship grows deeper. quickly from social to transactional interactions. Once the parties to a If you don’t provide an engaging relationship define it in terms of experience that fulfills the While a company’s relationship an exchange it is very difficult to consumer’s need for credible with individual consumers falls redefine it as something broader. information, you will struggle to into a specific phase, the company A properly developed romance keep them from clicking somewhere can be at different relationship defines the long term relationship else. You lose the consumer’s phases with different consumers, as something other than primarily a attention and, with it, your ability so a company is not limited monetary exchange or a transaction. to drive the relationship narrative. to a single relationship phase. By contrast, too many companies The descriptions below include today insist on a kiss at the companies that do a particularly Dell’s IdeaStorm allows Dell “to gauge beginning of the first date. good job at understanding specific which ideas are most important and types of relationships. The phase most relevant” by engaging the public names are both descriptive Twitter and other social networking in online discussion. Users are able to and instructive. applications are good at letting people add articles, promote them, demote explore and set their own pace of them and comment on them. By discovery and use. giving users the power to drive what is discussed, Dell maintains engagement while accomplishing its own goals of Co-Creation understanding what people care about and want to see. Commitment Stability Power Struggle Romance 1 ­ 8­ •­ The­Pragmatic­Marketer­ •­ Volume­7,­­Issue­5,­2009
  4. 4. Re-Inventing Product Management with LOVE Co-Creation Co-Creation Co-Creation Commitment Commitment Commitment Stability Stability Stability Power Struggle Power Struggle Power Struggle Romance Romance Romance Stability Commitment Co-Creation Finding balance Discovering shared outcomes Co-owning a vision At the point where no major Commitment comes when the The final and ultimate phase mis-match of status between relationship advances from stability is Co-Creation. At this level the the parties exists, a relationship to a shared outcome. While relationship is about co-creating enters the third phase, Stability. loyalty in a predominantly one- value and co-ownership of a A stable relationship is one where way, transactional exchange is common vision rather than merely you provide a reasonable value fragile, commitment in a stable, sharing in the outcome. With this proposition for filling latent bi-directional relationship is far more type of relationship, the consumer consumer needs. You have stability robust and makes consumers more is no longer merely making when both of the following are true: likely to stay in relationship through a purchase, but is supporting a the ups and downs the market preferred business. The benefits of 1. The consumer is willing to go inevitably deals. co-creation are huge, and reach into through the process of sorting every corner of a business and are through the criteria for making There are lots of ways to show reflected in both top line revenue a decision, and commitment. Preferred customer and bottom line costs. programs are one form of 2. You are willing to transparently commitment, although many As mentioned on page 17, iRobot, make available the information such programs are based on a makers of the Roomba robot vacuum needed to satisfy the consumer’s transactional quid pro quo rather cleaner, support an entire ecosystem criteria. than true commitment. of customers and partners. Many have hacked Roombas to add capabilities or Amazon.com is a company that McAfee formed a strong bond of create entirely new devices, in effect, understands this extremely well. The commitment with the hundreds of turning the Roomba into a platform. Amazon site is a virtual cornucopia “McAfee Maniacs” that handle much of By listening to its customers and of information on all manner of McAfee’s technical support via the Web. recognizing them as trusted partners, consumer products. Not only are there Some post thousands of responses in iRobot is able to embrace a class of user user reviews, but the reviews gain McAfee forums—as of this writing the that exceeds what we typically think of additional credibility because users can top contributor has made more than as a customer. As a result, the Roomba comment on the reviewers. Amazon 31,000 posts. Except for some modest has become more than just a vacuum provides an enormous quantity and peer recognition, the Maniacs are and its users are much more valuable to variety of information with the implicit uncompensated, and yet the shared iRobot than merely customers on the expectation that, if and when the outcome of helping people navigate other end of a monetary exchange. consumer makes a purchase decision, McAfee’s software motivates some Amazon is most likely to be the amazing commitment. purchase vehicle. Amazon benefits from a stable relationship because consumers have little reason to leave the Amazon site The LOVE model drives long-term value to gather additional information. Both in areas as diverse as customer support, product parties feel their needs are being met in a balanced way. As a consumer, you development, and thought leadership. are always free to leave the Amazon site, but why would you? The­Pragmatic­Marketer­ •­ Volume­8,­Issue­1,­2010­ •­ 19
  5. 5. Re-Inventing Product Management with LOVE New products Process improvements n tio New ways to ea message & market - Cr Cos es sin Bu LOVE for the entire company 3. New ways to message and market become apparent as soon as you start engaging with consumers in a Each of the five phases—Romance, Power Struggle, genuine dialog. They’ll help you sell their bosses and Stability, Commitment, and Co-Creation—represents they teach you how to market more effectively to their a different flavor of relationship and a different way neighbors. If your new product name is an undesirable of thinking for product managers. Some consumers slang term in a foreign language, they’ll tell you rather will want to align their interests with your company’s than letting you blast it to the world. because it makes their lives easier, such as frequent customers who want the sales process to run 4. Business co-creation is the Holy Grail of relationship. smoother. The motivation of other consumers may be It happens when your customers are emotionally less direct—perhaps visionary customers who see a invested in the success of your business. They make better way or an interesting combination of products referrals to friends, family, and colleagues because it or services. The Co-Creation process manifests itself creates intrinsic joy for them. Having a customer who in four distinct types of value: wants you to be successful is much more powerful than a customer you’ve bought with a loyalty program. 1. New products and services are the most visible way you It is important to remember that co-creators may exist can engage with and learn from your customers. A in forms and places that are invisible to companies. genuine dialog with consumer always makes the You need to support these advocates, even when you development process better, but in many cases it don’t know exactly who they are. also makes it simpler as feature sets can be better validated and it is easier to identify components To a limited degree, the LOVE model can be that add little value. implemented by a single discipline within a company, but as the above examples point out, the real value 2. Process improvements are an area where many consumers is in infusing its effects throughout the organization. have strong feelings, but few companies bother to ask. The LOVE model thus provides product managers Still far fewer take the view that consumers should be (and marketing) a vehicle for offering leadership to empowered to help design the processes. The key is the entire company. interests that are aligned in a deep and holistic way. 2 ­ 0­ •­ The­Pragmatic­Marketer­ •­ Volume­8,­Issue­1,­2010
  6. 6. How LOVE changes product management Stay current with The LOVE model gives product managers a relevant and actionable framework for generating valuable industry best practices interaction with consumers. These bi-directional interactions provide a source of product, process, and business improvement and innovation that enables your company to co-create new forms of value with customers. Both forces discussed in this article require significant changes in product management. First, the need for greater innovation and new types of solutions means that product managers are less makers and more organizers. The second force—the need to find a more workable model of consumer—company relationships, pushes product managers to interact with consumers in a truly bi-directional manner where consumers are peers rather than objects to the company. With changes to both the “what” and the “how,” the C-suite needs to re-think what they expect Visit the online community at from product management. Instead of being product champions, product managers need to be customer PragmaticMarketing.com or market champions with a broad view of how their company’s expertise and technology can • Review 10 years of Annual Product contribute to customer solutions. They need to Management and Marketing Survey results understand ecosystems rather than just product applications. They need to enable customers to help • Attend a webinar by one of today’s industry co-create all aspects of their business (not just the thought-leaders products) as this is how they will create sustainable differentiation. This will likely lead to changes in • Read hundreds of articles on product how the product management function is organized management, marketing and leadership and managed. strategies For the first time, companies have a holistic model to guide them in developing more valuable and • Read blogs from Pragmatic Marketing actionable relationships with customers across all thought-leaders and other industry experts parts of the company. Embracing the LOVE model embarks an organization on a journey of discovery • Stay connected with your industry peers which leads to quantifiable results, long-term value, by joining a local Product Management and enhanced competitiveness. Association • Read profiles of companies who have achieved success using the Pragmatic Marketing Framework™ • Participate in online networking with Bruce La Fetra is a Business Strategist for Rubicon LinkedIn and Facebook groups Consulting, Inc. With insights gained from more than 20 years experience in product management, • View a list of recommended books and marketing, and strategy consulting, he guides clients in market definition and visioning work software tools for product managers to define their mission and growth strategies. He writes and marketers and speaks on business models, consumer experience, and pricing & licensing. Prior to consulting, Bruce held product management, business development, and product & service marketing roles for leading software, hardware, and financial services companies. Contact Bruce with thoughts on the LOVE model at bruce@rubiconconsulting.com

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