Product Manager's Guide to Dealing With Sales People

1. PRODUCT MANAGER’S GUIDE TO DEALING WITH SALES PEOPLE Mike Chowla Twitter: @mchowla Silicon Valley Product Camp April 23, 2016 Copyright © Mike Chowla 2016 Slides available at http://www.slideshare.net/mchowla

2. My Background • Education • BS, Electrical Engineering and Computer Science, UC Berkeley • MBA, Wharton • Experience • 10 years as software engineer and architect building high performance infrastructure • 8 Years in Product Management • Previously Product Management for AOL Mail, StrongView, Aeris • Currently Sr Director of Product Management at Rubicon Project Copyright © Mike Chowla 2016

7. Account Executives • Out to win new business • Most of their compensation is commission • Top sales people will out earn everyone else in the organization • Obsessed with their comp plans • Best way to change their behavior is to change the comp plan • Always very optimistic • Typically overate the probability a deal closing • If your pricing structure is usage based, typically overate how much revenue a customer will generate • Under a lot pressure • Start from scratch every quarter to meet quota Copyright © Mike Chowla 2016

8. Sales Engineers • Are your best source of intel on how the product is fairing in sales situations • Sales engineers understand how the product stacks up against the competition and know where your product weak points are • Ask them what parts of the product do they try to avoid demo’ing • They often have clearer view what happened in particularly deal Copyright © Mike Chowla 2016

9. Account Managers • Your best source for how well the product is meeting needs of existing customers • Usually incentivized on customer retention • If you show yourself to be an asset to their mission, they will be happy to give you access to their customer Copyright © Mike Chowla 2016

11. Loss Reports I’ve only ever heard 2 reasons why a deal was lost: 1. Missing features 2. Price too high Reasons I’ve never heard: • Bad sales execution • Competition outsold us Copyright © Mike Chowla 2016

12. Getting Accurate Loss Info • Sales Engineers • Typically have a clearer view of what happened in the deal • Prospect Call • Tricky to arrange • See if anyone has a connection outside of the sales process you can leverage • Sometimes the sales team has friendly contact on that will talk to you • Absolutely do not change try to change the customer’s mind, and make it clear you are only looking for infomration Copyright © Mike Chowla 2016

13. Win Reports We know why we won, right? Often wrong about this too! Solution: Call New Customers • Customers almost always willing to talk to product management • Good opportunity to build a relationship with new customers • Include account management on call Copyright © Mike Chowla 2016

16. Is this statement true? Copyright © Mike Chowla 2016 Maybe, Maybe Not. I’ve seen it turn out every possible way: • Declined to do feature, won anyway • Declined to feature, lost deal • Did feature, won • Did feature, lost anyway Which is the worst outcome?

18. The worst outcome Copyright © Mike Chowla 2016 Did feature, lost anyway Why? • Wasted Precious engineering effort • Can end up supporting the feature forever • Showed your prioritization process can be upended without good cause

19. PM Tactics, Part 1 – Should we? Apply good PM fundamentals: • Is this a unique need of this customer? • If yes, how we can fill this gap with services? • Is this customer uniquely valuable? • Winning a customer with a great brand is worth more than the revenue • How many customers would this benefit? • Where would this be in the roadmap without this special request? Gather first hand info • Talk to customer directly. “I need to understand what the customer needs. Let’s schedule a call” Copyright © Mike Chowla 2016

20. PM Tactics, Part 2 – What to commit to? Assuming you decide it’s worth doing. All deals have some possibility of failing to close It’s much better to make a binding commitment to do the feature than scramble to the do the feature to close the deal • Write it in the contract, even giving the customer right to cancel the contract if you don’t deliver • Protects you against the deal failing to close • Customers are unlikely back out of a contract • Your legal team may not like it Copyright © Mike Chowla 2016

23. Step 1: What Really Happened? • Possibility 1: The sales team explicitly told the customer customer that the product did something it does not • Possibility 2: The customer misunderstood something in the sales process Goal is to figure out if the customer was mislead. If so, your organization has an obligation to make it right Copyright © Mike Chowla 2016

24. Step 2: Figure Out Your Options • How important is this problem to the customer? • What is the timeframe that the customer needs a solution? • How many other customers would benefit? • Where would be this on roadmap without this issue? • Can you solve the issue with services? Goal is figure out a plan that gets the issue resolved as part of your standard release cycle Copyright © Mike Chowla 2016

25. A Teachable Moment • Head of Product needs to make it clear to sales management that • the sales rep’s job is to sell the product that exists • Feature velocity falls when problems like this have to be dealt with as exceptions Copyright © Mike Chowla 2016

26. Why Does This Happen? • Sales is hard • Need to say “Yes” to pretty much everything • Need to project confidence that the product can solve the customer’s problem • I’ve done it! • When you need to close a deal, one just keeps saying “yes” • Though I knew the feature in question was feasible and could be delivered quickly Copyright © Mike Chowla 2015

28. Sales is a Roadmap Key Stakeholder • New customers are buying your roadmap as much as they are buying your product • Switching costs for enterprise software are still high (no matter what the SaaS pundits tell you) • No customers wants switch vendors again in a few years because your product is lagging • Communicated during sales process • Existing customers want to know if their current problems are going to get solved anytime soon • Also want to know if your product is still going to be meeting their needs in a few years • Communicated by account management Copyright © Mike Chowla 2016

29. Roadmaps To Support New Business • Focused on 12-36 months • Thing needed sooner are going to show in as deal closing features • Further out the road on better to be thematic than specific • We don’t really know what we are going to do • Customers don’t really know what they are going need • Themes should: • align with your longer term product strategy • address any hot & emerging areas • Want buy-in from sales management • Individual reps will all have opinions • However, grief to PM will come from sales management not buying in Copyright © Mike Chowla 2016

30. Roadmaps for Existing Customers • Goal: give account management the ammunition they need to keep customers renewing • Focus is on the next 12 months • Customer pain points will be front and center • Need to more be more specific than thematic • Under-commit on which pain points you commit to addressing • Not addressing something you promised to fix leads to unhappy customer • Existing customers will care about the longer term but this overlaps with the needs of new customers • Except if the customers of tomorrow are different segments than the existing customers Copyright © Mike Chowla 2016