Product Manager's Guide to Dealing With Sales People

Mike Chowla
Mike ChowlaProduct Management Leader at OpenX
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
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
What We’ll Talk About
• Collecting Field Intelligence
• Features to Close Deals
• Dealing With Features Being Sold that Don’t Exist
• Roadmaps & Sales
Copyright © Mike Chowla 2016
COLLECTING FIELD
INTELLIGENCE
Copyright © Mike Chowla 2015
Who is a Sales?
For my purposes, sale people are anyone
who is responsible for getting money from a
customer, whether that be new business or
retention
Copyright © Mike Chowla 2016
Types of Sales People
• New Business
• Typical Titles: Account Executive
• Sales Engineers
• Retention
• Typical Title: Account Manager
Copyright © Mike Chowla 2016
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
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
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
Win / Loss
• Win & Loss Reports are a staple of the industry
• If your company is not doing them, you should
• However, they are usually wrong!
• But still useful
Copyright © Mike Chowla 2016
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
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
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
FEATURE TO CLOSE
DEALS
Copyright © Mike Chowla 2016
The Ask
Copyright © Mike Chowla 2016
Sales person (usually at 5pm on a Friday with
2 weeks to go in the quarter):
I need this feature to close the biggest
deal of the quarter
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?
The real meaning of the ask
Copyright © Mike Chowla 2016
I believe I’d have a better chance of
closing this deal and getting my
commission if you do this feature for me
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
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
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
SOLD FEATURES THAT DO
NOT EXIST
Copyright © Mike Chowla 2016
The Scenario
After a deal closes, you find out the
customer allegedly was promised a
feature not in the product
Copyright © Mike Chowla 2016
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
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
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
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
ROADMAPS & FUTURE
PLANS
Copyright © Mike Chowla 2016
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
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
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
QUESTIONS?
mchowla@gmail.com
Twitter: @mchowla
www.linkedin.com/in/mchowla
Copyright © Mike Chowla 2016
1 of 31

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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
  • 3. What We’ll Talk About • Collecting Field Intelligence • Features to Close Deals • Dealing With Features Being Sold that Don’t Exist • Roadmaps & Sales Copyright © Mike Chowla 2016
  • 5. Who is a Sales? For my purposes, sale people are anyone who is responsible for getting money from a customer, whether that be new business or retention Copyright © Mike Chowla 2016
  • 6. Types of Sales People • New Business • Typical Titles: Account Executive • Sales Engineers • Retention • Typical Title: Account Manager 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
  • 10. Win / Loss • Win & Loss Reports are a staple of the industry • If your company is not doing them, you should • However, they are usually wrong! • But still useful 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
  • 14. FEATURE TO CLOSE DEALS Copyright © Mike Chowla 2016
  • 15. The Ask Copyright © Mike Chowla 2016 Sales person (usually at 5pm on a Friday with 2 weeks to go in the quarter): I need this feature to close the biggest deal of the quarter
  • 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?
  • 17. The real meaning of the ask Copyright © Mike Chowla 2016 I believe I’d have a better chance of closing this deal and getting my commission if you do this feature for me
  • 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
  • 21. SOLD FEATURES THAT DO NOT EXIST Copyright © Mike Chowla 2016
  • 22. The Scenario After a deal closes, you find out the customer allegedly was promised a feature not in the product 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
  • 27. ROADMAPS & FUTURE PLANS Copyright © Mike Chowla 2016
  • 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