A Pragmatic Marketing Publication productmarketing · productmarketing.com The Marketing Journal for High-Tech Product Managers . ... Identify and assess your company’s current

productmarketing.comT h e M a r ke t i n g J o u r n a l f o r H i g h - Te c h P r o d u c t M a n a g e r s . A P r a g m a t i c M a r ke t i n g ® P u b l i c a t i o n

Vo l u m e 1 I s s u e 1

Ten Marketing Challenges that Can Make or

Break Your Business (and How to Address Them)

Datatel LeveragesMarket-Driven

Methodology to Build Solutions that

Customers Really Want

™

Annual ProductManager SalarySurvey Results

As Pragmatic Marketing® enters its10th year, we have developed quite a following. Our process has beenadopted by thousands of productmanagers representing hundreds of high-tech companies.

Two years ago, we rolled out our contentwebsite, www.productmarketing.com, to

augment what we teach in our seminars. Thesite provides a method of keeping our alumni up to

date on contemporary issues and allows us to share bestpractices with the high-tech community. The site and itsassociated e-newsletter are highly regarded throughoutthe industry for the insights that it provides.

This is the initial issue of our print journal,productmarketing.com. It extends our websiteexposure to a circulation of over 50,000. In each issue, we will address some of the most pressing issues product managers face daily. We will also

profile companies that have achieved success in theirimplementation of technology marketing through case

studies. Contributing writers from Pragmatic Marketingpersonnel, domain experts, and your peers in high-techproduct marketing will provide the content.

We hope you enjoy this journal as much as our web offering and email newsletter. This first

issue is a little “skinny” but watch us grow in the following issues. If you would

like to contribute, we’d love to hear from you.

Craig StullPresident and CEOPragmatic Marketing, Inc.

1 / productmarketing.com

Welcome toproductmarketing.com™,the marketing journal for high-tech product managers

Inside this issue:productmarketing.com8955 E. Pinnacle Peak Road • Suite 104

Scottsdale, AZ 85255

President and CEOCraig Stull

Pragmatic Marketing, Inc.®

Managing EditorKristyn Marathas

Contributing WritersSteve Johnson

Barbara NelsonAdele RevellaSteve Unger

Vo l um e 1 I s s u e 1

No part of this publication may be reproduced,stored in any retrieval system, or transmitted, inany form or by any means, electronic, mechanicalphotocopying, recording or otherwise, withoutthe prior written permission of the publisher.

productmarketing.com™ is available free ofcharge to qualified subscribers. For subscriptioninquiries call (480) 515-1411; or [email protected].

For advertising rates, please call (480) 515-1411.

Other product and/or company namesmentioned in this journal may be trademarks or registered trademarks of their respectivecompanies and are the sole propertyof their respective owners.

productmarketing.com is atrademark of Pragmatic Marketing,Inc. Printed in the U.S.A.All rights reserved.

Special Features

3 Annual Product Management Roles and Salary Survey Results

Despite a downturn in the economy,Product Managers continued to enjoyincreases in salary and job responsibility in 2002.

11 Ten Marketing Challenges that Can Make or Break Your Business (and How to Address Them)

Identify and assess your company’s current marketing efforts.Rate your company with our survey and target problem areasby understanding challenges, issues and strategies.

In This Issue

1 Craig Stull welcomes you to the productmarketing.com journal

6 Book Reviews

Read a good book lately? We’ve got a couple to share with you from our “top seller” list for product managers.

6 Ask the Expert

9 The Pragmatic Marketing®

Process

• Business Case• Lead Generation• Requirements

19 Case Studies

Datatel helps colleges wise-up to the increased complexities of the higher education marketplace

23 Calendar of Pragmatic Marketing Seminars

About Pragmatic Marketing, Inc.

Based in Scottsdale, Arizona, PragmaticMarketing, Inc. was formed in 1993 to provideproduct marketing training and consulting tohigh-tech firms by focusing on strategic, market-driven techniques. Pragmatic's training coursesemphasize business-oriented definition of marketproblems, resulting in reduced risk and fasterproduct delivery and adoption. Since itsinception, Pragmatic Marketing has successfullygraduated over 20,000 product managers andmarketing professionals, and was named one ofthe Inc 500 fastest-growing companies of 2000.For more information about PragmaticMarketing and its courses, please visit thewebsite at http://www.pragmaticmarketing.com or call 480-515-1411.

™

productmarketing.com / 2


Each year Pragmatic Marketing®

conducts a salary survey of productmanagers, marketing managers,and other marketing professionals.Our objective is to provide industryinformation about compensation aswell as common responsibilities.

Despite a downturn in the economy,product managers continued toenjoy increases in salary and jobresponsibility in 2002. “Productmanagers’ compensation increasedan average of 5.5 percent in 2002,”said Steve Johnson, Vice President atPragmatic Marketing. Johnson is aninstructor with more than 23 yearsof product management experience,and heads up Pragmatic’s AnnualProduct Marketing Survey team.

“More product managers also are going on sales calls,” Johnsonadded. “According to our survey,47 percent of product managerswent on sales calls in 2002compared to 37 percent in 2001.This makes some sense as companiesstruggled to make their revenueprojections. In this scenario,everyone is in sales. Unfortunately,

selling is about talking, not aboutlistening, so these companies willfind that they have no new productsto sell this year. Mature companieshave learned that product manage-ment is not sales support.”

Profile of a Product Manager• The average product manager

is 35 years old

• 84% claim to be “somewhat”or “very” technical

• 92% have completed college;51% have some MBA classes and 40% have completed amasters program

• 35% are female, 65% are male

• The typical product manager hasresponsibility for three products

AnnualProduct

ManagementRoles and

Salary SurveyResults2002


Compensation

Average product managementcompensation was:

• $88,496 salary plus $8,092 annualbonus (78% of product managers get a bonus)

• Females: $84,663 base salary plus $7,548 bonus

• Males: $90,685 base salary plus $8,418 bonus

(All amounts are in $US)

Bonuses are based on:

• 59% company profit

• 27% product revenue

• 40% quarterly objectives (MBOs)

• More than 40% say the bonus doesnot motivate at all and only 11% saythe bonus motivates a lot

2002

OrganizationThe typical product manager reports to a director in the Marketing Department

• 49% report to a director

• 28% report to a VP

• 15% report to the CEO

• 27% are in the MarketingDepartment

• 10% are in the Product Management Department

• 10% are in Development or Engineering

• 7% are in a Sales Department

Product Management ratioswithin the companyHow are product managers allocated relativeto other departments? For each productmanager, we find:

• 2.7 Products

• 0.7 Product Lines

• 1.0 Services

• 13.3 Developers

• 1.7 Development Leads

• 1.7 Sales Engineers/Pre-sales support

• 5.0 Sales people

(All amounts are in $US)

Regional Impact on Compensation


Other job responsibilities• 69% researching market needs

• 55% preparing business case

• 77% writing requirements

• 48% writing specifications

• 86% monitoring development projects

Impacts on productivity• Product managers receive 63 emails

a day and send about 30

• On average, we’re going to 12 internalmeetings each week

• But 38% are going to 15 meetings ormore each week and 20% attend morethan 20 meetings!

Working with requirementsThe majority of product managers are researching market needs, writingrequirements, and monitoringdevelopment projects.

• 69% researching market needs

• 55% preparing business case

• 77% writing requirements

• 48% writing specifications

• 86% monitoring development projects

Working with Marcom and SalesProduct managers still spend a lot of time providing technical content forMarcom and Sales.

• 57% writing promotional copy

• 49% proofing promotionalcommunications

• 58% training sales people

• 47% going on sales calls

• 23% performing win/loss analysis

The survey asked forrecommendations for the VP of Sales. Productmanagers said...

• Product management is not sales support

• Give us access to customers and customer information

• Let product management manage the products (ie., quit interfering)

• Stop the rampant discounting

• Sell what we have (and stop selling product futures)

• Be more proactive and strategic rather than reactive in our operations

• Adequately training our sales peoplerequires more time than just a one hourwebcast. Could we please have somekind of sales training bootcamp?

• All of our lives would be easier if salesreps would take the time to learn thetools and processes that have beencreated to assist them

• Allow marketing more access to customers

• Back off and let marketing do its job

• Be less tool focused and more solution focused!

• Be more daring

• Be customer oriented not onlyshareholder oriented

• Be more accessible

• Read what we publish

• Be realistic about delivery dates, and revenue forecasts

To read all the comments, go towww.productmarketing.com

pm.c

The survey includes responses from 981 marketing professionals. It wasconducted during the period ofNovember 11 – 25, 2002 usingWebSurveyor.

Go towww.websurveyor.com/pragmatic for more information.

Product Management Roles(Cont inued )


Please stay where you are. Your company wants you tobring the strategy to marketing programs. Start by makingsure you really know the buying needs and words used

by each type of buyer you wantto influence. Then you’ll havethe data and instincts to decidewhich marketing programs andmessages will resonate with youraudiences. Your first instinct iscorrect—most collateral is awaste of everyone’s time, boththe writer and the reader’s. If youknow the people you’re talkingto, you won’t have to guesswhether you’re reaching them.

Management wants you toshow them how to measure the return they are getting ontheir investment in marketingprograms. Work with yourstakeholders to agree on successmeasures for every program, anddon’t use the number of leads as

a metric. You want to show how your programsmeasurably impact the three goals your stakeholdersvalue, i.e. revenue, brand awareness and customer

retention. Don’t spend another dime on any programthat doesn’t have a stakeholder-approved success measurethat you can relate to one of these goals.

You also need to spend time with your sales people to define a repeatable sales process. Make sure that each of your channels has the tools it needs to overcomeobjections and influence all types of buyers at eachstage in the cycle. Don’t be surprised to find out thatmost of the material in your collateral closet is irrelevant.Reallocate the dollars and resources you’re wasting onfluff and you’ll have time and money to spare.

Adele Revella

Instructor, Effective Marketing Programs™

I moved from product management to product marketing about a yearago. Before that I was a technicalwriter. I think I made a big mistake.They asked me to do this job because I could write, but everything I’msupposed to create is fluff. At leastthere were a lot of hard problems to solve when I was in productmanagement. This job has no credibilityor integrity. Should I go back toproduct management?

The Inmates Are Runningthe Asylum by Alan Cooper

Written for software executives andmanagers, this book reveals the innerworkings of a development project andshows why we struggle to createmarketable products in a meaningfultimeframe. Of particular interest to product managers is the discussion aboutuser personas and use cases. These areapplicable to bothdevelopmentrequirements as well as positioningto the target user-buyers, byhelping us focus onparticular users and uses instead of the generic.

Who Says Elephants Can't Dance? Inside IBM'sHistoric Turnaroundby Louis V. Gerstner, Jr.

IBM has redefined itself as a force in the industry by focusing on the customer.Again. And it took a customer to showthem how. Lou Gerstner describes thedoldrums facing IBM during the 90s,when the press and the industry hadwritten them off, and how the management

team brought IBM back.An excellent read foranyone who has been inthe business for a while,particularly in theenterprise space. It isalso an excellent bookabout how to run abusiness. Almost everypage has a nugget of

wisdom for running abetter technology-based business.

Purple Cowby Seth Godin

Is your product apurple cow? Or justyet another boringblack and whiteone? Is your value

proposition “more bland thanthe leading product?” If so, you need toread Purple Cow. Excerpted in “FastCompany,” the book sold out its firstprinting in three weeks. Godin’s writingstyle is friendly and populated with clearexamples from companies you’ll recognize.He invites us to create remarkableproducts to delight a specific market—people who will love the product and tell their friends. Learn more athttp://apurplecow.com/ (Note the “a”in the link. Purplecow.com is anotherunrelated but zany website.)

Book Reviews

Ask the Expert

Adele brings more than 20 years of high-tech marketing experience to thedevelopment and delivery of EffectiveMarketing Programs. Over the pastdecade, Adele led Product Management

and Marcom teams in her role as Vice President of Marketing. Adele launched her own successfulcompany that provided high-tech companies withpositioning consulting and public relations services.

email your questions [email protected]

Build market-driven

products by listening

to the marketThe Practical Product Management™ course fully

explores the role of technical product management,

providing tools and processes to help get products

to market more efficiently. This comprehensive course

offers real-world product management techniques—

using software and hardware case studies from

enterprise-level to desktop products and services.

Product marketing activities are analyzed in detail

with tips for how to be effective at the strategic

elements and how to manage multiple tactical

activities. This seminar is a challenging program that

emphasizes strategic product marketing and market-

driven management. Every concept is designed to be

actionable as soon as you return to the office.

The third day of the course drills down into the often-

difficult process of articulating product requirements.

Using concepts from the prior two days, students

learn a straightforward method for creating product

plans that product managers can write, developers

readily embrace, and that result in solutions that

the market wants to buy.

Learn what

every product

manager

needs to

know

High-Tech Product Marketing Training

Call (800) 816-7861 or go towww.PragmaticMarketing.com to register!

Practical Product Management™

Days 1 – 2I. Strategic Role of Product Management

• What is marketing?• Definition of the role of product management• Contrasting product management and product

marketing• Assigning ownership of responsibilities• Identifying the “first steps” with gap analysis

II. Market Analysis• Distinctive competence• Market research• Prospect problems• Technology assessment• Competitive review

III. Quantitative Analysis• Market sizing• Sales analysis• Product profitability• Win/loss analysis

IV. Strategic Planning• Business case• Buy, build, or partner?• Pricing• Thought leaders• Innovation

V. Product Planning• Product Definition• Positioning• Sales process• Roll-out process

VI. Case Study

VII. Delineating Responsibilities• Communicating market facts to Development,

Marketing Communications, and Sales• Drawing the line between product management

and the other departments

Day 3 (For those who write requirements)

VIII. Building the Market Requirements Document (MRD)• Writing requirements• Implementing use-case scenarios• Programming for the “persona”• Determining product feature sets• Creating the MRD

IX. Analyzing Business and Technology Drivers• Reviewing specifications• Prioritizing the product feature set• Creating the Business Case

X. Getting (and Keeping) Commitments• Product contract• Getting the product team in sync• Getting executive support• Communicating the plan in the company

and in the market

Course designed for:Product Managers or Marketing Managers and Directors; MarcomSpecialists and Product Developers. You should attend if youmanage or contribute to aspects of product marketing and management.


Practical Product Management™ introduces a process that gives productmanagers the tools to deliver market-driven products that people wantto buy. It focuses on the practical aspects of juggling daily tacticaldemands of supporting the channel with strategic activities necessary to become expert on the market.

Watch for future issues of productmarketing.com as we continue to highlight and further explore the process.

RequirementsClear requirements based on market needs are essential tocreate successful products. Product managers are responsiblefor uncovering market problems, and quantifying thepervasiveness and value the market places on solving theproblems. Requirements are communicated to developmentthrough a Market Requirements Document (MRD).

Too often, product managers deliver the MRD to development only to hear, “Thisdoesn’t have enough detail. I don’t know what to build.” The product manager thenspells out exactly what he wants. The developer says, “Don't tell me how to build it!Stay out of design.” Product managers frequently struggle to provide the right kindof detail to Development. When they go too far into the design process, they alsodon’t have time to spend in the market becoming experts about what the marketneeds and wants to buy.

If you're struggling with requirements, attend day three of Pragmatic Marketing’s“Practical Product Management™” seminar and learn how to provide the right detailin your MRD.

CompetitiveReview

TechnologyAssessment

ProspectProblems

MarketAnalysis

QuantitativeAnalysis

StrategicPlanning

ProductPlanning

MarketResearch

DistinctiveCompetence

MarketSizing

SalesAnalysis

ProductProfitability

Win/LossAnalysis Innovation

ThoughtLeaders

Pricing

Buy, Build,Partner

ProductDefinition

Positioning

Sales Process

Roll-OutProcess

ProductContract

ReleaseMilestones

The Pragmatic Marketing® Process

STR

ATE

GIC

Business Case

Requirements


Lead GenerationSuccessful lead generation requires a strategythat nurtures every qualified lead until theprospect becomes a satisfied customer. Theproduct marketing manager who has a clearunderstanding of each type of target prospect,their attitudes, motivations, and businessproblems, is the only person qualified to developthis plan. Marcom delivers the programs andsales people close the sale, but the success orfailure of lead generation programs depends on the product marketing manager.

The most prevalent point of failure for leadgeneration plans occurs during the hand-offfrom Marketing to Sales. Sales will only workleads that they regard as “hot.” Marketing must protect the company’s investment in,and relationship with, all qualified leads. So the program must include a plan to manage all demographically qualified prospects untilthey are ready for sales involvement. Plans thatrely on sales people to convert “cool” leads to customers are doomed to fail.

Want to learn more? Attend PragmaticMarketing’s “Effective Marketing Programs”seminar to learn the skills and processes that successful companies use to producemeasurable gains in revenue, positioningawareness, and customer retention.

Business CaseA business case is an assessment of a market opportunity based on a known pervasive problemthat can be solved profitably. In the post dot bomb era, it is becoming more imperative to evaluatebusiness opportunities based on potential profitability, not just the cool factor. Most companies arein business to make money—not just to pursue a hobby.

To build a business case, it takes market expertise—what problems exist, are they urgent enough to warrant attention, will people want to pay to solve them, how pervasive are they? Is the marketsegment large enough for us to make money? Creating a concise, compelling business case thatgets approved requires a process.

If you are being asked to create a business case to senior management to justify a new product or major upgrade, do you know what to do? If not, attend Pragmatic Marketing’s “AnalyzingMarket Opportunities” seminar and learn how to create a business case that gets approved.

PromotionalCommunications Sales Tools Channel

Support

ElectronicCollateral

PrintedCollateral

Demonstration

Presentation

SpeakingEngagements

Press

Advertising

White Papers

PhoneSupport

CorporateVisit

Seminars &Tradeshows

“Special”Calls

CostJustification

News Flash

CompetitiveWrite-Up

A model for successful product management

© 1993-2003 Pragmatic Marketing®

TACTIC

AL

LeadGeneration


Ten Marketing Challengesthat Can Make or Break

Your Business...

and How to Address Themby Steve Unger


• We’re having trouble planning the next productbecause we’re so busy supporting the productwe just launched.

• Our marketing folks are spending so much timeworking with Development they don’t haveenough time to support Sales.

• Our sales reps don’t have enough qualifiedleads and spend too much time cold calling.

• It takes us too long to close a deal. How canwe speed up our sales process?

• How do we decide on the features for the nextproduct?

• Should we delay launching the new product toget more features?

• We’ve grown to a size that our old way ofdoing things just isn’t working anymore.

• How do we make our company more market-and customer-driven?

• Are we getting the most out of our investment inmarketing?

• How should we organize our Marketing group?

These points are the classic dilemmas many companiesface. A successful company is one that identifies andassesses key issues. Analyzing your selling process andmarketing ROI helps control costs. Product planning inconjunction with growth and change are also challengesand strategies that can make or break your business.

Rate your company with our survey to help you target yourchallenges, issues and strategies.

Rate from 0 to 100 = no progress10 = outstanding progress

■■ We have a clearly defined sales model outlining the activities andtime required for each selling step.

■■ We use our sales model to track each opportunity as it movesthrough the sales pipeline.

■■ Our Marketing group effectively supports Development, Sales,and the executive team.

■■ Our Marketing group does a great job of supporting ourcurrent products.

■■ Our Marketing group does a great job of planning enhancedand new products in a timely manner.

■■ We plan for and track the measurable results for all ourmarketing programs.

■■ Our Marketing group is organized in a way that works for ourcompany—“all the bases are covered.”

■■ We collect ample input from customers and prospects—includingwin/loss reports.

■■ We periodically review our Marketing function to determinewhere we should invest.

■■ We have a formal requirements database and product featuresare based on specific customer requirements.

■■ TOTAL

Calculate your total score and find out where you stand:

0 – 50 points: You are just at the starting line; lack of marketing is significantly impeding your results.

50 – 80 points: You have some marketing basics in place, but wouldgreatly benefit from a more comprehensive approach.

80 points: Your marketing effort is stronger than most, and has the potential to be a major competitive advantage.

Does this sound like your company?


The Classic DilemmaMarketing has an obligation and need to support both Developmentand Sales. However, the simultaneous demand and contention forlimited marketing resources may cause one or the other to loseout. Creative thinking is required to assure that the needs of allparties are met.

Challenge 1We’re having trouble planning the next product becausewe’re so busy supporting the product we just launched.

Issue: Let’s face it, product launches are exciting. Months of energy have gone into creating a product that will (hopefully)enable Sales to make a breakthrough. Marketing is 120%absorbed in launch activities and training the sales force.The problem is that Development engineers are waiting to work on the next product and they need new productrequirements NOW!

Strategy: The answer lies in having a requirementsdefinition process that is on-going and produces an “evergreen”requirements database. You may also need to have one headcountdedicated at least half-time to key activities in product planning.

Challenge 2Our Marketing team spends so much

time working with Development, theydon’t have enough time to support Sales.

Issue: This issue is a corollary to the firstchallenge. A close working relationship between

Marketing and Development sometimes leaveslittle room for Marketing to support Sales.

Strategy: Again, the answer may come instructuring product planning as an on-going“evergreen” process. Often some Marketing staffmust have their roles and objectives defined toexplicitly favor sales support.

The Selling ProcessIdentifying and understanding your target customer anddocumenting the selling process are critical success factors.Proceeding without this information is like taking a long road trip without having a map.

Challenge 3Our sales reps don’t have enough qualified leads andspend too much time cold calling.

Issue: Sales productivity is an issue for many companies.

Strategy: The first step is to identify your targetcustomer—their characteristics and needs. This includesidentifying the economic and technical decision makers aswell as the influencers. At that point you can assess the keyfiltering questions. It may be possible to shift identifying andpre-qualifying “suspects” to lower level staff or outsourcing to a telemarketing company.

Success Story A software company in Palo Alto, CA assigned one of theirfour product managers to work primarily on product planning.This “product planner” supported the other product managersin planning activities while they continued to support thesales force. In this way Development had the input anddirection they required, and Sales received needed support.Also, the product managers were less stressed and hadgreater job satisfaction.

Ten Marketing Challenges


Challenge 4It takes us too long to close a deal. How can we speed upour sales process?

Issue: Does this sound like your company? The sales cyclegoes on and on. There are last minute problems and surprises.We waste time on prospects who just aren’t that serious.

Strategy: To speed the sales process you need first to havethought through and documented your “sales model.” What arethe step-by-step actions required to bring this sale to a successfulconclusion? How long should each step take? This will allowyou to track each opportunity in the sales pipeline and will alsohelp weed out the “lookers” from the “buyers” early on.

Product PlanningAs the saying goes, “Quality. Cost. Schedule. You can have any twoof the three!” Defining a new offering and getting it out the door isan exciting and challenging balancing act. The key is to do yourhomework in advance and then make skillful trade-offs.

Challenge 5How do we decide on the features for the next product?

Issue: So many requirements. So little time. Not enough dollarsto invest. And, each product has a life and momentum of itsown. Are we designing for ourselves or our customers?

Strategy: The features for future products ideally flow froma process. It begins with defining the overall objectives of thebusiness, identifying market opportunities, and determiningcustomer requirements. In the long-term, your company cansucceed or fail to the degree that product planning supports awell-considered business strategy that truly meets customerneeds. Maintaining an “evergreen” requirements database helpsease the burden at the beginning of the planning cycle.

Challenge 6Should we delay launching the new product to get morefeatures?

Issue: The promised delivery date gets closer. Commitmentsto customers have—rightly or wrongly—been made. Sales isscreaming for the new product, but only if it has the feature(s)they require. Keeping the Developers and Test people tied upadds to the cost.

Strategy: Here is where “creativity” comes into play. Ingeneral it is better to keep the train on track. If necessary tomeet customer commitments, look for options for an “early” or“pilot” release to selected customers. Also look for opportunitiesto schedule rapid follow-on releases to enable sales ahead of thedelivery of the required functionality.


Success Story

A San Francisco software company analyzed whichoperating system was used the most by its customers. Thecompany gave priority to delivering the new release onthat platform. Releases for the other operating systemsfollowed each month thereafter until the new release wasavailable on all supported operating systems. The releasewas delivered on the promised schedule and customerswere satisfied.

An enterprise software company in Boston with a six monthsales cycle analyzed their selling process and determinedthat getting a prospect to commit to a paid pilot projectearly in the sales cycle weeded out the “lookers” from the“buyers.” Also, the time to close was reduced by a month.

Success Story

Customers, Prospects, Industry Analysts

Executive Team

Development Marketing Sales

A

C D

B

Marketing is the “man in the middle”—mediating betweencustomers, prospects, Sales, Development, and the executiveteam. As such, Marketing is pulled in multiple directions.Marketing is the critical intersection between Development,Sales, customers, and the executive team.

The Role of Marketing

A. Marketing touches customers, prospects, and industrythought leaders via press releases, magazine articles,briefings, brochures, trade shows, customer councils,advisory boards, and lead generation programs. Inaddition to performing market research, Marketing alsoconducts or commissions win/loss interviews and gathersinput from customers and prospects on feature requirementsvia interviews, surveys, and focus groups.

B. Drawing on the information gathered both externally and internally, Marketing supports the executive team in developing business strategy by identifying marketopportunities and generating and executing marketingstrategies and plans that support attainment of business objectives.

C. Marketing works with Development to define requirements,plan products, and bring products to market. Marketingmust assure the delivery of a reliable and “complete”product that includes documentation, training, and support.If relevant, Marketing also addresses upgrade, migrationand “end-of-life” planning.

D. Marketing trains the sales force on new products, managesthe HQ visits of customers, prospects, and industry analysts,performs win/loss analyses, and gathers input on customerand prospect requirements.

How Marketing impacts your organization


Growth and ChangeYour company grows, the market changes, and you are challengedto turn the resulting process breakdowns into breakthroughs.

Challenge 7We’ve grown to a size that our old way of doing thingsjust isn’t working anymore.

Issue: Everyone knows that a company’s culture changesas a company grows. People are brought in who have workedat various other companies. Along with them come expec-tations about how things “should” be done. Communicationand “checks and balances” become more structured andformal. What worked before doesn’t anymore. People getstretched to the breaking point. And, the associatedbreakdowns in business process can be most unpleasant.

Strategy: Identify the breakdown in business processand treat it as a positive opportunity to mature theorganization. Also, look for opportunities to leverageinexpensive Web-based knowledge sharing technologies to foster information exchange.

Challenge 8How should we organize our Marketing group?

Issue: There are a variety of related questions. ShouldProduct Planning be part of the Development function?Should Product Management be separate from ProductMarketing? Should a Product Manager handle more thanone product? If so, how many products can a ProductManager handle? Should we have “cradle-to-grave”product management?

Strategy: There is no one “right” answer to such questions.Each organizational structure has advantages and challenges.

In general it is wise to remember that there are in-boundand out-bound aspects to marketing. In-bound coversrequirement definition and working with Development tobring a product into being. Out-bound covers the launch,training, and support activities required to bring a productout into the world. Balancing the demands of these functionsis a challenge facing every Marketing organization.

Also, it is important to remember that marketing is a multi-faceted function. Marketing comes in a variety of flavors—market research and analysis, product management, productmarketing, field marketing, channel marketing, industrymarketing, partner marketing, and marketing communications.


There are a variety of options: In some companies some ProductManagement activities are handled in Development or someField Marketing activities are handled in Sales. Or Partnermarketing may be handled in Business Development. Somecompanies form product or product line teams. A flexibledistribution of responsibilities is fine as long as all the bases are covered and it works for your organization.

Marketing ROIYou are likely to miss the target if your marketing programs are notaimed at identifying and addressing the true needs of customersand prospects in a manner that produces measurable results.

Challenge 9Are we getting the most out of our investment in marketing?

Issue: Investment in marketing is sometimes viewed as“discretionary”—at least more discretionary than other line itemson the budget. Yet there are core marketing activities that mustbe performed or a company won’t survive. Beyond thisminimum, however, there are any number of worthwhilepossibilities. How do you choose?

Strategy: In any given year, marketing programs shoulddirectly reflect the overall business objectives for that year. Makesure marketing programs are targeted to achieve measurableresults. It is also useful to conduct an annual 360 degree“marketing audit” to systematically evaluate how well you aredoing in various areas of marketing and where there would bethe “biggest bang for the buck” of investment.

Challenge 10How do we make our company more market- and customer-driven?

Issue: Many technology companies tend to be engineering- orsales-driven based on their history and the expertise of theirfounders. In one extreme, the company may only pay lip serviceto customer input, feeling that they know best and must “lead”their customers. In the other extreme, the company may impulsivelyreact to customer input in a knee jerk response. Both extremesare counter-productive.

Strategy: Customer contact needs to be built into theplanning process at all levels. Executives, Development, Marketing,and Sales need ongoing customer contact. Ideally requirementsshould be linked to the expressed needs of prospects andcustomers. Win/loss reports can provide highly valuablecustomer/prospect feedback.

The Marketing group of a start-up company was totallyoverloaded with product delivery. There were no Marketingresources to devote to lead generation. So the Salesdepartment generated prospect lists based on criteriaformulated jointly with Marketing, and then implemented atelemarketing program to pre-qualify prospects. Leads weregenerated, and the prospects’ current and projected buyingplans were documented in the summary report—providingvaluable input to Marketing.

Success Story

Success Story A software firm was being “spun out” from its corporateparent. It was critical to reassure and retain existing customers.The company sponsored 500 subscriptions to FortuneMagazine for the senior executives of its customers. Fourtimes in the course of the year the magazine was deliveredwith a special outer cover carrying the company’s message.A relatively small software company that could never affordto advertise in Fortune appeared to be doing just that. Anend-of-year survey showed a high degree of recipientrecognition and awareness, and customers remained loyal.



Ten Marketing Challenges / Summary of Challenges and Strategies

We have discussed some of the most common(and critical) challenges in software productmarketing—and proposed strategies toaddress them. The key is to be pragmaticand remain focused on identifying andaddressing the true needs of customers and prospects.

1. We’re having trouble planning the next product because we’re so busy supporting the product we just launched.

• Maintain an “evergreen” requirementsdatabase to support on-goingrequirements definition.

• Dedicate headcount to productplanning—at least one person half-time.

2. Our marketing team spends so much time working withDevelopment they don’t haveenough time to support Sales.

• Again, maintain an “evergreen”requirements database to support on-going requirements definition.

• Dedicate some headcount tosupporting the sales force.

3. Our sales reps don’t have enoughqualified leads and spend too muchtime cold calling.

• Analyze your target prospects.

• Identify key qualifying questions.

• Transfer pre-qualification to lower-level staff or outsource it.

4. It takes us too long to close a deal.How can we speed up our salesprocess?

• Define and document sales model.

• Track sales pipeline by stage in sales model.

5. How do we decide on the featuresfor the next product?

• Have Marketing support the strategicbusiness planning process.

• Focus on “outside-in” product planning—based on the requirements ofcustomers and prospect.

• Draw on “evergreen” requirementsdatabase.

6. Should we delay launching the newproduct to get more features?

• Keep the “train on the track” usinglaunch phasing and pilot programs if necessary.

7. We’ve grown to a size that our oldway of doing things just isn’tworking anymore.

• Identify and treat problems asbusiness process breakdowns ratherthan problems with people.

• Leverage technology for knowledgesharing.

8. How should we organize ourMarketing group?

• Consider trade-offs for variousstructures; determine what fits foryour company and is the “lesser of evils.”

9. Are we getting the most out of ourinvestment in marketing?

• Conduct annual marketing audit.

• Ensure that there are success metricsfor every marketing program.

10. How do we make our companymore market- and customer-driven?

• Conduct or commission mandatorywin/loss reports.

• Support customer councils, advisoryboards, and user groups.

• Link new feature requirements backto specific customers and prospects.

• Conduct or commission customersatisfaction surveys and focus groups.

pm.c

Steve Unger is a marketingconsultant living in Portland,

Oregon. For the past 15years, Steve has worked forlarge, small, and start-up

companies and helped themsuccessfully address the

challenges described in thisarticle. Contact Steve at

[email protected]

Call (800) 816-7861 or go to www.PragmaticMarketing.com to register!

Product Marketing TrainingHigh-TechEffective Marketing Programs™

Course designed for:Product managers, marketing managersand directors, industry marketingmanagers and all members of marcom.You should attend if you are responsiblefor strategic planning or execution ofprograms that build market share andbrand awareness in high-tech markets.

I. Roles and Responsibilities• Role definitions• Accountability• Models for Effective

Marketing Programs

II. Prospect Profiles• Positioning by prospect type• Prospect profiling• Sales channel audiences

III. Program Goals and Priorities• Goal-setting and projections • Market maturity model• Audience profiles• Sales funnel and processes• Lead management• Marketing program assets

IV. The Strategic Programs Plan • Impact of sales goals • Consensus-building processes• Launch plans • Success measures• Anticipating risks • Matching outcomes to budgets

V. High ROI Sales Tools• Strategic website development• Success stories • White papers • ROI documents

VI. Goal-Oriented Program Execution• Product launches • Direct marketing • Advertising and trade shows • Web marketing • Measurement techniques • Press/analyst relations

VII. Begin Again with New Clarity• Communicating program

success• The rewards of making

“mistakes”• Action plan and summary

Plan andexecute

marketingprograms

that producemeasurable

resultsEffective Marketing Programs™ is an

intensive two-day course that illustratesbest practices for programs that have a

quantifiable impact on revenue, marketawareness and customer retention.

Through real-life case studies, you willsee how companies of all sizes get their

message heard in markets both large andsmall. Take away skills and ideas that

immediately impact your results, and thenpay dividends throughout your career.


Datatel Leverages

Market-Driven Methodology

to Build Solutions that

Customers Really Want

Case Studies

For more than two decades, Datatel has focusedexclusively on higher education—deliveringintegrated information management solutionsthat help colleges and universities streamlinetheir administrative processes and improveservice to their constituents. Datatel'sinnovative technology solutions are specificallydesigned to help clients save time and money.In recent years, with the higher educationmarketplace growing increasingly complex,the company recognized the importance of enhancing the capabilities of its ownmarketing organization to better support the interests of its expanding client base.


Toward that end, Jayne Edge,Vice President of StrategicPlanning and Marketing, issharply focused on leading her team from a tactical,operational perspective to a more strategic role in thecompany. “When productmanagers think strategically,when they are freed up from an overload of sales andtechnical support tasks, theybecome extremely valuable to the company,” she says.“It’s easy to get so entrenchedin the day-to-day operational

and product issues of the daythat you forget to look up andout,” she explains. “If you aresimply keeping up with currentdemand, you are actually fallingbehind in the long run. Ourproduct managers are nowfocused on doing the rightthings at the right time. Theyare the information brokers,gathering knowledge on thecompetitive environment, markettrends, client needs andrequirements, and how we’reviewed in the marketplace.They are the market experts.They are sifting throughopportunities to find thatstrategic initiative that willmake a dramatic difference

to Datatel. That’s an entirelydifferent way of looking at things.”

Customer-CentricApproach DrivesSatisfaction andProduct Uptake

Although there are only ahandful of IT companies thatserve the higher educationmarket, competition is fierce,especially with higher educationbudgets continually being cut.

Strategic marketing, messaging,positioning, understanding howto approach the marketplace—those differentiators are buildingstrong competitive advantagefor Datatel.

To formulate its strategicapproach to marketing andcustomer service, Datatelturned to Pragmatic Marketing®

for training and methodologies.In its product managementseminars, Pragmatic offers ablueprint for strategic productmarketing that focuses oncommunicating with targetmarket segments in order toaddress high-value prospectproblems.

According to Liz Murphy, VicePresident of Professional Services,“The market is commoditizingsoftware, and service is becomingthe distinguishing factor. AtDatatel, we take a strong client-centric approach—understandingmarket needs from the verybeginning and only spendingtime developing things thatmake sense for our customers.We constantly retool oursoftware and service offeringsto be even more aligned to theway a customer thinks. Andthat is driving our success.”

The Pragmatic approach thatDatatel has implemented is apowerful contributing factor toclient satisfaction. “Our overallsatisfaction measures are up 10percentage points over last year,”Murphy explains. “That’s notan accident. We are buildingsolutions that people care about,and we are keeping them current.Customers are saying, ‘I reallyfeel like you’re listening to me.’”Product adoption rates havesoared as well. A little more thana year ago, Datatel re-engineeredand released a major new versionof its flagship product, Colleague,and the company has seenunprecedented market uptake.“More than 97 percent of ourclients are now on the currentrelease of that product,” saysMurphy. “The Gartner Grouptells us that there isn’t a softwarefirm in the world that can saythat. If our product and ourmigration strategies hadn’t beendeveloped with the customer in mind, we would never have

that level of adoption. Peoplewant what we are building.That’s the bottom line.”

Leading the Marketby Solving Problems,Not EliminatingSymptoms

Anthony Humphreys is Datatel’sProduct Manager for FinancialAid and Government Relations.He sees another very clearreason for the company’s successwith the Pragmatic approach.“Prior to taking the PragmaticMarketing courses, we were notlooking at the real challenges ofour customers. We were solvingsymptoms, not problems. Weactually started at the end andsaid, ‘The clients want these ten items fixed. If we do that,it will make everybody happy.’And we found out that doesn’tnecessarily make prospectshappy. It makes current clientshappy. While that’s a good thing,it doesn’t drive new sales orservice through the channel,”he says.

“With our strategic productmanagement methodology,we’re doing a much better jobof providing a problem definitionbefore we start building asolution. Our softwaredevelopment organizationcounts on us to set the strategicdirection and vision of theproduct—to guide the teamabout what and when to build.”

“If you are simply keeping up withcurrent demand, you are actually falling

behind in the long run. Our productmanagers are now focused on doing

the right things at the right time.”


He continues, “Now the productmanagement organization isspending time where we should—on strategic direction ratherthan being constantly pulledinto sales and tech support.That allows me to focus onwhere the market is going ratherthan where it has been. As a result, Datatel is positioned to lead the market, not follow it. The tools Pragmatic hasprovided enable us to be much more future-focused.”

A Pragmatic,Solutions FocusThat focus on the future is nowdriving Datatel to expand beyondbeing strictly a technologycompany to become a solutionsprovider. As the direction shiftstowards delivering strong,innovative professional services

packages that complement thesoftware, the company is applyingthe Pragmatic methodology tomarketing them as well.

“The Pragmatic approach is now ingrained in our culture at every level,” says Edge. “Theirframework positions us for growth.It’s helped us to have that structureon which to build and use as a

springboard. We are now usingthose principles to explore howwe can broaden our productmarketing to a complete solutions

view, applying them in the servicearena as well. In fact, our productmanagers are really becomingsolution managers.”

Murphy adds, “My services teamneeds to have a better sense ofwhere the market is headed, tobe able to fine-tune their listeningand probing skills, to understandwhat it is customers are lookingfor, to make sure that all of our

messages are aligned so we canbe more successful. One of ourkey strategic tactics for 2003 is todocument a service developmentmethodology, much as there is a product developmentmethodology.”

Pragmatic PeopleMake a Difference

“From the ground up, we builtour product managementorganization and job successprofiles on the Pragmatic map,”Murphy notes. “If you are tryingto figure out how to manage amarketing organization, thereisn’t a clearer, more effective,more precise organizationalframework to begin your efforts.”

The Datatel team also respectsthe level of professionalism thatthe Pragmatic instructors bringto the table. “These are peoplewho have done the job, who

know the obstacles,” Murphyemphasizes. “We respect theircaliber of experience, theirapproach, their attitude, and thequality of their programming. It’sa very clear, modular methodology.You can ramp up for as much asyou need at any given time—versus an all or nothing approach.Best of all, the logic of thisapproach resonates with theentire executive team.”

Edge concurs, “PragmaticMarketing has high standards for quality and best practices.They are professional, personable,knowledgeable, and flexible. It’snot just that they have developedsome rich materials and are greatpresenters. They have real-worldexperience. They have been inthe trenches. And they relay thosepersonal experiences in a funand informative manner as partof their teaching.”

“Pragmatic Marketing is the visionary in this field,”Humphreys concludes. “No oneelse is focused on technologyproduct management. Pragmaticcame along, and they broughtincredibly talented people with a fantastic combination ofprofessionalism, industryknowledge, and humor. Simplyput, they deliver expertise in aformat that’s actually interesting.You just can’t go to one of theirclasses and not come awayraving. It’s the best money I’ve ever spent.”

“With our strategic productmanagement methodology, we’re

doing a much better job of providinga problem definition before we start

building a solution.“

pm.c

Case Studies

Course designed for:Those responsible for market analysis,quantitative analysis, strategic planningand business aspects of high-techproducts.

I. Building Business Cases• Why write business cases?

• Understanding the perspective of senior management

• Defining the essential elementsof a business case

• How to get control of the situationas the CEO of your product

II. Market Sensing• Gathering information from

prospect interviews

• Effective primary and secondaryresearch tools

• Essential competitor informationand where to get it

III. Opportunity Validation• Target market segmenting

• Market sizing

• Positioning into the competitivelandscape

• Market Adoption Cycle™

assessment

IV. Planning & Analysis• Essential information sent and

received from Development,Marcom, Sales and other internalareas

• Building the pricing plan• Creating tactical plans• Building the financial model,

human resource and riskassessments

• International considerations

V. Selling the Plan• Writing and editing the

business case• Laying the groundwork with

the key decision-makers• Presentation approaches

VI. The Product (or Project)Termination Decision• Early warning signs• Gathering facts• Reasons to keep or terminate

products/projects• Evaluating alternatives

Build acompelling

business case for your

high-techproduct

Analyzing Market Opportunities™

is a two-day course that illustrates how to properly listen to customers and prospects, evaluate their input,determine market opportunities for any high-tech product—and build

a compelling business case.

The course includes a systematic,disciplined methodology to

understand potential opportunities,accurately size the market, assess

costs and evaluate risks.

A template is provided for compiling and presenting the business case. Also discussed

is how and when to terminate an existing product.

Analyzing Market Opportunities™

Product Marketing TrainingHigh-Tech

Call (800) 816-7861 or go to www.PragmaticMarketing.com to register!

Calendar of Pragmatic Marketing Seminars

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Product Manager

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A Pragmatic Marketing Publication productmarketing · productmarketing.com The Marketing Journal for High-Tech Product Managers . ... Identify and assess your company’s current