product marketing

The Role of Product (Marketing) Manager in Software Company

In previous articles, we’ve discussed the importance of the customer-oriented approach making software products and services. We also came across an idea that marketing is no one-person or one-department function. Everybody in the organization should exercise marketing approach when developing software products and be market-, not technology- oriented. Marketers, Developers, Salespeople and other members of an organization should focus on solving real problems and satisfy customers’ wants and needs providing exceptional value to customers. Easier said than done. In real life, there are huge gaps between software developers, salespeople and the customers they serve. Even within one company, developers, marketers, salespeople, designers, QA engineers and other people are so different in their ways of thinking, that there must be something or someone to bridge the market and various departments within a company to drive a product to success.

Developers are primarily interested in technologies; salespeople are interested in revenues; customers are ultimately interested in value, which, as we’ve learned earlier, is a combination of product’s quality, service, and price (QSP), called the customer value triad. The person who unites the company into a single value delivery unit is called a product manager. This person is responsible for balancing the cost of a product with the quality and functionality. Product managers act as a go-between for the product development and the commercial departments, translating technology and product features into user-benefits and Unique Selling Points (USPs). A product manager has to guide the cross-department team and focus on the right KPIs that are aligned with the current product/company strategy to ultimately make the product and the company successful. He or she also has to work with the market itself, which includes customers, partners, and competitors. To make the right decisions, the product manager needs to know the market thoroughly. That requires continuous attention and study. Without extensive knowledge of market trends, technological developments, competition, market volumes, segmentation, channels, pricing and market influencers, the product manager is ill-equipped to do the job.

A software product is not just a set of features with a price tag attached to it. A product is almost always surrounded by services, support, and the communication and distribution channels. The product manager should consult not only customers and prospects but also sales, customer service, and other departments to make sure the internal team is in line with the positioning of the product. Promotion is also important - the product manager must work closely with Marketing Communications and Public Relations people to ensure that the right message is sent out.

In most organizations, indirect sales, such as resellers, is the responsibility of the sales department. But managing a reseller is one thing – steering them in the right direction from a marketing point of view is another. The reseller channels need their own positioning and good reasons to sell your products. It is up to the product manager to bring all of these internal and external factors together and point them in the right direction.

A product manager (PM) is a weird person – someone who takes on an enormous amount of responsibility without actually being in charge. But it is important to point out that the product manager is not actually responsible for all of the departments that he or she is dealing with. PM must instead guide everyone in a direction that is ideal for the product. The success of the PM's job depends on the willingness of other people in the organization to cooperate since none of the team members working on a product reports to the product manager. The power the product manager has is the power to inspire, convince and motivate the others around him or her and come to agreements with others on what they will deliver.

What the product manager is mainly accountable for is the information handed over to the rest of the company; information that allows others to best do their job. Information in the form of guidance, directions and expectations. Information about budgets available, timelines, rules and conditions.

Moving From Product Manager to Product Marketing Manager

All product managers operate on the product lifecycle, and their responsibilities depend on the current product lifecycle stage. In the article explaining the software product lifecycle, I mentioned what it is for a product to be successful - high sales with short growth, long maturity and postponed decline periods. That’s a very simplified model representing the product lifecycle and providing the framework for measuring the product’s success. In another article, I also mentioned that money isn’t always the immediate desired response from the market. The definition of ‘successful product’ varies from company to company and also greatly depends on the current phase of the product lifecycle. If the company’s current goal is to get bigger and grow in popularity (growth stage), then the “success” at this particular stage might be measured as a market share, sacrificing the importance of immediate profits. Sometimes the KPI can be customer satisfaction or quality of services. Financial results are important for every company because without cash nothing else makes sense or is viable. The point is, while profits are the ultimate goals for almost every single firm, most of the companies shouldn’t focus on profits too much, especially during the growth stage. Profit is often a secondary goal, with some other metrics at the first place like “number of nights booked” for Airbnb, “total time spend reading” for Medium, or “monthly active users” for Facebook. These companies know that if their growth is aligned with these metrics, revenues will eventually catch up.

Product Life Cycle

Initially, during the introduction and growth phases, immediate revenue should never be a goal or a KPI. Focusing on revenues on these stages will inevitably slow down or even destroy growth. On the other hand, entering the maturity phase means the organization should shift its focus more on monetization and sales as the KPIs to make the product sustainable. That also means the focus, priorities, and responsibilities of a product manager should change over time as the product goes through its lifecycle.

There are two different roles, covering product management activities throughout the entire product life cycle which are frequently confused: Product Manager (PM) and Product Marketing Manager (PMM). Let’s take a look on these complimentary, but very different jobs:

A product manager (PM) is usually a member of a product development team whose role is to ensure the product is created, tested and released according to product requirements and specifications on budget and on schedule. By default, it’s a highly internally focused job requiring a high level of technical competency and project management experience. This role also implies active communications with other departments within a company, bringing them together.

A product marketing manager (PMM) is usually a member of the marketing department and rarely of the development team. PMM is responsible for bringing the product to the marketplace and making it accessible to various channels (distribution, communication, service). This includes various tasks from target customer identification to pricing. By default, it’s highly externally focused job.

The roles are not black and white though that’s why quite many companies combine two jobs into a single position. However, they shouldn’t since one person can rarely effectively combine the different responsibilities of these two roles. The trick with PMs and PMMs is the focus and the authority/responsibility balance at a given stage of the product lifecycle. When a product is in its early stages, the PMM role is premature. At this point, there are no meaningful market relationships or understandings to drive the future of product development. What is there, is the list of bugs and product-enhancement requests from the early adopters growing rapidly. If the list isn’t managed properly, the growth is nearly impossible. The PM is essential at the early development stage, but the problem with PMs working on the early/growth stages of the product lifecycle is that they are driven by technologies and technical solutions that they introduced as well as personal commitments made to early customers. Unfortunately, those commitments are often not in the best interest of the mainstream market customers. So once the product is in the middle of its growth stage, the PMM should step in taking over the list of bugs and product enhancements requests and the whole organization should start focusing on mainstream customer satisfaction. It doesn’t happen overnight. A smooth transition of power from a PM to a PMM matches the transition of the company from product-driven to market-driven. As the shape of the mainstream market emerges, as the needs of this market can be identified by market research, customer interviews and surveys, the more power should go to the PMM. During the early market, it’s important to be product-driven and to give strong powers to the product manager. But to fail to take those powers back and give them to the PMMs may result in stalling in the early market, never reaching the mainstream market, thus never reaching product success.

Losing power is always a painful process. But it’s required for the product to be successful. That’s why it’s important to understand the pioneer/settler nature of PM/PMM jobs. When a product is introduced to the market and starts getting its first early adopters, the product manager is fully in charge. This person is truly a pioneer, who does lots of experiments with the product and strives to find the ways to ignite product growth. In modern software development companies such people are called growth hackers. Once the product is in its active growth phase, the pioneer PM should give powers to a pioneer PMM, who is also a very active person but with a different focus (on the mainstream market), who’ll make experiments targeting the mainstream market. Once the pioneer PMM takes the authority over, the pioneer PM instead of just losing power, should find a replacement for him- or herself and start working on a new project while a new settler PM will be there with the development team until the end of the product life. The same thing should happen with the pioneer PMM. Once the product reaches its mainstream market (the maturity phase), pioneer PMM should move to another project or focus on something else where active growth is needed, while a new settler PMM continues maintaining the product prolonging the maturity period.

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