Market forecasts- how I would get them wrong – 2

Assumptions, B2B, Marketing, Product Management, Sales

In yesterday’s post I wrote about how your plans and forecasts go wrong, if the product on which you have based your service model itself doesn’t succeed or the OEM loses focus.

Today we will look at other aspects where because we didn’t see the obstacles in advance, we couldn’t meet our forecasts. This is again from a B2B perspective where we were involved in direct sales to customers.

One big gap which generally arises when we the product managers, do forecasts, is discounting the human factor. We are so focused on the positives of our product or services that we forget that our product has to be sold by someone. I have tried giving targets and I have tried to get sales people to create their own targets and I have failed in both situations.

The key reasons I think, are because we believe that human beings will work consistently like a machine. We lose focus quite fast. If you have to ensure that your forecasts don’t fail then you need to incorporate the factors which can get your persons de-focused.

So think in terms of what all obstacles may come up that you will need to face and what will be your plan. This doesn’t mean that other things can’t go wrong. Its about figuring out what all you can think of in terms of the obstacles. Also understand that I am not looking at moves your competition will make.

As an example one project execution has not gone as per schedule….and your sales person has to hand-hold the customer. How will he make the sales calls then. What happens if half your sales force leaves together or spread across the year and you are not able to hire the right kind of sales people on time. In B2B sales where the lead times are high getting the new person fully operational is a very big challenge. Same could happen on your delivery side.

The more assumptions about your plan that you can call out in advance, the better you can work your forecasts.

Till next time then.

Carpe Diem!!!

Market forecasts – how I would get them wrong

Assumptions, Learning, Marketing, Product Management

In product management, one of the key things that is expected is building a market forecast and then getting a budget approved.

Being in a services space, our services were centered around some software products. Which meant that if the software products didn’t sell our forecast would be worthless. So the OEM being able to sell the product was critical. As an example if SAP becomes a leader in the ERP space then all the service providers who have capabilities around SAP have a large market to target and their business will grow.

Generally I used to map all the people, at the OEM, who were involved with the specific product. These people would also help lead us into customer requirements.

Now the challenge is that most people who are part of the same team will generally always give the same pieces of data. Therefore there was a bias in the data that was being fed to me. Now since I was also invested heavily into the relationship with the OEM, I was also not willing to see if there were somethings about the data which were not ok.

Just to put things in perspective, this same method had also made me immensely successful as a product manager. The key was that at that time the products were successfully getting sold by the OEM, so that momentum also helped us sell a lot of the services.

As they say , failures give you lessons , to succeed to the next step. I realized I needed to meet people who were not involved with that product within the OEM and outside to see how they were performing. I also started asking questions of why its not a good idea to go with that product.

This helped make my investments into building service capabilities around specific products more rational. It also helped me push the technical team to create more cross functional capabilities.

As a product manager or marketing manager you have to learn to find a way to not fall into the dual traps of group think and confirmation bias.

Till next time then.

Carpe Diem!!!

Working backwards from the customer result- Part 4

Assumptions, Customers, differentiation, Marketing, single target market

Till now we have looked at the Future Reality tree, then we have highlighted the unsaid assumptions so we don’t miss a ‘snake in the grass’ which can mess up our plans. Then we identified the various use cases for a simple regular item like engine oil for cars.

Now let’s move forward with the example of the engine oil for cars. We identified OEMs (brand owners like Ford, Mitsubishi etc.), service stations and gas stations.

Lets take first – Gas stations. There could be gas stions which are right in the heart of the city and there could be those which are on the Inter State highways. Both sell to retailers who come to fill gas and may ask for a top-up. But the ones on the highway will fill a larger amount of gas because they may be traveling long distance. Can you think of how you can package your engine oil sales with the higher intake of gas….

On the other hand the person who is taking gas in the city may not get his engine oil filled because he can send his car for service during the week end. So the gas stations in the city may see a lower number of people asking for engine oil versus the ones who are traveling long distance and want to have a hassle free ride.

For the product management person, it is now important to figure out the kind of packaging she will do for these 2 different kinds of gas stations , the kind of pricing options, the kind of promotions…..there are so many ways to get creative to figure out how you can work through different markets within in a niche also.

But if you think of only engine oil as the niche then it becomes difficult to think of differentiated strategies. The moment you think from the end result – a person wanting a hassle free long distance ride you can start getting creative.

One person whom you should listen is Dean Jackson on his podcast morecheeselesswhiskers.com and another podcast that he does with Joe Polish ilovemarketing.com. Just listening to them will get your creative juices flowing.

Till next time then

Carpe Diem!!!

Working backward from the customer result – Part 3

Assumptions, Customer Delight, Customers, Marketing, Product Management

Now from here onwards, things get interesting. We have worked on the Future Reality Tree. We have identified the possible chokes / constraints in the system. We have also exposed the unspoken assumptions in our thought pattern.

So now we realise that the same Product or Service can be used for different use cases. And based on the use case the delivery can be different, the users can be different and therefore the method to reach them to give them your message can be different. This is where the role of product management stands out.usto

Lets take a very mundane example of an everyday product – car engine oil. Every car needs it. There’s not too much differentiation. Now the engine oil can be sold to the OEMs – here its a bulk purchase. It can be sold to the authorised service centres of the car companies – it will still be bulk purchase but the quantity and therefore the negotiations will be different. And you can sell it at gas stations (so you have to talk to multiple gas stations and the quantities are smaller) And you could also sell it via maybe big box retailers.

For each of these different markets your packaging would change, the people you connect to for getting the deal change.

So you identify each segment and how you will reach them, what are the dynamics. A big OEM may not want to add another vendor to their existing suppliers even if you have better product specs, because it can hamper production/roll-out schedules.

On the other hand a gas station may only keep small quantities of small size packages. Since she already has existing suppliers giving the products why should she look at yours.

This is where your true marketing creativity comes out, when you start working backwards from the end result.

Till next time then.

Carpe Diem!!!