The Complete Guide On Product Management
What is Product Management?
As a discipline, product management sits at the intersection of Customer, Business and Technology. This is where the magic happens.
- Customer â Understanding the Customer need/problem/pain to be solved.
- Understanding the size of the Market that has this problem.Â
- Defining your ideal customer, their User Persona.
- Business â considering the Business objectives or targets within the organisation. Know what the business drivers are.
- These could be Increase Revenue, Increase Acquistion, Reduce Churn, Increase Profitability etc.
- Often youâll have a stern commercial person that likes to hold onto the numbers and watches carefully every month to check that youâre meeting your targets.
- this would be one of your key stakeholders (which weâll talk about later).Â
- like other stakeholders, they need to believe in your vision of where you can take the product.
- If they back you, then itâll be easier for the rest of your stakeholders in the business to come on board.
- Technology â understanding the technical solution or product that can solve the customer problem.
- Keeping an eye on technical innovations, new technologies available in the market that can solve customer problems.
Where these three disciplines overlap, innovative products & services are born. Itâs also why people who come from either of these individual disciplines do well moving into product management.
Product Management encompasses
- Strategy (Business),
- Development (Technology) and
- Marketing (Customer).
Yet as a profession, Product management is still relatively young.
In the 1930s, Procter & Gamble described product managers as âBrand Menâ with responsibility encompassing tracking sales, advertising, promotions and managing the product through customer interaction and field testing.
HP took this further by making the product manager the voice of the customer and structurally creating self-sustaining product divisions that developed, manufactured and marketed their products. HP also borrowed from Toyotaâs innovative just-in-time manufacturing methodologies that focussed on continuous improvement.
Thus, the role of Product Manager became the Intrapreneur â
- championing the customer internally,
- leading the project team,
- setting the vision for the product,
- understanding the customer and their needs,
- developing a product that solves their problem while
- providing the organisation with a return on investment and
- designing the product in a way that encourages ongoing use and viral adoption.
Product Management vs Project Management
The role of Product Manager and Project Manager has been used interchangeably in job descriptions, but the tasks and responsibilities of these two roles could not be more different.
Within a project, the product manager and project manager act as partners to deliver outcomes, but their focus is different.
While a Project is temporary and is over once delivery is complete, a product delivers continuous value and can encompass multiple deliveries.
Product managers are responsible for the entire life cycle of the product. They aim to create products and experiences that customers want, solve customer problems and set the vision of the productâs future. As such, they are close to the external customer and monitor changes in needs and tastes so that the product delivered meets the customerâs expectations.
Project managers are responsible for the delivery of the project. A project manager will aim to break down the product strategy into actionable tasks and ensure the project team can deliver. Highly organised, the project manager oversees the budget, resources and schedule of the project. They manage risks to the project timelines and works with the internal team to deliver.
Product managers are concerned with customer behaviour with a focus on problems and pain to solve for the customer. Using real customer data, they work on what product or feature or experience to build to create value for customers. Intensely curious and innovative problem solvers, product managers understand the end-user and problem-solve to produce valuable solutions for customers.
Project managers are focussed on execution and delivering. They are practical, structured and manage multiple internal stakeholders expectations, one of which is the product manager. The project manager is concerned with planning, organising, communicating, risk management and conflict management with the end result being delivery of the project.
Project management makes sure the train runs on time. Product management helps design the train.
What is the process of Product Management?
The product management process can largely be thought of as the execution of the product development process. Product Managers are responsible for ensuring the right amount of due-diligence has been done to steer the product in the âmost-rightâ direction based on collected and available data. It involves a combination of research, analysis, creativity, prioritisation and execution.
The product strategy
A well-defined Product Strategy empowers the team to focus on the right things and move in the same direction. While the goals for a product are found in the Product Vision, the Product Strategy describes how these goals will be achieved and identify the milestones.
To craft an effective product strategy, itâs important to first understand the current state of the product (features, experience, customer perception, customer benefits, competitor comparison, differentiation), the business strategy and goals (who do we want to be when we grow up) and the external market conditions impacting the product (what external factors help or hinder our ambitions. How can we mitigate external risks and/or take advantage of external support).
What are the elements of a good product strategy?
A good product strategy can only be created with some key constructs to support it and inputs to shape it.
In ensuring your product strategy is good, you need to take into account:
- The product vision
- The business strategy
- The business goals/OKRâs
- Market and Competitor movements
- Current product performance
- Existing + Emerging technologies
- The ecosystem your product exists in
- Other players who can support/partner with you
- Current + emerging business models
- Revenue streams and concentration
A good strategy involves:
- A large frequently felt problem that needs solving (A pain thatâs big enough for a customer to pay for a solution for)
- A big market
- Few ideally inferior competitors (or none at all)
- A defensible solution (tech, talent, market adoption, solution superiority)
- A solid brand
The product vision
Product vision can be defined as the ingenuity that enables a product manager to turn a business strategy into a working product.
Your product vision should be an answer to the following:
- What problem is our product solving?
- Who needs our solution?
- How can we fix customer problems?
- How are we going to go to market?
- What is our business model?
- How can we measure the success of our products?
A clear product vision is essential to building a successful product and will enable you to:
- Unite your stakeholders (marketing, finance and technical teams).
- Motivate your team and stakeholders.
- Anticipate how, from a technological perspective, you are planning on building & delivering your product.
Product vision is even more important for agile teams than for teams working with more classical development approaches. In agile development, the features you build and the order in which you build them will never be set in stone – this makes product vision all the more important. At the beginning of every development cycle, your whole team should be able to understand how their upcoming work fits with your productâs key definition and objectives.
The product roadmap
The product roadmap should not be confused with a project plan. Roadmaps are a forward-looking view of what things youâll be working on to achieve the goals of the product strategy.
Roadmaps take many shapes and there is no silver bullet for what type of roadmap is best, but the primary function of the roadmap is to communicate which opportunities are being chased when.Â
A product roadmap should be clearly aligned to your strategy and OKRâs (or whatever other strategy deployment framework you use).
Roadmap Resources
Des Traynor (Co-founder of Intercom)
The Product Life Cycle
Back in 1966, the economist Raymond Vernon came up with the 4 stages of the Product Life Cycle. He observed that products would enter the market, enter a growth stage, flatline during maturity then decline in use in the final stage of the product life cycle.
This model is valuable to forecast sales trends, market targeting and positioning, management of a product portfolio and focus investment in products.
There are 4 stages in the Product life cycle:
- Introduction Stage
- Growth Stage
- Maturity Stage
- Decline Stage
Slide credit – SlideGeeks
Introduction Stage
In this stage of the product life cycle, a successfully developed product would be introduced into the market. This stage is marked by substantial investment in marketing and advertising with campaigns focussed on increasing awareness in the product, its benefits and uses. This stage is usually marked by negative cash flow, with often high unit costs (for physical products), high marketing costs to boost awareness, while sales are slowly growing.
The aim at the introductory stage is to encourage customer awareness and adoption.
For innovative new products, you may consider the following pricing strategies:
- Skimming or pricing your product at a premium to capitalise on early adopters, who value the product innovation and have a high willingness to pay, or
- Penetration pricing to increase market share as quickly as possible and gain first mover advantage before competitors enter the market or new technology renders your product ineffective.
Growth Stage
In the second stage of the product life cycle, consumers are aware of the product and its benefits and demand for the product grows. The greater demand leads to an increase in production and availability of the product. With economies of scale, unit costs fall and cash flow should become positive as sales are accelerated. This all attracts new competitors who try to replicate your product and success.
At this stage, to keep ahead of competitors and continue to innovate, you may improve the product with new features and options or increase distribution and promote to a wider target customer base.
Maturity Stage
In this stage, the product is the most profitable as costs of production and marketing decline. Consumers are aware of the product and know they want it, so there is less of a need to invest as heavily into marketing campaigns. With greater efficiencies, costs decline and for market leaders, profit increases. Sales start to slow as more rival competitors enter the market and fight for market share. Weaker competitors will exit the market and sales will start to slow.
The aim is to maintain product profitability and relevance in the maturity stage for as long as possible and avoid the decline stage of the product life cycles.
Strategies for products in the mature product life cycle stage include:
- Exploring new markets â either new geographical areas or targeting different customer segments
- Redesigning packaging â to renew interest in the product with subtle changes or appeal to new markets
- Reducing price â to appear more attractive to customers
- Enhance the product â and add valuable new features and improve the experience of the product
- Advertising â to remind the current audience and attract a new audience
At the maturity stage of the product life cycle it is critical to understand triggers for customer churn and actively put customer retention measures in place.
Decline Stage
During this final stage of the product life cycle, the product starts to lose market share and sales begin to decline. Profits and cashflow falls as excess capacity and unit costs increase. If the market for the product is declining (e.g.: the market for VCRs or DVDs), competitors start to leave the market and those remaining aim to squeeze out any remaining profit before the market become unsustainable.
There are four key reasons products enter the decline stage of the product life cycle:
- Technological change
- Change in consumer behaviour and tastes
- Increased competition
- Failure to develop the product
Strategies for products in the decline stage of the product life cycle include:
- Reduce Prices â to remain competitive and slow down the decline in market share
- Support Customer Loyalty â stay close customers and reward them for their loyalty
- Reduce Costs â such as marketing spend
Before finally exiting the product.
Source: Lumen
However, the Decline Stage of the product life cycle is not always inevitable.
While the length of each stage of the product lifecycle is different for each product and market, strategic decisions made impact where the product sits within the product life cycle.
Types of Product Managers
There are as many different product titles as there are types of product managers.
Generally there are 6 different types of product managers â technical, analytical, marketing, growth action orientated and visionary product managers.
Within these groupings, there are product managers who focus on B2C and those that focus on B2B. There are those whose products are physical and tangible products, and those whose who deliver services to their end customers. There are product managers whose products are in the mature stage of the product life cycle and those whose products are in the introductory stage or growth stage of the product lifecycle. There are also product managers whose products are in the decline stage of the product lifecycle.
Based on the product life cycle, who the end customer is and what problem the product solves, the product may need a different type of product manager.
One thing is certain, the demand for product managers is increasing. According to the January 2020 Jobs of Tomorrow report from the World Economic Forum , product development roles, such as product owners, were listed in the top 10 roles needed in the future.
While the role of product manager sits where customer, business and technology overlap, great product managers often come from one of these disciplines.
Technical Product Manager
The Technical Product Manager has a strong technical background and works more closely with the engineering teams than the business, marketing and sales teams. With a computer science or engineering degree, these product managers focus on how the product technically works, how it technically compares with competitors, emerging development opportunities and technology trends. They are internally focussed and work with the technical teams to provide requirements and user stories. While the technical product manager may lack marketing aptitude they make up for in the relationships they have with the technical and delivery teams. Often found at highly technical companies like Google, AWS or Microsoft. Similar roles include Product Owner.
Data or Analytics Product Manager
The Data or Analytics Product Manager has a strong focus on data management and analysis. Prior to becoming an Analytics Product Manager, they may have been in an analyst or data science team with experts at SQL or python. One of the most informed product manager types & in strong demand with ML or AI products. These PMs may be found in a small start ups, creating data based UX or work with a data scientist. Best at analysing and optimising where there is available data rather than innovating and creating new functionality where there is no data.
Product Marketing Manager
Those Product Managers with marketing or more generalist background may find themselves in Product Marketing Manager roles. A product marketing manager keeps an eye on the market and customer needs. They know the customerâs goals, motivation and persona. They have a strong understanding of which product experiences and features will sell and which wonât. They may be less involved in the technical day to day world of bug fixing and technical roadmaps and instead focus on product positioning, pricing and messaging – driving revenue, creating case studies, customer facing content, press briefings, product testing, pricing analysis and competitor comparisons. As the voice of the customer, theyâll conduct customer research and validate customer needs and benefits. Without a technical background, theyâll need to work hard to build trust and relationships with the technical delivery team.
Growth Product Manager
A highly sought after role over the last few years, the Growth Product Manager focuses improving a certain business metric, rather than the end to end product experience. They may focus on any stage of the product customer journey and run experiments on a micro level to improve a specific metric. At the start of the customer journey, their focus could be conversion rate optimisation. For existing customers, it could be improving the rate of upgrades or reducing the percentage of churn.
Action Orientated or Get Shit Done (GSD) Product Manager
The Action Orientated or GSD Product Manager is a strong problem solver. They donât take No for an answer and are laser focussed on business goals at all costs. With their lack of relationship building skills and stakeholder diplomacy, the GSD product manager often burns bridges in their quest to delivery on time. They often step into the role of others in the team, when they donât perform which can speed up delivery but also burn themselves out.
Visionary Product Manager
The rarest of product managers is the Visionary Product Manager. Like Product Marketing Manager, they look at the big picture, have a strong understanding of the market, customers and potential customers. The Visionary Product Manager plans in years, rather than quarters. Theyâll look for bigger industry trends, question how the competitive landscape will change over the next 3 years and ask how each feature fits into the plan to become the undisputed leaders in the chosen field. Often the visionary product leader becomes a founder at a start up who is great at inspiring, selling the long term vision and linking tactical decisions to this vision, but they can overlook the details.
Irrespective of what type of product manager role you may find yourself in, the most successful product managers are continual learners, curious generalists, ruthless at prioritising, passionate about their product, able to focus on detail and big picture and an evangelist for their product.
If the Avengers were Product ManagersâĶ
Roles & Responsibilities of the Product Manager
What do you need to be a Product Manager?
Thereâs no finite skill set for a Product Manager, but there are absolutely skills and capabilities which will help you be a better Product Manager and help you find the right thing to build and figure out how to build it right.
The key things youâll need as a Product Manager are:
- A deep understanding of UX design and research
- Problem solving & Emotional Intelligence
- Data inquiry and analysis skills
- Sharp strategic business acumen
- Marketing and Market research skills
- Strong knowledge of technical systems, capabilities and architecture
- Presentation, influencing, leadership and communication skills
- A general interest and passion for products and what makes a great one
What are the skills of the product manager?
A broad range of skills and knowledge spanning business, design, technology, strategy, marketing and domain are required to be successful. As a product Manager youâll be expected to be innovative, creative, commercially astute, strategic, tactical, analytical, communicative and influential.
What is the role of the product manager?
In Ben Horwoitzâs seminal essay âGood Product Manager/Bad Product Managerâ he writes âGood product managers know the market, the product, the product line and the competition extremely well and operate from a strong basis of knowledge and confidenceâ.
Ultimately product managers lead, plan and execute successful, impactful product development. Their responsibility is to analyse, strategise and de-risk the companyâs investment into development of new products/features. This can be achieved through strong market & customer research, diligent design process. Finally, prioritisation of initiatives based on the significance of the opportunity/problem and impact on business performance.
Working with a cross functional team Product Managers develop & maintain a roadmap of initiatives. Initiatives are based on informed hypotheses of which product developments will have the greatest impact on product and therefore business success.
The roadmap should reflect and be directly aligned to business strategy.
Top Resources
John Cutler (Amplitude)
Source: Medium
How much do product managers make?
Given the complexity of the role, the rare mix of skills required and the importance of the outcomes product managers are expected to deliver, compensation is normally reflective of the difficulty and importance of the role.
In Australia, according to available data, and a product manager you can expect the following at different stages in your career (keep in mind that in many cases your salary may also be packaged with additional perks, bonuses and/or options or equity).
|
Product Manager: |
$90-120K |
|
Senior Product Manager: |
$120-160K |
| Head of Product: |
$160-220K |
| Chief Product Officer: |
$220-320K |