I was working with an R&D leader in a large manufacturing firm with the focus of jumpstarting vibrancy in their core markets. The presenting issue was the sales force was reporting that their portfolio did not have the gravitas it once did, and the competition was taking advantage in some of their most profitable niches.
The first step was to look at as much data as we could find. When we were doing the fact-finding, we did a backward look at what they had recently released and how it was performing in each market. We pulled data by geography, customer, and product.
We then did a review of the business cases of record compared to the actual in-market performance. We looked at not only how they did individually, but also the trends over time.
Patterns began to emerge – there was a period where the team couldn’t miss, and everything they released exceeded the benchmarks. Then things began to tighten up, and recently, they actually had trouble even meeting the cost of product development.
When we went a bit deeper and drilled into how the R&D team had done their research and projections, a common item appeared: this firm had come to rely on its sales team as the core voice in the planning and execution of new products and services.
This approach works when the market is very predictable and the wind stays in the sails. When the market alters course, however, it’s very common for this approach to get out of sync fast.
The tricky bit is that the results don’t show up all at once, but tend to result in incrementally weaker performance. This, in turn, leads to weaker performance in the P&L, but not catastrophically.
Then it happens…you release a product that lands like a thud.
Why Does This Happen?
To get to the core of this question, we need to think like the end consumer, be it a business or an individual. When a firm is fresh in the market, many times it has done the work to largely define its niche on its own. All that needs to be known about the product or service is resident in the firm. The distribution and development teams are in close alignment, and they, in turn, are working with clients who are early adopters.
As the market matures, the client base shifts to fast followers and competitors begin making entries with “me too” offerings.
Suddenly the firm that had all the early insight is missing from the conversation. This leads to overconfidence by the firm, and rather than doing the much harder end-client use research, they rely on what sales tell them.
Keep in mind that sales teammates are not being duplicitous, they really are relaying what their clients are reporting.
The issue is that the end-user is not reflecting their true reasoning to their sales associate.
Why is this?
- It’s uncomfortable for the end user to tell the sales lead the truth when you have chosen not to go with them. So what do they say? The number one excuse will be cost. The second one will be performance that may or may not matter.
The anecdote: The product manager needs to do some detective work. They need to integrate these scraps of information and get to the front lines in the market. You can find this through in-person client visits, trade show interactions with thought leaders or deeper discussions with value chain partners.
2. Clients don’t always know why they make a decision. When forced to give a reason, they default to things like cost, quality, or a feature, but the truth is that they may not know. There are typically several shadow influences in a firm that are integrated to get to the final decision.
The anecdote: You need to spend some time mapping the real influence environment for products or services. The full map should include everyone who touches or influences usage. This includes the receiving dock, warehousings, purchasing, planning, manufacturing, design, and manufacturing engineering. Once you have these influencers mapped, apply your insights from Step One to get a much clearer view.
3. In this day and age, there are always alternative choices outside the core market. If you are not looking for substitutions, you may well fool yourself into believing that you know the full picture.
The anecdote: It takes a skilled “jobs to be done approach” to find all the potential competitors for your functional role. Take the map you built in Step Two, and look at related industries or services to see how they are solving the issue. With digital transformation, it’s highly likely if you rebuilt your product today, you would not do it in the same way. Now is the time for you to discover this before your competition slips into the lead.
All the above items put the insights our sales team brings to us as a disadvantage at best and blinds them from key changes at the extreme.
The paradox is that you have the best vantage point to understand and change up your product and service in advance, but you need to move your horizon of focus. To get a richer set of data, deep, need-based work needs to be regularly completed by the product team members or third-party analysts, who can deliver on point, contextual data.
It is very tempting to go and spend time in the field with the sales force and use those inputs as direct insights into the portfolio development process. But as we’ve shown above, this approach will win you a friend or two in the sales force but is highly likely to lead you to develop products and services that don’t meet the needs of a critical mass of your market.
If you’d like some help on this journey, I would be happy to talk. Please reach out to me at 847-651-1014 or use this link to set up a 20-minute dialogue with me directly in my calendar. Thank you.
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