One thing I always try to remind myself of, is that in the end, my job is to make the business successful. Product Management is a business optimization function. In short: get the most valuable products to market with a limited set of development resources to generate enough revenue to meet or exceed the business goals.
Now, given we work in technology, there is a lot of pressure to “innovate”, to create new technological differentiation against competitors, to develop the next “big thing”, or produce a new or novel offering that can be positioned uniquely in the market.
And, while there is nothing wrong with any of that, it is important to remember that although those things may be important, they are not paramount. The most important thing to do is address market needs more effectively than anyone else. This could mean doing the more mundane things like playing well in their existing environment, or providing platform support, or creating command line tools, or making sure the products are easy to use.
None of those things may seem all that exciting or novel, but they are important to customers who must use these products to meet their business objectives. There is no point creating a unique product showcasing great technology that few people want to buy.
Keep in mind that technology changes much faster than many people’s abilities to accept that change, and one of the best things you can do for customers is to actually help them mitigate that change where possible.
Case in point. Back in the early days of Java, I was product manager for a line of Java components. Java was growing and changing quickly and Sun was deprecating APIs regularly. One of the things we did was to provide consistent APIs to our customers so that as they moved from Java (1) to Java 2, they didn’t need worry about those changes from Sun. In short, we provided them a layer of insulation from the underlying technology changes. This was hugely valuable to customers and helped our business as well as our reputation as a company that delivered real value to them.
In the end, optimizing for the business success, and NOT simply technological leadership, should be the goal of every product manager.
A question was recently posted in a number of Product Management discussion groups. It read (in part):
…I am working on adding a subscription based pricing model for our product. I have read articles that talk about the “rule of 17″ that suggest a monthly payment should be 1/17th of a perpetual license fee.
I have structured the models so that the “crossover” between the License fee model (including maintenance streams) and the subscription model was sometime in the first half of year 2. I have seen 3 year models as well.
What do you use or what have you seen? Have you offered both model for a time and if so what are the conflicts (if any) that arise?
It can sound very tempting to provide a subscription alternative to your own enterprise software, but you need to think beyond simply price, and think through the evaluation model, the sales model, the expense model (you’re now taking on the cost of hosting/operations), and how you go to market, convert leads etc. I’m assuming here that the subscription pricing is for a hosted or SaaS version of you current on premise software?
The approach to take is to start from first principles, and define the value proposition for the end user or customer.
There is a real tendency if you already have an on premise solution to:
ensure you don’t cannibalize the revenue coming in from that solution
use the pricing of the existing solution to determine the price of the SaaS version
If you go down either path, the subscription solution is likely to fail.
The first one will always put the existing product ahead of the subscription based product. This is what happened with Siebel on Demand. The existing business had to be protected from encroachment or cannibalization by the on demand business and it hampered the on demand business significantly. Your company will really need to shift it’s thinking to manage this well.
The second is tied to the first, but also ignores a really great opportunity you have to define a true value-based and scalable pricing model that could generate more revenue and have significantly higher customer retention than the current pricing model.
Spend some time with the target customers and understand the value proposition from subscription based pricing, and do some price sensitivity testing with them. This should really help you understand how the pricing can provide value. It may also show that there is no appetite for subscription based pricing, but I’m assuming that is not the situation in your case.
One of the interesting things about subscription pricing is that the money will often come out of OpEx budgets in companies whereas for traditional enterprise pricing, it will come from CapEx budgets. Now a dollar is a dollar, usually, but whose budget it comes out of make s a big difference in how people perceive price.
Additionally the pricing model has to take into account the true value delivered by the software. It is very easy to think of per seat per month or per user per month pricing. It certainly worked for SalesForce.com. But the beauty of subscription pricing is that you are not tied into that model or one model for that matter. But whatever you do, keep it simple! Enterprise pricing is ridiculously over complicated. Use the subscription pricing exercise to address that problem.
Figure out what the key units of value are from a customer perspective and use those for the pricing. There may be multiple models based on user scenario. While you don’t want to force existing customers to move to subscription pricing, you’ll have to figure out a transition pricing model to move them over (and possibly back) if needed.
Think of it this way. If one of your competitors came out with a competitive subscription based offering to your current product, would they simply take your pricing and apply the “rule of 17″? No, they’d figure out a compelling value proposition and pricing model and use that as a weapon against you. Get one up on your competition and do it before they do.
You know, sometimes I wonder why I’m not working in consumer products. Not consumer software, but consumer products.
I’ve joked about this with my software product management friends before. Life would be a lot easier it seems. Forget about all the detailed technical work, and all the efforts to keep pace or leap frog the competition, and all the tedium of ensuring compatibility with 3rd party products. Just make the packaging bigger, or smaller, or add a nice lemony scent, or blue dots or something else, and launch a big new campaign to get customers!
One recent consumer campaign, at least here in Canada, has just got me laughing. Ah, if life in the technology industry was only that easy. Take a look and tell me what you think? And if you have any ideas about how to achieve something similar (and meaningful) in the tech industry, please share.
While clearly these two videos are tongue in cheek, the campaign is quite real. Here’s a link to the home page.
Clearly this is a publicity campaign, and the fact that I’m actually writing about it shows it has some impact, but does it make me or want to go and buy Shreddies? Nope, I think I’ll stick with Muffets.
When I talk to Product Managers about Win/Loss Analysis, one of the first steps I suggest is to analyze the sales funnel to find out where we are losing traction. (Normally I’m focused on places we’re losing traction, but the same thinking applies to figure out what’s working.) From there, we design the win/loss analysis to focus on the stage in the selling cycle where we are having the biggest problem.
The trouble is that funnel ratings are all over the map. There are so many problems … where to start? Some of the most common problems I’ve seen are:
sales people don’t use the CRM system reliably, so it can be very time consuming to determing where we are losing, or getting, traction
the ratings systems measure activity by the sales person, but don’t measure activities that the customer performs. Customer activity is a meaningful indicator and should be the primary thing we measure.
the resolution of the ratings systems are too high or too low. If there is no rating between “we know their name” and “onsite presentation”, then we really don’t know where we’re at with the top of the funnel. Similarly, if we have too many ratings, the sales people will stop using the ratings, or they will be used unreliably.
As I have said before, I like the CustomerCentric approach to selling. They outline a good way to measure activity throughout the funnel; to advance to a higher rating, the customer needs to agree to something or take action on something, and the CCS approach holds back valuable resources, information, and expertise from the prospect until they perform those actions.
The truth is though, it’s more important that your company trains, uses, and enforces some kind of sales process. Just using one is more important than which one you use. And even if your sales people don’t use a disciplined approach, you can use a framework like CCS to do your own querying for specific opportunities.
Later this week I’ll describe a high-level framework that I like to rank progress through the selling and buying cycles.
In my first post on this blog, I mentioned that I had taken on a full-time sales role for the first time. Every one of you should consider a role in sales for a year or two … it is a real education.
It’s not as though I hadn’t “done” sales before. In product management and corporate strategy, I participated in countless sales engagements starting at the first conversation and leading to the roll-out / deployment planning. I have trained dozens of sales people on my products, and after taking Customer Centric Selling myself, I have even been a coach in a CCS seminar put on by Philippe Lavie, a consumate sales person himself.
It is so easy to criticize a sales person, and how many times have I done that myself? Oh, we used to make truly geeky jokes that sales people are like Stateless Session Beans (thankfully the sales people didn’t understand why this got such a laugh). They’re so coin operated. Just order takers. They don’t even understand the product.
I still do believe that the really good sales people are very rare, and I have strong opinions about what makes a good sales person. But I am beginning to understand, in my bones, the real difficulty of the sales job, and it gives me a lot more empathy for the coin operated people in sales. Every phone call matters. I am constantly negotiating. When people don’t call me back, what do I do? (Next!) How do I set up this relationship so that I maintain my own power and not give it all away to the propsect? Will the deal close in time? Forgetting to log my activity in salesforce. Forgetting the status of an account when asked by my boss.
I really do enjoy selling and sales, and I will be doing this for some time to be sure. Personally I think I’m good at it and I’ve had some wins, along with some errors that led to failures. And certainly some failures that were not my fault, and wins for which I should take no credit. There is a certain Tao to it all.
But I caution you … the next time you get upset with a sales person, think again. It’s like the man said: When it comes to the breakfast, the chicken is interested, but the pig is committed. And when you are sitting in product management, the pigs in sales look at you and all they see is a chicken. Drop off your eggs and keep moving buddy, I’m making some bacon here.
I am personally glad that I started on the product side. But after sitting in sales for just about 9 months now, I can’t recommend it strongly enough: At some point in your career, take a commissioned sales position, and not just an SE role. Be the seller, and stay there for a couple of years. Stay there until you get it right.
In it, Steve writes about the need for domain knowledge for technology workers, particularly in regards to the business they are in and the needs of their market. Whether talking about engineers, marketers, sales people or product managers, everyone needs to understand the company’s strategic objectives as well as some aspect of market dynamics.
In this case, I can’t really argue too much with Steve. If key people in a company don’t have domain knowledge, then the question “Why not?” must be answered. Do your competitors have domain knowledge? Most likely, especially if they are leading you in the market. How can anyone run any kind of successful business without domain knowledge?
For technology companies, the questions to consider revolve around defining exactly what “domain knowledge” is, and how best to acquire and maintain it.
Domain knowledge, particularly in B2B technology companies, can be quite complex. Not only do Product Managers need to understand the overall market, but also market specifics that vary from geography to geography. They need to understand overall trends in the market, as well as technology and economic trends that could impact product performance. Then come the questions related to competitors — who are they, what are their strengths/weaknesses, and where are they heading? Finally, Product Managers need to understand their target customers in detail — what they do, what they find valuable, how they currently use your product (or one of your competitors), and why they would value yours.
All of these areas of knowledge constitute domain knowledge. The reality is, very few individuals can have a full understanding of all of this information. I believe there is a myth that the lone Product Manager can collect, analyse, understand and then react to all of this information. The reality is that technology companies should look at the Product Management function as opposed to the individual Product Manager, as the locus of this knowledge.
Clearly other teams in the company also have domain knowledge, but Product Management needs to collect it and put it all together to make a coherent picture out of it. To do that well, it can’t be the responsibility of a single individual. Companies should be thinking about Product Management teams for each of their products or product families.
Some companies seem to succeed in spite of themselves. You’ve all heard of (or maybe even worked for) at least one of these kinds of companies. They had an innovation that lead to a successful product, but couldn’t repeat that success. Why not? One of the principal reasons is lack of sufficient domain knowledge to make the leap to a second successful product.
Case Study
Remember Delrina Corp? The makers of WinFax? Back in the early 1990s, WinFax was the clear market leader for faxing on Windows operating systems. Everything in the company was focused on the Windows operating system.
I was a technical writer at the time, and was hired to join the “small but growing” Macintosh team at Delrina. The goal was, as I was told, to build out a whole product line of Macintosh products, with the first product being fax software. And who knew fax software better than Delrina, the people who invented it?
At the time, the core Macintosh development team consisted of three people: the lead (and sole) developer (Don), the QA engineer (Mike) and me (the tech writer).
During the development cycle of the first version of Delrina’s Macintosh fax software, a number of things happened that made me wonder if I’d made a good choice coming to Delrina.
Given that the three of us (Don, Mike and I) were virtually the only people in the entire company who had actually used a Macintosh, most people there only experienced the product through the documentation that I was writing (on a Windows PC using Ventura Publisher nonetheless — not my choice!).
On the Macintosh, the software worked by setting the fax-driver as the target for print jobs. This was done via the Chooser in the Macintosh environment.
At one cross-team meeting to review the development and documentation status, someone, I don’t recall who, asked:
“What are these Chooser and Finder things? Who named them that? Can we change them?”
I kid you not. I couldn’t make that up. Almost immediately Don looked at the person and stated, almost robotically:
“No we can’t change them or rename them. They are fundamental to the operation of the Macintosh.”
I gathered that this was not the first time he had uttered that line.
Later on, the issue of the product name came to light. At another cross-team meeting, it was announced that the naming committee had decided on a name for the product, and all software, documentation, marketing materials etc. should use the name. The name was….hold your breath: WinFax Mac.
Now, if you recall back to the early 1990s, it was the height of the Macintosh vs. Windows fight. Users in the Macintosh community were pretty vocal about their disdain for Windows.
Mike and I looked at each other and waited for Don to say something. Don made an attempt to hide his frustration and then tried to calmly explain why the prefix “Win” as in WinFax was not an acceptable name for a Macintosh product.
The Product Manager would have none of it. He explained the enormous brand equity “WinFax” had, and how strongly attached the name “WinFax” was to fax software and that the plan was to leverage it in this new foray in the Macintosh market. Mike also tried to explain the issues with using “Win” in the name of a Macintosh product and was also shut-down.
A couple of months later, at yet another cross-team meeting, the PM announced that feedback had been received from a large number of beta customers indicating their dislike of the product name, and thus a new name would be found without the prefix “Win” in it. Mike, Don and I looked at each other and rolled our eyes.
Once the project was complete, I decided to leave the company and find employment elsewhere. Even back then, early in my career, I could see the dark days ahead if I stayed at Delrina. I found work at a startup, but continued to track Delrina and their Macintosh product line. A few months later, I saw a review of the product in a computer magazine. The review was OK, but the documentation got a 4 out of 5! I still have a copy of that manual.
As it turned out, the fax product was Delrina’s first and last Macintosh product. Aside from Delrina’s lack of knowledge about the Macintosh computer and user community, they also didn’t understand the dynamics of the Macintosh fax market. Delrina had succeeded in the Windows market by being first to market with an innovative product, and then controlling the channels by signing OEM deals with virtually every PC fax hardware manufacturer. In short, virtually every PC faxmodem that shipped at the time came bundled with a copy of WinFax Lite.
The same strategy had already been executed by other Macintosh fax software manufacturers. So when Delrina entered the Macintosh market, it not only was a late entrant, but the channels were all tied up by competitors. Their strategy, leveraging their Windows dominance to enter the Macintosh market was completely useless. And why? Quite simply because they had no real domain knowledge or true understanding of the market they were entering. Decisions made in a vacuum always look pretty good at the time.
So, a few weeks back, a number of Product Management bloggers were invited to participate in a “blogfest” (blogapalooza?), responding to Steve Johnson’s post entitled “Why Demo at Tradeshows?“
Having said what I said — give me the opportunity to have a meaningful one-on-one conversation with a valid prospect, and I’ll certainly trade a quick demo for it — I’m a bit surprised that I recently attended a small summit and tradeshow (200 attendees), and in two days, had a number of conversations with a number of individuals at our small “demopod”, and never once did I show running software.
A few key Powerpoint slides and references to the product brochures and data sheets were all that was needed to explain what we did, answer questions and scan their badges.
So, on one level, I admit that Steve (and those who agreed with him) had a point about tradeshow conversations. But on another level, I must also say that the small size of the show was a factor. Many of the people were more interested in the iPod we were giving away versus the software we had to sell.
So, perhaps the attendees read Steve’s article and agreed with him that they didn’t need a demo, or perhaps they were simply preoccupied with the end of the quarter, or maybe they wanted a demo, but because we never offered one, they didn’t muster the courage to ask. Or, maybe there was another reason, but in the end, I noted, somewhat surprisingly that after two days, no demo was presented. A first in my experience.
A couple of years ago, when we were still living in the SF Bay Area, my wife and kids and I took a holiday down to Southern California. The objective was to hit the theme parks, see sights etc. Pretty typical stuff.
We first drove down to San Diego and went to SeaWorld and the San Diego Zoo. The zoo was pretty good and lived up to expectations. We liked the cable car ride over the zoo. It’s always nice to get up over the trees and see the world from another perspective.
The animal displays and pens were quite varied and certainly much better than the rather dated looking San Francisco zoo. But in the end it was still a zoo: pretty good but not really distinguished from any competing zoos.
The next day, we went to Sea World. Sea World is a bit of a strange place to be honest. From a positioning perspective, it’s part aquatic zoo, part educational institute and part theme park, but not exactly any of them. Schizophrenic is the term I would use.
SeaWorld started out as an attraction displaying marine mammals (sea lions, dolphins, killer whales etc.) performing various tricks. As the years went by, rides and other attractions were added to keep the people interested and occupied. There are only so many times people are willing to pay money to watch a killer whale perform a backflip!
From a product positioning perspective, this schizophrenia is troublesome.
During our day there, we attended the almost obligatory show featuring Shamu the killer whale. One thing that really annoyed me though, was that just before the show started, a brief video came on, featuring August A. Busch IV, welcoming everyone to the park and, in particular welcoming all the military families (San Diego is the home of the largest US Naval base on the West Coast) and acknowledging their sacrifice.
August A. Busch IV is the President and CEO, of Anheuser-Busch, Inc., the parent company of the SeaWorld and Busch Gardens theme parks.
Now, what was my problem? I’m on holidays with my family. I’m looking to remove myself from certain realities of the world and enjoy some time off. The last thing I want is to hear is a corporate/political pitch by some CEO who I’ve never heard of. Seriously…it completely removed any vacation context from my mind.
But then, given the schizophrenic nature of SeaWorld’s positioning, it should have been expected.
Next we went to Disneyland in Anaheim. We had bought three day passes for the family. Possibly overkill, but we wanted to take our time in the park.
So, why does Disneyland understand Product Management? Well comparing Disneyland with both the zoo and SeaWorld, there were a number of clear differences, starting from the moment we entered the grounds.
First of all, strange as it sounds, I can’t sing enough praises about the parking garage at Disneyland. Yes, you read that right. Disney has made even the mundane task of parking, ruthlessly efficient. Disney staff direct incoming vehicles into successive rows of empty parking spots. Contrast this to other parks, where, like in a shopping mall, you hunt up and down rows for an open spot.
After the parking lot, the tram ride into the theme park itself, helps put people into the right “Disney” frame of mind so that once they enter the park, they are ready to start enjoying the experience. And experience is the right word.
Once inside the park, there is no reference to the external world: no CEO videos, no newspapers, no CNN news feeds, nothing. The park staff are all in costume, down to the clean up crews, who do their jobs efficiently and unobtrusively.
Aside from the rides, the various characters that stroll around the park were interesting. Most, like Mickey, don’t talk. Some, like the green toy soldiers from Toy Story, don’t simply stroll, but enact certain behaviours that we’d expect of them. The soldiers, for example, move around the park in small groups, skulking from small building to small building.
My favorite character though, had to be the evil queen from Snow White. No fake smiles here. She kept a scowl on her face from the moment we encountered her. Yes, she took pictures with the kids, but not without throwing out a a few evil comments about princesses and dwarves. I think she’d give the CrankyPM a run for her money!
There were many other memorable things about the time we spent at Disneyland such as the evening fireworks and the truly unique Fantasmic show. But from a Product Management perspective, what I liked about their product was that it delivered on their promise, in an engaging, consistent, and satisfying way.
From installation (the parking lot), throughout the product usage lifecycle (3 days) and to the uninstall (back to the parking garage) we really enjoyed our time there. I’m not a big Disney booster (ask my wife), nor do I hold Disney stock, but the trip exceeded my expectations and despite the premium price over other parks, delivered real value. We won’t go back to SeaWorld or visit Busch Gardens, but will definitely go back to Disney theme parks.
when you build a superior product that turns a dowdy market-segment into one where customers rave about the product to their friends, you deserve success.
Now, I wouldn’t call theme parks “dowdy”, but I’ve never heard of too many people rave about SeaWorld. And I’ve been to other theme parks (Great America, Canada’s Wonderland) and neither provide the real experience that Disney does.
It’s more than simply positioning and consistency. It’s an end-to-end attention to detail, to really understand the needs of the target audience, and fulfill those needs as best as possible that makes a product successful.
And it’s not simply about having efficient parking lots and lack of external interruptions. Those are necessary in this case, but not sufficient.
It’s about defining a culture of customer focus throughout the organization, and ensuring that every customer interaction lives up to a standard that beats your competition. If you can do that, not only can you charge a premium price for your product, but you’ll develop incredible customer loyalty as well.
The technology industry could learn a lot from Disney.
So I have to go with Saeed here in response to Steve’s posting on tradeshows. Just because a lot of companies handle trade shows badly doesn’t mean they’re worthless. Most companies can’t do email marketing right either; I would not suggest that you stop emailing customers and prospects.
But before we think about what to do at the trade show, let’s review what a Product Manager can get out of a trade show. Two things: one, leads and two, conversations.
Now, leads may not be your direct responsibility, but everyone needs leads. Are trade shows the cheapest way to get leads? Nope. Are they the best way to get leads? Nope. But unless you generate more leads than your salespeople can handle, you need more leads. Even if you have too many leads, how many highly qualified leads are coming in through your other lead generation channels? (The answer is never enough!) Web- and email-based marketing is the #1 source of leads for many B2B companies and I can come up with plenty of ways that companies do web and email marketing wrong. That doesn’t mean they should stop doing it.
You need to have an ecosystem of leads, just like you need to have customers in more than one region or vertical market. And trade shows remain a good way to get new leads. I hate scanning badges as much as anyone, but it works.
Also, if you can’t prove that trade shows are generating quality leads for you, then that’s not the trade show’s fault. Implement close-loop leads tracking! You have a CRM system right? Creating a campaign in Salesfore.com and seeing how many opportunities result from it isn’t rocket science.
Second, conversations. A trade show lets you have longer, more fully engaged conversations with both customers and prospects. Prospects are key here - when was the last time you talked to someone who was actively looking to buy a product like yours but wasn’t yet in your company’s sales funnel? Talking to prospects is so important because if you only ever talk to customers you’ll never find out about what the people who decided not to buy your product think. Prospects can decide not to even consider your product or service based on your positioning, without ever talking to a salesperson. I have yet to find a better venue than a trade show to meet these people and talk to them.
Conversations at trade shows are also more casual and relaxed because of the whole circus-like atmosphere of the show floor. (Being at a circus is great, as long as you’re not one of the clowns). Customers have come up to me and said “I love your product! I use it every day!” I rarely get that sort of enthusaism over the phone during customer calls. Customers have also come up to me and said “I like your product very much. There are twelve things wrong with it. They are…” - I heartily recommend doing a few trade shows in Germany because you will get this kind of feedback from more than one person. It’s great. When you work in enterprise software (my experience has been in development tools and IT management tools) you rarely get to have an animated conversation about the strengths and weaknesses of your product. The development team has never actually used the product and my wife and friends don’t really understand what I’m talking about when I try to explain what I do. Trade show conversations have provided me with months’ worth of stories and user feedback that I trot out during requirements planning sessions.
So, can you do trade shows wrong? Sure. Any marketing activity can become a mindless exercise if you lose track of what your real goals are. But we need to do trade shows.
So, why demo at trade shows? Come on - people need something to look at. Imagine going to an auto show where there was nothing but booths and flyers about all the hot new cars. (Let’s ignore the booth babes for a second. Besides, I haven’t seen a booth babe in years at the Toronto Auto show. I think they may be extinct north of the 49th parallel)
The demo isn’t the goal - it’s just a tool to get people’s attentition. Entrepreneurs talk constantly about honing their elevator pitch. There better be more to your business plan than your elevator pitch, but that’s what the demo is at a trade show. It’s the shiny, animated prop that backs up your elevator pitch. Actual software that’s more than just canned Powerpoint slides says that you have a real product that goes with the pitch. Right or wrong, this is the bar that trade show attendees want to see before they’re going to stop and pay attentition to you. And once you have their attentition, you get to do the two really important things: scan their badge and have a conversation.
As a side note, one product I demoed at trade shows was a web-based marketing automation system. It was next to un-demoable. It worked great, but it was challenging to develop, deploy and track an integrated email marketing campaign in five minutes. (I probably could have done it in ten minutes ). But as I went through the pitch, everyone wanted to see something. One person wanted to see reports, one person wanted to see how to compose email, someone else wanted to see how the automation system worked. This was really a polite way of saying that I was full of sh*t and that there was no such product. My “demo” didn’t really show all that much but it proved that I had a real product, which made my message a lot easier to accept and remember.
In a blog posting, Steve Johnson of Pragmatic Marketing asks “Why Demo at Trade Shows?” Good question.
Abridged version
Why demo?
Steve writes:
Do we think that the product will sell itself? … Instead I fear that we’re showing too much too soon in the sales cycle and turning off our potential buyers.
I have to ask the question: Steve, what evidence is there that trade show demos turn OFF potential buyers?
Steve, you bought an iPhone right? Steve Jobs demo’d it at an Apple Conference a few months before they went on sale. What was the sales cycle that ensued that convinced you (and 100,000+ others) to get it as soon as it was available? I’m pretty sure it sold itself.
Full version
Why demo?
Why even attend trade shows at all for that matter? All those airline tickets and hotel rooms, not to mention trade show booth rentals, cost serious $$$. And then there are all those people who just come to your booth to get the nifty pen or other cool swag you have on hand.
What a bother!
But let’s get back to to the original post. Steve writes:
Back in its heyday, Comdex estimated that they threw away two tons of product literature every day. If they don’t keep the collateral, will they remember the demo?
Steve, a bit of logical fallacy here don’t you think? Sure, people throw away literature at trade shows. That doesn’t mean they throw away ALL of their literature, and it doesn’t at all imply they suffer from memory loss.
At it’s peak, Comdex attracted about 200,000 attendees. A bit of math (the numbers work out quite conveniently), and we see that (2 tons) 4000 lbs / 200,000 people = .02 lbs per person of wasted literature each day.
That’s about 9 grams per person. Not really a lot when you think about it. So, if people aren’t actually throwing that much away, maybe they are remembering the demo?
Later Steve writes:
Do we think that the product will sell itself? … Instead I fear that we’re showing too much too soon in the sales cycle and turning off our potential buyers.
I have to ask the question: Steve, what evidence is there that trade show demos turn OFF potential buyers?
Steve, you bought an iPhone right? Steve Jobs demo’d it at an Apple Conference a few months before they went on sale. What was the sales cycle that ensued that convinced you to buy it? I’m pretty sure it sold itself. Or at the very least, the Steve Jobs reality distortion field helped convince you to buy it.
BTW, if the product can’t sell itself, whose fault is that? Sure not all technology products are right for trade show demos, but that doesn’t mean none of them are. I had a wonderful experience a while back demoing a software product at a show. Could have sold lots of licenses on the floor if it were possible.
Many people attend technology trade shows explicitly for the opportunity to see a live demo of a product and speak directly to savvy personnel from the company that makes the product.
Ever watch a late night infomercial? They are nothing but extended demos of the products — kitchen devices, exercise machines, you name it. And boy do they sell product. One of most popular products sold by infomercial is the Showtime Rotisserie, pictured here. It is claimed that over 7 million units have been sold, generating revenues of over $1,000,000,000 dollars.
Steve continues:
Do the sales people demand it? Demo-selling is the laziest kind of selling. It says, “I don’t want to know you or learn your business. I just want to get you to buy as quickly as possible.”
I have to respectfully disagree here. First of all, as mentioned earlier, many people go to shows with the expressed intent to see the product and get a demo. Demo-selling is only lazy IF the vendor explicitly doesn’t want to listen to the prospect. In fact, if that is the case, it is not only lazy, but incredibly foolish as well. And yes, some companies do behave that way, but many companies don’t.
The great thing about trade shows is that in exchange for a short (not necessarily canned) demo of the product, I get to have face to face conversations with potential buyers. What’s my response to someone who comes to the booth and says:
“Hi, can I get a demo of your product?“
I say,
“Yes, absolutely. But first can you tell me a bit about yourself and what you are looking to do with a product like ours?“
If the person bites and responds to the question, then I have them. I can ask them a few more qualifying questions and if they fit the profile I’m looking for, I can get into a demo with them and continue the conversation, asking questions, probing for information etc. If they don’t fit the profile I can still give them the demo I promised, but I can decide how deep or not to take it. In the end, I get what I want, and they get want they want. Seems reasonable to me.
Later Steve writes:
Why do we demo at trade shows? Because everyone is doing it? My mother used to ask, “If everyone jumped off a cliff, would you?”
My mother used to say the same thing, but never in the context of tradeshows.
Just because everyone is doing it, it doesn’t mean it’s stupid.
I have a friend who was vacationing in Thailand a couple of years ago. He was sitting down to have breakfast with his wife and son. As they were eating breakfast on the restaurant patio, they started noticing people running up the road. As they watched, the number of people running up the road continued to increase. Many of the people were yelling in Thai as they ran by. My friend didn’t understand Thai. But, he figured that if so many people were running up the road, he and his family should do it as well. They abandoned their breakfast and ran along with the throngs of other people, not knowing why everyone was running.
The date was December 26, 2004. The people were all running up the road away from the beach and the massive tsunami that was bearing down on them. We don’t always have all the data to make well reasoned decisions on what to do, but many times, by observing crowds, we may get insight that delivers significant benefit.
There certainly are ways to have bad demos and to promote and sell products poorly. Some companies do it far too regularly, by focusing on their own features and functionality and not understanding the customer’s frame of reference. But that has nothing to do with a trade show. Alan blogged about this in one of his posts.
Steve concludes:
At your next event, try just asking people who come by the booth a few simple qualifying questions about their problem and its urgency to them. If they answer in the affirmative, scan their badge or take their card and invite them to enjoy the show. Meanwhile send a set of materials to them through the mail or better yet, have a sales person contact them the week after the show. Nobody retains information from a trade show–everyone is yelling to be heard. Perhaps you could be a little quieter and much more effective. Let’s use the demo where it belongs, much later in the sales cycle.
Steve, that’s an interesting idea. We have a big product launch coming up in September. We’re announcing the product at a big trade show at the Moscone Center in San Francisco. Now, I’m wondering, what would be the reaction of someone who took time off work, came down to the Moscone Center (maybe they are local, maybe they flew in for the show), and came to our booth and after a short interchange, I scanned their badge and sent them off to the next company of interest.
Hate to say it, but I doubt the impression would be a good one. What ROI are they getting from me, having spent time and money to come to my booth? A handshake, a short conversation and a “we’ll have a sales rep contact you next week“?
I’ll think about your idea. But to be honest, when I have the opportunity to have a high touch, high value direct conversation with a good prospect, I’m going to take it.
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Development, Innovation, Leadership, Marketing, Process, Product Management, Saeed, Sales | 
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Posted by saeed
As part of the second Pragamatic Marketing blogfest, I’m responding to Steve Johnson’s post: “
So, a few weeks back, a number of Product Management bloggers were invited to participate in a “blogfest” (blogapalooza?), responding to Steve Johnson’s post entitled “
