September 4, 2007 -- This article is the second in a series (see first article) of articles about Product Strategy. And why, you may ask, would we be talking product strategy to an audience that consists of many service organizations such as print shops and printing plants? The reason is simple. Everyone has a product. Sure, it may be a 'hard good' (printers, PC's, cars, etc.) or it may be a service-based product (printing services, document management outsourcing, etc.). Service-based products have all the attributes of a hard good including a manufacturing process, investment in development (in this case development of a service capability), and life cycles (even services go through life cycles).

Do You Plan or React?

Whether you are a manufacturer of print engines and printing products, or a local or regional printing services provider, having a targeted, well thought out product strategy is essential. I like to use the analogy of planning a trip. If I am going to drive from my home in Versailles, Kentucky to a client's office in New York City, I could certainly get in the car and start driving. I could go east until I hit the ocean and then head north. Sure, I might need to stop and ask for directions along the way, and I might even backtrack once or twice, but eventually I would get there.

Unfortunately, many companies treat their product strategy in this same manner. They define products based on immediate competitive threats or customer driven opportunities The organization is in a constant 'scouting' / reaction mode. And this may work okay for a while. The problem is, some companies actually have a 'plan'. Back to our analogy, instead of just getting in the car and driving, they have looked at a map and they have plotted a course. They know how far they can drive before needing a hotel and they have already booked a room in each of the hotels they will need. Their trip will be efficient, with minimal wasted effort or backtracking. In other words, they will beat you to the destination.

Many companies define their product strategy based primarily on immediate competitive threats or customer driven opportunities.

While you may be able to get to your destination without a product strategy, you are still going to be at a constant competitive disadvantage. Your competitor will be reacting more quickly, capturing more customer opportunities, and generally 'beating you to the punch'.

In this series we will walk you through many of the steps in developing a good product strategy. However, to begin the series, it is important to first identify what you do not want to do. So to begin, we will examine what I consider to be the 7 Deadly Sins of Product Strategy.

Sin #1: Internal Fixation: Assume that the external environment reflects your internal views, assumptions, and values.

Yes, even in this age of enlightened marketing we all have a tendency to project 'our view' of the world onto the rest of the world. The starting point for any good product strategy is to develop a comprehensive assessment of the external environment including customers, competitors, enabling technology platforms, and the regulatory environment. While most companies will say they do this, often times any analysis of the external environment is based upon an assessment of those organizations which are within the firm's comfort zone. They speak to the sales force, existing customers, suppliers, and in short, those individuals and organizations with whom they currently work.

The problem with this approach is that you may miss bigger trends, market changes, and opportunities which may not be evident or taking place within this 'comfort zone'. This is also one of the reasons it is critical to engage external firms to assist with this analysis. In short, they will bring a level of objectivity which is simply not available within an organization.

Too often, a company's analysis of its external environment is based upon organizations which are within its comfort zone.

Tips: In order to avoid this tendency, and reach outside of the 'comfort zone', try the following:

1. Interview your competitors customer's. Find out what your competitor is 'doing right' and why customers are using them. Be careful not to treat this as a 'sales pitch' --the customer will automatically go on the defensive. Focus on asking about their perspective. Don't react if they have something negative to say about your company. Probe and ask why they feel that way.

2. Stay involved in industry associations and trade shows. These organizations and venues can be a wealth of information for new technologies and trends. Sure, this is always the easiest thing to cut due to time or budget constraints. However, this is the least expensive 'consulting' you can ever get!

Sin #2: Confusing yourself with the customer. It's easy to think that your customer is very much like you. In reality, they may not be!

You may think your order entry system is very easy to use. Or, you may be used to that 'gruff' person working your counter. Or, perhaps you think this product or service feature is the best thing since sliced bread since you are 'into' that functionality. The problem is that you are assuming that your customer is going to share your views. In reality, our customers are often very different from us. As a result the product features you are defining or the services, you are offering may be significantly different than what your customers value and require.

Don't assume customers share your views. Our customers are often very different from us.

The challenge is to approach the product strategy process as the 'real' customer. What would their reaction to that 'gruff' person be? Or what if they actually find the feature you are so enamored with to be difficult to use, or to have little value.

The key is to gain objective data and analysis on what your customers care about, how they think, and why they are your customers (and not your competitor's). There are many methods and approaches to gathering this data including customer surveys, customer comment cards, and 'mystery' shoppers. The point is to look at the customer objectively.

Tips: To truly understand your customer, try the following:

1. Gather data from the 'real' or prospective customer. This can range from informal customer luncheons or advisory boards to large scale quantitative research studies. The key is that no budget is too small to be able to capture customer feedback and insight. As with other forms of customer research, the key is not to try and 'address' customer's objectives or viewpoints during the discussion, but rather, to explore their viewpoints and capture as much information as possible.

2. Put yourself in the customer's shoes. Go shop a competitor's store or use a competitor's product. Put yourself in the place of the customer. Quicken has had a unique program for understanding customer needs. When they are launching a new version of the software, they will send a couple of Engineers out to customer sites to watch the customer install and use the product. The Engineers cannot help the customer in anyway, but rather, they just focus on observing how the customer reacts to the software. It's amazing the amount of information they receive from these observations, particularly in the area of ease of use.

Sin #3: Technology Myopia: If you build it, they will come. Or not!

Almost all of us in the imaging industry are in some way, shape, or form involved in the technology industry. Either we manufacturer the printing technology, or, we are service providers who utilize technology to deliver our services to customers. In either case, there is a real tendency to just focus on technology. One of the biggest challenges in our business is to truly understand the customer's wants and needs and to translate these requirements into real product or service features that the customers value.

Tips: To avoid technology myopia, try the following:

1. Start with the customer. Develop a system for capturing customer requirements, requests, and needs into a database. This can be a sophisticated CRM system, or a simple notebook of customer requests. Be sure and look at all the internal sources of customer information at your disposal. What features have customers complained about or asked for on your technical support line? What do the individuals who interact with the customers every day hear from them on a consistent basis? What do they like or not like about your products and services?

2. Include your marketing and even sales management team in the product strategy development process. Bring individuals into the process who have a very strong customer focus, and who are less enamored with technology. This will help 'balance' the technology focus brought forward by the engineering / development organization.

These three sins are just the beginning of what to avoid in crafting your product strategy. Tomorrow we'll take a look at the next Four Deadly Sins of Product Strategy:

- Avoidance by delegation

- Perfectionism

- Trophy case mentality

- Distraction

And as always, feel free to email your thoughts and comments to me at [email protected].