Product Manager's Guide to Dealing With Sales People

PRODUCT MANAGER’S GUIDE TO DEALING WITH SALES PEOPLE

Mike Chowla Twitter: @mchowlaSilicon Valley Product CampApril 23, 2016

Copyright © Mike Chowla 2016

Slides available at http://www.slideshare.net/mchowla

My Background• Education

• BS, Electrical Engineering and Computer Science, UC Berkeley• MBA, Wharton

• Experience• 10 years as software engineer and architect building high

performance infrastructure• 8 Years in Product Management

• Previously Product Management for AOL Mail, StrongView, Aeris• Currently Sr Director of Product Management at Rubicon Project



What We’ll Talk About• Collecting Field Intelligence• Features to Close Deals• Dealing With Features Being Sold that Don’t Exist• Roadmaps & Sales

COLLECTING FIELD INTELLIGENCE



Who is a Sales?

For my purposes, sale people are anyone who is responsible for getting money from a customer, whether that be new business or retention

Types of Sales People• New Business

• Typical Titles: Account Executive

• Sales Engineers

• Retention• Typical Title: Account Manager


Account Executives• Out to win new business• Most of their compensation is commission

• Top sales people will out earn everyone else in the organization• Obsessed with their comp plans• Best way to change their behavior is to change the comp plan

• Always very optimistic• Typically overate the probability a deal closing• If your pricing structure is usage based, typically overate how much

revenue a customer will generate• Under a lot pressure

• Start from scratch every quarter to meet quota


Sales Engineers• Are your best source of intel on how the product is fairing

in sales situations• Sales engineers understand how the product stacks up

against the competition and know where your product weak points are• Ask them what parts of the product do they try to avoid demo’ing

• They often have clearer view what happened in particularly deal


Account Managers• Your best source for how well the product is meeting

needs of existing customers

• Usually incentivized on customer retention

• If you show yourself to be an asset to their mission, they will be happy to give you access to their customer


Win / Loss• Win & Loss Reports are a staple of the industry• If your company is not doing them, you should

• However, they are usually wrong!• But still useful


Loss ReportsI’ve only ever heard 2 reasons why a deal was lost:

1. Missing features2. Price too high

Reasons I’ve never heard:• Bad sales execution• Competition outsold us



Getting Accurate Loss Info• Sales Engineers

• Typically have a clearer view of what happened in the deal

• Prospect Call• Tricky to arrange• See if anyone has a connection outside of the sales process you

can leverage• Sometimes the sales team has friendly contact on that will talk to

you• Absolutely do not change try to change the customer’s mind, and

make it clear you are only looking for infomration

Win ReportsWe know why we won, right?

Often wrong about this too!

Solution: Call New Customers• Customers almost always willing to talk to product

management• Good opportunity to build a relationship with new

customers• Include account management on call


FEATURE TO CLOSE DEALS


The Ask


Sales person (usually at 5pm on a Friday with 2 weeks to go in the quarter):

I need this feature to close the biggest deal of the quarter

Is this statement true?


Maybe, Maybe Not.

I’ve seen it turn out every possible way:• Declined to do feature, won anyway• Declined to feature, lost deal• Did feature, won• Did feature, lost anyway

Which is the worst outcome?

The real meaning of the ask


I believe I’d have a better chance of closing this deal and getting my commission if you do this feature for me

The worst outcome


Did feature, lost anyway

Why?• Wasted Precious engineering effort• Can end up supporting the feature forever• Showed your prioritization process can be

upended without good cause

PM Tactics, Part 1 – Should we?Apply good PM fundamentals:

• Is this a unique need of this customer?• If yes, how we can fill this gap with services?

• Is this customer uniquely valuable?• Winning a customer with a great brand is worth more than the

revenue• How many customers would this benefit?• Where would this be in the roadmap without this special

request?Gather first hand info

• Talk to customer directly. “I need to understand what the customer needs. Let’s schedule a call”


PM Tactics, Part 2 – What to commit to?

Assuming you decide it’s worth doing.

All deals have some possibility of failing to close

It’s much better to make a binding commitment to do the feature than scramble to the do the feature to close the deal

• Write it in the contract, even giving the customer right to cancel the contract if you don’t deliver

• Protects you against the deal failing to close• Customers are unlikely back out of a contract• Your legal team may not like it


SOLD FEATURES THAT DO NOT EXIST


The Scenario

After a deal closes, you find out the customer allegedly was promised a feature not in the product



Step 1: What Really Happened?• Possibility 1: The sales team explicitly told the customer

customer that the product did something it does not

• Possibility 2: The customer misunderstood something in the sales process

Goal is to figure out if the customer was mislead. If so, your organization has an obligation to make it right


Step 2: Figure Out Your Options• How important is this problem to the customer?• What is the timeframe that the customer needs a

solution?• How many other customers would benefit?• Where would be this on roadmap without this issue?• Can you solve the issue with services?

Goal is figure out a plan that gets the issue resolved as part of your standard release cycle


A Teachable Moment• Head of Product needs to make it clear to sales

management that• the sales rep’s job is to sell the product that exists• Feature velocity falls when problems like this have to be dealt with

as exceptions


Why Does This Happen?• Sales is hard

• Need to say “Yes” to pretty much everything• Need to project confidence that the product can solve the customer’s problem

• I’ve done it! • When you need to close a deal, one just keeps saying “yes”• Though I knew the feature in question was feasible and could be delivered quickly

ROADMAPS & FUTURE PLANS


Sales is a Roadmap Key Stakeholder• New customers are buying your roadmap as much as

they are buying your product• Switching costs for enterprise software are still high (no matter

what the SaaS pundits tell you)• No customers wants switch vendors again in a few years because

your product is lagging• Communicated during sales process

• Existing customers want to know if their current problems are going to get solved anytime soon• Also want to know if your product is still going to be meeting their

needs in a few years• Communicated by account management



Roadmaps To Support New Business• Focused on 12-36 months

• Thing needed sooner are going to show in as deal closing features• Further out the road on better to be thematic than specific

• We don’t really know what we are going to do• Customers don’t really know what they are going need

• Themes should: • align with your longer term product strategy• address any hot & emerging areas

• Want buy-in from sales management• Individual reps will all have opinions• However, grief to PM will come from sales management not buying

in


Roadmaps for Existing Customers• Goal: give account management the ammunition they

need to keep customers renewing• Focus is on the next 12 months

• Customer pain points will be front and center• Need to more be more specific than thematic• Under-commit on which pain points you commit to addressing

• Not addressing something you promised to fix leads to unhappy customer

• Existing customers will care about the longer term but this overlaps with the needs of new customers• Except if the customers of tomorrow are different segments than

the existing customers

[email protected]: @mchowlawww.linkedin.com/in/mchowla


Product Manager's Guide to Dealing With Sales People

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