Marketing & Product Management Strategy & Tactics

The Hidden Costs of Offshoring
Training Product Managers On New Software
Product Promises
Leveraging Google™

The Hidden Costs of Offshoring
The media is full of reports of tech companies going offshore for their software development and support capabilities. While this is a real phenomenon that is happening, and the dollar cost savings can be compelling, there are several downsides that don't seem to be brought up very often. These can have a tremendously detrimental impact on a company's products and brands, and without careful consideration can lead to shortsighted decisions that ultimately take down a company.

Here are a few of the considerations:

1.) You may stifle and inhibit your product efforts
Truly great products are created by innovative engineering teams that work very closely with Product Managers and other groups in a company. As a Product Management professional I've worked with some great teams that have delivered some incredible products. Products like these aren't something you can simply write a spec for, deliver it to engineers overseas, and get something exceptional back. Sure, for simple and VERY straightforward coding work you can farm it out. But if you want to create truly breakthrough products you need a team that has great ideas AND that works closely with your Product Management folks to ensure customer needs are being met. The best situation is where you get a team that looks at the MRD (Market Requirements Document) and figures out how to deliver far more than what it calls for in a way that Product Management could never have thought up.

2.) Your brand and customer relationships may suffer
The cost of losing a customer and ruining your brand as a result of offshoring can be very high. Consider this example. My wife Sarah (VP of Sales for the 280 Group) recently had a software problem and contacted technical support for a well-known brand name product. She ended up exchanging email five or six times with them. After the second message it became painfully obvious that the person on the other end didn't speak English very well, and that they had little chance of even understanding the problem let alone solving it.

Now if this was an isolated incident it would be one thing, but this company gave me the exact same lack of service when I had a different problem. Sure, they saved a lot by having the support handled by someone in India. But now that they've lost us as customers, the question is, how much are they going to have to spend to attempt to win us back?

Smart companies are realizing this - that's why Dell pulled their India tech support efforts recently. The long-term value of a customer is FAR higher than any short-term savings they can realize by having someone less-expensive answering support questions.

3.) Managing offshore development can take a huge toll.
A friend of mine recently returned from a trip to India where he is managing an engineering team and was investigating finding new facilities. He goes there about once a quarter. During this trip he got violently ill, and suffered the usual jet lag and loss of personal time when travelling. Upon returning he informed his boss of the progress, and was told that he needed to return again in 2 weeks to finalize the deal on the office space and make sure the team was on track.

The cost of this? Well, I can tell you that if he gets the chance to work for a different company where he doesn't have to travel he'll be the first to jump ship.

Incidentally, he mentioned that they are having problems with attrition of staff in their India office, and that office space is no longer as cheap and widely available as before. While it had been easy and cheap to offshore two years ago, it had become more complicated and time-consuming recently.

4.) Lack of accountability

I'm working with a team that is remote right now for a client. Every day we have a team meeting conference call and people call in from multiple sites. Though good in theory, we end up having to repeat many things that are said because the phone lines are questionable. Additionally many people skip the meeting, or delay us because they don't have the project files to look at when we put them up on the projector. I also suspect that a good part of the team is doing work (or other things) on their computer while on the phone, since when they are asked a question it is clear they haven't been listening.

There is something to be said for making your team show up in person, look you in the eye when you are having a difficult discussion about schedules and features, and not be able to hide their facial expressions behind a phone line. True accountability makes for great product teams.

THE BOTTOM LINE
One has to wonder, when the laws of supply and demand begin to catch up with the situation, and the hidden costs of offshoring begin to become more apparent, will companies come to regret their cost-conscious post-bubble offshoring choices?
Click here for full article

Training Product Managers
Getting Product Managers Up To Speed With New Software & Processes

For many of the functional groups in high-tech companies, implementing new versions of software and the training they require is something that is built into their way of thinking and planning. New development and testing tools come out, and engineering and QA managers are used to integrating them into how they do their work. New versions of SFA and CRM software are released, and sales and customer service managers roll them out and make sure their staffs know how to use them. They plan for new software, including time for employees to learn the new tools and to get up to speed.

But for product managers, the concept of training and getting up to speed on new or existing tools isn’t a familiar one. Most product managers learn the software they use on a daily basis completely on their own. Whether it is Microsoft applications like Office, Visio or Project, most of the time product managers are left to their own devices to learn how to use the tools that are critical to their day to day success.

For desktop applications, this has been the way of product management life. But as new enterprise applications become available that are more powerful and useful, it’s important to give your team of product management professionals the support they need. This is even more critical if the software is integrated into your existing or new product processes that span across different functional groups in your company.

Following are a few suggestions for how to be more effective if you are implementing new software and/or associated processes at your company:

1.) Make learning and using the core software tools and processes part of your quarterly MBOs, goals and objectives. Even better, make it a part of employees’ annual review goals so that they are clear that it is a critical part of their job they will be judged on. That way they’ll know that if they aren’t proficient in the applications that are critical to their job, or don’t follow the product processes, they won’t get rewarded.

2.) Give your staff dedicated time to learn the new software. Force them to go off-site to a place where they have to turn off their cell phones and can’t access email. Without this dedicated, non-interrupt-driven time, learning the software will be given little less than lip service.

3.) Make sure that when new employees are brought on board they understand what tools and processes they are expected to use, and give them the resources they need to be successful. Provide them with training materials and pair them up with others in your group that are proficient and can help them if they run into questions or problems.

4.) Get full buy-in for the new processes and software and the training time required. Make sure that upper management as well as mid-level directors and product line managers understand how the new software fits into your product process, and that it is critical that your teams be proficient with it.

By using some or all of these suggestions above you’ll be sure to get the most of out of new software. And you’ll make sure your Product Management teams know what is expected of them, and can integrate new software and processes into their jobs quickly and easily.

Product Promises
Is your Product Promise really a promise?

I had an experience with a product this week that was so far off base I decided write about Product Promises.

A product promise is the implied commitment made to customers by a company. It embodies everything that the company, brand, marketing, features and benefits and product description convey. Put simply, a product promise is kept if the customer has an experience that is at least as good as what they expected based on what the company told them.

Products that keep their promises tend to build loyal fan bases and succeed. Products that don?t, often fail (though if they solve a burning need for the customer and are the only available solution they sometimes succeed anyway).

What are some examples of product promises where companies met customer expectations and it paid off for them? The original Palm Pilot made a product promise that synchronization would work seamlessly. For me it worked so well I couldn't believe it (at the time). Macintosh (at least the early days) had the product promise that it was the easiest to use personal computer available. Amazon.com had the promise that they offered the world?s largest selection of books and that purchasing and customer service be hassle-free. Google?s product promise is that you will find what you are looking for on the Internet rapidly with a minimum of effort.

Here's the 280 Group Product Promise. We promise to provide you with professional, high-quality Marketing and Product Management consultants and contractors that deliver excellent results at reasonable rates.

Product promises have gotten a bad rap, primarily because of what happened during the boom. Companies shipped crummy products, made claims that were nowhere near true, burned their customers, and then wondered why they had no repeat or referral business. In fact, one of the biggest challenges the tech industry faces today is that it has trained even the most tech-savvy people to be late adopters. Why beta test software or hardware for a company when you can wait until it is solid and many other people are using it reliably. Of course, this mentality leads to no one using anything because everyone is waiting for the other guy to endure the pain.

Oftentimes Product Management has to be the gatekeeper to watch over whether customers are truly being taken care of. Engineering will always have pressure to ship the product, no matter what. Sales will want the product now, and by the way, it had better work right. Upper management will feel the pressure to make quarterly numbers and will tend to want to ship the product even if it isn't completely ready. QA will tell you what the bug count looks like, and how many severe problems remain. But in many cases the only group that truly has a handle on whether the product will meet customer expectations and keep its promises is Product Management.

At one point during the boom I was offered a high-level job with a company going public in three months. They had an incredible story, lots of talent, a first-class board and executive team, and $120M in funding. But after consulting there for 2 months I declined their offers, despite the fact that they sweetened the pot multiple times and made me by far the best offer I had ever received in my career. Why? I was running Product Marketing and Product Management for them and despite my communication that the product was nowhere close to meeting its product promise, management was barreling ahead and determined to ship it. They did. They never made their numbers. Not even close.

Yes, the founders made some money. But think of the momentum and wealth they might have had if they had truly kept their product promise. They might even still be in business today.

Does your company really keep its product promises?

Leveraging Google™
Optimize your site so that new customers will find you

Can potential new customers really find your company and products on the web?

Imagine that you are one of your own target customers, and that you haven't heard of your company yet. You decide to search the web to look for companies that provide the products or services that your company offers.

Think of one short phrase that you would type into a search engine to find your company (not your company name). Now, using this same phrase, go see if you can find your company in the major search engines. Make sure you try each of the most popular search engines, as ranked by the usage statistics:

        Google                                     32%
        Yahoo                                       25%
        AOL (including Netscape)    19%
        MSN                                          15%
        Others                                         9%

Now go to each of these sites and type in "Marketing Consultant Silicon Valley" and see if you find The 280 Group.

Chances are you didn't find your company (unless you are already incredibly well known in a specific category), and that you did find the 280 Group.

I'm constantly amazed by the number of companies that do little or nothing to optimize their positioning and placement in search engines. They spend hours agonizing over content and design, and thousands of dollars implementing and building their sites, yet they never benefit because new customers don't find them.

Now consider this. By some estimates GOOGLE POWERS AN ESTIMATED 76% OF THE SEARCHES ON THE WEB (largely because they provide results to AOL and Yahoo).

Your business may not be one that needs new customers finding you on their own, but I'm betting that's not the case. If you want to remedy this situation, you'll have to embark on a search engine optimization campaign for your site.

There are many factors to consider when optimizing your site. Here are just a few:

• Website architecture and underlying technologies used to build your site
  
  
• Content used and how it is structured
  
  
• Keywords you believe prospects will use
  
  
• Popularity and ranking of your site (calculated by Google)
  
  
• Making your site friendly to website crawlers
  
  
• Ensuring you don't make any fatal mistakes that will disqualify your site from being ranked highly.

Search engine optimization takes a lot of time, effort and expertise. Whether you decide to build your own in-house group to manage it, or to bring in a company like the 280 Group, make sure you spend the time to do it right. If you do you'll get the full benefits from your website, increase your traffic and capture new customers.

Google is a trademark of Google Inc.

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Brian Lawley runs the 280 Group, a Marketing and Product Management Consulting services company in the Silicon Valley Bay Area. If you need an acting Vice President or Director of Marketing, or interim Product Manager or Marketing Manager, the 280 Group can deliver hand-picked, high-quality talent. For assistance with product launches, writing market requirements documents, customer research, developing sales tools, competitive analysis, search engine optimization (SEO), positioning, pricing or other Marketing or Product Management tasks contact the 280 Group for a free quote and proposal.

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