A product manager is assumed to “know his market”. But what does that mean? What should he know exactly and isn’t that supposed to be the job of salespeople?
Let us start with answering that last question: no, it is not the sole responsibility of sales to know the market and there is a difference in the depth of knowledge. A salesperson is assumed to know his customers intimately within his area of responsibility; that is not necessarily the whole market. A product manager can skip that intimacy but needs more of a helicopter view of the full market to be able to set priorities in product development.
To be able to know the market, one must understand the borders of that market. There are two potential errors that can be made here: either define the market too wide or define it too small. Both have a counterproductive impact on the company performance. Some markets may not be accessible because of political reasons, because there are not enough resources to cover all areas, because of fierce local competition, because of pricing matters, because our solution is not efficient in that market, etc. We should not spend precious resources and means on those markets. On the other hand, we may be focused too much on the core function of our product or on our established markets and not see opportunities in neighbouring markets. Thinking out of the box and taking the helicopter view may help to avoid that short-sightedness.
Now where do we get the market knowledge? There is no doubt that actually meeting and talking to customers is still generally the most informative experience a product manager can undertake. Nevertheless, I still see too many product managers who hardly leave their offices and base product decisions solely on personal assumptions, with limited input from salespeople or project-specific requirements. Sooner or later, sales will suffer. At the same time, keep in mind that understanding customer needs is an art. Not all customers are capable of clearly expressing their needs. Remember the famous quote of Henry Ford, “If I had asked my customers what they wanted, they would have said a faster horse.”
Besides customer intelligence, our data-driven world offers ample possibilities to improve one’s market understanding. Thematic or customized market reports can be valuable sources of information, be it quite expensive sometimes. Attending events and exhibitions is an enriching experience when it comes to keeping up with the market trends. Loads of market and competitive information can be found freely on the internet. Reading the specialized press should be a regular task for the product manager.
By gathering all this information, the product manager should be capable of estimating market size and accessible market share for new products. This is an essential part of the business case, required before engaging in any new product activities.
Remember that getting and maintaining market insight is a continuous effort. Markets are dynamic, competition is not sitting still, customer needs change. It is imperative for every product manager to occasionally dissociate from daily work and look around.
More sources of market information and methods to gain market insight can be found in my book “Practical Product Management”.
Leave a Reply