Who would have guessed that Vikings could sell credit cards?

I’m sure that any product manager living in the U.S. has encountered one of the Capital One ads for their credit cards at some point in time over the last year or so. What might get lost in the blizzard of Capital One ads and promotions that seem to always be around us, is that the product managers at Capital One are very good at what they do. Perhaps we can learn something from them…

It’s All About Analytics

There are a lot of companies out there that are selling credit cards to consumers. Why has Capital One succeeded where so many other firms have failed? I’ve got one word for you: analytics.

The product managers at Capital One have always taken a scientific approach to marketing. What this means is that they have taken the time and energy needed to create ways to analyze and segment their customers in a way that allows them to create new product offerings and then work with their account manager and business development manager coworkers to offer them in a way that they’ll appeal to their customers. It sure seems like analytics should really be part of a product manager job description these days.

The product managers at Capital One realized that they had a commodity product on their hands – credit cards. They looked around for ways to make their product offering different from everyone else’s. What they discovered was a set of different ways to create industry leading products. These included offering teaser rates on their credit cards and zero-balance transfers. These offerings are commonplace now, but they were started by Capital One.

What The Capital One Product Managers Did Differently

So just what did the Capital One product managers do differently that allowed Capital One to become such a big success? It turns out that analytics was just part of the story. Other credit card companies were also using analytics at the same time.

What the Capital One product managers did differently was to use their analytical data differently — they applied strategic management to their data. The other credit card companies were using their data almost exclusively to create predictive models that they would then use to drive the marketing campaigns for their cards. Capital One product managers turned this on its head by creating a culture of testing based on analytics.

This meant that they were using the data that they had collected to test different types of offers. It also gave them opportunities to test, test, test different product combinations. This was in marked contrast to all of their competitors who were forced to put all of their eggs into just a few very large scale marketing campaigns and hope for the best.

What All Of This Means For You

In the past 20 years, the product managers at Capital One have grown their credit card product line from nothing to being one of the biggest credit card issuers with more than 40 million customers.

The way that the Capital One product managers were able to get their products to stand out in an already crowded field was to find ways to harness the power of analytics better than any of their competitors. Like all of their competitors, they collected a lot of information on their customers. What the Capital One product managers did better than their peers was to use this information to build products that were even more successful. This is exactly what the rest of us would like to be able to put on our product manager resume.

All of the other credit card companies had access to the same types of data. What the Capital One product managers did better was to use this data to perform a great deal of market testing. This allowed them to introduce more products and to tailor those products to better meet their customer’s needs. We can all learn that asking our customers “What’s In Your Wallet” just might be the best way to become a better product manager.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that getting trained on how to use analytics to process customer data is something that every product manager should learn?

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What We’ll Be Talking About Next Time

Here’s a classic product management question for you: how well do you know your customers? I mean, do you know then REALLY well? We all like to say that we know what our customers are looking for, but do we? The product managers over at the online gaming company Zynga (you know, the one that went from nothing to $600M in revenue overnight) can say that they do know their customers very well. They’ve got the analytics to prove it.

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Too Many Returns Are Bad, But Too Few Are Also Bad…

Every product manager likes to think that once their customer has purchased their product, that’s the end of the story. The reality is just a bit different: for a whole bunch of reasons, our customers can change their mind about buying our product and decide to return it. What’s a product manager to do when this happens?

Returns Are A Good Thing

You might not realize it, but a certain level of customer returns is what a product manager really wants. Returns indicate that your customers are buying your products and the correct level of returns shows that enough customers are buying enough of your product. These customers are also buying other products from you at the same time. Too few returns means that you haven’t maximized your sales and too many means that something is wrong.

The role of a product manager is to keep track of the level of returns for his / her product. You’ll have to determine what the correct level of returns is, but once you know this then you’ll have to carefully mange it.

How NOT To Lower Returns

When too many of your customers start to return your product, then you’ve got a problem on your hands. All too often product managers may take the wrong actions when this situation shows up. One of the simplest (and wrong) things to do is to toughen up you product’s return policy.

Making a return policy more restrictive, for example shortening the window in which it can be returned, can end up reducing not only your returns but also your sales of y our product.

What Causes Customers To Return Products?

There are, of course, a lot of different reasons that your customers may decide to return your product after they have bought it. Two professors who have spent a lot of time studying what motivates customers to make returns are Dr. Andrew Peterson and Dr. V. Kumar.

One of the things that the researchers have uncovered is that when customers buy discounted products, they are less likely to return them. At the same time, what they’ve discovered is that HOW a customer buys your product may have an important bearing on if they will end up returning it.

When one of your customers buys a product that they are familiar with, but buys it using a different distribution channel (buys it online instead of from one of your firm’s sales teams), they seem to be less likely to return it.

The level of returns seemed to go up when your customers bought new products the way that they normally buy products (e.g. through your sales teams) or buying new products using channels that they are not used to (buying online for the first time).

How Can A Product Manager Lower The Rate Of Product Returns?

Product managers who have a problem with a customer returning too many products need to take action. Before doing anything, the product manager needs to take a close look at how the customer is buying the products that they are retuning.

Your initial steps to lower your rate of return should be to attempt to steer your customer who is making the returns to start to buy from you using a different channel. Sending them coupons or promotions to make use of a different channel is a great way to start this process.

How Can A Product Manager Boost The Rate Of Product Returns?

It sounds sort of counter-intuitive doesn’t it? It turns out that the proper level of returns means that your customers are buying enough from you – too low of a level of returns and they aren’t buying enough.

Product managers facing low product return levels need to reach out to their customers and encourage them to buy new products using new distribution channels. This will not only probably boost their return levels, but it will also boost overall sales.

What All Of This Means For You

Instead of being something that you need to fear, a product manager needs to view product returns as being a natural feature of their product. This also means that it needs to be managed.

In order to reduce product return levels, product managers need to drive customers to make purchases using channels that are more familiar to them. If product return levels are too low, then customers need to be encouraged to make more purchases using new distribution channels.

Realizing that product return levels are yet another metric that is available to them that will show how well a product is doing allows product managers to ensure that their products will have many happy returns…

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: which problem would you prefer to have: too many or not enough returns?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

It turns out that a Product Manager really doesn’t do all that much. I mean, they don’t actually create the product and they don’t actually sell the thing now do they? Sorta makes you wonder just exactly they do do? It turns out that most of a Product Manager’s time is spent doing scary stuff, like managing people and getting them to work together in order to get a product created and out the door…

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Product Mangers Know That Renaming A Product Can Be A Big Deal

Just image this scenario: you’re sitting there at “mid-sized company, Inc.” when one day your boss walks up to you and says “we’ve just been bought by really-big-company, Inc.” Ok, you say to yourself, how much of a big deal to my successful product can this be? Well one thing that you may not have thought of is that although your product name worked for your previous company, it may not fit with the branding of the new company. This means just one thing – it’s time for a product name change.

Early on in my career I was the product manger who was responsible for a small utility that pre-formatted code to prevent too many warning error messages from showing up. I had somewhat whimsically named this product “NUKE216″ for a variety of youthful and technical reasons. This name was ok when only hardcore developers were the market for it. However, when it got bundled with other products, then it started to get more exposure and, you guessed it, the name had to change!

So what steps should a product manger take if it comes time to rename his /her product? Here are the most important:

1. Buy In, Buy Early: Since many different people in your company deal with your product, they may all feel some sense of ownership of it (although, of course, it is YOUR product). You need to make sure that they feel included in the renaming process even if only means that you keep them informed about the process as the new name is picked.

 

2. Direct Mail Is Your Friend: In order to prevent your existing customers (and potentials) from becoming confused, the old standby of direct mail is a great way to get your new (and old) name and logo into their hands.

 

3. Press Time: Getting word out to the industry press about your name change is critical. The key will be to tie the name change into something more newsworthy – a big win, a local community event, etc.

 

4. Be A Tortoise: Nobody ever said that you had to change everything all at once. One approach is to change it slowly, over time. Like the next time you get brochures printed, you use the new name.

 

5. Go On A Name Hunt: You would be amazed at how many places your old product name exists. When you change the name, you need to find ALL of these hiding spots and change them to the new name. Perhaps offering a reward for staff who find missed names can help to speed up the process.

 

6. Ask Your Customers: The experts say that it will take AT LEAST a year for you to fully change the name of a product. Keep checking with your customers to find out how the name change is going. They are the only ones who will be able to tell you how much farther you have to go.

 

Have you ever had to rename a product? Why did you have to do it? How did you keep the internal team informed about the process? How long did the whole thing end up taking? Leave me a comment and let me know what you are thinking.

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Product Managers Can Use The Start Of The Year To Get A Jump Start On The Year

Happy New Year to everyone! As we stand together at the start of another business year, it’s important to realize that this time of year provides a product manager with a unique once-a-year opportunity to use this time of the business cycle to accomplish a few things that you just can’t get done at any other time of the year.

I’m not exactly sure why this is such a special time of year, outside of the fact that we’re coming out of the holidays. Considering how much of a product manager’s job revolves around contacting and communicating with people, this time of year just seems to make this task that much easier.

Here’s my list of what a product manager needs to do at the start of the year:

• Plan For Success: Forget New Year’s resolutions, I’m talking about Product Manager plans. Take a few moments and picture the end of the year – what do you want to have accomplished by the end of the year? Keep it real – no, your product is probably not going to become the next iPhone, but if you want to still have your job it is going to have to have some level of success. This plan can be a simple as a list of 5-10 items that you jot down. Paste it on the wall and you’ll be reminded of your yearly goals all year long.

 

• Reconnect With Old (Business) Friends: The madness of the end of the year is now over and everyone is in the process of trying to get their acts back together. This is a great time to reach out to everyone and connect with them in order to rekindle the relationship and get yourself in good standing for when you really need to talk to them later in the year.

 

• Hoard Resources: The neat thing about the start of the year is that nobody has a clear plan for what they want to do yet. This means that if you show up and ask for “things” – people, funding, office furniture, etc. you have a better than average chance of getting what you want. What’s that phrase, “The early bird gets the worm…”

 

• Visit Customers: Just like everyone else, your customers are going to get more and more busy as the year starts to pick up steam. If you want to have a chat with your customers about their needs and wants this can be the best time of year to have that discussion.

 

• Pick Your Product’s Next Features: We’ve talked about Job Mapping as a great way to find out what features your customers would like you to add next to your product. No matter how you go about doing it, the start of the year is THE time to plan out what features you are going to add and in what order you are going to add them.

 

• Plan Your Next Product: As product managers, we can easily become too comfortable with the products that we know and love. The truth is that all products have a life cycle and will eventually end up going away. We need to take the time to plan for what products will come next. The start of the year is a great time to do this type of activity.

Once again, the first few weeks of each year are a special time that, just like Christmas, comes only once a year. Make sure that you use this time to ensure that the rest of the year is merry for all of your products!

What do you do during the first part of the year to get ready for the rest of the year? Do you find that it’s easier to get in touch with people during this time? Have you ever asked for more resources at the start of the year? Was your request successful? Leave me a comment and let me know what you are thinking.

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Dell Consumer Product Managers Are Having Problems Creating Christmas Gifts

Q: How can you tell when a Product Manager drops the ball?

A: When there is an article in the Wall Street Journal with the title “As Holidays Approach, Dell Lags In New Products”

Man, talk about having your failures broadcast to the whole world! In the consumer space in which Dell sells some of its PC and notebook computers, the end of the year Christmas holidays are the key to a company’s survival. The sales that occur during this time generally account for 30% – 50% of Dell’s annual consumer PC revenue. Miss this revenue train and you’re going to be standing around waiting for the next opportunity for quite some time!

Where did product managers let Dell down? One place is in an ambitious mini MP3 player that Dell was planning on introducing. Way back in 2007, Dell bought a company called Zing in order to get access to their entertainment software. However, now Dell has decided not to launch this product before the holidays. Ouch! What this means is that the folks who would have bought this product will now go out and buy iPods and, maybe, Zunes. Once they do that, Dell is probably flat out of luck – once you’ve loaded your iPod up with $200 worth of songs, you sure don’t want to change players.

Interestingly enough, Dell product managers are not just falling down in the cutting edge new product area, they also seem to be dropping the ball in their bread & butter areas such as notebooks. So far this season, Dell has only released two netbooks (low end laptops, good for web surfing and emails) and some new paint schemes for some existing notebooks. Remember, they are playing in a highly competitive market – Apple just cranked out that very cool all aluminum Macbook and even Acer has released a bunch of new notebooks computers that have fancy styling and built-in access to 3G networks. What’s going on with those Dell product managers?

Michael Tatelman is Dell’s retail chief. He has been forced to tell the press that “You’ll see some very sexy products coming out of Dell”, though they may come out after the holidays. Double ouch!

Way back in the Fall, Michael Dell had told investors that Dell would “focus on killer products…” and they they would have a “shorter development cycle” that would allow them to get products out “40% to 50% faster”. Hmm, missing the Christmas season sure makes it seem like that is not going to happen.

This isn’t the first time that the Consumer products division of Dell has missed a great opportunity. Back at the start of the school year they had to hold back on introducing their first netbook because of keyboard problems and so they missed most of the back-to-school selling window. That probably explains why the consumer products division failed to make a profit in the last quarter and why Dell just got done laying off 9,000 of its workers.

What’s going on here? As product managers we are all probably quite familiar with the problems that Dell is facing. It sure looks like their new product pipeline, which is the lifeblood of Dell’s consumer division, has a friction problem – products are not traveling through it quickly enough. A product manager can’t fix a problem like this by his / herself. However, it is our responsibility to get the various folks who can fix it together and knock some heads in order to get it solved. Since this problem has existed since the start of the school year, clearly there is a lingering sense of a lack of momentum at Dell.

What should the Dell product managers be doing? They need to start with a calendar and determine when they need to have new products in order to match up with their customer’s buying cycles. Once they have this, then they need to start with a with the finished product and work back. What should the next product look like and what features will it have? Once this is nailed down, they need to determine how that product can be available by that date. Very basic stuff, but it sure looks like this is not happening. If a product can’t meet a date, then you need to determine what functionally can be dropped to still meet the date. If too much would have to be dropped, then and only then should you start to move dates around.

Dell can recover from these blunders, but it’s going to require that their Product Managers step up and take responsibility for fixing the system.

What do you think that Dell’s product managers should do next? Why do you think that they are having their current problems? Do you think that they should try to be more like Apple? Leave a comment and let me know what you are thinking.

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Microsoft Distributed A Patch To Catch Users Of Illegal Copies Of Windows

So here’s a little story that caught my attention in the Wall Street Journal the other day. The article was entitled “Microsoft Tries Blackening Screens To Fight Software Piracy In China”. The gist of the article went on to say that Microsoft had distributed a Windows XP patch to users who have elected to get automatic updates over the Internet that turns their backgrounds black and then nags them to switch to a legitimate copy of Windows. What do you think about this tactic – a sound business move or a product management disaster?

Perhaps a few more details on this update are in order. The update does not prevent users from using their PCs. You can change your computer’s background from the black setting to whatever you want (like a photo); however, every 60 minutes it will revert back to black. Additionally, messages are posted every so often to the screen that warn the user about using counterfeit software products.

In China, a number of potentially unsuspecting folks are getting zapped by this warning. People who may have purchased a computer that was built by someone who used a counterfeit copy of Windows XP are now being notified that their computers are running counterfeit copies of Windows. Microsoft has done two things to minimize the fallout from all of this. They’ve lowered the cost of a legit copy of Windows XP to $30 and they will send people a free copy of Windows XP if they send them the physical copy of the counterfeit copy that they were using.

From a product manager’s point-of-view, I can understand both sides of this story. Microsoft has a massive problem with counterfeiting. Since they have the most popular operating system out there, everyone wants to have a copy of it. However, at the same point in time, Microsoft generates a great deal of money from other vendors because there are so many copies of its operating system out there. The more people who use Windows, the more valuable Microsoft training and documentation becomes to others. All that being said, Microsoft is working on the next version of Windows, Windows 7, and it’s sure to be an instant hit the day that it is released simply because so many people are already using Windows.

Every product manager wants their product to be a success. However, we also want our company to get paid for the product otherwise the company may not realize just how successful our product has been. If we give away demo or free copies, it’s very tempting to add some sort of “kill switch” that can or will disable the product at some point in the future in order to motivate the customer to go out and purchase the real product. The challenge that we have here, is that we can’t really control what the customer is going to be doing with our product when this happens. I’m going to guess that more often than not, our product will stop working at just about the worst time imaginable. No matter how much the customer likes our product, they are going to be angry with us because we inconvenienced them.

Additionally, no security solution is going to be perfect. We’re going to end up cutting off some legitimate users. Can you imagine how angry they are going to be? Microsoft has not released any statistics; however, you know that they must have gotten hundreds of complaints from legitimate users who’s computers started incorrectly telling them that they were using counterfeit copies of Windows XP.

When dealing with a software product, it’s always been my feeling that once the product is out there it would be a fool’s quest to try to hunt down and stop any counterfeit copies that might have found their way in to use. Instead, I’ve always felt that making each and every user WANT to be a legitimate user was the way to go. What this meant is that I couldn’t just launch a software product, have people purchase it, and then forget about them. Instead, I needed to make the purchase of the product just the start of the relationship. It was my job as a product manager to make my customers want to have a closer relationship with my company.

The real trick to being a successful product manager is to create an ecosystem that your customers want to belong to. What this system consists of will be different for each product; however, some common components may include a user group community and the ongoing discussions that occur there, access to developers / technical experts who can answer even the most detailed questions, access to planned new release schedules and a description of enhancements / new features, invitations to user gatherings, etc.

Ultimately, I think that Microsoft has gotten it wrong again. If they made owning a legitimate version of Windows the passkey into a world of access to privileged information and exceptional customer service, then almost everyone would insist on having a non-counterfeit copy. Having your customers actively avoid counterfit copies and actually requesting legit copies is the way to go.

What do you think would be Microsoft’s best move to reduce piracy of their products? Do you agree with using the patch to hassle people who may be using counterfeit copies? Can you think of a better way to get these folks to buy a legit copy? Should Microsoft even bother going after them? Leave a comment and let me know what you are thinking.

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Product Management and Project Management are two different jobs that often get confused

Ok, so how many times has this occurred: someone asks you what you do for a living and you tell them that you are a Product Manager and they fire back at you “Oh, so you manage projects?”. Grrr, it’s really no fair – the two disciplines really have nothing in common. Well, wait a minute, maybe they do. No, no they really are different. Dang it. What’s the difference between the two?

A lot of the confusion comes from the simple fact that the two jobs do share a lot of things in common. However, never fear, they really are completely different no matter what your friends or your boss tell you. In a nutshell, the differences fall into three different categories: scope, execution, and results.

Scope: A project manager has the somewhat enviable benefit of having the hope of there existing clear cut boundaries that define what he/she is responsible for. They are responsible for a project that uses resources, has a schedule, and has a clear set of deliverables. A successful product manager on the other hand has a less defined job of creating a successful product. The product will be driven by not so much a set of requirements, but rather a customer need which may be fickle and change over time. A product manager has to be able to see through requirements and determine what the root cause of the customer’s issue is and create a product that solves that.

Execution: The project manager is responsible for basically reporting on the status of the project and he/she has a whole host of tools to do this with. However, the project manager is not responsible for designing the product. In fact the project manager does not have to be a subject matter expert – they can mange projects that they know nothing about the underlying technology. A Product Manager on the other hand desperately needs to know everything about how the product works. They need to know the motivation behind every design decision so that they can explain it in non-technical terms to a customer. A product manager is going to have to be able to sell (something a project manager never has to do) his/her product to others both internally and externally.

Results: How is a project manager judged? If a project follows a set schedule, delivers what was requested when it was promised and does not exceed its budget, then it is considered to have been a success. Basically, the less attention a project attracts, the more successful it is deemed to have been. The product manager on the other hand is expected to have created a product efficiently (similar to a project manager’s project), but has the additional burden of having to be successful no matter if it is delivered to an internal or external customer. If the product is a runaway success and gets lots of vocal praise from the customer than the product manager is deemed to have done a good job.

Yes, there are a lot of similarities between the jobs. However with due respect to both project managers and product managers, you can’t switch them around and expect success. Product Management really does require a special set of skills – it’s an art, not a science.

Have you ever been confused with a project manager? Does anyone in your family really understand what you do for a living? How do you get along with project managers – are you friendly or bitter enemies? Leave a comment and let me know what you think.

Tags: project, project management, product management, IT Product manager, product manager jobs

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Before creating product requirements a Product Manger must first create a business analysis

A good product manager needs to be able to wear many different hats and one of them is that of a Business Analyst. (Oh great I can hear you saying – yet another job for the overworked PM to take on). Before you throw your hands up in the air and run screaming from the room at being presented with even more work, it turns out that you are already doing this job and just may not know it. I guess we should start our discussion in the beginning – just what is a Business Analyst and why should I care?

We are all familiar with requirements and just how important they are to ensuring that the product that you are working so hard to create meets your customer’s needs. What has been missing has been the realization that an analysis of the business needs to be done before any requirements start to be collected. If you don’t understand WHAT the business does and, even more importantly, HOW it does it, then there is no way that you’ll ever be able to create products that complement the business. All too often Product Managers try to combine the business analysis task with the requirements collection task and end up doing at best half of both jobs.

In some larger companies, there may be whole departments of business analysts, in small firms the full responsibility for this task may fall on the shoulders of the PM. If we can all agree that the business analyst’s role of understanding how the business operates is important, then perhaps we should have a quick discussion to fully understand what a business analyst does?

At a high level, the business analyst is the role that the product manager plays in order to bridge the divide between IT departments and the rest of the business units that they support. No matter if the product being developed is for internal consumption or for external customers, the business analyst’s role is to ensure that the most is made of the human contact between multiple internal departments.

The end result of a business analyst’s efforts feed into the requirements collection process. However, in order to generate this output, a business analyst needs to start with a clear understanding of what those product requirements will eventually look like. This includes having a good understanding of the plan to eventually create the requirements, what types of requirements will be needed, the process that will be used to gather the requirements, and the planning and preparation that will go into creating the final set of requirements. Note that the business analyst does not need to actually create product requirements; however, they should have a good understanding of what they will look like.

In order to understand how a company does what it does, the business analyst is going to have to do a lot of talking. As the analyst moves from department to department, he/she is going to have to use many different techniques to elicit information from various employees. Some techniques that can be used include:

• Brainstorming
• Job shadowing / observation
• Surveys / interviews / focus groups
• Collaborative work sessions
• Prototyping
• Document / Interface analysis

After having collected all of the information needed to completely describe how the company operates, the next step is to find a way to document this information. As we all know, thick binders of dense text will be put on the shelf and never looked at again. A few issues that the business analyst needs to resolve as the information is processed are:

• Developing Use Cases to show how information & parts move within the company
• Categorizing and packaging the collected information
• Documentation techniques that work best for this particular company / division.
• Change control – critical because of the understanding that process information ages quickly.

In the end the Product Manager / Business Analyst needs to develop and document a detailed understanding of how the company/customer operates in order to prepare to develop requirements. The skills that a Product Manger needs to have in order to do this successfully are as follows:

1. The ability to elicit and assess information from information holders.
2. The ability to conduct interviews with users and business leaders.
3. The ability to facilitate collaborative sessions.
4. The ability to resolve conflicts and reach consensus.
5. The ability to navigate internal politics.
6. The ability to foster creative problem solving within the various departments.
7. The ability to document the business information that has been gathered.

So do you play the role of business analyst in your firm today? Do you do a good job of documenting how the business works or are you too busy creating actual product requirements? What skills did I leave off of my list of what a business analyst needs to do? Leave a comment and let me know what you think.

Tags: business, business analyst, new products, requirements, product management

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