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Helping Companies to think proactively about the “Paradox of Choice”

Why Market Segmentation and Prioritisation is Crucial

Paradox of Choice Market Segmentation Market Prioritisation
Paradox of Choice

I have been working as a consultant in Strategic Marketing and Product Management for many years now. I work with clients who are not just from the technology sector but from across a broad range of industries. I am seeing a common thread across many of these clients – the paradox of choice! How can market segmentation help?

Generally, as I start each engagement, we undertake a short capability assessment so that we can explore together where there may be gaps in the the company’s approach to what I call strategic marketing or commercial product management.

Invariably, when we chat about where they have challenges, and reflect on the capability assessment that captures all team members inputs anonymously, one of the key areas that is highlighted almost every time is lack of market focus.

Whether it is a startup or a more established business, they often are adhoc or scattergun in their approach to where they will find market opportunity.

What is a Paradox of Choice?

I have rarely come across a company that has not been relatively clear in describing the product or solution they have created. What they tend to be less clear on are the market segments that might benefit most from their product or solution. Generally, in each engagement I see one of two things happening:

  • The company has a product or service but they are struggling to align this with a clear need from a broad enough market base that will help them to drive meaningful revenue – i.e they have a product or solution looking for a market
  • The company has a product or service that could address many different market challenges across lots of different areas i.e. they are suffering from what I call a paradox of choice.

A paradox of choice might make us feel good because we think we have lots of opportunities to choose from. In reality having too many opportunities actually requires more effort. A lack of focus, jumping from one opportunity to the next and not targeting sales and marketing resources in the right way will not help us to maximise market opportunities that could be strategically very lucrative.

Why Market Segmentation Helps?

Taking time as a company to outline market opportunity and to assess this market opportunity through insight gathering and then through a prioritsation exercise can be hugely beneficial.

So who should perform this market segmentation and prioritisation exercise? In my view it is part of the role of a strategic Product Manager or a Strategic Marketer. The beneficiaries of this exercise are:

  • The CEO – they will have a way of aligning their strategic objectives (OKRs or KPIs) with defined market opportunities
  • Sales – the CEO can work with the sales team to assign realistic sales targets to validated market segments
  • Marketing – the marketing team can define compelling value propositions for each prioritised market segment and drive targeted marketing campaigns

In my experience, lots of companies avoid this activity because it does require some effort and focus and it does require some experience in doing it right. It is crucial to choose the right criteria to support segmentation, to implement market research to generate insights for decision making and to get buy-in from the full leadership team in prioritising market opportunity.

What are the consequences of not doing this?

From my experience, the key consequences of a lack of market focus are:

  • A sales team that are scattergun in their approach to revenue generation. Sales is an operational cost to the business and not ensuring that the sales team are focused and targeted at the right markets is a mistake
  • Revenue is coming from markets that are not really aligned with the strategic objectives of the business – perhaps leading to bespoke engagements to meet clients needs
  • Revenue is not being generated in a repeatable way from clients with similar challenges
  • Sales forecasting is really challenging as it is difficult to predict where market demand will come from

As a senior leadership team, take some time to help the business to achieve real focus by undertaking a market segmentation and prioritisation exercise.

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Making sure you hire the best Product Manager for your business

When it makes sense to hire a Product Manager

As an ex Product Manager myself, I now work as a mentor with startups and scaling SMEs and one of the most common questions I get asked is:

When is it time to hire a Product Manager?

The answer to this is not necessarily straightforward and really depends on how you define product management. Product Management, although pretty widely adopted as a discipline in organisations is still quite misunderstood.

If your organisation has adopted an Agile development methodology then the engineering team will likely be pushing for the business to hire a product owner:

A Scrum Product Owner is responsible for maximizing the value of the product resulting from the work of the Development Team. How this is done may vary widely across organizations, Scrum Teams, and individuals.

https://www.scrum.org/resources/what-is-a-product-owner

The primary goal of the product owner is to maximise the value delivered by Agile Scrum teams. For this reason, they need to understand and be respected by engineering and quite often they have an engineering background or technology focus. Because product owners lean more towards engineering than marketing they tend to be quite inward focused. The majority of their time is consumed by the agile development process – attending to the backlog, supporting sprint planning meetings etc. They typically have very little time (or inclination) to focus on market analysis or strategy.

The problem is that once a business hires a product owner they often feel that they have product management covered. My view is that this is often not the case and let me explain why.

In many early stage businesses the CEO/Founder is often the person who understands the target markets better than anyone else. They will have clarity on the vision, the target markets, the competitors and market needs and they will guide product strategy. If there is an established agile process in the business they will influence the product backlog. As the business scales they will find it harder to work directly with the engineering team so will likely push to bring in a product owner to do this. In early stage businesses the CEO/Founder will also guide and influence strategic marketing and sales.

As the CEO/Founder becomes increasingly busy just dealing with the day-to-day requirements that come with being a CEO of a scaling business they won’t have the same capacity to share their market expertise with the senior leaders of the business.

So who takes on the role of delivering clarity on the vision, target markets, competitive landscape, buyer personas, market needs, etc. when the CEO is too busy to do this to the same level as before? Who provides clarity on direction to the sales, marketing and engineering teams?

Many believe this should be the product owner – but as we discussed earlier they are generally pretty busy just keeping on top of a backlog of product development requirements. They have little time to focus on elements of strategic marketing. I ran a Product Management function in a large software development company myself so I understand how challenging it can be for product owners to take on both the strategic and tactical elements of product management.

Fig. 1: Key Product Management Focus

So if your product owner is too busy or too technical to focus on strategic marketing, then is it worth considering a supporting hire that has the capacity and capability to do this?

Someone with the title Strategic Marketer or Strategic Product Manager could add real value at a senior level in the business. Although closely aligned with the product owner, this role would be more strategic and outward focused and would perform many of the strategic marketing tasks that the early stage CEO/Founder undertook – articulation of vision, target market segmentation and prioritisation, competitive analysis, capturing of market needs, articulation and dissemination of a value proposition, etc.

I believe that at a certain point in a business’s growth there are signs it is time to take on someone with a strategic and market focused approach – read on for my view on what these signs are …

“Inside-Out” rather than “Outside-In” Product Management

Is your business having ad-hoc conversations with the market – often in broadcast (sales focused) rather than listening mode (strategic alignment, capturing market needs)? Are these engagements typically driven by a a handful of the senior leadership team?

If so then it is likely that no one person has responsibility for feeding back what they are hearing to the product development team or for owning how this is captured and framed in a value proposition for sales or marketing purposes. It may be the case that your product owner may not even be aware of these conversations! As a result the engineering backlog is likely driven by hunches and an internal view of the world as this is the only view the product owner has.

Although your business may have a Digitial Marketer, a Marcoms team, a Website Developer – are these resources typically in broadcast mode and focused on lead generation? Are they taking a strategic focus to market development?

Does your business have a high level understanding of target or addressable markets but not enough detail at a competitor, customer or market level to support a focused and prioritised approach to sales and market engagements?

If the product owner is focused inward then in reality product requirements will only tentatively link to market needs and it is likely that your product is being developed in a vacuum.

Product Manager not aligned with organisational functions…

Where it was once easy to align everyone, is this now becoming increasingly difficult as the business scales?

If the senior team are travelling more and required to attend more external meetings to grow the business then they will find it even more difficult to align functions across the business.

Have your engineering, marketing, finance and sales teams grown organically? If so then they are likely operating in silos with little cross-functional alignment and it will have become more difficult to benchmark or measure the effectiveness of these teams.

If the CEO/Founder is finding it increasingly difficult to align the senior leadership team on a market-focused approach to driving the strategy then it may be time to find a supporting resource to help with this – don’t assume the product owner has the capacity to do this.

Hunches setting the product strategy…

As an early stage business you had no option but to focus on strategy. Investors demanded it! As the company has scaled, has it been all hands on deck to deliver project commitments and has strategy had to take a back seat to tactical delivery?

Are Senior leaders in the organisation making product strategic decisions that are driven more from personal hunches rather than a validated view of the market?

To drive revenue, are you chasing every business opportunity even if it only has tentative links to your strategic vision?

Is this leading to confusion and an unhealthy lack of focus? Are business priorities unclear and is there a lack of focus across different functions?

If this is the case then it is likely that a culture of  priority du jour has developed. If your business is evolving chaotically then it is likely that the product backlog is often re-scoped to suit tight deadlines or sales demands and key market-focused features may be omitted or neglected. This could have a direct impact on your ability to attract and retain broader market interest.

A tactical rather than a strategic approach to product strategy…

In order to win business have you been driven by customer demands and do you have a tendency to approach each sales opportunity as a tactical bespoke deployment? Are solutions tailored to each customer’s exact needs rather than being taken off the shelf?

If this is the case then you likely have a lack of repeatability across customer deployments and your service deployment team is growing.

As a consequence, your software solution may become difficult to manage across customer sites and the development team may struggle to manage an increasing number of customer quality issues. This could have a direct knock-on impact on your ability to service the needs of the broader market through regular quality product updates.

Your product strategy is failing to attract or retain buyer interest …

Many technical companies have a strong product development heritage. Although your company may have mastered the competencies to deliver a high quality and technically masterful product are you failing to articulate its value to the market? Do you find that your business is struggling to understand and speak to the challenges or problems that your target markets are experiencing?

It’s hard to be heard when everyone is broadcasting to rather than communicating with the market.

Research has shown that people spend 60% of conversations talking about themselves. And this jumps to 80%  when communicating via social media platforms such as Twitter or Facebook.

Are you spending more time talking about your own business rather than your customer’s challenges? Is your message unintentionally encrypted for your target market?

Although it is so tempting to begin broadcasting about your products to anyone who will listen, it is so important to clearly speak to challenges your market can resonate with. You often only get one shot at making an impact when you broadcast – try and make it count by hiring someone whose job it is to understand your target markets really well and to support marketing and sales to create messages that will resonate.

Finding it hard to understand return on investment from Product Strategy…

If your business is winning lots of projects, are you assigning resources arbitrarily with little focus on “return on investment”?

It can sometimes be difficult to justify the investment in a project if the organisation cannot align it with a strong market demand.

Is your sales organisation chasing deals that are driving revenue but these deals are often once-offs and have loose ties to the overall strategic drivers of the business?

An active but misdirected sales team can consume organisational resources at a significant cost to the business.

Also, if product development activity is not carefully managed and aligned with a clear market strategy it can cost the business dearly. We would be foolish to invest in a large home renovation project, for example, without the guidance of an architect. We need their help to ensure our exact needs are met, to design the best solution and to ensure that the builders stay within budget. Product development projects are no different – strategic product managers ensure projects are well architected and align with market need. They manage and control investment in engineering development and work with product owners to ensure the business gets bang for buck!

Innovation is at a standstill….

Do you find that there is no clear process for capturing or prioritising new ideas?

Do you have a mechanism for gating ideas or preparing for what is beyond the next horizon? Does your business have the opportunity or capacity to seek out adjacent market opportunities and to fund blue sky thinking?

Every business needs time to plan for the future and to anticipate and react to industry trends and market needs. This requires foresight and investment and is a key part of strategic marketing.

Struggling to stand out in a competitive landscape …

Is your competitive landscape crowded and the market is finding it difficult to find compelling reasons to select your company’s products? Do you struggle to identify unique selling points for the products or solutions and it has become increasingly difficult to position your company competitively?

Although it is very difficult to maintain sustainable competitive advantage in a world where technology and market needs evolve quickly it is really important that every business focuses on what makes them great and what makes them stand out against the competition. Someone in the organisation needs to keep a close eye on the competitive advantage that your organisation can drive and maintain over time.

Although these indicators can manifest themselves to varying degrees in companies, depending on their stage of growth, they are a useful litmus test for the need to consider hiring someone who is focused on strategic marketing or strategic product management and who can support you to align everyone in the business around your vision.

How can IntegratedThinking Help you with Product Management?

Helping you to understanding what strategic product management or strategic marketing means to your organisation. Applying a step-by-step Insight2Value process that helps you to:

  • Create scalable and repeatable service, products or solutions that customers truly value
  • Drive future growth through the continued progression of innovative ideas
  • Remain focused – making sure everyone is marching not only in the “right direction” but in the “same direction”
  • Work to a clearly defined business model that meets corporate strategic objectives
  • Allocate your finite set of resources to the right projects and achieve maximum return on investment

It is so important though that you seek support when establishing the product management discipline – making any kind of change in an organisation requires alignment from the top down to ensure you draw a line in the sand and take the right approach moving into the future.

Contact: email siobhan@integratedthinking.ie for more details


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Product Management: How can you make sure investors love your strategy?

What Investors Care About?

Investors hate missing out on a great opportunity but equally they fear making a bad investment. For Product Management it is essential that they consider the needs of this crucial stakeholder.

So what are some of the things that investors think about when investing in product companies…

  • The challenge the product is trying to address and the evidence you have captured that this is a challenge the market wants solved
  • The size of the market opportunity
  • Any early traction you have obtained for your product
  • Your articulation of the value you bring to the market and how you will monetise this value
  • Why your business is uniquely different and how you compete with others?
  • Why you think people will be compelled to buy from you? Who your buyers are and what do they care about?
  • What team is in place to execute on the product strategy and how effective are this team?
  • Your strategy for marketing communications and sales
  • Your strategy for partnering with others to gain market traction or to execute on your product strategy

If this is what investors want to understand about your business, then how much attention do the leaders in your business, including Product Management give these areas?

As someone who has helped startups with their business plans and product strategy I understand that to capture the interest of the investor community it is hugely important to articulate the growth opportunity for your business through a business plan and associated Product Strategy.

Articulating the market opportunity and your value proposition for each target market is crucial. Clearly representing the challenge you address for your target market, capturing insights from this market and understanding how you will capture market interest to drive revenue growth is essential to ensure you get the kick-start of investment you need to scale your business.

Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation.” 

Robert Kaplan and David Norton (Strategy Maps)

Of course your Product Strategy needs to consider areas such as your mission and vision (with associated metrics of success), segmented market opportunity, your pricing strategy, your positioning of value for each target market, your competitive differentiation, any partnership strategy and a link to any sales and marketing strategies. You also need to highlight the key metrics that you will monitor to ensure product success – recurring revenue goals, customer acquisition rates, etc.

Everyone in the organisation needs to have sight of the key objectives (OKRs or SMART metrics of success) that the business is aiming to achieve at a high level so that they can define and align their own metrics of success to drive these corporate objectives.

A company that has captured initial investment through a clearly defined business plan and product strategy will move quickly to focus on the execution of this plan – hiring engineers, marketers and sales personnel. Keeping these resources aligned to deliver on the promises made to investors is now crucial!

It is really important that you can demonstrate to an investor that everyone in the business is aligned around the product strategy and that you can show how cross functional goals and initiatives are aligned. So it is important to define clear corporate goals and objectives that can be cascaded throughout the business. This ensures that you:

  • Create an aligned and collaborative organization that shares a common understanding of how the business will create value
  • Ensure the organization remains focused on corporate strategic objectives
  • Maximize ROI for corporate resources and ensure all resources are delivering effectively
  • Support decision making for all employees
  • Enable Sales and Marketing to clearly position the products and solutions to the target market and thereby drive revenue growth

How can you make sure you are investor ready?

Whether you are a startup or SME you should take the time to ensure that you have captured the right insights from the market to create a clear and compelling Business Plan and Product Strategy.

There are so many things that Investors care about but you need to focus on what is key in the context of your industry.

I have recently spent time running strategic insight gathering and value proposition workshops with companies across multiple industry sectors. The exercise has been enlightening for everyone – particularly those companies that have spent a lot of time focusing on the “execution” rather than the “strategic” side of product management and for those companies that have a requirement for near term investment. These workshops support the company with the insights that are needed to create a compelling product strategy.

Contact me siobhan@integratedthinking.ie for more details on how your business can capture market insights to drive future opportunity.


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5 Steps to Deeper Customer Insight

Market Insight Product Manager Product Strategy
Capturing Market Insight for Product Strategy

Why your Product Strategy needs to be based on deep market insight

As a Product Manager does market insight simply involve letting your existing customers dictate what they would like to see in the product? Sometimes, more influential customers (those with a strong contribution to overall revenue) can drive product strategy.  However, because one large company asks for something does not mean that there are lots of customers with this same need.  Individual customers generally have little concern for the needs of other customers.

It is easy to lose sight of market demand if you are too focused on your own product. If your product strategy requires that you deliver a broad-based market-driven offering then focusing on individual customer demands may not help you to achieve this. It is more likely to drive you down a services route.

Customers can provide lots of useful insights related to their use of the  product and what they would like to see in our product. However, there are steps you can follow to proactively capture deeper customer insight, enabling you to focus on the broader market.

5 Step Insight2Value Process – As a Product Manager:
  • Step 1: Capture Insights – Research and articulate data on your current business context, future market opportunities, buyer behaviours and competitive landscape
  • Step 2: Focus – Apply a methodology to help you to identify and prioritise key market opportunities that will drive revenue and enable you to clearly articulate your service/product/solution offering for these markets
  • Step 3: Position – Create a positioning statement that enables you to differentiate in a competitive landscape
  • Step 4: Validate – Apply Voice of the Customer (VoTC) techniques to enable you to validate your market hypothesis through qualitative and quantitative research
  • Step 5: Communicate – Create a compelling message that can be used in a targeted marketing campaign. Supporting you to create a Marketing Plan that will drive engagement with your target markets
High Performing Strategic Marketing

My approach is consultative and collaborate. Therefore, I strongly believe in approaches that help your business to align the disciplines of product management, engineering, sales and marketing. I have the foundations and understanding of how products are designed and engineered. I know the importance of an aligned approach across the organisation.

For those of you in the Technology Sector, everything I do will help you to create relevant business requirements (Business Epics) for the product or solution development backlog – aligning product management/strategic marketing and solution development (engineering).

Remember: “The customer rarely buys what the company thinks it is selling him. Companies need to take a customer-first perspective to succeed…”

Peter Druker, Innovation and Entrepreneurship

Checkout the Insights2Value approach to support your business to drive insights that will add real value.

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Articulating your Value Proposition – Not Just for Startups

The Challenge

As someone who has helped startups with their business plans I understand that to capture the interest of the investor community it is hugely important to articulate a compelling product strategy and value proposition. Clearly representing the problem or need you address for your target market, listening to your target customers and understanding how you will drive revenue growth is essential to ensure you get the kick-start of investment you need to scale your business.

Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation.” 

Robert Kaplan and David Norton (Strategy Maps)

Business plans typically only get shared with a targeted group – generally the CEO and potential investors. The continued articulation of the value proposition within the company, especially as the number of new employees grows, can be ad-hoc at best.

A company that has captured initial investment through a clearly defined business plan will move quickly to focus on the execution of this plan – hiring engineers, marketers and sales personnel. As time progresses and they learn more about their target market they may change their initial corporate strategy and re-evaluate their initial hypotheses of what the customer needs. Somewhere along the line their value proposition changes but often this is not captured or re-communicated clearly to everyone in the organization.

Once the company begins to execute the business plan different dynamics will occur across the organization. The background and focus of the engineering team will mean that they will generally position the product strategy from a technical standpoint, often failing to understand or demonstrate the “business value” of what they are creating. Marketing will battle to understand the technical complexities of the product and will fail to create compelling positioning material. Sales will struggle without a clear view of the target market, the value the company brings or the product’s unique selling points. Without a defined value proposition the company will struggle to position the product strategy and potential opportunities will be missed.

Articulating a compelling value proposition as part of your product strategy allows you to:

  • Create an aligned and collaborative organization that shares a common understanding of how the business will create value
  • Ensure the organization remains focused on corporate strategic objectives
  • Maximize ROI for corporate resources and ensure all resources are delivering effectively
  • Support decision making for all employees
  • Enable Sales and Marketing to clearly position the products and solutions to the target market and thereby drive revenue growth
The Solution

Whether you are a startup or SME you should take the time to ensure that your Value Proposition is clearly articulated inside your business so that everyone can clearly represent it outside your business.

Product engineering, sales and marketing teams are often too busy delivering current project objectives to focus on the company’s value proposition and ensure that everyone is aligned around a common message.

Undertaking this exercise takes time and focus from the Product Manager or Strategic Marketer.

IntegratedThinking can help through a short-term engagement that will provide tools and methodologies to support your teams to:

  • Understand the market segment you are addressing
  • Review and define the value proposition for each of your target customer segments
  • Articulate this value proposition to the wider team with clarity
  • Validate this value proposition with your target market
  • Support the marketing team to articulate this value proposition through corporate messaging

“Working with Siobhan enabled us to really understand the market we are addressing and the problems and needs of our customers – we learned to recognize the huge benefits that can be achieved from an “outside in” approach to product management. As a result, we have strengthened our value proposition”

Bill Walsh, CEO Aspire
The Approach

The initial consultation is free, helping your to articulate your requirements. I will then provide a project proposal for review and approval that will articulate what needs to be done, how long it will take and how much it will cost.  In a busy environment, where the time of your key resources is precious, you need someone who has done this before and can drive the project to completion.

Please feel free to give me a call or contact me via email and I will be happy to discuss this further.

Contact: email siobhan@integratedthinking.ie for more details

I have over 30 years of commercial experience with over
15 of these in strategy development with SMEs from across
multiple sectors.
I have experience of marketing, sales and product strategy
and use the many transferrable skills that I developed in the
technology sector to work with SMEs from across multiple
industry sectors. I focus specifically on key elements of
strategic marketing and product & service strategy.

Since the establishment of my consultancy business in October 2013 I have been providing in-house mentoring to scaling companies.