Product Manager's Guide to Dealing With Sales People

PRODUCT MANAGER’S
GUIDE TO DEALING WITH
SALES PEOPLE
Mike Chowla Twitter: @mchowla
Silicon Valley Product Camp
April 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 Reports
I’ve only ever heard 2 reasons why a deal was
lost:
1. Missing features
2. 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 Reports
We 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

QUESTIONS?
mchowla@gmail.com
Twitter: @mchowla
www.linkedin.com/in/mchowla

Product Manager's Guide to Dealing With Sales People

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