A product is an arbitrary line drawn around intellectual property for the purposes of communication and monetization.
The Merriam-Webster dictionary defines a product as “something produced.” It is hard to argue with that, but I would like to offer a more useful definition for technology product marketers.
The least useful way to think about products is to imagine they have an independent existence. They don’t, especially in software.
A product is what you say it is. This blank canvas places a heavy burden on product marketers. Drawing a product boundary in the wrong place is perhaps the most damaging and the most common product marketing mistake.
Defining product boundaries isn’t always easy. If you start by optimizing for communication and subsequently solve for monetization, then you will probably be on the right track.
Products are a handy way to wrap up a bunch of intellectual property in an orderly way that is easy to communicate. Products give people something to wrap their heads around. Products let you easily explain what you do. “Hey, Tesla, what do you guys do?” “We sell cars.”
But products only help your communication if you get the boundaries in the right place. If you misplace the borders, rather than making your communication more straightforward and more effective, you will force potential buyers to work harder to understand what you do, leaving you at a competitive disadvantage compared to more straightforward alternatives.
For communication to be effective, it should be as simple as possible and directed at a clearly defined audience. It is therefore helpful to have no more products than necessary.
For many companies, the ideal number is one. Everything gets harder with multiple products. Work multiplies, resources divide. If you always sell to very similar people in similar companies, then you probably only need one product.
If you have two offerings that are purchased by entirely different roles in different organizations, then you probably have two products.
You could think in terms of audiences. Each truly distinct audience may justify a separate product.
Categories are helpful here and should take you to the same answer. If what you do fits into a single market category, then it is probably a single product. If your offering spans a couple of clearly defined and generally accepted industry categories, then you probably have two products.
If you have more products than necessary, then the clarity of your communication will suffer dramatically. Perhaps the most common and most fundamental marketing mistake made by technology companies is having too many products. They have drawn the lines in the wrong places and present features to customers as products. Any company that has an A-Z product list is likely guilty of product overload.
Ironically, having too many products creates a lot more work for product marketing teams to do. Each product comes with its list of must-have marketing artifacts that you need to create. On top of this, you have to deliver workarounds to communicate what you do, aggregating the overly granular products into something more useful. You might call them solutions, sales plays, platforms, clouds, or suites.
Given the limited resources in product marketing teams, this is a recipe for staying stuck in the weeds. There are better ways to spend your time.
Dave Kellogg, a former boss, and outstanding marketer, defines the purpose of marketing as “making sales easier,” as he explains here.
Product proliferation makes sales harder.
I remember a fun chat with the head of product marketing at a midsize software company. The conversation went like this :
Product marketer: What do you think of [some competitor]’s website?
Me: I like it. It’s obvious what they do.
Product marketer: Sighs. Yes. But it’s so much easier for them. They only have three products, and we have fifteen.
Me: True. But you both do the same thing.
Having too many products doesn’t help. You do more work and get worse results.
If you run product marketing, one of the most valuable conversations you can have with your product organization goes like this :
Product: Here is a cool new product. Go ahead and launch it for me.
Product marketer: Thanks. That is a cool new feature.
As a product marketer, you must remember that others use the term product in a different way to you. It isn’t because there is a product manager that there is a product.
“Product = Customer x Business x Technology”Inspired: How To Create Tech Products Customers Love 2nd Edition, Marty Cagan, 2017, Wiley
Product multiplication mostly happens by accident. It occurs because product marketing is a single point of failure in preventing product proliferation. Sometimes product marketers understand this and act accordingly, but sometimes they view products as something that engineering or product teams throw over the fence that they must catch.
Occasionally, product proliferation is intentional, usually driven by monetization. If a company does a bunch of good development work and creates a new “product,” then it may be that your CEO wants to charge for the new intellectual property. If you include the new capability in an existing product, then you may need to give away all this work for “free” to existing customers.
Monetization can sometimes pull you in the opposite direction from communication as you figure out where the product boundaries sit.
Back in the days of on-premise software and license + maintenance sales, there was understandable concern over giving away enhancements to existing customers, rather than charging them. Some accounting rules also discouraged this altruistic behavior. Even then, good product marketers found ways to capture incremental revenue without creating new products.
Most software today is sold as a subscription, so it is harder to argue that anything you create for customers could ever be given away “for free.”
Still, let’s assume that there is a good reason to charge for some new capability that extends an existing product. The best way to handle this is rarely to introduce a new product. Instead, you can separate products that are publicly visible entities from modules that are not featured in your marketing but exist at a more granular level and appear in your billing systems. In this way, you can make separate decisions on how you charge new and existing customers. You could decide to include the module in your product for new customers but to charge existing customers. I’m not recommending this. My point is that when monetization is an excuse for product multiplication, somebody failed to think through the alternatives.
So that’s why I define a product as an arbitrary line drawn around intellectual property for the purposes of communication and monetization. I hope you find this helpful. Let me know what you think.
My definition is very product marketing-centric. If you would like a more product management centric definition, check out what Marty Cagan (author of “Inspired”) has to say. He defines a product like this :
Product = Customer x Business x Technology
You can read about his definition here.
What am I missing? Share your thoughts and experience with the PMM Hive. Join Free today!