1. 8 1 2010
Pragmatic Marketing’s 10th Annual
Product Management and Marketing Survey
World’s Largest Review of Product Management Practices
Re-Inventing
ProductManagement
withLOVE
F
iveWays
toTorpedo
YourProduct
Management
Career

2. Executive Briefing
The proven way to organize and measure
effective product management teams.
• Review key concepts of the Pragmatic Marketing Framework,
the worldwide standard for product management.
Business Marketing
Positioning
Plan Plan
• Learn techniques leaders can use to accelerate adoption. Pragmatic
Marketing
Market Market Buying Customer
Pricing
Problems Definition Process Acquisition
• Designed specifically for senior management. Win/Loss Distribution Buy, Build Buyer Customer
Framework
Analysis Strategy or Partner Personas Retention
Distinctive Product Product User Program
Competence Portfolio Profitability Personas Effectiveness
STRATEGIC
TACTICAL
MARKET STRATEGY BUSINESS PLANNING PROGRAMS READINESS SUPPORT
Competitive Product Launch Sales Presentations
Innovation Requirements
Landscape Roadmap Plan Process Demos
eaders
ed In L te success
of Tunpany CEOs creahy most fail)
m w
gy co (and Technology Use Thought “Special“
The How te
chnolo
Assessment Scenarios Leadership
Collateral
Calls
Status Lead Sales Event
ott Dashboard Generation Tools Support
rman Sc
vid Mee
Myers Da
g Stull, Phil
by Crai
Referrals Channel Channel
Get a free e-book at
References Training Support
© 1993-2010 Pragmatic Marketing
PragmaticMarketing.com/secrets
PragmaticMarketing.com/seminars
Call (800) 816-7861 to conduct this seminar at your office

3. The Pragmatic Marketer ™
8910 E. Raintree Drive
Inside this issue: Volume 8 Issue 1 • 2010
Scottsdale, AZ 85260
10 T
Pragmatic Marketing, Inc.
Founder and CEO
Craig Stull
H
Editor-in-Chief
An
Kristyn Benmoussa
nua
lS
Managing Editor
Graham Joyce
—————————————————
urv
Interested in contributing an article?
Visit PragmaticMarketing.com/submit ey
6 Pragmatic Marketing’s 10th
No part of this publication may be reproduced, Annual Product Management
stored in any retrieval system, or transmitted, in
any form or by any means, electronic, mechanical and Marketing Survey
photocopying, recording or otherwise, without the by Steve Johnson
prior written permission of the publisher.
For advertising rates, call (480) 515-1411. Pragmatic Marketing conducts an annual
Other product and/or company names mentioned survey of product managers and marketing
in this journal may be trademarks or registered
trademarks of their respective companies and professionals. So it is that time of the year
are the sole property of their respective owners. to take a close look at where you and your
The Pragmatic Marketer, a Pragmatic Marketing
publication, shall not be liable regardless of the company stand in the ratings.
cause, for any errors, inaccuracies, omissions, or
other defects in, or untimeliness or unauthenticity
of, the information contained within this magazine.
Pragmatic Marketing makes no representations,
warranties, or guarantees as to the results obtained
from the use of this information and shall not be
liable for any third-party claims or losses of any 16 Re-Inventing Product
kind, including lost profits, and punitive damages.
Management with LOVE
The Pragmatic Marketer is a trademark of
Pragmatic Marketing, Inc. By Bruce La Fetra
Printed in the U.S.A. To deal with the changes in
All rights reserved.
how customers interact with
ISSN 1938-9752 (Print)
companies, a new model for
ISSN 1938-9760 (Online)
About Pragmatic Marketing®
customer relationships is
Creator of the world’s most popular product
needed. The Lifetime Opportunity
management and marketing seminars, Pragmatic Value Equation (LOVE model) gives
Marketing has trained more than 60,000 technology
product management and marketing professionals
product managers a relevant and
at 5,000 companies in 21 countries. As the thought- actionable framework for generating
leader in the industry, the company produces blogs,
webinars, podcasts, and publications read by more
valuable interaction with consumers.
than 100,000 every year.
Pragmatic Marketing has been honored four times by
Inc. magazine as one of the fastest growing private 23 Five Ways to Torpedo Your
companies in America (2000, 2007, 2008, 2009), and Product Management Career
in 2008 named a Comerica Bank Arizona Company
to Watch. By Greg Council
Visit PragmaticMarketing.com to learn more. With technology-based solutions it really
does “take a village” to raise a successful
product. Failing to recognize that can lead
to disaster. Read the five common pitfalls
(or torpedoes) that can make or break a
product manager’s career
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 3

4. Are your product management and marketing teams
overloaded with tactical activities, spending too much
time supporting Development and Sales rather than
focusing on strategic issues?
The Pragmatic Marketing Framework ™
Business Marketing
Positioning
Plan Plan
Market Market Buying Customer
Pricing
Problems Definition Process Acquisition
Win/Loss Distribution Buy, Build Buyer Customer
Analysis Strategy or Partner Personas Retention
Distinctive Product Product User Program
Competence Portfolio Profitability Personas Effectiveness
STRATEGIC
TACTICAL
MARKET STRATEGY BUSINESS PLANNING PROGRAMS READINESS SUPPORT
Competitive Product Launch Sales Presentations
Innovation Requirements
Landscape Roadmap Plan Process Demos
Technology Use Thought “Special“
Collateral
Assessment Scenarios Leadership Calls
Status Lead Sales Event
Dashboard Generation Tools Support
Referrals Channel Channel
References Training Support
© 1993-2010 Pragmatic Marketing
Visit PragmaticMarketing.com or call (800) 816-7861
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 4

5. Seminars
Living in an Agile World™ Requirements That Work™
Strategies for product management Methods for creating straightforward product
when Development goes agile. plans that product managers can write and
developers embrace.
Practical Product Management®
Principles of the Pragmatic Marketing Framework, Effective Product Marketing™
the industry standard for managing and marketing Repeatable, go-to-market process to design,
technology products. execute, and measure high-impact marketing
programs.
Pragmatic Roadmapping™
Techniques to plan, consolidate and communicate New Rules of Marketing™
product strategy to multiple audiences. Reach buyers directly, with information they
want to read and search engines reward
with high rankings.
Product Launch Essentials™
Assess organizational readiness and define team
ExecutiveBriefings responsibilities for a successful product launch.
Designed specifically for senior management,
Executive Briefings discuss how to organize
Product Management and Marketing
departments for optimal effectiveness
and accountability.
In addition to the extensive published schedule, training can be conducted
onsite at your office, saving travel time and costs for attendees, and allowing
a much more focused discussion on internal, critical issues.
Pragmatic Marketing’s seminars have been attended by more than
60,000 product management and marketing professionals.

6. P r a g m a t i c M a r k e t i n g ’s 10 th A n n u a l
Product Management
and Marketing Survey
by Steve Johnson Each year Pragmatic Marketing conducts a survey of
product managers and marketing professionals.
Our objective is to provide information about
compensation as well as the most common
responsibilities for those performing
product management and marketing
activities. Over 1,500 responded to the
survey between October 29 through
November 25, 2009 using Vovici’s
EFM Feedback survey tool.
Remember when making decisions, this report
describes typical practices, not best practices.
For best practice in product management
and marketing, attend a Pragmatic
Marketing seminar.

7. 10th Annual Product Management and Marketing Survey
Organization
Profile of a Product Management ratios
product manager within the company
• Average age is 37 How are product managers allocated relative
to other departments?
• Responsible for 3 products and work in a
department of 6 people For each product manager, we find:
• 87% claim to be “somewhat” or “very” technical • 0.7 Product marketing managers
• 32% are female, 68% are male • 0.7 Marketing Communications
• 95% have completed college and 41% have • 6.1 Salespeople
completed a masters program
• 2.3 Sales engineers (pre-sales support)
Reporting • 1.1 Development leads
The typical product manager reports to a director • 6.5 Developers
in the product management department.
• 0.9 Product architects and designers
Title
Other ratios
• 44% report to a director
• 3.7 developers per QA manager
• 31% report to a vice president
• 2.5 salespeople per sales engineer
• 19% report to a manager
• 6% report to a CXO
Impacts on productivity
Department
• Product managers receive 50 e-mails a day
• 26% direct to CEO or COO and send 25.
• 21% in Product Management • Product managers spend roughly two days a week
• 16% in Marketing in internal meetings (15 meetings/week). But 55% are
going to 15 meetings or more each week, and 35%
• 13% in Development or Engineering attend 20 or more meetings!
• 8% in Sales • Product managers typically work 50 hours per week.
• 3% in Product Marketing
3.7
deve
lope 2.5 salespeople per
rs p sales engineer
er Q
Am
ana
ger
The Pragmatic Marketer Volume 8, Issue 1, 2010 • 7

8. 10th Annual Product Management and Marketing Survey
Activities
StrategicActivities (based on the Pragmatic MarketingActivities
Marketing Framework)
72% Market problems 33% Marketing plan
Percent of respondents
34% Win/loss analysis indicating they conduct 21% Customer acquisition
the activity
52% Distinctive competence 20% Customer retention
47% Market definition 63% Launch plan
57% Product portfolio TechnicalActivities 31% Thought leadership
72% Business plan 75% Competitive landscape 15% Lead generation
57% Pricing 35% Technology assessment 36% Referrals references
47% Buy, build or partner 80% Product roadmap SalesActivities
66% Product profitability 47% Innovation 24% Sales process
71% Positioning 79% Requirements 60% Collateral
24% Buying process 69% Use scenarios 60% Sales tools
34% Buyer personas 62% Status dashboard 60% Channel training
56% User personas
69% Presentations demos
Business Marketing
43% “Special calls”
Positioning
Plan Plan
42% Event support
Market Market
Pricing
Buying Customer 67% Channel support
Problems Definition Process Acquisition
Win/Loss Distribution Buy, Build Buyer Customer
Analysis Strategy or Partner Personas Retention
Distinctive Product Product User Program
Competence Portfolio Profitability Personas Effectiveness
STRATEGIC
TACTICAL
MARKET STRATEGY BUSINESS PLANNING PROGRAMS READINESS SUPPORT
Competitive Product Launch Sales Presentations
Innovation Requirements
Landscape Roadmap Plan Process Demos
Technology Use Thought “Special“
Collateral
Assessment Scenarios Leadership Calls
Status Lead Sales Event
Dashboard Generation Tools Support
Referrals Channel Channel
References Training Support
© 1993-2010 Pragmatic Marketing
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 8

9. reate material for
external audiencel for external
Create materia s audiences
Create promotiona
l material promotional material
Create
Measure marketin
10th Annual Product Managementraand Marketing Survey g prog ms marketing programs
Measure
Create sales presen
tatioCreate sales presentations
ns
Manage company
social med they conduct media
Manage
Comparison of roles Percentage of respondents indicatingia company socialthese activities.
Train salespeople Train salespeople
0% 20% 40% 60% 80% 100%
Go on sales calls Go on sales calls
Research market needs
Work with press or
analysts k with press or analysts
Wor
Perform win/loss analysis
Visit sites (without salespeople) Product Man
agement Product Management
Product Marke Product Marketing
ting
Prepare business cases
Write product requirements
Write detailed specifications
Monitor development projects
Create material for internal audiences
Plan and manage marketing programs
Create material for external audiences
Create promotional material
Measure marketing programs
Create sales presentations
Manage company social media
Train salespeople
Responsible for
Go on sales calls go-to-market strategies
Work with press or analysts
CMO 4%
Product
Product Management Product Marketing CEO 4% Manager
35%
Responsible for Other 5%
product profit loss Product
Director
12% Marketing
Other CFO 4% Manager
VP 26%
Director 8% Product Marketing Manager 14 %
15% 4%
CEO
18% VP
31%
Product
Manager
20%
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 9
8

10. 10th Annual Product Management and Marketing Survey
We asked,“Howmuchinfluenceissocial
mediaonyourgo-to-marketactivities?”
Influence of social media
on go-to-market activities
We recognize it should be more of We want to do more, but have
an influence, no approval to do yet to resource this area and have
Considered None a cohesive strategy to leverage
but not 40% Social media is becoming a larger social media
a significant part of what we do but currently is
factor in the planning stages No formal process to integrate to
51% product plan
Crowdsourcing is used significantly
for tactical product input from We are still looking into it, too
customers large of a company to adopt
without a corporate brand message
Major part of Not used, not allowed by company
the program policy Conservative industry, slowly
9% moving to social media
Not incredibly relevant for B2B
Our customers do use it to review
Use of social media tools such as products or offerings in Business
blogs is under consideration but not to Business
used at present
Do you use Oh I wish, too big of a company
Twitter? We are ramping up in the area, and everything is reviewed by legal
but currently it is more on the
No corporate communications side of Becoming more critical
62% the house
Our customers do not use social
Yes, SM is growing strongly and will be media channels (as a rule)
personally major tactic in 2010
27% Increasing as our SM base grows
Yes, for the company
Use of Twitter
(as an individual and/
or as the company) Still trying to figure out its value I follow (I don’t personally tweet)
11% in a B2B world
In a professional capacity, avoiding
The Valley is again pulling the personal comments/updates
wool over the world’s eyes. We’ve
learned nothing from the late 90’s! A nuisance perpetuated by the
self-absorbed
Will use more in 2010 for products
Hate it but feel I need to know it
No tweets but do use search
I am scared to use Twitter on
Twitter as a marketing tool has very behalf of the company
interesting potential
Contribute corp tweets to
Only experimenting at present corp account
It makes my eyes bleed
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 10

11. 10th Annual Product Management and Marketing Survey
After a year-long void at the
We asked,“Howhasyourjobchanged?” Executive level in Marketing,
we brought in an experienced
Sr. VP of Marketing Product
Management. Having someone at
the executive level who understands
software product management has
Organizational challenges Less focus on “strategic,” been enormously helpful.
more on “tactical”
We lost PL responsibility at I am working with an amazing
the product level and are well Changed to “all-hands-on-deck,” director who has let me really
on the way to being a sales doing more non-PM work (filling try getting out of the office to
support function. the gaps between the scarce visit customers and prospects.
engineering staff). He’s pleased with the results so
Program management was dissolved far. Nothing like success to win
by the previous management Way too much babysitting of people over!
making product management developers that are incapable
take on program management. of hitting deadlines without it! More strategic—YEAH!
Lots of folks in areas they are not
comfortable and don’t really have
It is increasingly field-facing. We I have gone from Product Manager
enough time to devote to in order
now spend considerable time in TITLE to Product Manager in
to do the job good service.
supporting sales calls with roadmap actual role performance.
presentations and product details/
My original manager (VP) retired explanation, etc.
making a peer of mine a manager... Social media and the ability to take
big mistake! in information from many sources
Finally releasing our largest most has increased significantly—which
complicated product attempted to lets me spend less time looking for
Hectic is the new normal—role date. Lots of janitorial work is being information and having information
has expanded beyond product done to clean up the mess the appear on my doorstep more
management with no end in sight. best I can. easily. In addition, the perspective
Lots of product managers who call of technical product ownership/
themselves PMs have no clue what management has increased so that
they are doing. Some good news… there’s a name for the job I was
doing all along.
I am spending far less time on sales After my boss attended the
calls (which is good) but also far Pragmatic Marketing seminar, she Since Pragmatic Marketing
less time out of the office (which understood the role of product certification, I’ve been trying
is not good). We are “protecting” management. Now we spend a lot to incorporate more of the tools
our product managers from giving more time with customers and on into my presentations to the
sales demos but also making them overall strategy. leadership team. This seems to
spend far too much time on internal be encouraging them to see the
project meetings. Product as genuinely strategic
Fairly significantly. Product
management has evolved from because they’re seeing things from
I started doing win/loss analysis something like a cousin to us that they’ve never seen before.
after Pragmatic Marketing seminar. engineering management into real Unfortunately, the opportunity
WOW!, worth its weight in gold. product management (as defined by immediately in front of them
I also say “product managers Pragmatic Marketing). It was a long tends to trump all the best will
need to publish” and “product process to bring it about. in the world.
manager’s work must apply to all
customers, not just one.” With the
economic downturn, I’m doing Job is becoming more clearly
more individual consultation with defined. Not there yet, but
customers and more support work getting close.
due to less headcount.
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 10
11

12. 10th Annual Product Management and Marketing Survey
Compensation Average salary
$120
Average US product management compensation is $96,580 salary plus $12,960
annual bonus. 77% of product managers get a bonus (multiple responses were $100
permitted). Bonuses are based on:
$80
• 66% company profit $60
• 26% product revenue $40
• 36% quarterly objectives (MBOs) Anything goes $20
(cowboy coding)
Anything goes
• 27% say bonus does not motivate at all and 14% say bonus motivates a lot. (thousands)
(cowboy coding)
Bachelor’s
Doctoral
MEng
MBA
Geographic impact on compensation (US $) An Agile methodology
An Agilenot Scrum
that’s methodology
Average Average Minimum Maximum Maximum
Int’lRegion Salary Bonus Salary that’sSalary
not Scrum Bonus
Australia $ 94,308 $ 11,714 $ 44,000 150,000
Scrum (a$ speci c type$ 20,000
Canada 89,588 11,290 50,000 Agile (a150,000 c type40,000
of
Scrum development)
speci
Europe 87,743 10,616 24,000 Agile development)
of 170,000 45,000
USA 98,005 12,369 14,000 210,000 50,000
Waterfall
Waterfall
0 5 10 15 20 25 30 35 40
US regional impact on compensation 0 5 10 15 20 25 30 35 4
Average Average Minimum Maximum Maximum
USRegion Salary Bonus Salary Salary Bonus
Upcoming Current
Upcoming Current
Midwest $ 89,490 $ 11,566 $ 38,000 $ 150,000 $ 37,000
Northeast 102,823 13,351 14,000 210,000 50,000
Pacific 107,860 12,263 41,000 170,000 45,000
Southeast 91,652 11,424 44,000 145,000 40,000
South 98,609 13,194 51,000 150,000 45,000
Gender comparison in
West 91,662 12,821 21,000 145,000 50,000 compensation vs. experience
Average 98,017 12,360 14,000 210,000 50,000 $120
$120
$100
Annual Salary (US $)
Midwest (IA, IL, IN, KS, MI, MN, MO, ND, NE, OH, SD, WI)
$100
Northeast (CT, DE, MA, ME, NH, NJ, NY, PA, RI, VT) $80
Pacific (AK, CA, HI, OR, WA) $80
$60
Southeast (AL, FL, GA, KY, MD, MS, NC, SC, TN, VA, WV)
$60
South (AR, LA, OK, TX) $40
West (AZ, CO, ID, MT, NM, NV, UT, WY)
$40
$20
$20
(thousands)
1-2 3-5 6 - 10 11 - 15 15+
(thousands)
1-2 Years of6experience15
3Female - 10 Male
-5 11 - 15+
Female Male
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 12

13. 10th Annual Product Management and Marketing Survey
Ifyoucouldsayonethingtoyour
companypresidentwithoutfear
ofreprisal,whatwouldyousay?
We received about 800 responses to this survey question.
Highlights are:
It’s all about Just because something
communicating strategy sounds like a good idea
I understand the laser focus
to you, it doesn’t mean it’s
anything our customers have on delivering positive financial
Give the company some vision any interest in. results to shareholders. However,
besides make some money. resources have been cut so
severely, resulting in a culture of
Let product management do their frustrated overworked employees.
It’s better to do a few things right job! Just because your kid saw
than a million things half-baked. I expect a mass migration once
something last week don’t shift the job market opens up.
the roadmap!
Not the best with having realistic
expectations and setting and Stop complaining about how
Stop thinking you know we are too slow to launch new
sticking to strategic direction. everything and that our customers
Tends to change directions with products and innovate and spend
don’t know what they want. Listen a week in my job to see why the
the expectations of the most recent to our customers more!
customer he’s spoken to. “outsource everything” product
development environment you
Great sales leadership, not a clue have implemented causes the
Why aren’t we attempting what to do with Marketing. challenge you are so quick to
more of a land-grab in these point out yourself!
uncertain times? Belt tightening is
stifling us from going after new He is knowledgeable about our
opportunities. customers and is focused on There is no more blood to squeeze
producing products they need to from this turnip. Start focusing on
get their jobs done. But he is more how we can provide more value
You cannot maintain a wartime frequently getting pressured by to our customers with the meager
economy indefinitely. Not the finance department to save resources we have.
every product release of every costs at the expense of customer
product can qualify as an satisfaction.
emergency. Better planning and Treat your employees with more
communication of that plan will respect. Especially when laying
make the company more profitable them off.
and stable.
Fix the staffing issues
Please allow your executive staff
Get me more developers! I have to do their jobs. You are way too
Don’t lose touch with what our
products to build. involved in the details. Get over
customers are like. They are not
as cutting edge as you are and your Steve Jobs envy.
they are risk averse. I wish you would understand what
my role is and quit assigning my
job duties to other people.
Go work in one of our retail stores
for a day.
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 13
12

14. 10th Annual Product Management and Marketing Survey
Fix the Sales issues Some positive news Remarkably consistent in terms
of following a market strategy.
Don’t overvalue your sales Advocates change which is a
director for what the vision nice change. She is great.
of the product should be.
He has a very clear understanding Steers the ship well. Good
Give us the control we need to of product management’s purpose business focus.
execute our roadmap rather than within the organization.
constantly change direction due Thank you for fostering such a
to some unsubstantiated item that He is a very smart and capable positive environment in which to
comes out of a sales engagement individual. work. Your dedication to business
or a random revelation. success and your employees shows
through each of those that
He is great! He has mixture of
Please don’t sell what we don’t report to you.
strong sales skills and an in-depth
have and don’t have resources understanding of technology.
to scope, develop and deliver. Thank you for truly understanding
and valuing product management!!
He is new to the job. It would be
Stop changing the sales model nice to know what he is doing.
every year. You’re doing a great job! (he’s new
since September 1st).
He puts employees first with the
Stop chasing shiny objects and belief that happy employees serve
approve products with proven customers better.
revenue streams. And finally…
He understands how to hire and
Your sales force is not equipped to motivate people. Don’t get drunk in front of
sell our solutions and you have no customers and prospects.
clue how to develop software.
It’s my company and I can say
anything to the CEO. Please come to work more often.
We want to see you and your
passion for this space.
Keep up the good work—We have
been growing at a 20%/year rate
for the past 4 years. He started today!
Steve Johnson is a recognized thought-leader
on the strategic role of product management
and marketing. Broadly published and a
frequent keynote speaker, Steve has been a
Pragmatic Marketing instructor for more than
10 years and has personally trained thousands
of product managers and hundreds of company senior
executive teams on strategies for creating products
Visit
people want to buy. Steve is author of the
Product Marketing blog. Contact Steve at
sjohnson@pragmaticmarketing.com
PragmaticMarketing.com/survey
for more results
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 14

15. Product Launch Essentials ™
Plan and execute a successful product launch
Are your product launch efforts focused on deliverables rather than results?
Launching a product is more than following a simple checklist. A successful product launch is the
culmination of many, carefully planned steps by a focused, coordinated team. Even good products can
fail because of organizational issues, misunderstanding of roles and responsibilities, and a lack of a
strategic approach to guide efforts.
• Learn a repeatable product launch process to shorten the launch planning cycle, get the resources
needed, and know what to expect at every step.
• Understand the seven product launch strategies your team can use
to maximize sales velocity.
• Measure product launch progress with indicators that identify unforeseen
issues before they become big problems.
Get a free e-book at Daniel
s
PragmaticMarketing.com/launch
id
By Dav
Download a complete agenda and register at PragmaticMarketing.com/seminars
Call (800) 816-7861 to conduct this seminar at your office

16. Re-Inventing
Product Management
with
By Bruce La Fetra
The critical role of the product manager is in the process of changing significantly, and both
companies and product managers need to adapt. While product management is among the
most critical roles in any company, it’s a role whose importance is under-heralded in most
organizations. The extent and nature of the changes to the role mean that those that fail
to re-invent themselves—or don’t try—are likely to find themselves displaced.
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 16

17. Re-Inventing Product Management with LOVE
Change or die direct customer meetings create The key in the new environment is
a truly bi-directional relationship interacting with consumers rather
Two major forces are driving of the type that is needed going than transacting with them. Product
the need for change in product forward. These transactional type managers and marketers currently
management. First, the nature activities are controlled and shaped lack a model for understanding
of the competitive landscape is by the company. Non-transactional how to interact with consumers as
changing with the emergence over interactions occur between peers. the company - customer relationship
the past 15 years of low-cost, off- The need for interactions rather than evolves through different stages.
shore manufacturing that quickly transactions changes the methods (Newsflash: not all consumers are
clones successful products. Merely employed by the product manager the same.) This represents a huge
manufacturing a quality product that (the “how”) every bit as much as the change for marketing managers
people want has become a profit- need to accelerate innovation and as they must stop trying to bribe
challenged commodity business. introduce solutions (the “what”). and manipulate people to get
Earning the types of profits investors consumers to do what they want.
expect from American technology To date, nearly all attention has This is transactional behavior that
firms now requires rapid and focused on the “what,” although the doesn’t encourage your company—
continuous innovation and a move “how” is no less a challenge. Since or the consumer—to seek new
toward difficult-to-copy solutions customer interaction is growing forms of value.
rather than products. Apple’s success in importance, a big part of the
with the iPod and iTunes represents “how” is the manner in which your Product managers have a lot
near perfect execution. Often company interacts with consumers. at stake as well. More than
a solution may span companies This is a huge and visible change marketers (perhaps), product
or involve active partnering with for the marketing function. To non- managers understand that customer
users. Crowdsourcing and mash-ups product managers, the change is less relationships evolve. However, most
are examples. visible for product management, but lack any sort of model to understand
no less important for success. this evolution and use it to their
The key to success is being open benefit. Even fewer use—or even
to new forms of value. Some of Technology makes it easier than ever recognize the enormous power
the new forms of value may be for product managers to listen in of—a model that is shared across
unfamiliar: consumer products or interact directly with customers, all parts of your company.
companies offering their “products” adding new tools to the product
as components to third-parties manager’s kit such as crowdsourcing
building unique solutions or even and co-creation. Technology is Why the world needs LOVE
entirely new products. Turning one’s an enabler, but doesn’t tell the
customers loose is an excellent way The Lifetime Opportunity Value
product manager when and how to
to drive lots of innovation. iRobot Equation (LOVE model)1 departs
engage customers, or to understand
allowed its Roomba robot vacuum from the buying funnel by viewing
how customers vary in their
cleaner to become an open platform consumer relationships as an
relationship needs.
resulting in a nearly limitless variety evolving set of bi-directional
of upgrades and modifications interactions. These relationships
available from third-parties. Many We need a new model grow from an introductory stage
of the resulting devices are not where neither party knows much
even vacuums. To deal with the changes in how about the other all the way to
customers interact with companies, co-creation. In a co-creative
With so many more inputs, the role a new model for customer relationship, you and your customers
of the product manager is becoming relationships is needed. Product share a common vision and align
less about coming up with great management (and marketing) needs interests. The benefits of co-creation
ideas and more about enabling, to lead the way in understanding are huge, and reach into every
gathering, and coordinating inputs how to engage and leverage corner of your company and are
as a sort of “traffic manager” or hub. customer relationships in the reflected in both top line revenue
age of two-way media. and bottom line costs. Deeply
The second force is the manner engaged customers buy from your
in which companies interact Most organizations—probably yours, company not merely because they
with their customers. Gone are too—define customer relationships like the product or service, but
the days when companies could in terms of a linear path that allows because they genuinely want your
broadcast a controlled message to deterministic modeling, such as the business to be successful.
consumers. Two-way media such buying funnel process: awareness,
as blogs, user reviews, and social consideration, and purchase. The
media mean consumers can talk buying funnel is predicated on your
company controlling the message, [1] The LOVE model is built on concepts originally
back—and to each other—without
the company having any say in but this no longer works in an developed by Harry Max at Rubicon Consulting.
the matter. Don’t fool yourself into environment dominated by two-way Harry also came up with the LOVE model name.
thinking focus groups or even and unstructured communications.
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 16
17

18. Re-Inventing Product Management with LOVE
The LOVE model explained
The LOVE model can be applied Co-Creation Co-Creation
to any online relationship, not
just to customer acquisition and Commitment Commitment
purchase. Likewise, the benefits
of the LOVE model extend far Stability Stability
beyond social media and marketing
campaigns, making it of particular Power Struggle Power Struggle
value to product managers seeking Romance Romance
to drive change throughout their
organizations. The LOVE model
drives long-term value in areas Romance PowerStruggle
as diverse as customer support, Getting introduced Maintaining interest
product development, and
thought leadership. You can’t build a relationship Where Romance is about generating
with someone you don’t know, interest and opening the door to
Product managers will experience so the initial phase of the exciting possibilities, the second
an epiphany as they realize how consumer–company relationship phase, Power Struggle, is about
to engage customers at each phase is Romance. Romance is about spending time together and getting
of an evolving relationship. By introductions and learning and to know each other. In the world of
understanding more about how to trying things. People don’t want commerce, this is about working to
interact with customers, you can to think about big commitments maintain the consumer’s attention.
tailor your interactions to be more when they’re still trying to decide The power struggle isn’t adversarial,
productive. Because the interactions if they even want to get to but is a mutual effort to learn how
are vibrantly bi-directional, your know you better. both parties in the relationship are
company and consumers grow going to fit together. After all, there
in alignment as the relationship There are serious pitfalls in skipping needs to be balance if a relationship
grows deeper. the romance phase and moving too is going to last for the long term.
quickly from social to transactional
While a company’s relationship interactions. Once the parties to a If you don’t provide an engaging
with individual consumers falls relationship define it in terms of experience that fulfills the
into a specific phase, the company an exchange it is very difficult to consumer’s need for credible
can be at different relationship redefine it as something broader. information, you will struggle to
phases with different consumers, A properly developed romance keep them from clicking somewhere
so a company is not limited defines the long term relationship else. You lose the consumer’s
to a single relationship phase. as something other than primarily a attention and, with it, your ability
The descriptions below include monetary exchange or a transaction. to drive the relationship narrative.
companies that do a particularly By contrast, too many companies
good job at understanding specific today insist on a kiss at the
Dell’s IdeaStorm allows Dell “to gauge
types of relationships. The phase beginning of the first date.
which ideas are most important and
names are both descriptive
most relevant” by engaging the public
and instructive. Twitter and other social networking
in online discussion. Users are able to
applications are good at letting people
add articles, promote them, demote
explore and set their own pace of
them and comment on them. By
discovery and use.
giving users the power to drive what is
discussed, Dell maintains engagement
while accomplishing its own goals of
Co-Creation understanding what people care about
and want to see.
Commitment
Stability
Power Struggle
Romance
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 18

19. Re-Inventing Product Management with LOVE
Co-Creation Co-Creation Co-Creation
Commitment Commitment Commitment
Stability Stability Stability
Power Struggle Power Struggle Power Struggle
Romance Romance Romance
Stability Commitment Co-Creation
Finding balance Discovering shared outcomes Co-owning a vision
At the point where no major Commitment comes when the The final and ultimate phase
mis-match of status between relationship advances from stability is Co-Creation. At this level the
the parties exists, a relationship to a shared outcome. While relationship is about co-creating
enters the third phase, Stability. loyalty in a predominantly one- value and co-ownership of a
A stable relationship is one where way, transactional exchange is common vision rather than merely
you provide a reasonable value fragile, commitment in a stable, sharing in the outcome. With this
proposition for filling latent bi-directional relationship is far more type of relationship, the consumer
consumer needs. You have stability robust and makes consumers more is no longer merely making
when both of the following are true: likely to stay in the relationship a purchase, but is supporting a
through the ups and downs the preferred business. The benefits of
1. The consumer is willing to go market inevitably deals. co-creation are huge, and reach into
through the process of sorting every corner of a business and are
through the criteria for making There are lots of ways to show reflected in both top line revenue
a decision, and commitment. Preferred customer and bottom line costs.
programs are one form of
2. You are willing to transparently commitment, although many As mentioned on page 17, iRobot,
make available the information such programs are based on a makers of the Roomba robot vacuum
needed to satisfy the consumer’s transactional quid pro quo rather
cleaner, support an entire ecosystem
criteria. than true commitment.
of customers and partners. Many have
hacked Roombas to add capabilities or
Amazon.com is a company that McAfee formed a strong bond of
create entirely new devices, in effect,
understands this extremely well. The commitment with the hundreds of
turning the Roomba into a platform.
Amazon site is a virtual cornucopia “McAfee Maniacs” that handle much of
By listening to its customers and
of information on all manner of McAfee’s technical support via the Web.
recognizing them as trusted partners,
consumer products. Not only are there Some post thousands of responses in
iRobot is able to embrace a class of user
user reviews, but the reviews gain McAfee forums—as of this writing the
that exceeds what we typically think of
additional credibility because users can top contributor has made more than
as a customer. As a result, the Roomba
comment on the reviewers. Amazon 31,000 posts. Except for some modest
has become more than just a vacuum
provides an enormous quantity and peer recognition, the Maniacs are
and its users are much more valuable to
variety of information with the implicit uncompensated, and yet the shared
iRobot than merely customers on the
expectation that, if and when the outcome of helping people navigate
other end of a monetary exchange.
consumer makes a purchase decision, McAfee’s software motivates some
Amazon is most likely to be the amazing commitment.
purchase vehicle.
Amazon benefits from a stable
relationship because consumers have
little reason to leave the Amazon site The LOVE model drives long-term value
to gather additional information. Both in areas as diverse as customer support, product
parties feel their needs are being met
in a balanced way. As a consumer, you development, and thought leadership.
are always free to leave the Amazon site,
but why would you?
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 19
18

20. Re-Inventing Product Management with LOVE
New products
Process
improvements
n
tio
New ways to
ea
message market
Cr
-
s Co
es
sin
Bu
LOVE for the entire company 3. New ways to message and market become apparent as
soon as you start engaging with consumers in a
Each of the five phases—Romance, Power Struggle, genuine dialog. They’ll help you sell their bosses and
Stability, Commitment, and Co-Creation—represents they teach you how to market more effectively to their
a different flavor of relationship and a different way neighbors. If your new product name is an undesirable
of thinking for product managers. Some consumers slang term in a foreign language, they’ll tell you rather
will want to align their interests with your company’s than letting you blast it to the world.
because it makes their lives easier, such as frequent
customers who want the sales process to run 4. Business co-creation is the Holy Grail of relationship.
smoother. The motivation of other consumers may be It happens when your customers are emotionally
less direct—perhaps visionary customers who see a invested in the success of your business. They make
better way or an interesting combination of products referrals to friends, family, and colleagues because it
or services. The Co-Creation process manifests itself creates intrinsic joy for them. Having a customer who
in four distinct types of value: wants you to be successful is much more powerful
than a customer you’ve bought with a loyalty program.
1. New products and services are the most visible way It is important to remember that co-creators may exist
you can engage with and learn from your customers. in forms and places that are invisible to companies.
A genuine dialog with the consumer always makes You need to support these advocates, even when you
the development process better, but in many cases don’t know exactly who they are.
it also makes it simpler as feature sets can be better
validated and it is easier to identify components To a limited degree, the LOVE model can be
that add little value. implemented by a single discipline within a company,
but as the above examples point out, the real value
2. Process improvements are an area where many consumers is in infusing its effects throughout the organization.
have strong feelings, but few companies bother to ask. The LOVE model thus provides product managers
Still far fewer take the view that consumers should be (and marketing) a vehicle for offering leadership to
empowered to help design the processes. The key is the entire company.
interests that are aligned in a deep and holistic way.
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 20

21. Re-Inventing Product Management with LOVE
How LOVE changes product management
Stay current with
The LOVE model gives product managers a relevant
and actionable framework for generating valuable
industry best practices
interaction with consumers. These bi-directional
interactions provide a source of product, process,
and business improvement and innovation that
enables your company to co-create new forms
of value with customers.
Both forces discussed in this article require significant
changes in product management. First, the need
for greater innovation and new types of solutions
means that product managers are less makers and
more organizers. The second force—the need to
find a more workable model of consumer—company
relationships, pushes product managers to interact
with consumers in a truly bi-directional manner
where consumers are peers rather than objects
to the company.
With changes to both the “what” and the “how,”
the C-suite needs to re-think what they expect Visit the online community at
from product management. Instead of being product
champions, product managers need to be customer
PragmaticMarketing.com
or market champions with a broad view of how
their company’s expertise and technology can • Review 10 years of Annual Product
contribute to customer solutions. They need to Management and Marketing Survey results
understand ecosystems rather than just product
applications. They need to enable customers to help • Attend a webinar by one of today’s industry
co-create all aspects of their business (not just the thought-leaders
products) as this is how they will create sustainable
differentiation. This will likely lead to changes in • Read hundreds of articles on product
how the product management function is organized management, marketing and leadership
and managed. strategies
For the first time, companies have a holistic model
to guide them in developing more valuable and • Read blogs from Pragmatic Marketing
actionable relationships with customers across all thought-leaders and other industry experts
parts of the company. Embracing the LOVE model
embarks an organization on a journey of discovery • Stay connected with your industry peers
which leads to quantifiable results, long-term value, by joining a local Product Management
and enhanced competitiveness. Association
• Read profiles of companies who have
achieved success using the Pragmatic
Marketing Framework™
• Participate in online networking with
Bruce La Fetra is a Business Strategist for Rubicon
LinkedIn and Facebook groups
Consulting, Inc. With insights gained from more
than 20 years experience in product management,
• View a list of recommended books and
marketing, and strategy consulting, he guides
clients in market definition and visioning work software tools for product managers
to define their mission and growth strategies. He writes and marketers
and speaks on business models, consumer experience, and
pricing licensing. Prior to consulting, Bruce held product
management, business development, and product service
marketing roles for leading software, hardware, and
financial services companies. Contact Bruce with thoughts
on the LOVE model at bruce@rubiconconsulting.com
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 21

22. Training at
Your Office
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team advantage
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23. Product
Management
Career
By Greg Council
If you’re just starting a career in product management, take comfort in the
fact that not only is the role and value of product management getting
more notice, but there is also a decent amount of information regarding
the mechanics and strategies of product management available to
product managers. Techniques and tools, such as those offered by
Pragmatic Marketing and others, provide product managers methods for
focusing attention on tasks that really matter.
Just as important is the attitude of collaboration and camaraderie you
take into your new role. Even though the product manager role is at
the center of many activities involved with identifying opportunities
and bringing solutions to market, a lot of other folks take part in
getting market-driven products to market. Unfortunately, many product
managers take the “manager” in “product manager” a little too far and
try to command and control every aspect of the process.
With technology-based solutions it really does “take a village” to raise a
successful product. Failing to recognize that can lead to disaster.
In my many years as a product manager, I’ve observed five common
pitfalls (or torpedoes) that can make or break a product manager’s career.
The Pragmatic Marketer • Volume 8, Issue 1, 2010 • 23