If something’s going to succeed, it needs an owner. The product management profession was born for that very reason. In a market where products and services commoditize faster than ever, many B2B organizations are adopting vertical market strategies to accelerate growth. If those organizations are going to succeed in their chosen vertical markets, the market owner role is a must.
Vertical Market Strategies and Product Portfolio Management
First things first! Why are more B2B organizations adopting a vertical market approach? The short answer is specialization and faster growth. If you have a suite of products and services that meet 80% of every customer’s needs, your growth will flat-line sooner rather than later.
When you adopt a product portfolio management model, you’re making a strategic decision to not be everything to everyone. The goal is to deliver higher value solutions, but to a smaller chunk of the overall market. By narrowing your market focus and meeting the higher-value 20% needs gap for fewer markets, your solutions deliver exponentially greater value and drive faster penetration into those markets. As your penetration grows in each market, you’re well-positioned to continue expansion into adjacent markets and do it from a position of strength.
That philosophy shifts an organization’s strategy from “good enough” for every market to “best-in-class” for specific markets. The result is faster growth, and usually higher profitability due to a narrower focus that doesn’t require an organization to spread itself so thin operationally.
The Market Owner Role
Enter the market owner role. For an organization to succeed with its vertical market strategy, product, marketing and sales teams have to see each industry segment through the same lens. In other words, everyone has to see the same markets the same way instead of seeing them through the lens of each product or the sales pipeline. The market owner role is the lynchpin to establishing a common market view that becomes the foundation for all product, marketing and sales decisions.
The market owner role is pure and simple: Educate the organization on the dynamics of your target markets – without any bias to what you do. Think of it this way. If your organization didn’t exist, the dynamics in healthcare, energy, banking, utilities, etc. wouldn’t change. They are what they are, regardless of whether your organization exists or not.
It’s then up to product, marketing and sales teams to align with those markets to maximize short-term revenue from existing solutions, and fuel longer term growth with new solutions.
Let’s say that you sell marketing automation solutions. Your portfolio of products and services has value to any organization that does marketing. A vertical market strategy would shift your focus from “any organization that does marketing” to consumer product companies and banks, for example.
The market owner’s first order of business is to understand how the dynamics in each of those market segments are shaping the strategies of customer organizations, and subsequently, how those executive-level strategies are dictating tactical changes down in the trenches. The market owner’s second order of business is to educate your organization on those top-to-bottom dynamics for each market so that everyone sees them through the same lens and can plan accordingly.
Marketing and sales teams will position existing solutions around those market dynamics to maximize short-term revenue while product teams use the exact same information to determine portfolio strategies and tactical product roadmaps to drive longer-term revenue.
Does My Organization Need the Market Owner Role?
Here’s the bottom line: The market owner role is about thinking bigger than just user needs. If you’re going to succeed in one or more vertical markets, there has to be a role in your organization that’s the recognized authority on those markets and understands business needs that are strategic to those markets. It’s not a part-time job for someone in another role. It’s a full-time resource to product, marketing and sales teams. Consider the following benefits:
- How appreciative are customers and prospects when you can speak eloquently on their industry, strategic goals and business challenges? It instills tremendous confidence in your ability to deliver solutions that align with their priorities.
- How appreciative are your own executives when that market knowledge makes their strategy decisions simple and straight forward? It results in strategic plans you can see through to fruition, the best defense for “shiny object syndrome.”
- How appreciative will your engineers, who have little to no customer contact, be when they understand what business problems they’re being asked to solve and why they’re so important to the customer’s success? It inspires technical innovation.
If you want to elevate the value of your products and services beyond tactical user needs, consider the value of full-time market owners. They’re the lynchpin in identifying and solving industry-specific problems that have greater strategic value, and doing it at a level that scales across product, marketing and sales teams.
The heart and soul of product portfolio management is to first and foremost understand what it takes to make your target customers successful, both strategically and tactically. Product management, product marketing and sales enablement is about using your portfolio of products and services to grow profitably doing it via solutions that have exponentially more value than any single product.
If your product management function isn’t driving growth because it’s too tactical, contact Proficientz to learn how the market owner role and our B2B Product Management Training Programs can give your team the strategic component it needs to deliver higher-value solutions and accelerate growth.