Are product revenue and profitability goals a good metric or are they counterproductive?
If the target markets for each product are mutually exclusive, product revenue and profitability goals don’t present any issues in B2B. The trouble starts when you have multiple products that target the same exact markets and customers. Here’s why.
Individual product goals force each product team to compete for development resources, marketing resources and mind share with the sales team – all in the interest of individual product goals. It’s a product centric view versus a customer centric view.
Here’s what changes if all product teams have a common view of your markets and customers.
- You’ll see the customer’s business goals and challenges (from their perspective) a few levels higher in the organization than your users.
- That view by default, encourages product teams to work together because customer issues with strategic impact usually require multiple products to satisfy.
- Each product plays a more critical role in delivering value to the customer because customer value is more clearly defined.
- Your solutions have much tighter integration because they’re supporting cross-functional use cases that help customers eliminate silos that are detrimental to their business.
- Marketing and sales messages will be stronger and differentiate more effectively because they’re communicated in context of more strategic business drivers versus product value propositions that rarely address anything beyond the tactical needs of users.
Here’s the bottom line: Too much focus on product revenue and profitability will eventually inhibit your growth. It prevents you from taking a holistic view of your target customers and delivering multi-product solutions that have more strategic value to them.
More strategic value to the customer usually means more revenue and profitability for you.