A cheat sheet for setting OKRs

jannes-glas-548485-unsplash.jpg

Midway through the year is an excellent time to revisit goals, and potentially rejigger goal-setting.  I’m a big fan of the Objectives and Key Results (OKR) framework, as a way to help product teams focus on outcomes instead of outputs.  

Setting OKRs involves choosing objectives for your product (why you’re building the things you’re building), and key results for each objective (what you measure to see if it’s working).  Coming up with what to measure can be tricky, especially the first time, so I’ve been collecting good ideas from books, conferences, and teams I’ve worked with.  The result is the following index of OKR archetypes.  They come in a couple of flavors: lagging indicators, leading indicators, and pre-launch indicators.

Lagging indicators

Lagging indicators are those tied most closely to the business’ success: things like revenue and bookings.  Every product team should keep them in mind, but they usually manifest too slowly to be the only outcome you track.  They make good long term goals, and are useful for mature products.

lagging indicators

Continue reading “A cheat sheet for setting OKRs”

Who should own product marketing?

anna-samoylova-535880-unsplash

For software companies, it’s no longer viable for designers and engineers to build a product, then toss it over the wall for marketers to sell it.  Product positioning and go-to-market strategy needs to adapt as fast as customer needs and product features do, so pretty much constantly.  Enter product marketing.

Product marketing is hard to define, because it tends to fill the gaps in any given organization.  If could help marketing better highlight product differentiation that customers aren’t understanding, it could help product build the features that customers will pay the most for, or it could provide sales enablement to pick up sales velocity.  No matter what shape it ends up taking, product marketing can be tricky because its goals are almost always shared with other functions, most notably product and marketing.  Big technology companies may have entire product marketing departments, but for a small and growing business, where should product marketing sit?

If you DON’T have dedicated product marketing managers…

Owner: Marketing

In a small company, much of marketing’s job is product marketing, so marketing leaders need to have deep knowledge of their product.  If bandwidth is limited, the most important activities include packaging product value and positioning, identifying and targeting personas, and defining the go-to-market plan.  Product can and should help with articulating the value of the features and products they’re releasing.

Watch out for: Traditional marketers who mechanically drive volume without thoughtful focus.  If your marketing leader is wearing the product marketing hat, make sure that they are assessing their market, and positioning your product intentionally, rather than just driving volume at the top of the funnel generally.  Continue reading “Who should own product marketing?”

Not quite recurring: driving utilization in reoccurring revenue businesses

nacho-capelo-473751-unsplash

Reoccurring–don’t you mean recurring–what’s the difference?

Recurring revenue is pretty well defined: this is revenue that comes in repeatedly, in predictable amounts, at regular intervals.  There is also a sister category, which I’ll call “reoccurring revenue”.  I can’t find a good business definition, so I’ll have to lean on the grammatical distinction between recurring and reoccurring.  Things that reoccur happen more than once, but not always regularly or predictably.  So by extension, reoccurring revenue is revenue that repeats, but for which there’s some uncertainty around timing or amount.

Technically, lots of repeat customer relationships could qualify as reoccurring revenue, but I’m more interested in steadier arrangements that might otherwise be categorized as recurring revenue.  There are a few big categories that fit this bill

1. Payments, commission, and other B2B2C

While business-to-business-to-consumer (B2B2C) companies get revenue through the same business clients every month or year, the amount of revenue can vary based on behavior of the end consumers.  Payments companies are a classic example: the revenue that a payment processor makes in fees depends upon end customer traffic, spending, and choice of payment type.  Companies that make their money on commission or referrals, like travel aggregators, would also fall into this category.

 2. Two-sided platforms and marketplaces

Marketplaces have always had to build their products around distinct buyer and seller user groups.  Typically their revenue is proportionate to the traffic on their platform, so they need to drive utilization by both user types.

3. Contracted volume-based pricing

More and more SaaS and tech-enabled service companies are opting for usage or value-based pricing.  Most end up still operating with some flavor a recurring model, but some move to pricing that’s completely variable and enter reoccurring territory.  For examples, think about companies that opt to charge only for users active in a given period (like Expensify) or companies that charge per usage event (like Twilio).

Utilization is the name of the game

In reoccurring arrangements, there are often multiple customer types: service provider and service seeker, product buyer and product users, payer and payee.  Usually, it’s something of a two-part sale, where you start with a larger “partner customer”, then encourage a smaller “utilization customer” to use the product or service.  If you stop once you have the partner customer, you’re only half way there. Continue reading “Not quite recurring: driving utilization in reoccurring revenue businesses”

Do you want to grow by winning more, serving more, or charging more?

3 plants widescreen

Is your biggest growth goal to win and retain more customers, serve more segments, or charge more per contract? Does your product roadmap match that strategy?

You probably have a laundry list of customer feature requests, enhancements promised by sales, and team pet projects in the development backlog—which ones should define your roadmap, and which should stay in the queue? The best way to answer that question is to make sure that you’re using your high-level strategy objectives to guide your prioritization. There are at least 3 overarching growth objectives you could choose to be the guiding star for your product development efforts. The catch? Each will lead you to build different things.

1.      Win or keep more core customers

This might be a priority if…

Churn has spiked, or you’re increasingly losing deals to competitors.

Product development to prioritize: feature parity

If customers are churning to competitors, or if you’re losing them to competitors in the sales process, you could have a feature parity problem. That’s not the worst news, you can use your competitor’s feature set as a roadmap cheat sheet. But be careful not to just replicate everything your competitor offers—you may not need to. Use insights from your sales team and user feedback to understand which features really matter to customers.

One important caveat: if customers are churning back to using nothing or a manual process, or if you’re losing deals to “no decision”, you may be facing more of a pivot than a tweak. It could be a product-market fit problem, and/or you could be targeting the wrong segment. Continue reading “Do you want to grow by winning more, serving more, or charging more?”