Comments on: Is There Anything as Predictable as a Sales Droid? http://crankypm.com/2009/05/sales-droid-price-cuts/ Product management and the ugly side of software product development. Thu, 11 Mar 2010 09:34:59 +0000 http://wordpress.org/?v=abc hourly 1 By: Dr. Jim Anderson http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3590 Dr. Jim Anderson Tue, 02 Jun 2009 02:17:14 +0000 http://crankypm.com/?p=1257#comment-3590 Tilting at windmills again are we CPM? Look, I've been there, done that at least 100 times and, yes, I lost the battle each and every time. However, one does not become a Product Manager without learning a few tricks (or, as Paco says, jedi mind tricks). Give it up, you've lost the current battle, and yet the war still rages on. It sure sounds like it's time to roll out another release of your product or, if permitted, another product. In all honesty, the "new" product doesn't really have to be all that new - it just has to have a higher version number (e.g. "Windows 7"). Once you do this, you can assign it premium pricing and the current product that is a reminded of the battle that was lost will quickly become a distant memory. Not easy, not fun, but definitely possible. In the end, Product Mangers always get their way. - Dr. Jim Anderson <a href="http://www.TheAccidentalPM.com/" title="The Accidental Product Manager Blog" rel="nofollow">The Accidental PM Blog</a> "Home Of The Billion Dollar Product Manager" Subscribe to The Accidental Product Manager Newsletter now: <a title="Subscribe to The Accidental Product Manger Newsletter" href="http://www.theaccidentalpm.com/subscribe-to-the-accidental-product-manager-newsletter" rel="nofollow">Click Here!</a> Tilting at windmills again are we CPM? Look, I’ve been there, done that at least 100 times and, yes, I lost the battle each and every time. However, one does not become a Product Manager without learning a few tricks (or, as Paco says, jedi mind tricks).

Give it up, you’ve lost the current battle, and yet the war still rages on. It sure sounds like it’s time to roll out another release of your product or, if permitted, another product. In all honesty, the “new” product doesn’t really have to be all that new – it just has to have a higher version number (e.g. “Windows 7″). Once you do this, you can assign it premium pricing and the current product that is a reminded of the battle that was lost will quickly become a distant memory.

Not easy, not fun, but definitely possible. In the end, Product Mangers always get their way.

- Dr. Jim Anderson
The Accidental PM Blog
“Home Of The Billion Dollar Product Manager”
Subscribe to The Accidental Product Manager Newsletter now: Click Here!

]]> By: Craig http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3580 Craig Thu, 28 May 2009 13:23:01 +0000 http://crankypm.com/?p=1257#comment-3580 Excellent! Excellent!

]]> By: Paco http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3578 Paco Wed, 27 May 2009 19:40:43 +0000 http://crankypm.com/?p=1257#comment-3578 "the Cranky PM created this elaborate pricing model spreadsheet based on shitloads of historical pricing and sales data . It showed price was relatively inelastic. " Hasn't anyone ever told you that microeconomics is best left to middle-aged balding men who've never sold or marketed anything or employed anyone ever? I almost barfed from laughing so hard when I saw "price elasticity". The CPM needs a vacation. As your attorney, I advise you to fly to Vegas, rent a big Caddie convertible, pose as a journalist covering a motocross event, and... <b>blatant attempt to use world-class education = guaranteed futility*</b> When a PM resorts to pure logic and reason, an intervention is necessary. Realize there are people how love/fear you and who never want to see a three-dimensional scattergram of pricing data again in their lifetimes. If you love/loathe these people at all, you owe it to them to never be so blatantly logical and straight-forward ever again. <b>covert use of brainpower while appearing drunk = jedi mind trick**</b> When it comes to persuasion, I think the PM arsenal is ranked thusly (and I believe 'thusly' should be a real word): 1. Box seats for a play-off game 2. Ridiculous bar tab 3. Ridiculous sushi tab 4. Indulging in other party's favorite legal activity (e.g. karaoke) 5. Referring to "those videos" you found on other party's laptop 6. Indulging in other party's favorite illegal activity (bring your camera-phone) 7. Random acts of musical violence (e.g. West Side Story) 8. <a href="http://www.urbandictionary.com/define.php?term=roshambo" rel="nofollow">Roshambo</a> 9. A really well-crafted and data-rich spreadsheet 10. Voodoo (the real stuff with a dead chicken, not the stupid stuff with the dolls and needles) I'm glad you didn't resort to #10, though I suspect you're dangerously close to doing so. Which leads me to reiterate - as your attorney, I advise you to take a vacation :) <i>*This formula holds true when you're smarter than the people you work for. **These aren't the sales droids you're looking for...</i> “the Cranky PM created this elaborate pricing model spreadsheet based on shitloads of historical pricing and sales data . It showed price was relatively inelastic. ”

Hasn’t anyone ever told you that microeconomics is best left to middle-aged balding men who’ve never sold or marketed anything or employed anyone ever?

I almost barfed from laughing so hard when I saw “price elasticity”. The CPM needs a vacation. As your attorney, I advise you to fly to Vegas, rent a big Caddie convertible, pose as a journalist covering a motocross event, and…

blatant attempt to use world-class education = guaranteed futility*

When a PM resorts to pure logic and reason, an intervention is necessary. Realize there are people how love/fear you and who never want to see a three-dimensional scattergram of pricing data again in their lifetimes. If you love/loathe these people at all, you owe it to them to never be so blatantly logical and straight-forward ever again.

covert use of brainpower while appearing drunk = jedi mind trick**

When it comes to persuasion, I think the PM arsenal is ranked thusly (and I believe ‘thusly’ should be a real word):

1. Box seats for a play-off game
2. Ridiculous bar tab
3. Ridiculous sushi tab
4. Indulging in other party’s favorite legal activity (e.g. karaoke)
5. Referring to “those videos” you found on other party’s laptop
6. Indulging in other party’s favorite illegal activity (bring your camera-phone)
7. Random acts of musical violence (e.g. West Side Story)
8. Roshambo
9. A really well-crafted and data-rich spreadsheet
10. Voodoo (the real stuff with a dead chicken, not the stupid stuff with the dolls and needles)

I’m glad you didn’t resort to #10, though I suspect you’re dangerously close to doing so. Which leads me to reiterate – as your attorney, I advise you to take a vacation :)

*This formula holds true when you’re smarter than the people you work for.
**These aren’t the sales droids you’re looking for…

]]> By: The Cranky Sales Engineer http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3576 The Cranky Sales Engineer Tue, 26 May 2009 10:47:35 +0000 http://crankypm.com/?p=1257#comment-3576 This post was enough to bring the Cranky Sales Engineer out of his scotch drenched mourning of his personal income, and comment. After reading this post, the Cranky Sales Engineer has concluded that those sales droids suck. In his experience, price has never been a serious factor in the sales process unless one of two things happens: 1. The price is WAY (5x-10x) above any justifiable ROI. 2. The product is undifferentiated and has competitors. Without one of those the CPM was right to stick to her guns, and the resulting loss in revenue was easily predictable. But we all know what being right gets us---frustrated. This post was enough to bring the Cranky Sales Engineer out of his scotch drenched mourning of his personal income, and comment.

After reading this post, the Cranky Sales Engineer has concluded that those sales droids suck. In his experience, price has never been a serious factor in the sales process unless one of two things happens:

1. The price is WAY (5x-10x) above any justifiable ROI.

2. The product is undifferentiated and has competitors.

Without one of those the CPM was right to stick to her guns, and the resulting loss in revenue was easily predictable.

But we all know what being right gets us—frustrated.

]]> By: gander http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3568 gander Thu, 21 May 2009 03:35:04 +0000 http://crankypm.com/?p=1257#comment-3568 From someone who s in the think of a full on pricing/positioning exercise, the numbers I came up with told me to RAISE price on three of 4 products, keep one the same, and povide a slight bit more flexibility in discounting when we are in tender situations. The Sales Droid Directors were ini on the big meeting, and they were shocked that this is what really, honestly, and truly came out of the exercise. All of them were screaming that the prices were too high, and oh lordy, if you don't drop them by a minimum of 20%, TEOTWAWKI would happen (The End of the World as We Know It). DELICIOUS. From someone who s in the think of a full on pricing/positioning exercise, the numbers I came up with told me to RAISE price on three of 4 products, keep one the same, and povide a slight bit more flexibility in discounting when we are in tender situations.

The Sales Droid Directors were ini on the big meeting, and they were shocked that this is what really, honestly, and truly came out of the exercise. All of them were screaming that the prices were too high, and oh lordy, if you don’t drop them by a minimum of 20%, TEOTWAWKI would happen (The End of the World as We Know It).

DELICIOUS.

]]> By: Saeed Khan http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3567 Saeed Khan Wed, 20 May 2009 20:01:34 +0000 http://crankypm.com/?p=1257#comment-3567 Listening to what sales reps have to say is good. Having to obey them is wrong. The "price" of anything is simply an artificial number used to place a value on it. Need and Perceived Value are really what determines actual prices. The price of gas fluctuates daily where I live. I have no alternative but to fill up and I can't haggle at the gas pump so the need outweighs the cost. With software, there are many alternatives, including "do nothing" so buyer needs must be understood and the value of the offering must be clearly conveyed and understood by the buyer. The list price only factors minimally because everyone understands discounting will occur. Good sales people sell on value. Bad sales people complain about price. Take a look at Average Deal Size by rep and you'll get a good idea of who is selling to prospects and who is simply looking for buyers. Saeed My test for sales reps is to Listening to what sales reps have to say is good. Having to obey them is wrong. The “price” of anything is simply an artificial number used to place a value on it.

Need and Perceived Value are really what determines actual prices. The price of gas fluctuates daily where I live. I have no alternative but to fill up and I can’t haggle at the gas pump so the need outweighs the cost.

With software, there are many alternatives, including “do nothing” so buyer needs must be understood and the value of the offering must be clearly conveyed and understood by the buyer. The list price only factors minimally because everyone understands discounting will occur.

Good sales people sell on value. Bad sales people complain about price. Take a look at Average Deal Size by rep and you’ll get a good idea of who is selling to prospects and who is simply looking for buyers.

Saeed

My test for sales reps is to

]]> By: Irina http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3566 Irina Wed, 20 May 2009 19:41:23 +0000 http://crankypm.com/?p=1257#comment-3566 My full sympathy to you, Ms. Cranky. Been there on the Droid front. (haven't we all). My full sympathy to you, Ms. Cranky. Been there on the Droid front. (haven’t we all).

]]> By: Chris Steele http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3564 Chris Steele Wed, 20 May 2009 15:58:31 +0000 http://crankypm.com/?p=1257#comment-3564 Well, as Karl Popper said: "Good tests kill flawed theories; we remain alive to guess again." Your test killed the theory that your price was too high. Now what the Sales Droids might have really meant was "my commission is too low", I'm sure the CEO would be only too happy to hear that feedback when you explain that sales have slumped because of lack of motivation in Droid Department. Then you'll have a Cranky CEO too, but maybe not if you wear the extra specially jeans... Well, as Karl Popper said:
“Good tests kill flawed theories; we remain alive to guess again.”
Your test killed the theory that your price was too high.
Now what the Sales Droids might have really meant was “my commission is too low”, I’m sure the CEO would be only too happy to hear that feedback when you explain that sales have slumped because of lack of motivation in Droid Department. Then you’ll have a Cranky CEO too, but maybe not if you wear the extra specially jeans…

]]> By: Greg Glockner http://crankypm.com/2009/05/sales-droid-price-cuts/comment-page-1/#comment-3562 Greg Glockner Wed, 20 May 2009 07:06:43 +0000 http://crankypm.com/?p=1257#comment-3562 Damn CPM, you hit the nail on the head again. I remember once when half the sales reps were losing deals because the development price was too high. The other half were losing deals because the deployment price was too high. My solution: Give it away for free! Fortunately, people got that I was making a joke. Damn CPM, you hit the nail on the head again. I remember once when half the sales reps were losing deals because the development price was too high. The other half were losing deals because the deployment price was too high. My solution: Give it away for free!

Fortunately, people got that I was making a joke.

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