JohnMMarketingProduct ManagementSalesSegmentation

Meeting Product Goals is Pure Luck

By John Mansour

fourleafcloverUnless your sales team is given quotas for each product, there’s no conceivable plan product managers can execute to meet revenue goals for their products. When they do meet their goals, it’s pure luck. There’s a better approach that doesn’t rely on luck and is more conducive to the success of the organization.

Why do organizations set revenue targets for each product? The theory makes perfect sense. If every product hits its revenue goal, the company will likely hit its revenue goal. But the execution couldn’t be further from reality. Sales people sell what they get paid to sell. All things being equal, they’ll sell what customers are asking for and look for opportunities to upsell or cross sell other products and services.

The Downside of Product-Centric Goals

So when product managers are given product revenue goals, there’s no possible way they can translate those goals into sales execution plans if sales goals aren’t product specific. The negative ripple effect just adds insult to injury.

Sales Confusion

It forces every product manager to lobby the sales force and convince them one product is more beneficial to sell over the others. It’s confusing to the sales force at best.

Buyer Confusion

Imagine how it comes across to your prospective customers – selling what’s important to you instead of selling what’s important to them. It hurts the credibility of your organization.

The other part of establishing product revenue goals that makes even less sense is that no one is considering how your target customers view your organization. How would they position your organization to themselves in a way that offers maximum value relative to their goals?

Don’t Rely on Luck

B2B organizations that consistently meet their revenue targets don’t set revenue goals for each product. They set revenue goals for each target market segment so all product managers have the same incentive – to create product and service solutions that give sales people and the organization a distinct advantage in key market segments.

Benefits of Setting Market Goals Instead of Product Goals

There are a number of benefits to thinking about markets and market goals:

  • Product planning priorities are much easier to establish because the primary focus in on removing the biggest obstacles your target customers are facing. Product priorities follow accordingly to create the solution.
  • Marketing messages are more effective because they’re relevant to the industry and operational issues in each market segment.
  • The sales force is pulled into more situations where you have a distinct advantage and your messaging speaks to decision makers, not users.

A market segment approach to setting sales goals doesn’t preclude the sales force from selling outside those segments. It just gives them more incentive to spend time selling to organizations in those market segments where you have an advantage.

Market segmentation makes it easier for your organization to meet its goals. Vertical marketing (by segment) and horizontal product management (cross-industry solutions) force product teams, marketing and sales to see your organization through the eyes of your target-customer organizations first. And when everyone is focused on helping those target customers meet their goals first and foremost, your goals are much easier to reach.


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About the author

John Mansour is a 20-year veteran in high technology product management, marketing and sales, and the Founder of Proficientz, a services company focusing on product portfolio management.