Sequestration is a big word that most of us are not familiar with. However, as product managers we should know it very well. What it refers to is when one of your customers decides to make across-the-board budget cuts. Sure they might be a great customer now, but when each one of their budgets gets slashed, what’s going to happen to your product sales then?
How To Prepare For Sequestration
One of the most common places that you are going to run into sequestration will be if your product gets sold to a government. They are always running into budget issues and have to make cuts. Sorry, even the best product development definition can’t anticipate something like this happening. However, should there be another global financial crisis then there is a good chance that any one of your existing customers might end up introducing you to sequestration.
As a product manager, you need to anticipate this coming. No, you can’t prevent it; however, you sure can prepare for it. Do this well and you’ll have something to add to your product manager resume. There’s not just one thing that you can do, but rather a series of steps that you need to take in order to be ready for day when it arrives. Here is what you need to be doing.
- Get Active: Every industry has its own set of associations. You need to make sure that your business is an active member of all of the associations that have members who might buy your product. What this means is that if your product is sold to larger firms whose contracts might get hit by sequestration, then developing contacts with other firms is what you need to be doing now.
- Diversity Your Customer Base: Having all of your eggs in one basket is never a good idea. What you need to do is to take a long, hard look at just exactly what market segment your current customers are in. If it turns out that they all belong to the same segment (e.g. defense, healthcare, finance, etc.) then you had better get busy reaching out to customers in other segments in order to protect your product’s sales.
- Move Faster: We all have plans to grow our products. However, all too often those plans are off somewhere in the future. Since we can’t control when a sequestration might happen, in order to prepare for the future what we need to do is to move faster. We need to expand our products into new markets NOW instead of later on.
- Improve Your Internal Processes: How successful you are going to be when you try to go after new markets and target new segments of customers is going to come down to how efficiently your product team is able to move. In order to prepare for a coming sequestration you are going to need to take the time to optimize your processes so that you’ll be ready to move quickly.
What All Of This Means For You
Just when you think that you have everything under control as it relates to your product, a sequestration can occur. Nothing in your product manager job description may have prepared you for this. That kind of across-the-board budget cut can cause even the best of products to go into a nose dive. As a product manager, you need to anticipate this happening and take action now.
There are a number of different things that you can be doing now. These include getting active in industry associations, diversifying your customer base, moving faster, and improving your internal processes.
There is nothing that you or I can do in order to prevent a sequestration from happening. However, there are a number of different things that we can in order to take proactive actions in order to prepare our products before one happens. Take the time to sit down today and create a plan for the future. When the sequestration happens, you’ll be glad that you did!
Question For You: Just joining an industry association is not enough, what else do you have to do to make this worthwhile?
P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
As product managers we spend a lot of time trying to segment our market as a part of our product development definition. Once we get that taken care of, we then create marketing programs and product messages so that we can reach our target market and convince them to buy our product. However, sometimes things don’t work out the way that they should. What should a product manager do when the wrong customers start to buy your product?