Product Manager Marketing Mistakes

What Product Mangers Know About Marketing May Be All Wrong
What Product Mangers Know About Marketing May Be All Wrong

Where did you learn your marketing skills? At school? On the job? Never learned it? I’ve got some bad news for you: a lot of what you know may no longer be correct. A lot of what serves as conventional wisdom in the world of marketing is based on the way that things used to be. However, there have been a number of breakthroughs in the understanding of consumer behavior and this changes everything…

Lots of companies suspect that a lot of the money that they spend on marketing is being wasted. Why is this? When you spend dollars based on bad marketing concepts, you can pretty much kiss that money goodbye.

Let’s discuss where product marketing has gone wrong and what we can to to fix things:

Mistake: Product managers should find and target market segments for their brands.

This is classic product management thinking – you need to identify and target the specific market segments that might be interested in buying your product. But wait, this kind of thinking can cause you to target too small of a set of potential customers.

It turns out that many customers, both consumers and business customers, are what researchers refer to as “repertoire customers” – they buy several brands regularly. Case in point: who made the cell phone that you have right now? Do you only buy cell phones that come from that manufacturer? I know that I started with Nokia, went to Motorola, and now I carry a LG. I’ll go back to the others if price / features appeal to me when I’m shopping for my next cell phone.

One way for product managers to take advantage of repertoire buyers is to offer lots of brands and variants within the same product categories. This will allow you to capture more of the buyers as they purchase a repertoire of products.

Mistake: Loyal customers are your best customers.

You would think so, but it turns out that this is not true when you are dealing with repertoire customers. Studies have been done that show that it turns out that really only about 10% of customers can be considered to be loyal customers. Additionally, it turns out that they actually buy your product less frequently than non-loyal customers do. Clearly, loyal customers may not be where you want to be spending your marketing dollars.

Mistake: There are three ways to boost the growth of your brand – get more customers, make customers more loyal, and get customers to buy more often.

Oops, it turns out that there is really only one way to grow the sales of your brand – get more customers. This means that you need to either get more people in your existing markets to buy your product or you need to enter into new markets.

As product managers we often become worried when we see existing customers buying from our competition. We will quickly start dreaming up ways to stop our other customers from leaving us. Additionally, we start looking for ways to get our existing customers to purchase more often from us in order to make up for the customers that we’ve lost. Can anyone say slash prices?

Turns out that this is all a waste of time. When you are dealing with repertoire customers it’s actually quite natural for them to buy from your competition over time. Studies show that actions on your part to stop them from leaving rarely work and more often than not end up damaging you.

The way to deal with this situation is to work on gaining market share for your product by acquiring new customers. Don’t waste your time trying to win customer loyalty or get them to buy more often.

So what do you think – do you think that your product is in a repertoire market? Does your customer switch between brands on a regular basis? Have you ever tried to create a customer loyalty program – did it work? How do you grow your market? Leave me a comment and let me know what you are thinking.