2014 - The New Whole Product

The New Whole Product

Description - How has the whole product concept changed in the light of trends like cloud, consumerization, social, self-service distribution etc.? A new present-day whole product framework is presented and the elements that are different and new from the categories in the original framework are discussed in this post.

The Whole Product framework/concept was first coined by Regis McKenna and imprinted in our (technology) minds by the timeless (in technology years) book, Crossing the Chasm.  The Whole Product concept refers to the need to address the complementary set of products and experiences that a customer expects beyond the generic product that a firm creates. The premise is that by understanding the expectations of the mainstream customer, a company can plan ahead to build the complementary set of partnerships and experiences to fulfil the mainstream customers expectation thus creating a broad market for the new product entry.

I have created a framework that extends the original 'doughnut' concept into a new 'wheel' framework that attempts to incorporate the market dynamics and evolution in customer expectations since the book "Crossing the Chasm" was first published. The original premise still remains that a firm can plan market entry for a new product by understanding and addressing the complementary set of experiences that fulfil the whole product promise.

Original Framework (Source "Crossing the Chasm")

Source: Crossing the Chasm, ISBN 0-06-051712-3

Source: Crossing the Chasm, ISBN 0-06-051712-3

The New Whole Product Framework

So what are the categories in this wheel framework that are different or incremental from the original doughnut framework?

Extensibility

Marketplace - Marketplace here refers to the digital watering holes of today where complementary products, professional services, tools, references, processes etc. gather to provide a supporting set of capabilities that help complete the generic or base product.  Examples of successful marketplaces that offer these complementary capabilities include the Amazon cloud marketplace, Salesforce AppExchange etc.. Samsung's recent struggles in not being able to attract a rich developer community to build apps for the Tizen mobile operating system shows us how the generic product cannot cross the chasm to the mainstream without a supporting marketplace or ecosystem.

APIs - APIs can be core to a company's approach be it a company like Twilio's whole dependence on a developer community for its communications services or on the other side for a developer needing data sources to build a business and income stream. APIs can be also be internal to in-house developers for knowledge sharing, repeatable solutions and business agility such as discussed in the Netflix API-as-a-tactic post by Daniel Jacobson. For my framework, I refer to the "non-core" extensibility and leverage that APIs provide to business objectives by closing the gap between the generic product and the augmented product.  On the consumer side, a familiar example is how the social media companies have driven traffic and user engagement through the Share APIs that allow for easy content sharing by creators on the social media networks. On the enterprise side, the various SaaS offerings in the Amazon Web Services Marketplace that require the SaaS partner to be primarily hosted on AWS infrastructure is an example of extensibility of the AWS core offering.

Experience

Support and Social Learning - Today, support includes community based learning and the leverage that social media provides.  Social media groups, Q & A websites like Stack Overflow, vendor specific communities like Angie's List Answers  and community forums like Bimmerfest for BMW present and future owners are a key part of the support model today beyond the traditional call-in tiered support, onsite support etc. The whole product needs to factor in the availability of these support channels to augment the support model that comes with the generic product.

Training & Experiential Learning - Training now goes beyond the vendor created classes or industry body created certifications. Freemium models, free trials, advertising-based product version allow customers an entry point to experience a product version before committing spend to a full-scale, paid or ad-free version respectively. Also, consumerization of the enterprise is a strong trend, so enterprise vendors would do well to help build products that have interfaces similar to what people experience in their personal lives or to create consumer facing versions of enterprise products.  Vendors now need to create an experiential dimension to augment the generic product.

Self-Service & Multi-Device Access - Today's distribution channels include self service portals and an expectation of solutions that work across different form factor device access points. If the generic product is centered around a single device experience or high touch distribution such as field sales, then the whole product experience must be thought about carefully to include self service and multi-device experiences. 

Enrichment

Service Providers - Given the growth of the cloud-based X-as-a-Service market, to access the broad mainstream market, a traditional on-premise solution must be augmented with a cloud delivery model. A generic product may be extended into the cloud market through partnering with a cloud service provider and help them create a viable service offering. This is the 'arm merchants' to the cloud approach to extend the generic product to cloud-based delivery such as Desktop-as-a-Service. The other approach is the earlier example provided where SaaS providers can build upon an existing IaaS cloud service provider infrastructure to create a whole product cloud solution.

The overall strategies in "Crossing the Chasm"  and the tips on whole product management continue to be quite inspirational. I suggest the new framework detailed above to take a more current view of the new market dynamics to achieve success through the strategies espoused by Geoffrey Moore.

Where is the 'Consumerization of the Enterprise' puck going to be?

Image Courtesy Kenneth Lu http://www.flickr.com/photos/toasty/

Description - What consumer behaviors today will create new incremental enterprise revenue streams tomorrow? How can enterprise solution providers prepare for where the puck is going to be?

The term consumerization has a few related definitions. The reorientation of product and service designs around the individual end user.  The use of personal consumer electronics at work. The blending of personal and business technology use.  Gartner summarizes it as " Consumerization is the specific impact that consumer-originated technologies can have on enterprises. It reflects how enterprises will be affected by, and can take advantage of, new technologies and models that originate and develop in the consumer space, rather than in the enterprise IT sector. "

The oft-stated example of how consumers translated their personal device preferences (e.g. iPhone, iPads) into enterprise class communication tools of today is probably the best example of consumerization of the enterprise where consumer preferences created a new enterprise market. In fact, I think about the Apple case study as prominent and repeated as the Dell operational excellence 'build-to-order' case study of the last decade. Other less-accounted examples of consumerization include the consumer cloud storage space where consumers brought their personal usage of tools like Hightail(formerly YouSendIt), Dropbox etc. into the enterprise to share, store and collaborate work files because they found it difficult to work within the constraints of equivalent enterprise tools. SaaS, Social Media in the enterprise, and the list goes on.  Consumerization is beyond hype and demonstrated significant economic value for enterprise vendors/service providers.

So, how will present day consumer behaviors and expectations translate into new future economic streams in the enterprise? How can enterprise vendors  amplify existing consumer usage or foster new consumer usage to take advantage of these trends?

                                                

Recommendations, Ratings and Reviews - As consumers, we have become accustomed to proof-points  that are in the public domain. We expect a Yelp or Zagat review before we try a new restaurant, we expect opinions on Trip Advisor before we select a vacation destination, we rely on crowd-sourced recommendations to pick a movie to watch on Netflix, we look to ratings to evaluate apps in app stores or to trust a merchant in an online marketplace. While the recommendation/ratings/reviews system is still maturing and ironing out some wrinkles, it is here to stay. Today, the enterprise provides proof-points via customer testimonials, 3rd party studies, analyst influences etc. However, these proof-points are initiated and fostered by the vendor. The democratic or public opinion system will translate over to the enterprise.  Enterprise vendors can prepare and foster this aspect by starting with building presence in the evolving enterprise app marketplaces and proactively building support and quantitative proof-points in the online communities relevant to their industry.

Education - Products used in schools, colleges, universities are habit forming. Our first bank account, first email account etc. are sticky. The earlier in life, the stronger the habit. I recently attended a middle school club event which required presentation by groups of students to a large audience - Powerpoint was not the presentation tool of choice for this particular group of middle schoolers. Early experiences like these are what this generation will carry over into their work lives. Enterprise vendors/service providers will be well served by investing in low-cost or free solutions for education. Another way enterprises can foster consumerization is by contributing knowledge, products and define new course offerings in the evolving MOOC education space populated by Udacity, Coursera, edX etc. The M in MOOC stands for massive!

Experience - As consumers, we increasingly buy experiences more than we buy products these days. Part of the experience is manifested in the showrooming effect which the consumer vendors such as Best Buy are embracing to their advantage. We increasingly try before we buy. The experience precedes the purchase. The enterprise players already have a head-start on this through existing mechanisms such as technology centers, centers of excellence, development environments, demo/trial programs etc. The enterprise players should invest in and amplify these avenues.

Fun - "Happy Streaming", "This is gonna be fun", "Why's it cool" - These were the messages I received when opening  the package of my digital streaming device. Again, a manifestation of the experience over product trend -for example, termed as the Experience Economy by Pine-Gilmore. Or defined by Simon Sinek in his TED Talk as the "Start with the Why". The "Why" is more important than the "What" and the "How".  This is a tough task for the enterprise i.e. to make the experience matter more than the product, make it fun. I will point to the Super Bowl ads of today (incidentally) for inspiration - Think about the non-consumer companies that captured your attention by how they appealed to your sense of fun.

Other aspects of consumerization like simplicity & aesthetics found in our consumer app experiences that are well known as are the effects of consumer electronics in the workplace. I have not focused on these since much has been written about these effects and their impact on the enterprise such as this Forbes article by Darian Shirazi. Instead, I tried to take a forward looking view to emerging consumer behaviors that have not yet made it over to the enterprise.  Where the puck is going to be.......

Is the era of the bag-carrying sales rep over? The future of sales in the technology industry

A couple of weeks ago, I attended the annual TieCon 2012 event - a technology oriented conference in the Bay Area which saw many distinguished speakers and up-and-coming leaders offer thought and opinion on the latest trends and what's ahead in technology. During this two day event, I observed that a panelist made a statement to the effect that the era of the bag carrying sales rep was over. I believe his reference was to the growing trend of the freemium  model whereby a product is given away for free with the potential to upsell follow-on premium services. The assumption is that customer acquisition costs are reduced because of the experiential component and the associated advantages of word of mouth, social and referral networks, viral marketing etc. What role then would sales play in the future if we were to gravitate to this business model? While the success of many companies at the conference and at large e.g. LinkedIn, Yammer, Box and even my children's Angry Birds and other game freemium apps lend credence to the panelist's statement, I thought of the major technology trends and market inflection points underway and how they would impact the Sales function overall.

First, the trends of the Freemium model and online marketing - let me address both together since they are related. The freemium model simply means that the evaluation phase of the sales cycle is accelerated and the salesperson is liberated to focus on the other components of the sales cycle like purchase and post-purchase. If the online marketing channel were to obviate the need for sales, the assumption then is that the sale is solely a transactional sale with no consultative component. In many ways, the sales effort or role is about creating extrinsic value for customers i.e. creating value beyond the product value alone. Even before the advent of online marketing, sales personnel had little role to play in a purely transactional sale, so how does online marketing now obviate the need for the sales component? I would actually expect the sales function to evolve to take advantage of the accelerated sales cycle and the opportunity to focus on the consultative component of the sale. Why? Because of the 'timeless' concept of the 'whole product' in technology, there will always be a need to help customers acquire and complete the remaining components of the 'whole product' that complete the freemium, online offering, base functionality product. Partnerships will need to be developed, knowledge needs to be added, services need to be assembled etc. Sales can continue to play a big role if they focus on the 'whole product' sale.

Second, the trend towards the simplification of IT - the premise that we have gone overboard in a bewildering array of features, tools and functionality at the expense of ease-of-use, usability and simplicity. Regardless of the target market segment, it seems that we offer a Swiss army like spread of tools to address a single specific need. This is manifesting itself in the increasing demand for the elegance of self-service applications and the demand for the simplicity of consumer apps like Facebook in the enterprise. On the trend towards simplicity, the development of base functionality by cloud providers to address a broad user base, the trend towards faster development cycles and iteration based on user experience and feedback etc., what might be the impact to the sales function? I would anticipate that the role of the sales function around customer engagement and customer intimacy would increase significantly given the ongoing need for customization and the feedback that would result from the iterative nature of this model. Again, the thinking I applied above to 'whole product' applies to this trend of the simplification of IT as well. Simplification will enable business agility but the demands of customization, iteration and solution completeness will engage sales deeply.

Third, the consumerization of the enterprise. The most evident impact of consumerization of IT is in the phenomenal popularity of consumer-centric mobile devices like the iPad and how users have brought their personal/consumer devices into the workplace and influenced IT to support and address this need. This is not a trend anymore but a reality! Self-service app stores in the enterprise is another trend. This is a broad topic so I'll address the trend of social media in the Enterprise. To the sales function, this manifests itself in three ways; (a) Building a social media reputation and presence proactively; (b) Seeking out social media forums to build 'social intelligence' on customers and establish newer touchpoints with customers and (c) Using social tools built for the enterprise to collaborate at new levels with colleagues/partners and accelerate knowledge sharing. This area of social media is probably the best impact to the sales function in terms of change and opportunity. I would expect the sales function to evolve and for successful sales personnel to quickly embrace these forums and tools because sales folks have long understood and used the power of leverage. Second, in published analysis of the profile of successful sales person, being 'social' is a key attribute - Why would successful sales people be behind in embracing social media?

Fourth, not the trend but the established momentum of cloud computing which refers to the momentum in the delivery of IT as a service leveraging resource sharing to achieve economies of scale. To the end user, the key promises are business agility and cost structure benefits. If you are in sales working for a service provider, your challenge is only how to maximize your time to take advantage of the massive opportunity. Of course, there is some change and education that needs to be done to win over skeptics but the market momentum is in your favor. If you are in sales selling traditional on-premise IT solutions to customers, then much change is to be expected. You will have a new channel to market - the service provider.

Fifth, Big Data. It looks like data got very big over the past year! I speak with humor because having worked in the storage industry for multiple years, the volume effect of data explosion is not new and was never looking small. However, what is new is the recognition of the other dimensions of big data such as data diversity and the promise of harnessing data to drive new business insights. When I worked in the storage industry, our top sales personnel took it upon themselves to monitor and understand the machine data that was generated by 'call-home' technology because they wanted to understand the impact to their customer's systems especially problem detection, resolution and account intelligence. What a concept! Big Data will be no different. Overall, the implication is Big impact to Sales. Sales personnel will need to accelerate their education on the newer insights into their customers and newer sales analytics tools that will shape salesforce structure, design and strategy.

The more things change, the more they stay the same. Sales has been about people selling to people - in past studies, trust and problem solving are cited among the top three factors of value that customers attribute to sales. There will be newer complimentary forums to build trust such as LinkedIn Groups but the golf course (or in my case, the squash courts) won't go away. Similarly, successful sales personnel have long understood the power of leverage. A top performing sales rep once told me that EVERYONE in the company worked for his account. This was not an arrogant view. Rather, my sales colleague understood the power of leveraging the entire company not just his immediate circle. So, good sales personnel will understand and add social selling tools to their arsenal. Remember, consultative selling? Before we move on to Sales 3.0, there will be newer and more bewildering options available to customers through online channels and newer business models. This means that sales will (continue to) have a big role to play in consultative selling and adding value beyond the base product value available in freemium format, online channels and base functionality.

What will then be transformational changes? For one, the number of touch-points to the customer will increase dramatically. Furthermore, the touch-points to the customers will exist in multiple functions across the  selling company and will include partner touch-points such as cloud service providers. Therefore, the notion of sales having 'full customer ownership' will be flawed. Sales personnel who continue to prescribe to 'account ownership' will be challenged. There will be transformational change, for the better, to the sales-marketing traditional silos and misalignment. Through Big Data advancements, sales will have democratic access to market intelligence and will play a bigger role in strategy. Marketing will have much  more and direct access to the customer and previous inefficiencies in the customer information flow between sales and marketing will be much improved. Finally, much is being written about this but there is compelling evidence of the shift of power to the customer through social media and unprecedent access to information. I prescribe to the more balanced view that the era of sales-customer joint destinies is almost certainly upon us.