Product Manager skills are most easily broken down into categories – different drawers of your tool box, if you will. Product Managers rely heavily on a wide range of skills to cope with their complex jobs. Due to the diversity of what companies ask Product Managers to do in a day, the range of skills – and tools that they use is broad. Imagine your tool box at home, only much larger and you need to find and use the right one at a moment’s notice! The first category of Product Manager skills is a set of strategy tools and concepts.
Product Manager Skills: Strategy Tools
Product Managers often operate at a tactical level. You cycle through tasks quickly – making rapid decisions, parsing through a range of options before landing on the one that will allow your team to make progress. Decision making is oh so much harder if you don’t know the strategic direction your company, your division and your product are headed in. This list of strategy tools helps provide guiderails as you make those quickfire decisions. If these tools are unfamiliar to you, read up on them or buy Product Management for Dummies for a Product Management focused view of what you need to know.
- Product Lifecycle: Is your product just launching into the market, follow the guidelines for the introduction phase. In Mature phase, the ground rules change and so do your tactics.
- Ansoff’s Growth Matrix: Where are you looking for growth for your product line? From existing products and customers or from a combination of new products and new customers. Once you know which quadrant you are working in, you’ll be in better at making the right decision with confidence.
- Porter’s Generic Strategies: What markets are you addressing and on what basis are you gaining competitive advantage? If you rely on a broad target market and differentiated products, you have your work cut out looking for the next big differentiating offering.
- SWOT Analysis: Your company strengths and weaknesses, the market opportunities and threats all form part of this classic, but amazingly effective strategic tool. Oh yes, you’ll need to get to grips with analyzing your product and market situation and then determining what actions you take given what you learned.
Strategic tools are the Product Manager’s best friend for quick decision making with less errors.
Product Manager Skills: Finance Concepts
The next set of Product Manager skills focuses on financial concepts. As the CEO of your product line, understanding how to use and get actionable data from the following financial terms is critical to your success.
- Net Present Value (NPV): All cash flows are not equal. The sooner money is earned, the better. Why? Because the alternative is to invest it elsewhere. NPV will take your proposed cash flows over time and work out how much they are worth in today’s money. The larger the NPV, the better.
- Return on Investment (ROI): If you invest a certain amount to develop a product, how much do you expect to get back in return. Most companies have a target number they want you to reach or they won’t consider spending the money.
- Profit and Loss Statement: Use your Profit and Loss statement to work out what is spent and what is earned over time. This common financial tool helps you break down what happens to income and expenses over time. Then you can calculate your NPV and ROI!
- Breakeven Analysis: A breakeven analysis calculates how many units you need to sell before you make any money at all. It’s a fast calculation that lets you know quickly if a product opportunity is realistic or not.
These four financial terms will make sure that you make the right financial decisions.
Product Manager Skills: Marketing Speak
The following group of Product Manager skills uses ideas from marketing to discuss customers: how customers think, how they differ, how they make decisions, how they feel. Here are a few that Product Managers and Product Marketing Managers keep top of mind as they decide how to create the most effective story for customers to follow.
Markets: The totality of all the people that can buy your product is called a ‘market’. They are also collectively known as customers. Product Managers refer to the group of people they think are most likely to buy their product as their ‘Target Market.’
Segmentation: Figuring out which market is the best one (or ones) to go after with your product offering is the process of market segmentation. Product Managers and Product Marketing Managers break down the data on their customers so that they can create ‘segments’ of customers who react similarly to marketing messages. These segments have similar needs, wants or demand characteristics.
Positioning: Once you have segmented your market, what do you want each of them to believe about your product? What is the market position that your product offering occupies in their mind? Remember that what you want a customer to believe and what they actually believe are different.
Buyer Behavior: How does your buyer make the choice to purchase a product? Which elements go into that decision? Break down the buying interaction so that you understand it in detail and can plan for a successful sales process.
Marketing Mix: 4 or 7 P’s – Marketing mix is a set of actionable categories that breaks down different categories of possible actions. The goal is to balance the ‘mix’ of marketing action to increase your product’s success. Traditionally the Marketing Mix has been defined as describing the Product, Price, Promotion and Place (It’s actually distribution, but that word doesn’t start with a P). You can change product attributes, modify it’s price, change how you promote it and through which distribution channels it’s sold.
Service products bring a less tangible aspect to the Marketing Mix.
To address this, the Product Manager now also considers people, process and physical evidence. That translates as: how can the person delivering the service best represent the brand and offering? What process do you need employees to follow so that the product offering remains consistent in the eye of the customer? And finally, in a very abstract world of digital and virtual offerings, what evidence does the customer have that the product exists? Physical evidence includes airline apps showing boarding passes, emailed confirmation of transactions and something as mundane as a well-laid out bank statement.
Keep the 4 or 7 Marketing Mix P’s in mind as you market your product to have a better shot at product success.
Digital Marketing: The ability to ‘speak’ digital marketing is an important Product Manager skill. It is a huge subject area beyond the scope of this guide. Spend time learning how to nurture customers, create lead magnets, track customers and learn a smidgen of HTML so that you can have coherent conversations with your digital marketing expert.
Marketing is an under-appreciated Product Manager skill. Anytime you spend learning more about this area will give you a long-term edge in your career.
Product Manager Skills: Technical Vocabulary
The final Product Manager skill set involves technical vocabulary that you use to talk with your development team. Since we don’t know exactly what this is for your industry, start making a list. Share it with your group and think about using more productive terms with your development colleagues that lead to positive outcomes.
The vocabulary used in development teams varies from site to site. In Agile, use the standardized set of terms and tools used in the Agile world.
You became a Product Manager so that you will never be bored. The breadth and depth of Product Manager skills to know and learn can keep you growing throughout your career.