22+ years in Product Management means the Dude has see a lot of bullshit. Some seriously wack shit that are true whiskey-tango-foxtrot situations, involving sales, management, customers, and all stakeholders. This is a post where he drops some of the top WTF moments, focusing on the realm of sales and customer interactions.
#1 Sales and Discounts
Product Management is in a unique position on the sales cycle. The sales organization often has some level of discount authority to play with, and goals to limit the leakage of revenue (and to be honest, they are motivated by their commission, so they should be diligent).
Above that guidance, there is a band of discount approval that comes to Product Management. As the keepers of the P&L (or at least profitability) they are deemed a gateholder. Above that, and you are in senior executive land, and all bets are off.
This story begins in 2005 or so, the Dude is in an afternoon operations meeting. He get a call to his cell phone. It is the North American sales director, and he has a case that is above his level of approval. The Dude takes the call and walks into the hallway. He listens to the terms, the desired configuration, and the requested discount. The sales director says that this might be too high, and the Dude, running some numbers in his head, says that the discount seems too high. The call ends, and the Dude goes back into his meeting.
The next morning, the Dude gets a call from the Regional Sales Manager and the sales person on the account. They explain the case, "important customer", "good partner", "willing to be a reference", all the yada-yada. The Dude says he will run the numbers and get back to them.
The numbers weren't as terrible as the mental calculation the Dude made, and in light of the other considerations, the Dude says "Book it".
Case closed. Team happy. Customer delighted. Happy ending. Right?
Wrong. Not more than 10 minutes later the sales director calls the Dude up and commences to yell at him for - get this - making him look ridiculous. He told his RSM no, and now I caved in and let them book the deal. This weakens the perception of the sales director, and the Dude is a horrible fucking human being (yes, that is what the Dude was told) at volume levels loud enough that through the telephone handset people across the hall could hear it clearly.
This tirade went on for a full 5 minutes, ultimately, the Dude hung up the phone.
The Dude got yelled at for approving a discount. You can't make this shit up.
#2 You're not a product manager until...
In the theme of the discount scenarios, this one will resonate. Product management has some band of discounting that they are in control over. Above that, you kick it to finance, or your controller, who is supposed to be the final word. Except it isn't the true final word.
Some sales managers truly seem to not care about their commission (unlikely), or prefer to use your products as lubricants in large deals. That is, if they are selling multi-million dollars of one class of products, and your products are measured in prices of tens of thousands of dollars, especially if your product is just software, they expect to throw your product in as a deal sweetener. I mean, after all it is just software, there is no cost associated with it, right?
In the case the Dude is relating, the deal was north of $3M USD, and as a sop, the sales manager wanted to toss in $300K of the Dude's software. After a balk, the sales manager wanted to offer the $300K of software at a 97.5% discount, that is about $7,500 total.
The Dude of course said "no". The truth is that that paltry sum wouldn't even cover the cost of one support email to our support team, let alone fund our development and maintenance. In the old days, the Dude would say that wouldn't pay for the staples in the manual that we ship.
Controller involved. Still, the answer is 'no'.
Finance director involved. Still, the answer is 'no'.
Can you guess where this is going? Sure you can. An escalation is raised, a SVP of sales overrules all common sense, and the product is given away.
Product management needs visibility to senior leadership, but alas, this is too often the leadership visibility. Fuck my life.
The Dude has an adage:
You're not really a product manager until you have had an escalation to the senior leadership team
Sad, but true.
Note that this is also about sales and discounting...
#3 Truly upset customers
The proverb "The customer is always right" is, and always has been a myth.
In this scenario, the customer had a very specific use case. A use case that was iffy at best for our product, and a competitor's product was far better suited. It happens, you can't be everything to everybody.
Our sales person persisted, aided by a sales engineer who promised capabilities, and more importantly, support for their required use. Supposedly, he thought that the customer would be blown away by our product and wouldn't notice us not meeting his needs.
Order booked, high visibility case, pissed off competitor (who should have won), and we were struggling, and very very pissed off customer. Wants to return the product.
The Dude's advice was to suck it up, take the product back, and apologize profusely. Save whatever face we could, and prevent ginormous backlash.
Is that what happened?
You guessed right. No. Management wanted to keep that order on the books, and commenced heroics. Over the course of 3 months, 5 visits by ever senior engineers, countless calls, and pressure from the finance team to keep this order on the books. All potential profit was eaten up by these interventions, and ultimately, we ended up taking the product back, and returning all the money to the customer, who then bought the competitor's product and was happy ever after.
Fortunately, the decision to plow forward wasn't the Dude's to make, and the endless cycles to appease the customer were out of his purview, but the hit to the reputation of his group, and market perception was enough to cause discussions years later.
All to save about $40K of margin, and to not back down.
#4 The bad meeting
At the Dude's first stop in product management, he worked for a company that made capital equipment for semiconductor manufacturers. They had been working on a deal to sell one of his tools (about $2.5M) to a customer in Japan. During this process, the Dude had visited the customer multiple times, to move the deal forward. It was just expected to have the factory involved, so the Dude rolled with it, and racked up far too many air miles.
Late in the negotiation, the Dude flew over twice in one month to work through the last details, and the sales team assured us that all was well.
Lastly later the same month (yes, in one month the Dude made three treks to Japan for this one case) the Dude was called over to participate in the closing of the deal. He dutifully got on the plane, ate the same shitty food, watched the same shitty movies, and saw the same flight crew.
Upon walking into the "order closing" meeting, the Dude, his sales manager, the sales engineer, we faced 11 of our customers. Bad form, you always balance the number of visitors to customers.
But, upon walking in the room, the Dude noted that all the customers were wearing brand new jackets. Not an odd thing in Japan, where company uniforms are common. What wasn't common was that they were wearing branded jackets from our competitor, who has won the business.
The Dude was called over to hear that we lost the order. Un-fucking believable. The Dude was pissed. He yelled at the sales manager on the cab ride back to the train, and then said no more until he left their company. The Dude's management publicly dressed down the regional sales leader.
Here, almost 20 years later, this still pisses the Dude off.
This is but a mere scratching of the surface of serious WTF scenarios that the Dude has experienced. These are all sales related to some degree. A future post will focus on Engineering, and Operation WTF's.